Reviewed by Sep 30, 2020| Updated on
A target hash is a number that must be greater than or equal to a hashed block header for a new block to be awarded. The target hash is used to determine the difficulty of input and can be adjusted to ensure efficient processing of the blocks.
Cryptocurrencies depend on the use of blockchains containing transaction history, which are either "hashed" or encoded into a number with a letter sequence. Hashing involves taking a data string of any length and running it through an algorithm to produce a fixed-length output.
The output will always be the same amount, no matter how large or small the input is. With hashing, someone working with a blockchain will consider the hash instead of the input itself. Each block will contain the preceding block header hash.
The blockchain is decoded and stored as mining. Mining includes using computers to run hashing algorithms to process the latest block, with the requisite details contained in the block header in mining. For this hash, the cryptocurrency network sets a minimum value, the minimum hash, and miners seek to decide what this value is by checking all possible values.
The block header contains the number of the block edition, a timestamp, the hash used in the previous block, the Merkle Root hash, the nonce, and the goal hash.
The block is generated by taking the block content hash, adding a random number string (the nonce), and hashing the block again. If the hash meets the target's requirement, then add the block to the blockchain. Cycling through solutions to guess the nonce is called proof of work, and the miner who finds the value is awarded the block and paid in cryptocurrency.