The terms of the week

In an ever-evolving world like that of blockchain technology and cryptocurrencies, two terms stand out in particular: “hash” and “smart contract”. Although they may seem distant, they are actually two fundamental components that interact with each other in the blockchain ecosystem. Hashing ensures the security and immutability of data, while smart contracts introduce automation and programmability into blockchain transactions.


Hashing is a cryptographic function that plays a crucial role in the blockchain ecosystem. It converts an input of any size into a fixed-length string. This characteristic is fundamental to ensure the integrity of data on a blockchain: every block on the chain has its own unique hash and includes the hash of the previous block. This unique link between blocks creates an indestructible chain of records. The beauty of the hashing process lies in its simplicity and its powerful effect. Any minor modification to the information in a block, such as a transaction or data, would change its hash. Since each subsequent block in the chain contains the hash of the previous block, even a small change in a block would propagate throughout the entire chain, making any attempt at manipulation evident. This property helps to maintain the integrity of data and ensures that all transactions are immutable and transparent, which is a fundamental characteristic of blockchain technology.

Smart Contract

On the other side of the spectrum, we find smart contracts, protocols that facilitate, verify, or automatically execute a contract. These are the engine that drives many of the most innovative applications on the blockchain, from decentralized finance (DeFi) platforms to non-fungible tokens (NFT). Smart contracts automate the process of agreement and execution of a contract, eliminating the need for an intermediary. This opens the door to countless possibilities and applications, making blockchain much more than just a simple transaction ledger.

In summary, while hashing ensures the integrity and security of data, smart contracts allow the creation of complex and automated decentralized applications. These two components work together to make blockchain a powerful and versatile tool. Despite their functions seeming very different, both are indispensable for the correct and safe functioning of a blockchain.