SHA-256 is a secure hash algorithm used to secure data on a blockchain network. Several popular blockchains, including Bitcoin, Bitcoin Cash, Namecoin, and Peercoin, use this cryptographic hash.
You can think of the SHA-256 cryptographic hash as a type of signature. The algorithm generates a 256-bit or 32-byte signature that is almost impossible to replicate due to its complexity.
Unlike encryption, where the data can be secured and decrypted, the SHA-256 algorithm is a one-way cryptographic function. This feature makes data stored on the blockchains that adopt this hash tamper-proof.
SHA-256 is also used for digital signatures for authenticating data within the blockchain. Developed by the NSA, the SHA-256 is one of the most effective hash functions in the crypto industry.