Bitcoin’s proof-of-work mining process uses the SHA-256 hashing algorithm.
Miners repeatedly hash a block header, changing a variable called a nonce and sometimes other fields, until the resulting value satisfies the network’s difficulty target. Bitcoin applies SHA-256 twice to the block header, a process commonly called double SHA-256. The winning miner broadcasts the block and its proof of work to the network.
SHA-256 belongs to the SHA-2 family of cryptographic hash functions, which the National Security Agency designed and NIST standardized. It produces a 256-bit digest. Hashing is not encryption: it is intended to be a one-way transformation, although brute-force searches can still test possible inputs.
Bitcoin also uses other cryptographic operations, including elliptic-curve signatures and hashing in its transaction and address structures. Therefore, SHA-256 is central to Bitcoin mining but is not the only cryptographic algorithm used by the system.