SHA 256 is an algorithm that takes a digital input of any length and returns a string of 256 bits (typically converted to 64 hexadecimal digits). It's a one-way algorithm, which means there's no known way to practically retrieve the input from the output. As far as anyone knows, there has never been an instance of two different inputs having the same output, which means the hash of an input is a reliable unique digital fingerprint.
In this 6-minute video, Matthew Weathers explains why SHA 256 is "useful for digital signatures, cryptography, authentication, and is a central part of the Bitcoin protocol."
