A CGA (cryptographically generated address) is created using two hash functions with multiple inputs. The first function uses a public key and a changing random value to obtain a certain number of zero bits in the hash. The second function combines the network prefix and the first hash. The final 128-bit address combines the network prefix with the last 64 bits of the second hash.
These hash functions help confirm if an IPv6 address is a valid CGA, ensuring secure communication between trusted addresses.