A cryptocurrency network's security and health can be measured by its hash rate. This refers to the number of miners working to verify transactions and the speed at which they can generate hashes in a proof-of-work network.
But what exactly is hashrate, and does it matter? Here's a closer look at hash rate meaning and what to know about this important metric.
Hash Rate Meaning
The term hash rate refers to the speed at which a computer is able to perform hashing computations. In the context of Bitcoin and cryptocurrencies, the hash rate represents the efficiency and performance of a mining machine. It defines how fast a mining hardware operates when trying to compute a valid block hash.
In short, the process of mining involves a myriad of hashing attempts, until a valid hash is produced. In other words, a Bitcoin miner needs to run a bunch of data through a hash function in order to produce a hash, and they are only successful when a certain hash value is generated (a hash that starts with a certain number of zeros).
Therefore, the hash rate is directly proportional to the profitability of a miner or mining pool. A higher hash rate means that the probability of mining a block is higher and thus, the miner has a better chance of receiving the block reward.
What Are The Different Hash Rates?
That number is so big we are talking about megas, gigas and teras. These are the hash rates you will see being talked about in cryptocurrency mining:
- 1 kH/s* (one kilo hash) is 1,000 (one thousand) hashes per second
- 1 MH/s (one mega hash) is 1,000,000 (one million) hashes per second
- 1 GH/s (one giga hash) is 1,000,000,000 (one billion) hashes per second
- 1 TH/s (one tera hash) is 1,000,000,000,000 (one trillion) hashes per second
- 1 PH/s (one peta hash) is 1,000,000,000,000,000 (one quadrillion) hashes per second
- 1 EH/s (one exa hash) is 1,000,000,000,000,000,000 (one quintillion) hashes per second
- 1 ZH/s (one zeta hash) is 1,000,000,000,000,000,000,000 (one sextillion) hashes per second
- 1 YH/s (one yotta hash) is 1,000,000,000,000,000,000,000,000 (one septillion) hashes per second
* kH/s is always written with a lower case k as upper case K is reserved for Kelvin (which is a measurement of heat).
Why Is Hash Rate Important?
The hash rate is an important metric for assessing the strength of a blockchain network – its security to be specific. The more machines dedicated by honest miners to discovering the next block, the greater the hash rate rises and the harder it becomes for malicious agents to invalidate the network.
A 51% attack for example, is when a single individual or group of attackers purchases or rents enough mining equipment to control over 50% of a blockchain’s hash rate. Because blockchains are trustless and abide by a rule known as the “longest chain rule,” a person or group that controls a majority of the hash rate could technically block or reorganize transactions, and even reverse their own payments.
This would create double spend issues which in turn, would completely undermine the integrity of the underlying blockchain. A fall in hashrate would therefore mean a reduction in the cost to perform a 51% attack, resulting in the network becoming more vulnerable.
Why Hash Rates Matter to Miners
There are many types of mining machines, and new ones are constantly debuting. Each cryptocurrency is mined with different machines, and they don’t all have the same hash rate due to mining requiring different amounts of power, memory, and processing bandwidth.
Individual miners can calculate their personal hash rate using a hash rate calculator that can easily be found by searching up the Internet. By inputting information about their mining equipment, power and electricity consumption, mining fees, and other relevant information, the hash rate calculator can spit out an earnings estimate.
When mining equipment is upgraded with more powerful machines, the network hash rate might increase as a result. However, a more powerful network doesn’t necessarily result in Bitcoins being mined more quickly, as the Bitcoin network has been programmed to issue a certain amount at a time.
Changes to hashing power are also related to mining difficulty, the number of miners in the network, and ultimately, profitability for miners. If new miners join the network, the mining difficulty increases because miners now need to make more guesses each second to solve the calculation and win the block reward. A higher hash rate is better, because it increases the miner’s chances of finding the next block and receiving a Bitcoin reward.
Closing Thoughts
Hashrate is an important metric for proof-of-work cryptocurrencies since it is entirely based on the number of miners involved in securing a network, which in turn is somewhat correlated to the native cryptocurrency price – a higher value means a bigger reward for mining.
For those interested in the crypto industry, hash rate is an essential metric to learn and monitor. Having read this article to understand hash rate meaning is already a great first step!
