You may have heard about the hash rate. Perhaps you’ve heard about it going up or down, or how you could earn more money if you could only increase it. What exactly is it, and how does it work? Is it important, and do you need to do anything? Here’s what it’s all about.
No, hash rate isn’t some kind of fried breakfast snack. In short, the hash rate is a metric for comparing the mining power of a computer and the processing power of a blockchain such as Bitcoin. A higher network hash rate means the blockchain in question can process more work in the same period of time than the same blockchain with a lower hash rate. As a miner, a larger hash rate from your computer may mean you have a greater chance of getting a block reward.
Hash rates are units of power like brake horsepower for your car, or a gigahertz for your computer processor. It’s a metric to compare and measure available power.
What Is Hash Rate?
There are two types of hash rate. The first metric is “hash rate”, or “the hash rate”. It’s a measure of how many hashes your mining rig or computer can calculate, often over a one-second time frame.
The network hash rate measures the total available power for a given blockchain. This is the total of all the computing power provided to a blockchain from users all around the world. If we started a Blocks Decoded blockchain (possibly using cryptocurrency platform Waves), the hash rate would be zero until miners start mining and sharing their computing power. If Gavin and Dan both contribute one hash/second each, the total network hash rate would be two hashes per second. Real-life hash rates are far higher than one or two hashes per second, but you get the idea.
The hash rate is measured in hashes per second or H/s. Current high-performance graphics cards can calculate somewhere in the range of 50 MH/s, which is 50 Megahashes per second, or 50 million hashes.
Hashing is a race: with Bitcoin and other Proof of Work blockchains, miners compete with each other to calculate the correct hash first and claim the prize. As your hashes per second increase, so do your chances of hitting the jackpot in the Bitcoin lottery.
The current total hash rate of the entire Bitcoin network is 68 EH/s. EH stands for Exahash, which is 68 million million million. This is a 68 with 18 zeros after it!
Why Is Hash Rate Important?
The hash rate has a big impact on the speed of a blockchain. Going back to the theoretical Blocks Decoded blockchain example, this hash rate of 2 H/s is appalling. While it may work with one or two users, you cannot scale the network. While the block reward is the incentive for miners to mine Bitcoin and other cryptocurrencies, sometimes the price of Bitcoin, the cost of electricity, or both mean it’s not always cost-effective to mine Bitcoin and miners may switch to other coins in the hopes of making more money.
To stop the network grinding to a complete halt, miners need encouraging to stay, and people like you and me still want to transfer our funds in the same timeframe we’ve come to expect. Bitcoin would not work if the average transaction time changed every time someone stopped mining. While it does sometimes experience congestion, the mining difficulty helps keep this in check.
The mining difficulty defines how difficult it is to mine Bitcoin or other cryptocurrencies. By adjusting this difficulty, the theory is that miners will want to keep mining, and the average block time will stay roughly the same, keeping transactions moving.
If there are few miners (the network has a low hash rate), the difficulty falls, which makes it easier to mine new Bitcoins. This serves two purposes. First, the current miners can process more transactions, helping keep the network running smoothly. Next, it encourages other miners to begin or resume mining Bitcoin. If it’s easier to mine Bitcoin now when compared to last week, it will cost less money, and the potential to earn a reward increases. This entices miners to switch back to Bitcoin. As more miners join the network, the difficulty increases again. The Bitcoin halving works in conjunction with the mining difficulty to keep miners interested in the blockchain.
The final important aspect of the network hash rate is security. If the hash rate dramatically falls, it becomes easier for a 51% attack to happen. This is bad news for any blockchain, so maintaining a high hash rate makes attacks such as this more difficult to achieve.
I’ve Got the (Hash) Power!
Now you know all about the hash rate, what will you do? Will you start tracking Bitcoin’s network hash rate, and evangelizing every time it reaches a new all-time high? Or will you get started mining on your gaming computer, and get sucked into the world of high-performance GPU systems, hash-per-watt calculations, and enthusiastic comparisons of hash rates between competing GPU models?
If you’re not sure your computer can handle the vast hash rates required to make any money mining Bitcoin, have you considered joining some of the best mining pools? Or how about running your own lightweight node. All the fun of mining Bitcoin without the electricity bills!