Being new to the world of cryptocurrency is exciting and overwhelming all at the same time. There is new terminology to learn and regulations to consider, and one of the things you’ll have heard quite regularly is that the number of times that the hash rate of Bitcoin – also known as hash power – has increased or decreased. You could be nodding along, with no idea what it means or stands for, so let’s look into it in detail.
Hash rate or hash power is an integral piece of the network within Bitcoin, though you will hear this term when referring to every cryptocurrency. Bitcoin is one example because it’s the cryptocurrency that which people are familiar. Hash rate and hash power is the unit of measurement that measures how much power is being consumed by the Bitcoin network to be functional enough to generate blocks at the ten minute meantime. The whole cryptocurrency network consumes a lot of energy due to the intense mathematical computations that it has to solve to find the blocks.
What Is Hash Rate?
A hash is the output of a hash function and is the speed at which a compute is completing an operation in the code of Bitcoin. When mining, the higher the hash rate, the better, as it increases your chances of finding the next reward when you find a block. If crypto mining is in your future, then you need to know what a hash rate is, and you need to do some research into its effect on your ability to mine the coins. The better you are informed, the better the decisions you can make in the mining business.
Mining hash rate involves hashing the block’s header so that it’s below or equal to the “target,” which changes with every change in difficulty. Hash rate is computed in hashes per second (h/s), and some of the terms that you will come across in your research include Mega, Giga and Tera, depending on the number of hashes. A mining machine for Bitcoin would have a different hash rate compared to Ethereum, which proves that not every machine used to mine has equal hashes.
Denominations of Hash Rate
- 1 KH/s = 1,000 (one thousand) hashes per second
- 1 MH/s = 1,000,000 (one million) hashes per second
- 1 GH/s = 1,000,000,000 (one billion) hashes per second
- 1 TH/s = 1,000,000,000,000 (one trillion) hashes per second
- 1 PH/s = 1,000,000,000,000,000 (one quadrillion) hashes per second
- 1 EH/s = 1,000,000,000,000,000,000 (one quintillion) hashes per second
What Is Hash Power?
Cryptocurrency hashing power is the power that your hardware uses to run or solve the varying hashing algorithms. These are primarily used for generating new cryptocurrencies and allowing the transactions between them, which is better known as mining. If you are mining online, you are selling hashing power to those who want to mine but don’t have the right equipment to do so. Buyers pay to rent the hashing power in cryptocurrency, and then these are paid to sellers when they forward the hashing power.
Hash Rate, Miner’s Reward & Difficulty.
These three things are, and whenever the cryptocurrency network’s difficulty goes up, more hash rate is required to mine. The funny thing to realize is that the reason that cryptocurrency network difficulty goes up is that of more miners that join the network. This increases the hash power and means that more computational guesses need to be made to find the solution.
Some people learn all about the world of cryptocurrency and want to mine Bitcoins themselves. This is a costly and energy-draining affair which isn’t something that everyone can do. If you choose to go down that route, you’ll be making expensive hardware investments and paying for substantial electricity bills at the same time – it also demands a huge amount of computer knowledge.
As more and more miners join to compete for the block reward, the mining calculations will increase along with the hash rate and block difficulty. In increase in hash rate also triggers an increase in network security, which can solve the vulnerabilities involved in dealing with digital currency. It should be known that anyone across the world has the potential to become a miner for cryptocurrency. The entire Bitcoin network is secured by over ten quintillion calculations per second, which makes it the most extensive computing network in the world.
Price will continue to do what it does, which means that the hash rate will settle into the new market conditions as they happen. Old gear and is out, and the hash rate will increase as miners lower their opex, which can be done by sourcing cheaper electricity. Currently, there is no such risk of the mining collapsing – if it were going to happen, the cryptocurrency price would need to pung to near zero and, in this market, this will never happen.