If you've done a little digging into how Bitcoin works you've most likely come across a term called hash rate. Those in the know tend to watch it and rave about it each time it reaches a new all-time high. Even though the amount of hash power usually has very little to do with the price or affect it much in any way.
So what is this hash rate, why should you pay attention to it, and how does the Bitcoin network use it?
Let's dive in and find out, shall we?
What is the hash rate?
The current hash rate or hash power is something very critical and integral to Bitcoin’s network but it is only another unit of measure. So what does it measure you ask?
Hash Rate, also Hash Power measures how much power the Bitcoin network is consuming to be continuously functional. The hash power is the amount of power consumption to generate/find blocks at the average mean time of 10 minutes.
Hash rate is a unit measured in hashes per second or [h/s] and can be grouped into several denominations such as:
- 1 kH/s is 1,000 (one thousand) hashes per second
- 1 MH/s is 1,000,000 (one million) hashes per second.
- 1 GH/s is 1,000,000,000 (one billion) hashes per second.
- 1 TH/s is 1,000,000,000,000 (one trillion) hashes per second.
- 1 PH/s is 1,000,000,000,000,000 (one quadrillion) hashes per second.
- 1 EH/s is 1,000,000,000,000,000,000 (one quintillion) hashes per second.
At the time of writing this the Bitcoin network's hash rate sites at around 92 million TH/s.
Image source - blockchain.com
Why does hash power go up or down?
Miners are needed to secure the network and as a result, supply computing power to product hashing power to secure blocks onto the chain. As more miners join pools to mine Bitcoin the Bitcoin network’s difficulty goes up due to more competition.
The more computers lending power and competing increases the level of hashing power. (i.e. more computational guesses needs to be made per second to find the solution).
If you would like to check out the current hash rate of the Bitcoin network in real-time, you can do so on this site.
The hash rate is produced by various mining pools which all contribute resources to keep the network going; if you want to see the largest mining pools and their hash rates you can do so here
What is the benefit of more hashing power?
The more miners competiting to solve equations and leading hash power to the Bitcoin network, the more decentralised and secure it becomes. As competition increases and more resources pore into the system. This competition increase makes it increasingly harder for anyone to gain too much power over the network and ensures the safety and security of the network.
Miners will come and go due to the profitability of mining while some could be taken down in regions that are not crypto-friendly. Miners could go offline due to things like power cuts or damage to machinery so the more power the network has the less chance of any interruption in service and securing transactions too.
As the hashing rate continues to grow it also a strong indication of faith in the system and support for the network, which might not be a price factor but shows beliefe in the system and interest in what it can offer users.
Authored by @chekohler
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