Hash rate is a measure of the Bitcoin network’s processing power. Bitcoin is mined, and it is kept running via a network of thousands of computers (mining machines) that are run by operators globally. These mining machines can mine Bitcoin when the miners solve complicated mathematical problems. As of January 2020, Bitcoin has kicked off with a record high hash rate topping its previous records; its hashing power hit 119 quintillion hashes per second. In this article, we will understand the Bitcoin Hash rate.
What does Hashrate mean in Bitcoin?
- Bitcoin hash rate signifies how powerful, profitable, and efficient the Bitcoin network is at any point in time. Simply put, the Bitcoin network hash rate is described as the speed with which a specific type of mining machine functions.
- Even though Bitcoin is a cryptocurrency, it still needs to be mined, and it should maintain its network to stay running. When the Bitcoins are mined, its blocks of verified transactions need to be hashed beforehand when it is added to the growing chain of blocks, via the blockchain.
- These hashes are created by completing complex mathematical problems successfully. The hash rate is a general measure of the number of times the network can try to solve the complicated problem every second.
- This implies that a hash rate is an indicator of the Bitcoin network’s strength. Compared to a lower hash rate, a higher hash rate is preferable, and it means that the Bitcoin network is highly secure from 51% attacks.
- A higher hash rate makes it more logistically difficult to coordinate with different computers required to commit 51% attack. This means that no entity owns or controls the majority of the hash power of the Bitcoin network.
How can we measure Hash Rate?
- The hash rate is calculated as the number of hashes per second (h/s). The Bitcoin network has become more powerful and big that quintillions of hashes every second can also be calculated.
- Megahash (MH/s) for 1,000 kilo hashes
- Kilohash (KH/s) for 1,000 hashes
- Terahash (TH/s) for 1,000 megahashes
- Petahash (PH/s) for 1,000 terahashes
- Bitcoin’s daily mining power can have significant fluctuations; it can either increase or decrease 10% mining power or more every day, which is common. This fluctuation does not mean that thousands of machines are turned off or on daily.
- With several machines running globally, calculating the Bitcoin mining hash rate will not be precise. Experts can study the recent market activity and create an estimated value of the current hash rate.
- Hence, various reports and websites will release different hash rates, even though daily fluctuations are so large. Analyzing the hash rate daily is not useful; instead, you can use long-term trends like weekly or monthly trends and different indicators to determine the hash rate.
What is Bitcoin’s current hash rate?
As the Bitcoin network grows stronger, it can compute more hashes a second, like its hash rate increases. Moreover, adding powerful AISC (application-specific integrated circuit) mining machines will also increase the Bitcoin network’s hash rate. Bitcoin’s current hash rate is 171 million EH/s per second, which denotes one exa hash is 1 quintillion hashes. This implies that miners are computing 171 quintillion hashes a second.
Why is hash rate important?
- Bitcoin, on average, is designed to mine a single block every 10 minutes. It maintains this rate by adjusting its mining difficulty with the overall hash rate of the Bitcoin network. Simply put, it makes it difficult for the miners to complete the complex mathematical problem. This means when the hash rate increases, Bitcoin mining difficulty also increases.
- A higher hash rate implies that more resources are added for processing the transactions on the blockchain. This, in turn, makes the network more vulnerable to attacks. As the bad actors might need to spend huge amounts of money to out-compete the other mining facilities to gain a majority of 51% control and to stop the other people’s transactions, or they need to double-spend their coins.
- Generally, the higher the hash rate, the harder for the attackers to source the required hashing power, and virtually the network becomes harder to attack.
How is the hash rate calculated?
There is no new way to identify the exact hash rate of a cryptocurrency that needs to be mined, even though it can be estimated traditionally. Hash rate is estimated depending on the public data about its fundamental cryptocurrency, including the Bitcoin mining difficulty. Although the traditional method is used currently, it has been criticized by several people as it is not accurate. Kraken, the most famous crypto exchange, has used a way for estimating the hash rate by using statistics to arrive at 95% confidence, where the hash rate lies in a range.
To summarise, several miners have entered into the Bitcoin mining system, which pushes the hash rate up. As the Bitcoin price has spiked to $55,510.44 today, more new miners are joining the competitive space. When there is an increase in demand, the Bitcoin price will spike upward and attract more investors looking for significant returns. If there is an increase in miners, it pushes the Bitcoin mining difficulty up, which in turn increases the hash rate up. Apart from that, If you are interested in making investment in Bitcoin then check out Bitcoin Future Robot. It is an automated trading platform that is working on an algorithm. To know more further check out Bitcoin Future Review from industry experts.