Hash Rate

What Is Hash Rate?

Hash rate is the measure of the computational power in a proof-of-work (PoW) cryptocurrency network. The hash rate is used to determine the health, security, and mining difficulty of a blockchain network.

A hash is an alphanumeric code that is randomly generated, and hashing is the process of guessing that code (or as close to it as possible). Each guess submitted by computers on the network is measured, and the hash rate is how many guesses per second are taking place across the entire network.

Key Takeaways

• Hash rate is a measure of the computational power on a blockchain network.
• Hash rate is determined by how many guesses are made per second.
• The overall hash rate helps determine the security and mining difficulty of a blockchain network.
• Hash rates can change over time, with the most popular blockchains increasing year over year.

Understanding Hash Rates

Hash rates are measured by the number of guesses each computer makes per second to solve for the hash on a blockchain network. This is an essential part of the crypto mining process on a proof-of-work (PoW) network.

Here’s how it works:

• A blockchain network employs a hashing algorithm that randomly generates a hash code.
• Mining computers on the blockchain network compete to guess the hash value.
• The amount of guesses per second on the blockchain network is measured as the hash rate.
• The hash is “solved” when a miner guesses a value that is lower than or equal to the numeric value of the target hash.
• The winning miner is allowed to add the next block to the blockchain and earn crypto rewards (known as block rewards).

The more computers that join a blockchain network and process hashes (guesses) on the network, the higher the hash rate is.

A high hash rate represents more security and health on a PoW blockchain network, as there is less of a chance of an attack on the network.

How to Measure Hash Rate

Hash rate is measured by the number of hashes (or guesses) per second on a blockchain network. The larger the blockchain network, the higher the hash rate. 

Because there are typically hundreds (or thousands) of computers making millions of guesses per second, hash rate is typically measured in terahashes, or 1 trillion hashes, per second. For example, the Bitcoin network hash rate is measured in terahashes per second. 

Smaller networks may be measured in smaller increments, such as kilohashes per second (1,000/s), megahashes per second (1 million/s), or gigahashes per second (1 billion/s).

Why Is Hash Rate Important?

Hash rate has importance as an indicator of the overall security of a blockchain network, as well as the mining difficulty for miners to earn block rewards. The more miners who are part of a blockchain network competing to mine blocks, the less likely it is for a malicious attack on the network to occur.

Hash rate also affects the mining difficulty of a given blockchain. Some blockchains increase the difficulty of mining a block as the hash rate increases. This means that crypto networks with very high hash rates may be nearly impossible for individual miners to compete.

What Is Bitcoin’s Hash Rate?

The hash rate on the Bitcoin network as of March 2023 is around 320 million terahashes per second (or 320,000,000 TH/s). The network first hit a hash rate of 1 TH/s in May 2011 and has increased every year since then.

What Happens When the Hash Rate Changes (Increases or Decreases)?

The hash rate is a gauge of the overall network activity by miners on a proof-of-work (PoW) network. When the hash rate increases, here’s what it means:

• More computational resources are being used to mine blocks.
• More electrical power is consumed.
• The network increases in security, as it becomes too big to overpower by a single entity.
• Mining becomes much more difficult, and most blockchain network algorithms increase the difficulty to mine as the hash rate increases.

When the hash rate of a PoW blockchain network decreases, this typically means:

• Fewer miners are competing to add blocks and earn block rewards.
• The network becomes less secure, and more vulnerable to a 51% attack, which occurs when a group of miners who control more than 50% of the network’s mining hash rate alter the blockchain.
• Less power is consumed by mining computers.
• Mining difficulty declines, making it easier to mine blocks.

Where Can I See Different Crypto Hash Rates?

There are several places to view the hash rates of popular PoW crypto blockchain networks. Websites such as BitInfoCharts and others measure the hash rates of various cryptocurrencies. Here are a few of the most popular PoW hash rates:

• Bitcoin
• Ethereum (historical)
• Ethereum Classic
• Dogecoin
• Litecoin
• Monero

The Bottom Line

Hash rates are indicative of the popularity of a cryptocurrency. The more computing power dedicated to a given crypto network, the more likely it is that the cryptocurrency is increasing in growth and adoption.