Digital assets known as cryptocurrencies, such as Bitcoin and Ethereum, are bought and sold through transactions that can be completed without the need for an intermediary, such as a bank or broker. Instead, you make arrangements through a blockchain network made up of cryptocurrency miners from all around the world. 

Every transaction is secured with a layer of cryptography, as evidenced by the use of blockchain. Miners must solve difficult mathematical calculations in order to add them to the blockchain and earn a hash, which is subsequently recorded in the ledger. 

The Bitcoin hashrate may be used to assess the security and health of a cryptocurrency network. In a proof-of-work network, the number of miners verifying transactions and the pace at which they can produce hashes is referred to as the hash rate. Keep reading to learn more about what is a hashrate and how it works. 

So what is the Bitcoin hashrate? 

The hash rate is the total computational power being used by a proof-of-work cryptocurrency network to execute transactions in a blockchain. It’s also a metric of how quickly a bitcoin miner’s computers finish these tasks. Miners use computers to solve complex mathematical problems based on transaction data in order to verify transactions. These systems generate millions or billions of potential solutions per second based on the solutions to these problems.  

Hashes are sequences of alphanumeric characters that have been scrambled to identify a single, unique piece of data. The goal is to be the first miner to create a block of transaction data that contains the correct solution and fulfils all of the criteria for acceptance. In other words, a hash must be validated by other miners to ensure that the correct amount of computing power was utilized to generate it. A miner validates a block, which is added to the blockchain and provides the miner with new cryptocurrency.  

“Computers are required to verify and execute transactions on a blockchain” says David Kemmerer, CEO and cofounder of CoinLedger. The more computers compete to verify transactions by attempting to predict the next hash, the more secure the network becomes. As a result, the greater the hash rate for a given proof-of-work blockchain, the more secure it is and the less vulnerable to assaults it is. The proof of work method is used by Bitcoin and Ethereum, the two most popular cryptocurrencies in the world, to validate transaction blocks before they are incorporated into the network blockchain. 

How can Bitcoin hashrate be measured? 

The Bitcoin hashrate is a measure of the number of calculations that can be performed per second, which might range from millions to billions, trillions or even quadrillions. The following notations are used to represent it: 

  • KH/s (kilo): thousands of hashes per second  
  • MH/s (mega): millions of hashes per second  
  • GH/s (giga): billions of hashes per second  
  • TH/s (tera): trillions of hashes per second  PH/s (peta): quadrillions of hashes per second  
  • EH/s (exa): quintillions of hashes per second  

Hash rates are usually represented as a range of numbers. The way hash rates are displayed varies from network to network, and even miner to miner, because it is determined by the speed of the computers being utilized and/or the number of miners in a network. Bitcoin employs the SHA-256 hashing function and measures hash rate in exahashes per second (EH/s). 

Question remains: why is Bitcoin hashrate relevant? 

The hash rate is crucial to bitcoin miners. Because they are always competing with other miners to be the first to compute a valid hash, they want their computers to solve problems as quickly as possible.  

If they’re employing equipment with a hash rate that’s beneath the competition, they won’t win as frequently. They are also competing against a large number of miners if they operate in a network with a high hash rate. In both situations, the miners’ profitability is affected. Investors also pay close attention to hash rate as a sign of network security.  

Because there are more computers validating transactions, it’s harder for a bad actor to launch an assault on a network with a large hash rate. 
Read more interesting stuff on the WAGMI’s Crypto Casino blog section.