What is a Hash Rate?
A hash rate is a measure of total computing power used on a proof-of-work (PoW) blockchain. It measures the number of nodes hashing blocks on the network. As transactions on the blockchain are verified, crypto-mining computers use their computational power to guess the transaction's hash. A hash is an alphanumeric code generated for each block.
Because miners earn rewards for adding and validating blocks to a network, each node is incentivized to submit guesses for the hash. The hash rate is the number of guesses submitted per second.
What are Hash Rates Used For?
The blockchain hash rate (or hash rate) is used to measure the security and integrity of the network. The more computers and computing power contributing to the network, the more stable it becomes. Hash rates can increase due to the number of miners using computational power or with upgraded mining equipment which can solve hashes faster.
Miners also use hash rates to project the profitability of mining. The higher the hash rate, the more difficult it becomes for each node to gain a mining reward. This architecture bolsters the security of the blockchain network while decreasing individual miners profits as network difficulty increases. The Bitcoin (BTC) blockchain is a perfect example of this method of increasing difficulty as total supply diminishes.
With more computing power contributing to the network, the blockchain becomes more secure and often indicates a promising digital asset.
How do Hash Rates Work?
Hashrates are usually measured in hashes per second (H/s). Very powerful mining processors (typically ASICs) do mathematical calculations using the blockchain’s hashing algorithm. These calculations, which use computing power, force nodes to work to mine blocks. This PoW model is one of the most commonly implemented methods of blockchain computing.
As miners solve mathematical equations, they submit their answers to the network. When the correct answer is submitted, the hash is confirmed and a block is added to the chain. Rewards are then given to the miner who successfully mined the block.
Notable Hash Rate Statistics
- If a miner or group of miners can control more than half of a network's computing power, they can perform what’s called a “51% attack”
- As of May 2023, the Bitcoin hash rate reached an average of over 364 million TH/s
- Foundry USA and AntPool are the dominant Bitcoin miners with 33.9% and 18.7% hashrates, respectively
- Bitcoin mining difficulty in April of 2023 was up 72.58% from one year prior
- In April of 2023, miner revenue experienced nearly 70% growth since the beginning of the year
Hash Rate (Hashrate) Related Terms
Ethereum — A decentralized blockchain that enables developers to build and deploy decentralized applications (dApps) and smart contracts.
Blockchain — A blockchain is a decentralized database that records transactions on a distributed ledger.
Smart Contract — A piece of code that autonomously facilitates and executes the terms of a contract or an agreement.
Mining — Blockchain mining is the process of adding new blocks of transactions to the database. Mining nodes hash blocks and confirm transactions, updating the ledger.
Proof-of-work — An blockchain-based algorithm that uses computing power to secure the network.
