In the world of cryptocurrencies, the term Bitcoin Hash Rate and Hash Power is commonly used. In fact, you must have heard a lot of times that Bitcoin hash rate has increased or come down.
If you’re wondering what the hash rate is and hash power in Bitcoin/Cryptocurrencies, then read on.
The post shares with you details about Bitcoin hash rate and hash power. It provides much stuff about Bitcoin hash power/rate so that you can quickly learn about these terms.
Here, we need to say that hash rate or hash power is a very critical term in the Bitcoin network that you will come to know in this article.
Moreover, you will come to know what it actually means that will help you to understand the importance of Hash Rate/ Hash Power easily. It is used in every cryptocurrency, not just the Bitcoin network.
Now, let’s get started:
What is the Hash Rate?
Hash Rate is defined as the measuring unit that measures how much power the Bitcoin network is consuming so that it is continuously functional.
So, it allows you to know how much hash power it is consuming to generate blocks at the normal mean time within 10 minutes.
In fact, the Bitcoin network consumes much energy as it needs to solve the intensive mathematical computations for finding the blocks.
Basically, these computations are mathematical puzzles that cannot be guessed without using computations.
For successfully mining a block, a miner has to hash the block’s header so that it is fewer than or equal to the “target.”
In fact, the target is the SHA-256 hash of a block’s header which is a 256-bit alphanumeric string. It starts with 18 zeros. The target is changed with every 2016 blocks.
The miner can arrive at the particular target (hash) by changing the small portion of the block’s headers, which is designated as a “nonce.”
A nonce begins with “0” and gets incremented every time for getting the required hash or target. The chances of getting the particular hash are quite low as the varying of the nonce are hit and miss. So, a miner needs to make a number of attempts by changing the nonce.
Finally, this number of attempts made per second is known as the hash rate, and the process of mining the Bitcoin blocks is known as Bitcoin mining.
Simply put, the hash rate is defined as the speed at which a given mining machine operates. In fact, crypto mining is all about finding blocks through complex computations.
These blocks are like mathematical puzzles. The mining machine makes thousands and sometimes millions of guesses per second for finding the right answers when solving the block.
For effectively mining a block, the miner needs to hash the blocks header so that it becomes below or equal to the “target.” However, the target can change with the change in difficulty.
For arriving at a giving hash (target), the miner needs to vary the block’s headers, which is called as a “nonce.”
Each nonce starts with a “0.” It is increased every time for getting the necessary hash. In fact, the miner needs numerous tries by varying the nonce as the chances of getting a given hash (target) is quite low.
The number of attempts which the miner carries out per second is called as the hash rate or hash power.
What is the unit of Hash Rate?
Hash rate is the rate of hashes per second (h/s). Here, we list out the denominations used with hash rate:
- 1 Kh/s – 1000 hashes per second
- 1 Mh/s – 1,000,000 hashes per second
- 1 Gh/s – 1,000,000,000 (one billion) hashes per second
- 1 Th/s – One trillion (1,000,000,000,000) hashes per second
- 1Ph/s – One quadrillion (1,000,000,000,000,000) hashes per second
- 1 Eh/s – One quintillion (1,000,000,000,000,000,000) hashes per second
The common hash rate conversion system is as follows:
- 1 MH/s – 1000 Kh/s
- 1 GH/s – 1000 Mh/s
- 1 Th/s – 1000 Gh/s
As of now, the Bitcoin network hash power is 50 TH/s. Moreover, it is constantly growing as more miners are joining it continuously. The overall hash rate is calculated depending on the time between blocks.
What is the Hash Rate Per Second?
Hash Rate per second is the SI derived unit that represents the number of double SHA-256 computations performed in one second. It is usually represented as h/s together with an SI prefix. It is used to calculate the overall hash rate of the Bitcoin network.
Defining the relationship between hash rate, miner’s reward, and difficulty
The terms such as hash rate, miner’s reward, and difficulty are interdependent in quite a number of ways. When the Bitcoin network difficulty goes up, it requires more hash rate to find or mine blocks. It results in miner’s earning block reward of 12.5 BTC plus the transaction fees.
In fact, the Bitcoin network difficulty goes up when more miners join the network. So, the hash power needs to be increased. More computational guesses are required per second for finding the solution.
This interesting relationship is enforced in the Bitcoin protocol itself to make the average block time close to 10 minutes.
What’s the Impact of Electricity on Profitability?
The Bitcoin mining device such as ASIC comes with a mining power of 12 terahashes per second. It can produce 0.318 BTC per year. However, the final profitability depends on electricity costs that are associated with this mining equipment. It is known as the efficiency of the miner.
The difficulty of mining cryptocurrency increases electricity costs. So, a mining machine that has a 10 percent higher hash rate than another but requires 50 percent higher electricity costs is considered wasteful and less profitable.
So, it’s important to consider the efficiency along with the hash rate when mining for cryptocurrency.
With this, we complete this eventful post on Hash Power/Rate in Bitcoin. We hope that you now possess a better understanding of these terms that will help you to make improved profits in the blockchain industry.
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