What is hashpower?
Essentially, hash rate is the rate at which a crypto miner (a computer, really) is working. The faster a miner is working, the higher the hash rate, and consequently the more likely the miner is to successfully complete the next block in the network and claim their reward.
High hash rate = happy miner.
In this article, we will look at:
A hash is a set of data that has been mapped to a fixed size. If you hash data it will provide you with a string of numbers and letters. Changing anything in the data will completely change the hash output.
It’s a way of condensing a dataset while being able to verify data integrity. If you continue to use the same hash function, the hash output will remain the same length regardless of the length of the input.
In a Proof-of-Work cryptocurrency like Bitcoin, miners compete to solve a mathematical puzzle to validate the next block being added to the network’s blockchain. The data in each new block is stored as a hash.
Most miners use computers that are dedicated to mining. These computers work to complete a predefined task, which is usually searching for a long random number known as a “nonce”. This nonce returns the desired hash. The rest of the content in the block is predefined.
The difficulty of finding the hash, and therefore the nonce, can be scaled by increasing the amount of zeros required at the start of the hash.
This is how the Bitcoin network works.
Miners guess a number they think might be the nonce, and when it is combined with the ordered transactions in a block, it is revealed whether or not the number is the nonce, depending on whether the hash output meets pre-defined criteria.
Every miner in the network is guessing to try to find the nonce to claim the reward.
Miners try different random numbers many times per second. Each time they guess a number, they must hash the contents of the block, along with the number they are testing, to see if they have found the desired hash value and therefore found the desired nonce.
The rate at which a miner can generate a new random number and hash it (with the rest of the block contents) to test if it is the correct nonce is known as the hash rate. Hash rate is measured in hashes per second (h/s).
If a miner has a hash rate of 100 h/s, they are completing 100 guesses for the nonce per second. This means that every second the miner is generating a random number and hashing it, along with the contents of the block, 100 times.
Hash rate can also be looked at from a network standpoint. Take Bitcoin for example. The overall hash rate of the network could be calculated by knowing the hash rate of every single Bitcoin miner in the world.
If the overall hash rate of a network increases, the difficulty of finding the correct nonce increases too because there is more competition.
You may have come across the term “hash war” when reading about hash rate. Hash wars are something that can occur when two forks of a chain compete to have the higher hash rate to try to prove themselves as the dominant chain.
A recent example of a hash war is the competition that began following the hard fork of Bitcoin Cash into BCH ABC and BCH SV.
Prior to the hard fork, Bitcoin SV supporters allegedly controlled more than 56% of the Bitcoin Cash hashpower. It was therefore thought, prior to the fork, that BCH SV would become the dominant chain, or the “real Bitcoin Cash”, purely in terms of hash power.
Once the fork was completed, things changed. On one side of the war, BCH SV proponent Craig Wright announced on Twitter that there would be “continuous competition until one dies as we do not stop”, referring to the hash battle between the two forks.
On the other side in the BCH ABC camp, Jihan Wu, co-founder of mining pool Bitmain, announced intentions to fight BCH SV using by switching some of Bitmain’s mining power from Bitcoin to BCH ABC.
Similarly, Bitcoin.com’s mining pool also announced they would utilize some of their mining power for BCH ABC instead of Bitcoin.
If you are new to the world of cryptocurrencies, I guess you would have heard a number of times that Bitcoin’s hash rate, also referred to as hash power, has increased or come down. Does the term make you wonder what it actually means?
I actually used to wonder in my initial days as to what Bitcoin’s hash rate/power actually meant. And eventually, after learning a lot of stuff about Bitcoin, I was able to understand the reference.
Hash rate or hash power is something very critical and integral to Bitcoin’s network for a number of reasons, which I will explain further in this article.
But before that, it is very important that one understands what this actually means because by doing so one will be able to naturally understand why this hash rate/power matters so much.
Note: Hash rate/ hash power is used in every cryptocurrency that is proof of work but for this example, I am using Bitcoin because most of us naturally connect to this cryptocurrency.
Hash Rate, also Hash Power, is the measuring unit that measures how much power the Bitcoin network is consuming to be continuously functional. By continuously functional I mean how much hash power is it consuming to generate/find blocks at the normal mean time of 10 minutes.
If you remember, in my previous article What is a Bitcoin hash I explained thoroughly that the Bitcoin network consumes a lot of energy because it has to solve mathematically intensive computations regularly to find the blocks.
These computations for finding the blocks are basically mathematical puzzles that a miner cannot just guess without a lot of computation.
To successfully mine a block, a miner needs to hash the block’s header in such a way that it is less than or equal to the “target.”
The target, at the time of writing this article, is that the SHA-256 hash of a block’s header must be a 256-bit alphanumeric string, and must start with 18 zeros. The target changes as the difficulty change every 2016 block.
And the miners arrive at this particular hash (or target) by varying a small portion of the block’s headers, which is called a “nonce.” A nonce always starts with “0” and is incremented every time for obtaining the required hash (or target).
Since the varying of the nonce is hit and miss, the chances of getting this particular hash (or target), which starts with these many zeros, is very low. Therefore, many attempts must be made by a miner by varying the nonce.
And this number of attempts made per second is called hash rate or hash power. And this hash power or guessing attempts are made by miners who mine the Bitcoin blocks by a process called Bitcoin mining.
To understand more about hash power see this short video on hash power or hash rate which perfectly explains it.
Hash rate, as I said, is a unit measured in hashes per second or and here are some usual denominations used to refer it.
Hash rate denominations
Comman Hash rate Conversions
Bitcoin Network’s Hash Rate & Distribution As Of Now?
This is the Bitcoin’s hash rate distribution.
Bitcoin network’s hash rate now is 50 TH/s and is only growing as the more miners are joining in so more difficulty is going up.
Hash Rate, Miner’s Reward And Difficulty
Hash rate, miner’s reward, and difficulty are interdependent on each other in various ways. Whenever Bitcoin network’s difficulty goes up more hash rate is required to mine/find the blocks and as result miners earn the block reward of 12.5 BTC plus the transaction fees.
Interestingly, the Bitcoin network’s difficulty goes up because of more miners joining the network and thus the hash power needs to be increased (i.e. more computational guesses needs to be made per second to find the solution).
This interesting correlation is enforced in the Bitcoin protocol itself so that the average block time remains 10 minutes.
After reading this, some of you would want to mine bitcoins by providing hash power to the Bitcoin network but that is a very costly and energy-intensive affair which everyone cannot do. It requires you to make expensive hardware investments, pay for huge electricity bills, and demands that you have a good amount of computer knowledge.
And until you are ready to become a miner, keep working hard in your current profession, HODL Bitcoin and stay tuned to CoinSutra to keep learning more about the Bitcoin revolution.
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For further reading:
The computational capability in a machine that is used for crypto mining. Hash power may also refer to the total computing power of a miner or mining pool.
