Importance of the hash rate
The above then leaves us with a new question: How important is the hash rate? Well, the hash rate is a data that allows us to know two things.
Hash rate as a demonstration of network security
The value of the hash rate allows us to know how secure the mining network of a cryptocurrency is. The rule is simple, The higher the hash rate, the more secure the network is. This is because the power required to carry out a 51% attack increases. As that power can only be reached by hundreds of thousands of miners, the chance that a malicious entity can achieve this attack in isolation is drastically reduced.
Hence, many specialists pay special attention to the global hash rate of a cryptocurrency to know if it is safe. In fact, several cryptocurrencies have been the victims of 51% attacks, because their hash rate is so low that a single miner can successfully carry it. In the case of Bitcoin, this is practically impossible, since its global hash rate can only be defined in one way: monstrous and unattainable for a single attacker.
Hash rate for calculating mining difficulty
On the other hand, the hash rate is also used to calculate the mining difficulty. Remember that the mining difficulty is adjusted to a certain number of blocks and depending on the time it took to find or generate those blocks. For example, in Bitcoin the average time between blocks is 10 minutes. Bitcoin's algorithm is programmed so that every 2016 blocks the difficulty is adjusted. This means that it is adjusted approximately every 2 weeks.
Now why does the difficulty adjust? Well, the reason is that the Bitcoin miner network increases its power every time a new miner connects and starts mining. Thus, the global hash rate of Bitcoin increases, and the time it takes for the network to generate a block is shortened. This is because the network of miners can resolve hashes faster, generating blocks faster and faster than desired. At that point, the algorithm that controls the mining difficulty in Bitcoin, would adjust the mining difficulty again, to return again to the stipulated time of 10 minutes per block.
In this complex process, the hash rate value intervenes, in order to provide the value of the network power. This value is then used to make the correction on the mining difficulty, increasing or decreasing it as the case may be.
Various network validation and testing processes
But beyond this, the value of the hash rate of a network like Bitcoin also serves other cases. Following our example with Bitcoin, the hash rate is also used as a vital value in facilitating certain network monitoring functions.
En Bitcoin Core We can see functions to calculate the time it would take to redo a work difference between blocks, taking the hash rate and the current difficulty. It is also used as part of the functions for block validation.
In short, we are faced with a value with great utility and that we simply cannot take for granted. After all, the hash rate tells us at all times, the state of health of the network and the miners that comprise it.
The hash rate and mining hardware companies
Many people talk about cryptocurrencies and often mention decentralization of them among their benefits. Well, this is actually a hotly debated point in the community and with good reason. Currently, there are a very limited number of companies that concentrate enormous technical capacity and hardware to mine.
Companies like Bitmain or Canaan, have a huge presence in different cryptocurrencies, especially in Bitcoin. But not only for creating powerful ASIC miners, but for having a monopoly on this market and accompanying it with gigantic mining pools. A fact that has made more than one ask: Is the mining hardware that these companies offer the latest of the latest? Are the most powerful miners reserved for themselves and then released when they develop a new generation?
In either case, these companies and the monopoly they exercise puts Bitcoin decentralization at risk. However, despite this situation so far no serious problems have occurred so far.
Hash rate and the energy consumption associated with it
Another important point is the relationship between the hash rate and the total energy consumption of the blockchain network. The relationship is very simple, the more power is added to a blockchain network, the greater the energy consumption. Obviously this has an important footprint and impossible to despise. In fact, networks such as those of Bitcoin have set milestones in terms of energy consumption. The latest calculations by specialists indicate that Bitcoin has consumed as much electric energy as Switzerland consumes in a year. To give a figure, it would be about 65 TWh a year.
However this does not mean that Bitcoin wastes energy. In fact, compared to processes such as gold mining or oil production, Bitcoin hardly consumes energy. But beyond that, all the intense mining work of Bitcoin and other cryptocurrencies like Ethereum is not a waste. After all, these networks maintain unique systems that are considered the future of the world economy. So let's forget about myths about bitcoin and other cryptocurrencies, and let's accept that every watt spent has been worth it, and always will be with the goal of creating free money. The question should be why governments don't boost purely renewable energy much more.
Hash rate units
- 1 kH / s is 1,000 (thousand) hashes per second;
- 1 MH / s is 1,000,000 (1 million) hashes per second;
- 1 GH / s is 1,000,000,000 (1000 billion, 1 billion US) hashes per second;
- 1 TH / s is 1,000,000,000,000 (1 American trillion) hashes per second;
- 1 PH / s is 1,000,000,000,000,000 (1 American quadrillion) hashes per second;
- 1 EH / s is 1,000,000,000,000,000,000 (1 quintillion) hashes per second.
Typical hash rate conversions
- 1 MH / s = 1,000 kH / s;
- 1 GH / s = 1,000 MH / s = 1,000,000 kH / s;
- 1 TH / s = 1,000 GH / s = 1,000,000 MH / s = 1,000,000,000 kH / s.