In April 2021, the news of Bitcoin hitting its highest network hash rate grabbed the attention of all crypto miners. Surprisingly, the coins’ hashing power hit a record breaking hash rate of 198 quintillion hashes per second.
Hash rate is a crucial metric that helps determine the strength of the security of your blockchain network.
A higher hash rate means a highly secure network and fewer chances of any disruption on the network from malicious groups.
In the world of cryptocurrency, mining coins is challenging and competitive. A metric that can help your crypto’s boat sail effortlessly is the understanding of the network hash rate. So, read further about the basics, importance, and role of network hash rate in an investor’s life.
Network Hash Rate – What Does It Mean?
Hash rate is one of the more critical data metrics to know in the blockchain world.
Otherwise known as hash power, network hash rate stands for the number of operations that a miner carries out in a specific period for a blockchain network, say Bitcoin. As a rule of thumb, you as a miner are likely to make more profit in your crypto coin if you have a faster network hash rate.
Each cryptocurrency needs a specific and unique computational power to consume continuously to remain functional in the crypto market – the hash rate. The term hash rate can be divided into two parts:
- Hash: It is an alphanumeric code that represents different data of varying lengths in analogs.
- Rate: It is defined generally as the speed at which something is done, in this case, the speed of the computational power that a user throws at the network.
Why Should You Consider the Network Hash Rate?
Determining the network hash rate can help predict how good the network can be. Using a hash rate calculator, any investor can calculate their hash rate and know the estimated earnings from their crypto coin when mining.
Additionally, like mentioned above, the network hash rate is primarily meant to know the strength of your network in terms of security. When you know what your hash power is, you target hashing power accordingly.
Remember that less network hash rate means your computing power is less; your network is not as secure and is open to malware attacks. Likewise, if your hash power is higher, your network has excellent security and can resist attacks.
How Does Network Hash Rate Work?
Mining cryptocurrency cannot be done on laptops and personal computers. Specific mining machines have been designed for the process.
Different cryptocurrencies require a different memory, bandwidth, and power for mining. So, depending on these factors, the choice of mining machine varies. No mining machine has the same hash rate.
To calculate the hash rate individually, a miner uses some calculation method to come up with estimated earnings from the crypto mining. The factors that can alter the hash rate include:
- Stability of the mining machines connection
- Level of mining difficulty
- Hash rates of other miners
- The mining programs settings
- Number of miners mining in a network
Every miner keeps guessing the hash rate and changing it to get the right one. The process is like a cryptographic math problem in which miners keep computing until they win a block reward in the form of a transaction fee or mined coins.
If new miners join the network, the mining difficulty increases because miners now need to make more guesses each second to solve the calculation and win the block reward.
With the increase in the difficulty of the network, the hash rate is likely to increase. So, the more the competition is, the higher the hash rate you are likely to get.
How Can You Calculate Network Hash Rate?
Among several ways to calculate your network hash rate, the best and most approximate ones are:
Hash Rate Calculator:
There are multiple top-notch hash rate calculators available on the internet that you can refer to for approximating your hash rate.
To get a measure of your hash rate, download mining software. Once done, run the software on your mining equipment.
Usually, the network hash rate is measured in hashes per second, mega hashes per second, and solutions per second of hash computations in blockchain technology and typically are very long.
Overall, a higher network hash rate keeps your cryptocurrency network safe and secure from attacks. Therefore, as a miner, look for higher hash rates to have more secure and predictable experiences. Also, as an investor, keep track of the hash rates of other cryptocurrencies as well.