Hash rate is the unit of measurement for the total computational power – or speed of computation – used by a cryptocurrency network to process transactions on the blockchain.
The Long Explanation
Cryptocurrencies are decentralized digital currencies that can process transactions without any central intermediaries. Instead, certain cryptocurrencies like Bitcoin and Ethereum are maintained by a network of decentralized miners.
Miners are individuals or organizations who contribute their computational power to help process transactions and mint new coins. To do this, they calculate complex cryptographic hashes – pseudorandom alphanumeric codes used to identify a unique piece of data.
Cryptographic hashes prevent duplicate transactions, while also ensuring new coins aren’t created out of thin air. But these numbers aren’t known in advance by miners. Instead, they have to solve complex puzzles that generate multiple guesses per second as to what the correct solution to the problem is.
At every point in time, there are multiple miners generating thousands, millions, or even trillions of hashes. The hash rate of a cryptocurrency network is, a measure of the total speed of these calculations by all of the mining rigs powering the network.
The speed of hashing (hash rate) is measured as the number of calculations performed per second by all of the operational mining rigs on the cryptocurrency network at any given time.
The hash rate is typically presented as hashes per second (h/s), with an SI prefix whether the network is producing thousands of hashes or quadrillion hashes per second. This is often presented as:
- Kh/s (Kilo) – thousands of hashes per second
- Mh/s (mega) – millions of hashes per second
- Gh/s (giga) – billions of hashes per second
- Th/s (tera) – trillions of hashes per second
- Ph/s (peta) – quadrillions of hashes per second
- Eh/s (exa) – quintillions of hashes per second
The hash rate of a specific rig is dependent on its computing power. CPUs, GPUs, and ASICs all have different hash rates thanks to the difference in their computational powers and optimization.
To successfully guess the correct hash that processes a transaction, each device must go through thousands, even millions of guesses. Thus, a device’s hash rate is key to how successful it’ll be in finding the right guess and being profitable (providing mining rewards) to its owner.
For the crypto network itself, the overall hash rate of the network is a key indicator of its security. This is because for hackers to penetrate the network, they must first overcome the network’s total hash power. Therefore, the higher the hash power or hash speed, the more difficult to hack a network is.
Hash Power: A reference to the total computing power behind a cryptocurrencies network. Because this number cannot be calculated by itself, the hash rate is often used as a proxy for its value – making both hash power and hash rate to be interchangeable values.