Hash rate plays a significant role in cryptocurrency mining. If you are interested in mining cryptocurrency, then understanding what hash rate is and how it relates to mining is crucial. Continue reading to find out more about hash rate and its relationship with cryptocurrency mining.
What is hash rate
Hash rate and hash power refer to the same process; the speed at which computer hardware can complete computations. In terms of cryptocurrency mining, a miners hash rate is the number of guesses that their mining hardware can make per second when trying to find a block. Hash rate is measured in hashes per second.
The more hashes per second a miner has, the more guesses they can make per second when trying to solve the algorithm that will add the next block to the blockchain. A miner would find it beneficial to have a high hash rate; this is because it gives them a higher probability of finding the next block. When a miner finds a block, they are rewarded with a block reward and the transaction fees attached to the block.
The relationship between hash rate and mining
For blocks to get added to the blockchain, a miner must find the correct answer to a cryptographic hash puzzle that contains the next block of transaction data. To do this, miners use computers–CPU, GPU, FPGA, ASIC–that run mining software. This software tries to find the correct answer to the hash puzzle. It is not possible to predict the answer to this puzzle; so to find the answer, the miner’s hardware makes several guesses at what the correct answer might be. The more hash power a miner has, the better chance they have at adding the next block and receiving the block reward and transaction fees. That’s why it’s in a miner’s best interest to be able to make as many guesses per second as they can. Or in other words, to have as much hash power as they can working for them.
How hash rate effects mining difficulty
The total hash rate of a network determines how difficult the cryptographic hash puzzle is. For example, on the Bitcoin network, the goal is for block creation to always take an average of 10 minutes. If the difficulty did not adjust, and more miners joined the network, then the average time it takes to find a block would decrease. This is because there would be more machines making more guesses per second on the network. As a result, it would take less than 10 minutes to find the block if all other variables remained unchanged (ceteris paribus). And if miners left the network, and the total hash rate decreased, then it would take longer than 10 minutes for the block to be solved, ceteris paribus. So to level the playing field, the difficulty of the puzzle adjusts every 2016 blocks in a way that makes the average time it takes to find a block 10 minutes (on the Bitcoin network). If the hash rate increased during the 2016 block interval, then the difficulty increases. If the hash rate decreased over the interval, then the difficulty decreases.
The more hash power, the more secure the network
The more hash power a network has, the more secure that network will be. Cryptocurrency networks are often revered for their security. Many argue that one of the only ways to successfully attack a cryptocurrency network would be via a 51% attack. A 51% attack is when a miner or a group of miners controls at least 51% of the network. To control 51% of the network means you are the owner of at least 51% of the hash power on the network. When this is the case, you can interfere with the incoming records on the blockchain ledger. For example, you can halt transactions, falsify transactions, and reverse transactions when you control 51% of the network. However, the more hash power a network has, the more unlikely it is for a 51% attack to take place. This is because it becomes more expensive to execute a 51% attack since miners must pay for enough hardware to control 51% of the network, as well as the electricity bill to power that hardware.
The more hash power, the better
Hash rate is an important factor in cryptocurrency mining as well as cryptocurrency network security. Hash rate determines a miners probability of solving the next block as well as their profitability, the difficulty of the cryptographic hash puzzle that unearths the next block, and the size of a cryptocurrency networks attack surface.
If you are looking to mine cryptocurrency, you will find it advantageous to have as much hash power as you can working for you. The higher your hash rate, the higher your chance of finding the next block, and the more likely you are to run a profitable mining operation (ceteris paribus).
If you are looking to support a cryptocurrency network, it would be in your best interest to find one with a significant amount of hash power dedicated to it. Amplify Exchange will host a number of the cryptocurrencies with the lions share of the hash power in the cryptocurrency industry. For example, Amplify will support Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash, Stellar, Dash, Tron, and many more at launch time, or shortly after launch time. It is safer to support the networks with an ample amount of hash power rather than those without it. The more hash power a network has in summation, the less likely it is that an attacker can successfully attack the chain and falsify the transaction records. And if you keep funds and send transactions on a cryptocurrency network, the last thing you want is for that network to have a large attack surface and be subject to fraudulent activity.