Ugh, this is what Bitcoin’s hash rate means and why it matters
But there’s another metric, hash rate, which has been reaching all time highs this year. But what is it? What does it mean? And why do people regard it as a measure of the network‘s health?
The hash rate low down
Put simply, hash rate is a general measure of the processing power of the Bitcoin network.
As Bitcoins are mined, blocks of verified transactions have to be “hashed” before being added to the ever growing chain of blocks, AKA the Blockchain.
Each of these hashes is created by successfully completing an intentionally difficult mathematical puzzle. The hash rate, is a measure of how many times the network can attempt to complete this puzzle every second.
This means that hash rate is a good indicator of the Bitcoin network’s health. A high hash rate, when compared to a lower one, is preferable as it effectively means the network is more secure from 51-percent attacks.
The higher the hash power of the network, the greater the number of miners would be needed to commit a 51 percent attack.
So, a high hash rate makes it more logistically difficult to coordinate the number of computers required for such an attack. This is assuming that no one entity controls or owns a majority of the hash power of the network.
Ownership of hash power can be a concern. Research from October