What are Hashrates? How Do They Affect the Mining of Bitcoins?

• Hash is a guess that a node makes while solving a complex math problem in the Proof-of-Work consensus.
• Terahashes means a trillion hashes per second. 

Blockchains such as Bitcoin rely on Proof-of-Work as their consensus protocol, where the miner needs to prove that they have done some work and they are legitimate miners. Here, the work means solving a complex mathematical question using strong computer hardware which has used their resources of electricity. 

What are Hash Functions?

Hash functions are functions that convert any input data into an output of fixed characters. In Bitcoin, any input is converted into a combination of 64 characters. However, these are one-way functions which means that the input can’t be reverse-engineered from the output. However, a guess can be made on the input, to produce the same output as the given hash. 

These functions are collision-free. This means that no two inputs will lead back to the same output. Each unique input has a unique output. Bitcoin blockchain relies on the SHA-256 (Secure Hash Algorithm 256-bit) algorithm.

a	ca978112ca1bbdcafac231b39a23dc4da786eff8147c4e72b9807785afee48bb
aa	961b6dd3ede3cb8ecbaacbd68de040cd78eb2ed5889130cceb4c49268ea4d506
A	559aead08264d5795d3909718cdd05abd49572e84fe55590eef31a88a08fdffd

The table shows different outputs generated from nearly the same inputs. The algorithm takes into account even the capital letters and space bars to produce unique outputs.

How are Mining and Hashrate Related?

Crypto mining involves miners solving complex mathematical problems to validate transactions. However, this process is not done by a single miner; many miners are competing against each other and the one to correctly guess first, is awarded Bitcoins.

Hashrate is the measure of the computational power of a computer which tells how long it will take for a miner to validate transactions or solve a math problem. 

Example: 000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f

This is an example of an output from a hash function. Notice that it contains 64 characters and it will take nearly unlimited guesses for a miner to compute its input. Thus, it becomes a resource-intensive process, using a high amount of computational power, and the miners are rewarded in Bitcoins to carry out the task.

                                             Hash = Guess

Hash Rates are measured in different units which are:

KH/s	Kilo hash per second	One thousand
MH/s	Mega hash per second	One million
GH/s	Giga hash per second	One billion
TH/s	Tera hash per second	One trillion
PH/s	Penta hash per second	One quadrillion
EH/s	Exa hash per second	One quintillion
ZH/s	Zeta hash per second	One sextillion
YH/s	You hash per second	One septillion

How is Cryptocurrency Related to Hashrate?

Hashrate is the measure of a blockchain network’s security, health, and mining difficulty. 

Miners generally prefer a network with a high hash rate as it is more secure. However, a higher hash rate also indicates that there are many other miners in the competition. A network may have thousands of miners. 

So, the computer makes nearly millions of guesses per second, making the overall hash rate of the network hit trillions or even more. Presently, the hash rate of Bitcoin is measured in EH/s, and Ethereum’s is measured in TH/s. 

Final Thoughts

Hashrate is an important factor for a miner’s profit. As the blockchain’s value grows and more miners join the network, the security is increased. However, the computational load of the network also increases. These high energy consumptions are already damaging the environment and more cryptocurrencies like Ethereum are adopting Proof-of-Stake consensus protocols. 

As this value increases shortly, it will become impossible for a single miner with a computer to mine bitcoins. Taking this into consideration, organizations have already started investing in renewable energy sources to hold their feet on the line.