Today we explain in simple terms what the Bitcoin hashrate is, and why the hashrate hitting new highs ensure the security, reliability, and decentralization of the Bitcoin blockchain.
Anyone who’s had the pleasure, or voluntarily claimed the honor, of explaining the fundamental basics of Bitcoin and cryptocurrencies to someone completely new to the crypto space, knows how difficult it can be. The language is new and foreign (even alien), the technology can be highly complex, while the paradigm shift from centralized to decentralized financial structures is not easily digested or understood at first for most.
Now try explaining the Bitcoin hashrate, and why the hashrate hitting new highs ensures the security of the blockchain. That is what we’ve set out to do today.
Bitcoin Hashrate Explained
In simple terms, the hashrate is the measuring unit of the total processing power of the Bitcoin network. That is, it’s the speed at which any given mining machine, or a collection of miners, operates on the Bitcoin blockchain.
Mining is simply the operations that occur when verifications of transactions are happening on the blockchain. In the case of Bitcoin and other mineable cryptocurrencies, this involves powerful machines (mining hardware) solving complex mathematical and cryptographic equations to produce blocks, which contain the immutable transactions.
In terms of the total BTC hashrate, BTC’s Hashrate/second (H/s) is the number of calculations, or hashes, that the BTC network is solving as a whole every second at any given time. Put differently, the Bitcoin hashrate is a calculated value or estimate of how many hashes are being generated by BTC miners attempting to solve the current Bitcoin block or any given block in the chain.
This also means that the higher the hashrate, the more miners (or mining rigs) are actively in the mining operations of Bitcoin, trying to solve the block and get the block rewards. Since a higher hashrate means that miners are increasing in numbers, the difficulty and competition to get the BTC block rewards grows as well.
Current Hashrate Breaking Records
Bitcoin just touched its own all-time high in hashrate on January 24, with the previous high being recorded on December 30, 2020, less than a month ago.
Since the calculations of the BTC hashrate are simply too large to spell out, abbreviations are instead used. For instance, the Bitcoin hashrate recorded on January 24 was 178 ExaHash per second EH/s, which is equivalent to 178 Quintillion or 178,000,000,000,000,000,000 hashes. The number is both impressive and unfathomable at the same time.
Higher Hashrate = More Secure Bitcoin Network
The higher the hashrate, the more miners operate, creating a stronger, more decentralized, and secure Bitcoin network.
This is partly due to the fact that one of the main components of Bitcoin’s security level is how difficult it is to make any changes to a block that has been validated in the past.
As more miners participate and join the network, Bitcoin becomes increasingly more decentralized, harder to alter, and hence more secure and reliable.
For instance, if a change to Bitcoin’s financial policy, supply change, or alteration of block size is proposed, a majority of miners need to decide to follow the new rules.
There have been numerous attempts to change the fundamental rules of the Bitcoin blockchain, with most attempts failing in relative terms, and instead of creating less valuable and far less powerful hard forks, such as Bitcoin Cash and Bitcoin SV, both of which have lost most of their value vs BTC.
But the simple truth is this: Bitcoin’s most valuable component 12 years after the launch of the BTC Genesis Block, is the fact that Bitcoin’s financial policy has been written in stone, remained unchanged, constant, and immalleable.
This has resulted in innovations among companies, exchanges, wallets, apps, and other crypto service providers, instead of altering the rules of BTC, so it can continue to function as the world’s largest supercomputer and the backbone of the decentralized crypto economy.
Director of Communications at Klever