Tutorials:Total Hash Rate

Quest: Total Hash Rate

The Hash Rate measures the computational power involved in finding a solution to the proof of work, it is the sum of all nodes contribution. If an attacker wants to include a fraudulent transaction in the network it has to gather more than half of the hashpower used by the whole network.

If such an attacker has that much power, they could make more money by contributing to the network. 

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Total Hash Rate

1. Select All to display the full range of data.
2. Notice how the Total Hash Rate has been increasing more steadily than the price.
3. Notice how the major drops in the hashrate occur after a price spike.

The hashrate drops when miners stop mining. And miners will stop when it is not profitable to do so. This means that the rise in difficulty during the price spikes rises the cost of production, now you need to spend more time and energy to mine the same amount of Bitcoin. But when the price falls again after a price spike, then at some point mining becomes unprofitable reducing the number of miners and hashrate.

Exercise

• At the time of this writing, the Bitcoin network hashrate is approximately 800 Million Tera Hashes per second.
• A million Tera Hashes is referred to as an Exa Hash (exa = 10^18).

 Units progression: deca > hecto > kilo > mega > giga > peta > exa !!!  

Significance of Hashrate:

• The high hashrate reflects the difficulty of solving the proof-of-work problem.
• Finding a solution to the proof of work requires a trial-and-error process, consuming significant energy and computational resources.

Bitcoin as a Commodity:

• Like commodities, Bitcoin has a real cost of production, grounded in economic reality.
• While the hashrate ensures security and scarcity, the price of Bitcoin can still be subject to market speculation.