There are dozens of terms in digital finance that are incomprehensible to newcomers. One of them is “hashrate”. This word is often used in the cryptocurrency community. In particular, users and analysts sometimes specify the term in the context of mining digital coins. Hashrate in mining is the number of calculations performed by the hardware in one second. The higher it is, the higher the user’s probability of mining a new block.
Features of hash rate
This term is used by users in relation to cryptocurrency networks, mining pools, nodes of the digital chain and equipment. However, the general meaning of the concept is the same in all cases. It is worth considering the meaning of “hashrate” in different spheres:
- Cryptocurrency networks. The term means the number of calculations per second within blockchains.
- Pools (communities engaged in joint mining of cryptocurrencies). Here, this term should be understood as the combined computing power of teams of miners.
- Nodes (nodes). In this context, the concept implies the computing power of the mining farms of individual cryptocurrency miners.
- Hardware. The term refers to the power of certain computer hardware.
To create new links in blockchain networks with the Proof-of-Work (PoW) consensus algorithm requires the calculation of cryptographic hash functions. They allow previous transactions and blocks to be linked to new transactions and links, i.e. to build data chains.
In simple words, miners sort of guess crypto functions by brute force. When crypto-networks get valid (valid) values, they accept new packets of information, rewarding nodes for their work.
In this process, all nodes compete with each other. The faster they brute force the values, the higher their chances of being rewarded.
The speed of searching cryptographic functions depends on the overall hash rate. Its value is influenced by the power of the used hardware.
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Measuring hash rate
In 2022, 7 basic values are used to denote the speed of calculating new cryptographic functions. They are presented in the table below.
| Measure | Value name | Value, hash/sec. |
|---|---|---|
| 1 H/s | Hash | 1 |
| 1 KH/s | Kilohash | 1 thousand |
| 1 MH/s | Megahash | 1 million |
| 1 GH/s | Gigahash | 1 billion |
| 1 TH/s | Terahash | 1 trillion |
| 1 PH/s | Petahash | 1 quadrillion |
| 1 EH/s | Exahash | 1 quintillion |
What affects the level
The value of hashrate depends on several parameters. It is important to distinguish between the processing power of mining farms and the same indicator for specific equipment. The hashrate of computer equipment is influenced by:
- The type and purpose of the equipment. For mining, 3 types of equipment are used: processors (CPU), video cards (GPU) and special devices (ASIC). They are created for different purposes. For example, video cards are used in PCs and laptops for rendering (processing) graphics and displaying images on monitors/screens. However, because of their technical characteristics, GPUs are massively used for cryptocurrency mining as well.
- Clock frequency of cores. All CPU, GPU and ASIC models have certain technical structures. They often include several digital microprocessors (constituent crystals, that is, integrated circuits) – cores of computing machines. Their main characteristic is the frequency of operation. It determines the speed of execution of commands by one crystal.
- Number of cores. The number of microprocessors built into integrated circuits affects the speed of operation.
- Memory performance. CPUs, GPUs and ASICs use chips for short-term storage of information that is currently being processed. The higher the speed of these chips, the greater the hashrate of the device.
- Architecture. This term refers to the set of information types and characteristics at each level of computer hardware operation. Manufacturers of integrated circuits periodically optimize their architectures in new generations. This increases the speed of processors, graphics cards, and ASICs.
The hash rate of a mining farm is affected by:
- The amount of equipment. The more computer equipment a miner uses, the higher the hash rate of his farm.
- The power of the equipment. The total hash rate of the farm is affected by the speed of calculation of each individual computer device in its composition.
- The hashing algorithm of the cryptocurrency network. The results of operating the same mining equipment in several blockchains usually differ. This is due to the specificity of the encryption mechanisms used in digital networks.
Also, for example, the hash rate of a video card depends on system parameters and other characteristics. Because of this, its processing power may be lower than the average value or the figure from standardized mining calculators. The following main technical parameters often affect the hashrate reduction:
- Connection method. Specific types of connectors are used to connect the hardware. Rarely, mining equipment supports connection through different interfaces. Connectors differ in terms of bandwidth – the speed of information transfer. In older interfaces, this parameter is usually low, which causes a decrease in the hash rate of the computer equipment.
- Temperature of operation. It is inherent in technical equipment to heat up. High temperature can cause its breakdown. Because of this, the equipment has a built-in mechanism of automatic power reduction as protection against overheating. If you do not use effective cooling methods, the average hash rate per unit of time will be less than the proper value.
- Operating System. The OS controls the operation of the software that allows hash function selection and performs mandatory service tasks. The latter often consume a noticeable part of the power of the used hardware. As a result, resource-intensive operating systems reduce the average hashrate. To avoid this, members of the cryptocurrency community often use low-demanding operating systems Ubuntu and Debian – Linux distributions – for mining.
- Timings. Under this term, it is customary to refer to the time that integrated circuits need to perform a single operation. However, default settings often block the maximum power of computer hardware. This is due to the standard short waiting period between operations. To remove downtime, you need to properly adjust the timings. This is done by flashing the computer hardware through the BIOS. Instructions for setting timings and target parameters can be found on thematic sites and forums.
Distribution of hashrate
To mine cryptocurrencies you need to:
- Buy equipment.
- Customize the computer hardware.
- Connect the farm to the blockchain of interest through special software.
Because of the simplicity of mining, cryptocurrency mining is practiced by many people from all over the world. However, the relevance of this activity in different countries and regions strongly depends on local electricity rates. The cheaper the energy, the higher the profitability of mining.
Some think tanks consider the hashrate of large blockchains like Bitcoin in terms of geographical location. In this case, the hashrate for selected networks is measured in specific countries and regions. Based on this information, analysts map the world with hashrate distribution. For example, in mid-February 2022, the United States owned just over 35% of the computing power on the Bitcoin network.
Complexity and reward
The security of cryptocurrency networks increases along with the hash rate. However, hash selection never gets easier in a global sense. Crypto networks have integrated algorithms to increase the complexity of mining. Mining virtual currencies becomes more difficult the higher the total hashrate of blockchain participants.
Mechanisms to make mining harder also increase the security of crypto networks. If such algorithms did not exist, selecting valid hashes would be too simple a task. As a result, increasing the processing power of blockchain participants would decrease the security of cryptocurrencies.
For their work, miners receive a reward. It is formed from the basic fee for creating new blocks and the amount of user commissions for cryptocurrency transactions. The reward for generating links is set at the program level. At the same time, most Proof-of-Work blockchains have a built-in halving mechanism. This algorithm systematically halves the reward for block creation. The periods between halving in the Bitcoin network are about 4 years.
Profitable hashrate
The profitability of cryptocurrency mining is influenced by such factors:
- The complexity of mining in the chosen network.
- The value of rewards per mined block.
- The price of equipment.
- The power of mining equipment.
- Electricity tariff.
Profitability of mining can be calculated manually, but it is better to use special calculators for this purpose. One such service is WhatToMine. Calculators help to quickly and accurately calculate the profit from mining in various cryptocurrency networks. To get started, you need inputs like these:
- Total hash rate.
- Total energy consumption.
- The current price of 1 kWh.
- The commission of the mining pool.
Yield
It is impossible to say exactly what hash rate is needed for mining. This indicator varies from one blockchain to another. It is also important to take into account the total power consumption of the equipment and the electricity tariff. For example, if these indicators are too high, mining may become unprofitable.
Bitcoin’s Hashrate
As of February 13, 2022, the Bitcoin cryptocurrency network had the highest hash rate of any blockchain in operation. On that day, Bitcoin’s hashrate was 236 EH/s on average and 248 EH/s maximum.
How to increase hashrate
In February 2022, there are 3 methods to increase the processing power of a mining farm. The main methods are summarized in the table below.
| Method | Brief description |
|---|---|
| Buying additional equipment | A method that requires the investment of hundreds of thousands of rubles. But this method is the most effective. |
| Overclocking processors and graphics cards | If the composition of the mining farm includes CPUs and GPUs, you can achieve greater computing power by increasing the frequency of the technique. If properly configured, this method safely increases the hashing speed of computer devices. You can increase the frequency of the CPU and GPU through utilities like MSI Afterburner. However, along with overclocking, you will need to increase the speed of the cooler fans through the same program or switch to more efficient cooling. There are also methods to increase the initial power of some computers in 2022. These often come down to software re-flashing. |
| Operating a less demanding OS | This method only helps small mining farms. In some cases, the OS can take up to 30% of their power. For cryptocurrency mining, it is desirable to exploit low-demanding Linux distributions – for example, Ubuntu. |
How to choose a device to get a high hash rate
You should not mindlessly buy the most powerful equipment in the current market conditions. The main parameters when choosing devices with high performance are payback period and the ratio of price to computation speed. However, the correction for power should still be present. There is no point in buying old and cheap, but quick-payback mining equipment with low hashing speed.
During non-stop cryptocurrency mining, the equipment works under a high load. Under such conditions, the lifespan of new devices is often less than 3 years.
The choice of machinery for mining is influenced by such parameters:
- Low price and high power relative to other equipment.
- Payback period.
- Availability of potential for overclocking.
You can calculate the payback period of the purchased equipment in mining calculators. Having received in them information about the potential daily profitability of the equipment of interest, you need to divide the price of the computer device by the daily profit.
Hashrate in cloud mining
In 2024, it is not necessary to buy computer equipment to mine cryptocurrencies. There are many websites offering customers the opportunity to rent free computing power. The advertisements of cloud mining services usually specify such obligations of the company:
- Payment of electricity taxes
- Maintenance of mining devices
- Customization of computer equipment
- Increasing the frequency of operation of devices.
The lease is carried out at the rates available on the services. At the same time, the price of services is often specified in dollars per gig or terahash.
There are many fraudulent platforms operating in the cloud mining market. It is not recommended to invest in a service for renting computing power, as there is a risk of sending savings to attackers.
Summary
The term “hashrate” means the number of hashes generated by the mining technique per second. This parameter depends on the power of the equipment used. It is specified if it is necessary to characterize such objects:
- Cryptocurrency networks
- Mining pools
- Nodes in the blockchain
- Mining equipment.
On the value of computing power depends on the income from cryptocurrency mining. The hash rate is affected by a number of technical indicators of computer devices and parameters of various blockchains. To get high computing power with minimal money spent, you need to take into account these characteristics and customize cryptocurrency mining in the most efficient way. To automatically calculate the profitability of mining, special calculators like WhatToMine are suitable.
Frequently Asked Questions
❓ Which consensus algorithms require high computing power?
As of 2022, it is only required for Proof-of-Work blockchains.
💣 What is the danger of single-handedly controlling most of the hash rate of a crypto-network?
If a conditional attacker collects more than 50% of the blockchain nodes with PoW, he can manipulate the digital chain. This is called a “51% attack”.
🔎 Is there a unit of computing power that is greater than EH/s?
Such a unit exists – ZH/s, or Zettahash. It is equal to 1 sextillion hashes per second, but as of 2022, no blockchain has reached that kind of power.
🕐 How to find out the average crypto computation speed of hardware?
To do this, it is worth using standardized tables with relevant information. They can be found on thematic sites and forums.
📝 How to effectively cool processors when mining?
To reduce the temperature of the CPU, it is not enough to operate coolers. Additionally, you need to use thermal paste that reduces the thermal resistance between the contacting surfaces of processors and heat sinks.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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