What Is BTC Hashrate? Why You Should Care (July 2024 Update) (2024)

Education

Bitcoin hashrate? Sounds confusing, but itsnot. Learn the role Bitcoin’s hashrate plays, why its important and what the current BTC hashrate istoday: July 26th, 2024.

Understanding Bitcoin Hashrate

Bitcoin Hashrate isdefined asthe Bitcoin mining difficulty oftheblockchain. Itmeasures how difficult itistomine aBitcoin.

• Hashing Process: Ahash, analphanumeric code, israndomly generated bythe hashfunction. Bitcoin mining, also known as'hashing, ' involves attempting toguess this code using acomputer that submits these guesses totheblockchain.

• Hashrate Measurement: Bitcoin hashrate measures how many guesses are submitted per second tothe entireblockchain. Ahigher hashrate indicates the need for more computing power, increased energy costs, and longer verification and transactiontimes. This results inslower and more expensive Bitcoinmining.

Current Bitcoin Hashrate

Units ofBitcoin Hashrate

Bitcoin Hashrate ismeasured in:

• Billions

• Trillions (athousand billion)

• Quadrillions (10^15)

• Quintillions (10^18)

For example, according toCoinwarz, the current Bitcoin Hashrate asofJuly 26th, 2024, is733.41 EH/s exahashes persecond.

• 1 exahash is1 quintillion (10^18) hashes persecond. This means 688 quintillion guesses are being submitted tothe blockchain everysecond.

• Historical Comparison: OnJuly 26th, 2023, the hashrate was 379.55 exahashes per second, indicating that itwas 48.24% cheaper tomine Bitcoin just ayearago.

Interactive Hashrate Graphs

You can check out aninteractive graph ofBitcoin hashrate inexahashes onCoinwarz.

• 1 exahash per second = 1 quintillion hashes submitted persecond.

For viewing interahashes, visit Blockchain.com.

• 1 terahash = 1 trillion hashes submitted persecond.

Understanding these metrics helps tocomprehend the complexity and cost associated with Bitcoinmining.

Understanding Bitcoin Hashrate

Hashrate iscommonly defined asthe speed atwhich aBitcoin mining machineoperates. Inthe context ofBitcoin, hashrate refers tothe number ofcomputations that hardware can perform per second asitworks tosolve the cryptographic puzzle.

Asmore miners join the network, the network hashraterises. The higher the Bitcoin hashrate, the more difficult itistoattempt toattack Bitcoin.

How Hashrate Works

Bitcoin miners and hashrate are inexorablylinked. Miners provide the hashrate tothe network inexchange for the newly issued Bitcoin and transaction fees.

OnaBitcoin only exchange such asSwan, orcrypto exchange with higher fees such asKraken orCoinbase.

1) What isBitcoinMining?

Bitcoin mining involves adding new transactions tothe blockchain and securing thenetwork. Miners use powerful computers tosolve complex mathematical puzzles, validating transactions. Miners are rewarded with newly minted Bitcoin for theirefforts. Learn more about the Byzantine Generals Problem and mining costs.

2) What isSHA-256?

SHA-256 (Secure Hash Algorithm 256-bit) isthe cryptographic algorithm used inBitcoinmining. Ittransforms transaction data (block header) into afixed-size hash value using proof-of-work.

3) What isaNonce?

Anonce isaspecific value miners must find toproduce ahash with certain characteristics. Itisanumber used only once inthe cryptographicprocess.

4) How DoMiners Find theNonce?

Miners use trial and error tofind thenonce. They continuously change the nonce value and run itthrough the SHA-256 algorithm until they find ahash that meets the requiredcriteria.

5) What isaBlock Time?

Bitcoin’s protocol adjusts mining difficulty every 2016 blocks (approximately every two weeks) tomaintain anaverage block time ofabout 10minutes. This ensures asteady and reliable rate ofnew blockadditions.

The Role ofMiners

Miners are computers that perform the computations for the Bitcoinnetwork. Hashrate represents the number ofcomputations persecond. Asmore miners join the network, the hashrate increases, making itharder for asingle entity toaffect thenetwork.

Key Points

• Computational Guesses: Solo miners could spend years without solving ablock and getting paid, due tothe random nature ofthe computations.

• Mining Pools: Tomitigate this risk, many miners join miningpools. Pools combine computing power, raising the probability ofsolving ablock and resulting inmore frequent, smallerpayouts.

Mining Pools Explained

• Increased Probability: Bypooling hashing power, miners improve their chances ofsolving ablock.

• Frequent Payouts: Participants inmining pools receive more regular, smallerpayouts.

Comparison

• Lotteryvs. Bond: Mining pools are like playing the lottery versus buying abond, with the bond paying interest inBitcoin instead offiatcurrency.

Swan’s Yan Pritzker explains Bitcoin mining asalottery system inthis Twitter thread.

The Impact ofHashrate onBitcoin

Security Implications

Ahighhashrateinthe Bitcoin network:

• Acts asashield against potentialattacks.

• Safeguards the integrity oftransactions.

• Enhances the trust and reliability ofthe decentralizedsystem.

Asmore miners join the network, the difficulty ofmining adjusts tomaintain aconsistent blocktime. This mechanism:

• Ensures smooth networkoperation.

• Reinforces security bykeeping mining competitive and resource-intensive.

Ahighhashrateimplies substantial computational power dedicated tomining and processing transactions. This makes the network robust and secure against potential threats bymaking attacks cost-prohibitive.

Hashrate and Bitcoin’s Value

When comparing Bitcoin’s price movement with its hashing power:

• Bitcoin’s price fluctuates significantly.

• Hashrate follows arelatively steady upwardtrajectory.

Some argue that:

• Hashrate leads topriceincreases.

• Miners position themselves for profits during price run-ups.

Understanding the correlation betweenhashrateand Bitcoin’s value provides insights into market dynamics and networksecurity.

Some would argue that hashrateleads price, oreven causes price toincrease.Others may say miners are positioning themselves tomake windfall profits when the price runs upinevitably.

Challenges and Risks

Regarding Bitcoin’shashrate, it’s essential tobeaware ofpotential risks thatmaythreaten the network’s stability andsecurity. Here’s abreakdown ofsome key risks tokeep inmind:

1) 51% Attacks: Quelling the Majority Menace

Risk: A51% attack occurs when anindividual orgroup controls more than half ofthe network’shashrate, granting them significant power tomanipulate transactions ordouble-spendcoins.

Such attacks can undermine the trust and integrity ofthe Bitcoin network, potentially leading tofinancial losses and aloss ofconfidence inthe cryptocurrency.

Mitigation

• 51% attacks are only possible ifone entity, likely amining pool, controls over half thehashrate.

• Pool operators would need malicious intent,which would likely destroythe value they havecreated.

• Switching mining pools iseasy, somany miners would leave apool ifitapproached 51% ofthe networkpower.

2) Contentious Hard Forks: Splitting the Blockchain

Risk

• Ahard forkhappens when aprotocol upgrade creates rules incompatible with the existingblockchain. Contentious hard forks occur when there isdisagreement within the community about the changes, leading toasplit and the creation ofanew cryptocurrency.

• These forks can cause confusion, disrupt transactions, and impact network security andstability.

• They occur when there isadisagreement among the community about the proposed changes, leading toasplit inthe blockchain and the creation ofanew cryptocurrency. These forks can cause confusion, disrupt transactions, and potentially impact the security and stability ofthe network.

• Theblocksize war, involving Bitcoin and Bitcoin Cash, revolved around the debate onthe optimal block size limit for processing transactions.

• Bitcoin Cash, which split from Bitcoin in2017, increased the block size limit toimprove scalability but has since become lessrelevant.

Mitigation

• Bitcoin’s strength lies inits decentralized nature and consensusmechanism.

• During the blocksize war,influential entities likeCoinbaseand significant portions ofthehashratesided with big blockers.However, their efforts were thwarted bynode runners and network users who stood firm intheir refusal toaccept the proposedchanges.

• Hashrate does not grant the power tocontrol the network; users running nodes that maintain Bitcoin’s ruleset still hold significantpower.

Byunderstanding these challenges, Bitcoin users and stakeholders can better navigate and mitigate risks, ensuring the continued stability and security ofthenetwork.

Measuring and Analyzing Hashrate

How Bitcoin Hashrate isMeasured

The BTC hashrate istypically calculated ashashes per second (h/s). The hash unit can beexpressed bysize:

Byanalyzing the time ittakes tomine ablock and the difficulty level ofthe network, one can estimate the total hashrate ofthe Bitcoin network.

Here are afew tools you can use tokeep aneye onoranalyze hashrate:

• Ifyou really want todig indeep, Luxor’s Hashrate Index isprobably your best bet.

• Ataglance, tools like TimechainStats can’t bebeat, but with agood amount offunctionality for those who want alittle more.

• For those who love summary visualizations, Time Chain Calendar isagood option for quick hashrateupdates.

Bitcoin Hashrate History

The higher Bitcoin’s price goes, the more miners will want tojoin the network, further adding tothe security and reliability.

Bitcoin Hashrate All Time High

835.86 EH/s

May 24, 2024 atblock 844,894

Swan Bitcoin HashRateUp Series

Newest Episode: July 14th, 2024— Energy & Bitcoin ASIC Development with Haris Basit

Inthis episode ofHashrateUp, wedive deep into the world ofBitdeer with Haris Basit the Chief StrategyOfficer. Join usasweexplore Bitdeer’s journey, their approach tovertical integration, and their groundbreaking advancements inASIC development. This episode provided adeep dive into Bitdeer’s strategic approach, technological innovations, and the challenges and opportunities inthe Bitcoin miningindustry.

HashrateUp isapodcast that delves into Bitcoin mining and exciting projects, utilizing hashrate production tounlock new potentials inthe broader energyindustry.

FAQ Section

What factors can affect Bitcoin’shashrate?

• Factors affecting hashrate and mining profitability include Bitcoin price, block reward, difficulty, the cost ofpower, and geopoliticalconditions. For example, after the halving, the block reward iscut inhalf, somany older miners may fall out ofprofitability and shut off, decreasing thehashrate. However, ifBitcoin’s price increases fast enough, those old machines may beprofitable toturn back on, resulting inasubsequent increase inthe hash rate.

What happens ifBitcoin’s hash rate decreases significantly?

• IfBitcoin’s hash rate decreases significantly, itmay take longer for blocks tocome inthan the 10-minute targetedaverage. Eventually, the network would reach the 2016 block limit and adjust the difficulty level accordingly. Depending onthe degree ofhash rate loss, this may have tohappen several times toreach the 10-minute target— though slow block times would likely increase the demand for block space, resulting inhigher fees and incentivizing more miners tojoin thenetwork. The network isaself-licking ice cream cone ofincentives that keeps things moving.

Can Bitcoin’s hashrate ever reach zero?

• Azero hashrate would imply the world hasended. Inthis case, your diversification into guns, ammunition, and general doomsday prepper goods and services may eventually behelpful. Inall seriousness, the answer tothis question isprobablynot. Similar toquestions about "what ifthe internet doesn’t work.” Well, then basically nothing else does either, sogood luck accessing your bank account.

What ifmining isbanned inmycountry?

• China banned Bitcoin mining in2021, which iswidely believed tohave chopped the head off the 2020 bull run, sotospeak. Since then, hashrate has nearly tripled, with foreign countries like Ethiopia experiencing the benefits rather than China. You can’t ban Bitcoin; you can only ban your country from benefiting.

Isn’t Bitcoin mining bad for the environment?

• Bitcoin mining does not waste energy; rather, itputs economic value onwastedenergy. Though hotly debated, those inthe know understand that Bitcoin and Bitcoin mining have the potential toradically transform the world’s energy infrastructure into acleaner, more reliable, and abundant energy system for everybody.

Let’s Wrap Up

Simply put, Bitcoin’s hash rate isarepresentation ofthe network’s power and security.

Hashrate represents the backbone ofBitcoin— itpowers the network and allows transactions tobesecurely processed, validated and added tothe blockchain.

While the concept istechnical, itprovides valuable insight into the health and growth ofBitcoin.Monitoring hashrate provides critical data that analysts can use toassess the overall security and state ofthe Bitcoinecosystem.

AsBitcoin continues todevelop, its ever-growing hashrate iscementing its position asthe most powerful and secure computational network inthe history ofthe world.

OnJanuary 25th, SwanannouncedSwan Mining, adivision ofSwan Institutional.

Whether you’re new toBitcoin oraseasoned enthusiast looking toexpand your portfolio with aBitcoinIRA.

Join Swan Bitcoin today!

For more information, please visitswan.com.