Home
News
- 1 Terahashes per second is a unit to measure hash rates, with 1 terahash per second equal to 1 trillion hashes per second.
- 2 It is a unit to measure the computing power of a system that can be used to operate a blockchain or mine a cryptocurrency.
- 3 Hash rates are very important indicators for comparing blockchains on various grounds, especially for crypto miners.
Terahashes per second, denoted by Th/s or THps, is a unit of computing power that a system is capable of performing. It is a measure of the amount of processing power required to solve a complex mathematical problem that will perform an algorithm on a computer system.
1 terahash per second is equal to 1 trillion hashes per second, which means the system is capable of generating that many hashes in a second. This is an indication of computing power of the system as it shows how many transactions it is capable of performing in a second.
In cryptocurrencies, mining is performed with the help of computers by solving highly complex mathematical puzzles (with variables up to millions in an equation). When the puzzle is solved, a block is added to the blockchain, which for mining, represents the addition of a new token of the currency. It’s a way to verify the amount of token mined in that particular process without defrauding the ledger.
What is Hashing in Crypto?
Hashing is a technique of cryptography which transforms any given key or a string of characters into a shorter value for easy retrieval of the original key. Generally, the hash is a number sequence with alphabets and special characters in order. Hence, it’s a fixed-length value representing a key making it easier to locate and employ it.
In the context of computers, a hash refers to a fixed length output corresponding to an input of variable length. The hash will contain multiple characters, but its length will remain constant even though the length of the input will keep on increasing. This will be recorded in hash with the change in pattern of the various characters of hash.
In a blockchain, the input data is recorded on a block. The data could be anything— transaction amount, transaction activity, execution of a condition etc. Therefore, each block is assigned a hash to keep track of the block and propagate the chain. In a nutshell, each new block generation is associated with a new hash generation.
Cryptocurrency mining, done to generate a new token, is the addition of this new block to the blockchain. What miners do is they solve complex mathematical equations to reach the hash to add the new block. Furthermore, it’s not limited to just mining. Any transaction that generates a block requires the network nodes to give consensus to validate the transaction.
The way this is done differs with different consensus mechanisms of the network. But overall, it can be said the rate of hash generation is a clear indicator of how much data a system can compute in a given time.
Significance of Hash Rates
Hash rates are used to determine the difficulty it would take to mine a certain cryptocurrency and the speed of transactions for a blockchain as the hash rate of generation of one block. When it comes to mining, this number indicates what kind of computing power a miner needs.
Miners in a Proof-of-Work blockchain compete with one another to mine a coin, such as in the case of Bitcoin. The first one to solve the mathematical equation gets to add the new block and get the reward. Hash rate could be an important indicator of the probability of a miner winning the race.
Networks involving a large number of users will have a large number of validators, therefore, having very high hash rates. Thus, hash rate can also be a measure of a network’s security. The higher the hash rate, the more difficult it is for a malicious party to hack the system.
Hash rate is also important for investors as they indicate the amount of traffic on the network. A higher hash rate can be a sign of higher demand for the cryptocurrency by traders and miners.
It is also an indicator of the environmental footprint of a network, though not always. When it comes to mining, a higher hash rate means more energy consumption of the network. But for consensus mechanisms that don’t use PoW, that’s not the case. Since it is an indicator of energy consumption, it will determine the electricity costs of mining a crypto. This determines the profitability of mining a cryptocurrency in correlation with the mining rewards.
For example, when Bitcoin was launched in 2009, it could be mined by a regular desktop, but as more BTC came in and the demand surged, it required more advanced computers. The hashing algorithm used by Bitcoin is the SHA-256 (Secure Hash Algorithm), which was developed by the US National Security Agency (NSA).
The current hash rate of Bitcoin (a PoW blockchain) is 343.83 million terahashes per second, while that of Ethereum (a PoS blockchain) is 9.82 terahashes per second. This can only be achieved by using heavy power ASICs.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
