Key Takeaways:
- A good hash rate for mining cryptocurrencies is essential as it indicates the computing power of a mining machine and the security of the blockchain network
- The hash rate is measured by the number of calculations per second and is typically expressed in tera hashes per second (TH/s)
- While high hash rates are desirable, they come with significant electricity consumption
What is a Good Hash Rate to Start Mining?
The hash rate can vary heavily depending on the hardware you use.
A good hash rate should be at about a minimum of 100 TH/s (tera hash per second).
The hash rate is calculated by the number of calculations per second. 1 TH/s (tera hash per second) means there are a trillion hashes per second performed.
At the beginning of 2022, the hash rate for Bitcoin was at about 190 EH/s (Exa hashes per second) which amounts to 190 quintillion calculations per second.
This is much more than only one TH/s and this heavily varies depending on the machine you are using. You can still mine this digital currency, even if your machine has lower hash rates.
You will just need to wait longer to achieve a result compared to other machines with this exorbitant amount of hash rates. The higher your hash rate, the more likely you will get the next block reward.
Many miners join a mining pool because of these numbers. This can lower the mining difficulty for them. There are even specialized services where you can rent cryptocurrency mining hardware to take part in this process without needing your own hardware.
A miner should always consider the amount of electricity consumption needed to run a mining computer. It requires a lot of electricity to run mining machines.
Mining farms are often maintained in countries where electricity costs are at a minimum. Otherwise, they could be too high, so profits would be too low.
What is the Hash Rate in Mining?
Hash rate is the measure of the computing power of a mining machine and the blockchain network.
It represents how much processing power is being used to secure and process transactions.
The higher the hash rate, the more secure the network gets. It means that more miners invest more resources into the mining process.
This increases security because a hacker would need more than half the amount of the network’s computing power.
The more power it has, the less likely a hacker can accumulate this much power. Hash rate also affects the blockchains transaction fees. Higher hash rates mean more miners. They prioritize transactions with higher fees to maximize their profits.
As a result, higher hash rates can lead to higher fees. Overall, the hash rate is an indicator of how much value the network is given to. It is valuable to invest in mining hardware, if Bitcoin has high value.
Some of the popular cryptocurrencies using proof-of-work concepts are Bitcoin, Dogecoin, Litecoin or Monero. Ethereum used it as well in the past, but switched in late 2022 to the proof-of-stake consensus.
How is a Hash Rate Measured?
Hash rate is measured in H/s or hashes per second.
It is the measure of the computing power of a hardware.
Hashes per second mean how many calculations per second a machine can perform. In Bitcoin’s mining process, one calculation equals one guess. The mining machine tries to guess a target hash, which is an alphanumeric code.
The more hash rate it has, the more guesses it can perform per second. With high hash rates, a machine can perform much more guesses per second and is therefore faster.
The entire network comprises many mining machines and their total computational power is measured in total hash rate (TH/s) or total hash rate per second.
It is a measure for a whole cryptocurrency network and shows how secure a network is. If a new cryptocurrency would have a network with low hash rates because there are not a lot of miners, then it is much easier to hack it.
As a side note, it can be confusing because TH/s not only means total hash rate per second, but also tera hash per second. Try to keep that in mind so you don’t confuse them.
With low hash rates, relatively weak machines are already enough to attack such a network. The higher the hash rate, the more miners work for the network and secure it from manipulation.
It is further an indicator of how hard it is to compete in the mining process. You need more powerful machines if miners upgrade their hardware, too. Today’s mining machine can perform billions of calculations per second.
Hash rates are not measured in H/s but in Giga hashes (GH/s), tera hashes (TH/s) or Peta hashes (PH/s). There are even calculators on the internet where you can calculate the hash rate of your computer.
Why is Bitcoin Hash Rate Important?
Hash rate is a key indicator for Bitcoins’ health.
High hash rates are an indicator for more value Bitcoin is believed to have so the prices for it increase.
A miner with high hash rates available could decide to mine another cryptocurrency. If he decides to mine Bitcoin, this means that it is more valuable to mine. Miners look where they can make the most profit with their equipment.
If they can solve the problems faster, then their chances increase to mine the new block and get the reward for it. This is because they compete with other miners to find the next target hash faster than anyone else.
More miners competing means that the difficulty of mining crypto increases as well. The higher the difficulty, the more secure the network gets. This is another important factor of hash rate for a cryptocurrency.
Miners not only increase the difficulty, but they also increase the barrier for hackers to try malicious attacks on a crypto network. A hacker needs to compete with his hardware, too.
The higher the hash rate, the more computational power a hacker would need to try an attack. This is because the blockchain works with a majority principle. Changes in the network have to be approved by the majority of miners.
If a hacker now tries to alter the blockchain by presenting his block, then the network will only accept it if the majority accepts it. But because a hacker would provide incorrect data, the network would check it and reject the data.
If a hacker would more than half of the network’s hash rate, then he could validate it by himself because he would be the majority. With high hash rates in an extensive network, this won’t happen as easy.
What Are Average Hash Rates for Cryptocurrencies?
The current hash rate in Bitcoins network amounts to 390 EH/s as of January 2023.
The hash rate needed to mine 1 BTC depends heavily on your circumstances.
It depends on your hardware and the time it takes to mine a Bitcoin. If you would buy a mining machine, also known as ASIC miners (application-specific integrated circuit), you would have a good setup.
But even a good ASIC miner with a hash rate of about 140 TH/s, costing about 18k dollars, would need about 2,000 days to mine 1 BTC. Because you would validate transactions besides it, you would get paid in transaction fees, too.
This would make you a profit every month, but as you can see, with solo mining, you wouldn’t mine bitcoins fast. Because of this, most miners work together in mining pools.
In these pools, miners collaborate by adding their computational power, so the mining pool gets a high hash rate. This way the time is extremely short to mine a Bitcoin. Instead of waiting months or years, now they can mine Bitcoin in a few days.
Of course, the rewards need to be split over all miners. This minimizes the profit, but overall mining gets profitable that way. In addition, the Bitcoin halving lowers the rewards by half every four years.
Therefore, companies build mining farms in countries with cheap electricity to mine Bitcoin at scale. This allows for maximizing profits.
We hope you have been able to gain valuable insight into the factors contributing good hash rates to mine crypto. Today it is hard to mine crypto by yourself with good profits, so it is best for most people to join mining pools instead.
FAQ
Ethereum (ETH) Mining Hash Rate
Ethereum has switched from proof-of-work to proof-of-stake in 2022.
Therefore, Ethereum cannot be mined anymore.
The last Ethereum was mined in September 2022 and the hash rate of the network was at about 1 PH/s. Since the switch to the proof-of-stake consensus, no ETH can be mined, so this topic is not relevant anymore for miners.
They now have the possibility of either switching to Bitcoin or another currency or to stake their ETH to generate further profits in Ethereum. At this time, the Bitcoin network had a hash rate of about 240 EH/s.
At the beginning of 2023, the hash rate was at about 390 EH/s, so eventually a lot of miners changed to Bitcoin giving it this increase in hash rate in a few months since then.
What Makes the Hash Rate Higher?
Hash rate is a measure of computing power.
Upgrading a computer increases the hash rate.
You can do this in the same way as you would update a computer, either buy a more powerful one or upgrade parts of your current computer. Investing in the best possible hardware will give you the most potential out of your money.
If you go for a specialized mining hardware, you can achieve much higher hash rates. But even if you have such powerful hardware, it could take up to years until you finally mine Bitcoin.
To be more profitable, joining a mining pool could be a great alternative.
What Happens When the Hash Rate Changes?
When the hash rate changes, it affects the security of the blockchain.
When the hash rate increases, it means more computational power is used, which needs more electricity.
Mining becomes more difficult. The network security increases as it becomes bigger. This makes it less likely for attackers to hack the network. If the hash rate decreases, the competition is lower, meaning it is easier to mine crypto.
Less electricity is used, but the network is not as secure anymore. Hackers are more likely to form a majority and then can alter the blockchain.
This is not a big problem today because even if the hash rate decreases, it is that high that no one can actually alter the data.
Conclusion: What is a Good Hash Rate?
A good hash rate is essential for mining cryptocurrencies. It indicates the computing power of a mining machine and the security of the blockchain network.
A higher hash rate leads to increased network security and makes it more difficult for hackers to manipulate the network. The hash rate also affects transaction fees and the overall value of the network. While high hash rates are desirable, they require significant electricity consumption.
