Hashrate and China

The word Hashrate is associated with Bitcoin mining.

In the Bitcoin network, a new Bitcoin is issued to a “miner” as a block reward for solving a block. This is done by using special hardware to solve a complex computational problem. The result of such a problem solving brings the miner to a hash- a random 64 character output.

To find the hash number the miners use the SHA-256 Cryptographic Hash Algorithm. Once the hash is found, the block is closed and is added to the blockchain. For this addition, the miners are rewarded with Bitcoins.

Thus Hashrate can be said as the speed at which a miner arrives at a hash ie. the number of times a hash function is computed. In other words, Hash rate is a measure of the power of the computers linked to the Bitcoin network, which determines their ability to produce new coins.

On a side note, in mid-September, Bitcoin surpassed the hashrate of over 100 quintillion hashes per second. By the end of October it reached 114 quintillion hashes per second.

A Bitcoin network is said to be compromised, if any one or group of miners take over 50% of the network. But when there is a higher hashrate, it becomes more difficult to take over a network. A higher hashrate also shows the confidence of the miners, in that they are willing to deploy the sufficient energy requirements to solve for a hash.

This brings us to China. China accounts for the 65% of the world’s mining power, according to a Bitcoin Mining Map, released by Cambridge University. About half of the country’s hash rate is produced in just one place, the autonomous Xinjiang region, which makes up 35.76% of the global total. This high hashrate is mostly due to the availability of cheap energy resources though it has only around 400 nodes compared to more than 2600 nodes in USA, followed by Germany, France and Netherlands.

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Shreesha S
Shreesha writes about Business, Finance and Tech for The Snippets Journal. He is also the Founder and Head of Content Development.
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