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Bitcoin has surpassed another milestone on Thursday, August 8th, as the world's leading cryptocurrency's hash rate hits 80 quintillions for the first time. This news comes at a good time for bitcoin, where bitcoin was being valued at over 12,000 U.S dollars. So what exactly is a hash rate and why does it matter.
What Is Hash Rate
Hash rate is the measure of the processing power of the bitcoin network. In other words, it's the processing power of all of the computers mining bitcoin. When Bitcoin is being mined computers must solve a complex mathematical puzzle. The hash rate is the measure of these computers mining that. Sence the miners of Bitcoin is what secures the network and allows transactions, that means the hash rate is also a measure of the security of the network. Some may get confused and think that because there is a higher hash rate that bitcoin can be solved faster but this isn't the case. Bitcoins network is programmed to mine a block every 10 minutes, this is achieved by adjusting the mining difficulty.
Why Is This Important
The hash rate is important because it shows how secure the network is from attacks like a 51% attack. A 51% attack is caused when one person or group controls more than fifty percent of the hashing power. When this occurs they can create and change transactions to the way that they would like. This basically no longer makes it a secure currency. While no one group controls all 51% of the hashing power Research by academics from Princeton and Florida Universities from October 2018 shows that 74% of Bitcoins hash power is controlled by mining pools that are operated by companies or individuals in China. Theoretically, this might give China significant power over the Bitcoin network.
What would this mean to Investors?
In general, this is very good news for investors, and this leads to the current bullish sentiment with bitcoin. The hashing power is incredibly important to make people feel secure and comfortable using bitcoin as a payment option.