Understanding hash rate and its impact on your mining efforts
Whether you’re a seasoned crypto pro or brand new to the industry, chances are you’ve at least heard the term hash rate or hash power on a fairly consistent basis. But hearing the term and fully understanding its meaning are two dramatically different things. Here is a high-level explanation of what hash rate is to help you understand the impact it can have on your mining efforts and overall profitability.
What is hash rate?
Hash rate is ultimately a measurement of a miner’s performance. It is the speed at which a miner’s equipment operates and the speed at which a miner is able to successfully solve a block. It also measures the amount of a power a network of cryptocurrency is consuming in order to remain functional. Hash rate is measured in hashes per second, or h/s, and has several denominations used to refer to its varying levels. These denominations are easily understood by those familiar with computer storage terminology, as they include kilohash/s (1,000 hashes per second), megahash/s (1 million hashes per second), gigahash/s (1 billion hashes per second), and so on.
What is hash rate’s impact?
To give a more in-depth understanding of what this breakdown means, note that a rig operating at 100 h/s will make 100 guesses per second towards solving a block. So a hash per second is essentially a guess per second. When the difficulty of a network – like bitcoin, for example – goes up, it is as a result of an increase in hash rate, meaning more power and more guesses per second are needed to successfully solve a block. The difficulty of a network typically goes up when more miners join, so equipping yourself with more power and thus a higher hash rate will provide you with a greater opportunity to make money over the competition. The best combination of low difficulty, high hash power, and low electricity costs will return the greatest profit for the miner.
Hash rate and mining colocation
More popular digital currencies like bitcoin and certain altcoins are unable to be mined successfully at home as of late due to their increasing difficulty and hash rate required. You now need high-powered equipment in a location that will allow you to maximize your operation while minimizing electricity costs. This is the tremendous advantage of mining colocation. These high-powered, mining-dedicated facilities are constructed in locations with cheap electricity, allowing miners to set up their equipment and operate at an incredibly high hash rate without worrying about breaking the bank on power costs.
Mining colocation with Compute North
Compute North has built powerful colocation facilities equipped to handle complex operations at a low cost to the miner. The process begins with you outlining your power requirements and sending us your hardware, which we then set up in our secure, efficient, and cost-effective space. We then continuously monitor your equipment to help you maximize your mining efforts at the best possible return. Our facilities were designed specifically to handle blockchain infrastructure, with 24/7 surveillance, renewable energy resources, and more. Contact us today to reserve your mining space and help your operation reach its full potential.