Explanation
Rising hash rate signals more investment in security, but also more competition between miners and therefore lower margins per machine.
What it measures
Hash rate is the number of attempts per second the entire network makes to find a valid block, expressed in exahashes. It is the direct measure of what attacking the network would cost: the higher, the more expensive an attack. The figure is an estimate, derived from how quickly blocks are found.
How analysts use it
A falling hash rate usually indicates miners dropping out due to low prices, power outages or heat in Texas. A sharply rising hash rate means new machines are coming online — a sign of confidence, but also of coming dilution for existing miners. The link to price is loose: hash rate follows price more often than the reverse.
Key takeaways
- Higher = more expensive to attack.
- It is an estimate, not an exact measurement.
- It follows price more often than it predicts it.