And how does it work?

Bitcoin miners convert energy into security. They ensure the network cannot be comprimised as the incentive to secure the network is higher than the incentive to attack the network.

The miners compete to find the next block by solving a puzzle that will confirm the transactions into the blockchain. The successful miner(s) receive new bitcoins as a reward for their work.

This is fundamental to why bitcoin is the most secure computer network ever invented.

Bitcoin mining is the definition of capitalism – it rewards productivity and efficiency. The more people that mine the harder it becomes to find a block.

hash rate is the measurement computational power of all the bitcoin miners currently on the network

Explanation

Mining hashrate is a key security metric. The more hashing (computing) power in the network, the greater its security and its overall resistance to attack. Although Bitcoin’s exact hashing power is unknown, it is possible to estimate it from the number of blocks being mined and the current block difficulty.

Notes

Daily numbers (raw values) may periodically rise or drop as a result of the randomness of block discovery : even with a hashing power constant, the number of blocks mined can vary in day. Our analysts have found that looking at a 7 day average is a better representation of the underlying power.

Methodology

The hashing power is estimated from the number of blocks being mined in the last 24h and the current block difficulty. More specifically, given the average time T between mined blocks and a difficulty D, the estimated hash rate per second H is given by the formula H = 2 32 D / T