What’s hashrate? A beginner-friendly 2026 guide

Cryptocurrency miners harness computational power to solve cryptographic puzzles with rapid-fire guesses. These attempts create hashes, and hashes that solve the puzzle create the next block on the chain. Put simply, hashrate is how much computational power a mining rig has.

The total hashrate in a blockchain network influences many of the factors that let proof-of-work (PoW) consensus mechanisms function smoothly. These include network security, mining rewards, and how difficult it is to mine a new block.

In this guide, we’ll explore what hashrate is, how it works, and why it matters. We’ll also look at what the hashrate is on Bitcoin and other major blockchains, and how mining rewards affect your taxes.

How is hashrate measured?

Hashrate, also called hashpower, is measured by how many hashes a miner produces per second. The higher the hashrate, the better the chance of solving the next block. 

Hashrate is exponentially large, so miners use units like MH/s, KH/s, and GH/s to mean how many hashes per second they’re performing. Here are the most common hashrate measurements:

• Kilohash (KH/s): 1,000 hashes per second. Mining hardware at this hashrate is now obsolete. In the early days of Bitcoin, when the network was still tiny, CPUs and even smartphones could compete.
• Megahash (MH/s): 1 million hashes per second. The GPU era brought hashrates into the MH/s range. Hashrates with this degree of computing power are also too slow to be successful against what Bitcoin’s hashrate is today.
• Gigahash (GH/s): 1 billion hashes per second. This hashrate isn’t powerful enough for Bitcoin and other major PoW networks, but it can hold its own on smaller blockchains.
• Terahash (TH/s): 1 trillion hashes per second. This is where dedicated mining hardware like ASICs becomes a viable option, even for cryptocurrency networks like Bitcoin.
• Petahash (PH/s): 1 quadrillion hashes per second. Individual mining rigs can’t reach PH/s’ scale alone, but it’s well within reach for blockchain mining farms and midsize pools.
• Exahash (EH/s): 1 quintillion hashes per second. Only the biggest mining pools can produce this much computing power. Bitcoin’s total hashrate, for example, is measured in EH/s.

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Why does hashrate matter?

Hashrate is one of the most important elements that keeps blockchain networks up and running. Here are the main components it impacts.

Network security

The reason PoW blockchain networks have miners solve cryptographic puzzles is to improve the blockchain’s security. This system prevents miners from tampering with the transaction history by capturing 51% or more of the total hashpower, which would let bad actors replace recently confirmed blocks to double-spend coins.

The computational power needed to reverse a transaction – especially on a major blockchain like Bitcoin – is beyond the reach of all but huge corporations and wealthy nation-states at the time of writing.

Mining difficulty

Hashrate works as a way to balance mining speed. When the hashrate rises from more computational power (whether that’s more miners or stronger rigs), the cryptographic puzzles become more difficult to solve; lower hashrates make solving them easier. 

These fluctuations keep block production time relatively stable. The Bitcoin protocol refreshes roughly every two weeks (2,016 blocks) and targets a block production time of about 10 minutes to create a cushion for new blocks to move through the network. Other PoW cryptocurrency networks use different targets.

Market value of the underlying digital asset

Rising hashrates indicate miner confidence in the long-term viability of a blockchain – more people are joining, or the current miners are investing more resources into the chain. When confidence grows, traders are more likely to invest in the blockchain and its corresponding digital assets.

What influences total hashrate changes?

Many different factors contribute to the overall hashrate on Bitcoin and other cryptocurrency networks, such as:

• Mining hardware advancements: As mining hardware gets more powerful and miners adopt the new tech, overall hashrate increases too.
• Energy costs: Mining hardware uses a lot of electricity. When energy prices go up, mining profitability dips, pushing some miners offline.
• Market price fluctuations: When the price of a digital asset goes up, the potential rewards increase, and more miners join the network. When it goes down, mining profitability goes down too, and some miners choose to switch to other blockchain networks or sell off their hardware.
• Halving: Some PoW blockchains, including Bitcoin, periodically halve the block reward. This keeps inflation in check by slowing the production rate of new coins.
• Regulatory considerations: When countries loosen or tighten regulations on crypto mining, total hashrate tends to increase or decrease with it.

What does a high total hashrate mean for miners?

A high total hashrate is a sign of a healthy network. The blockchain is more stable, more competitive, and less reliant on single miners, which boosts overall security by making attacks more expensive. This gives larger mining pools an edge and makes solo mining less feasible.

Risks and common misconceptions about hashrate

Low total hashrate can lead to serious problems for cryptocurrency networks. Here’s a look at the risks and common misconceptions of hashrate dips.

Risks

• Centralization: Decentralization is the heart of blockchain. If total hashrate dips too much, it’s easier for hashrate-stacked mining pools to take outsized shares of block rewards.
• Economic non-viability: Higher hashrates require more power to run, which can get expensive fast for solo miners.
• Market volatility: Significant changes in the underlying digital asset’s price can quickly eat into miners’ profit margins.
• Hardware obsolescence: As mining hardware improves, previous generations are phased out and the mining rewards they generate no longer cover operating costs.

Misunderstandings

• Hashrate is the only measure of security: There are many other elements that influence the security of Bitcoin and other blockchain networks, including decentralization and code transparency.
• High hashrates waste energy: This point is subjective. People who value blockchain technology believe its benefits justify the energy usage.
• Low hashrates immediately compromise the network: Mining difficulty adjusts downward when hashrate drops, compensating for the reduction in computing power.
• Two mining pools control over 51% of Bitcoin’s total hashrate: At the time of writing, Bitcoin’s two top mining pools, Foundry USA and Antpool, control less than half of the network’s total hashrate. 
• Hashrates accelerate transaction speeds: Since mining difficulty changes to maintain a target block time, increases in hashrate don’t affect how long it takes for a block to be confirmed in the long run.

Tax considerations for miners

In the United States, mining rewards are taxed as ordinary income on the day they’re mined. The taxable amount is based on the fair market value of the mined digital asset, or the average price at time of purchase across exchanges. So if someone earned one Bitcoin mining reward, they’d be taxed on that 3.125 BTC minus gas fees.

When a user sells mined crypto, they’ll also need to pay capital gains (or loss) tax – the same as selling crypto purchased on an exchange.

If you mine crypto as a business, you can deduct depreciation of your mining hardware under Section 179. Hobbyists don’t get this benefit.

Get your crypto tax reporting right with CoinTracker

Hashrate is foundational for keeping PoW blockchain networks decentralized and secure, and the rewards you earn for mining are taxable digital assets. Miners need to keep track of these rewards so they can accurately report their ordinary income during tax season. But if you’re mining regularly, this can become an overwhelming amount of transactions to track manually. CoinTracker connects to thousands of digital wallets and exchanges to keep all your crypto transactions in one place. 

Stay informed and in control of your digital assets. Continue your journey with our comprehensive crypto glossary.

Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.