Bitcoin hashrate: What is it, why is it important, where is it expected to head in 2022?

cnbctv18.com:

Crypto hashrate, the computing power of Bitcoin’s network, has dropped sharply in recent days following a deadly uprising in Kazakhstan that saw an internet shutdown impacting the country’s fast-growing crypto industry. After China clamped down on crypto mining, Kazakh became the second-largest Bitcoin mining country after the United States, per a Cambridge Centre for Alternative Finance report. According to a Reuters report, Kazakhstan accounts for 18 percent of the world’s hashrate.

And after the internet shutdown, the hashrate has seen a 14 percent drop in the major crypto mining pools—a group of minders that team to create bitcoin. However, it is not new. The hashrate has seen a lot of volatility in 2021.  There was a substantial impact on the ‘hashrate’ or global computer power of the bitcoin network due to China's ban on mining activity—the biggest mining center in the world until then.

The ban led to an over 50 percent drop in hashrates in July 2021 to about 85 exa hash per second (EH/s) on a seven-day average.Also Read // Bitcoin network power slumps as Kazakhstan crackdown hits crypto minersSince then, however, hashrates have recovered. In December, the rate touched a new record high of 182 EH/s as mining operations shifted to North America (Canada and America) and Kazakhstan.

All signs point to the hashrate will only increase from here. But why is hashrate so important, and how will it impact the bitcoin economy? Here are answers to some frequently asked questions.  What is hashrate? Hashrate is the measure of computational power used to verify transactions and add blocks in a Proof-of-work (PoW) blockchain. The two biggest blockchains networks globally, Ethereum and bitcoin, are PoW blockchains that utilize