According to Bitpanda, a hash function is a cryptographic function that “converts randomly entered data into a string of bytes with a fixed length and structure (hash value).” Blockchains use hash functions to verify transactions. Using hashes also improves the security of the blockchain.
Hashing works by converting words, sentences, data, numbers, etc. into a fixed-length alphanumeric code. There are many different hashing algorithms, but the one used by Bitcoin (SHA256) converts data into a 64-character long string of numbers and letters.
Identical pieces of data will always have the same hash value. As long as you use the same hashing algorithm, the number 2021 will always have the same hash value. In addition, the hashes will always have the same number of characters, no matter how long the input data is. You can enter an entire book and SHA256 will still create a 64-symbol hash.
As we have already said, each block of data in the blockchain contains the hash of the previous block. Since you cannot reverse engineer the input values (transactions) using the output hash, it is difficult to crack the blockchain. But here, we are interested in using hashes to verify transactions.
Therefore, once a cryptocurrency transaction occurs, it is not immediately written to the blockchain. Before it enters the database, miners around the world must solve complex equations to validate it. These equations include generating a hash equal to or lower than the “target” hash value. They do this by changing the individual values of the hashes called “nonce”.
The target hash is always randomly generated, so solving these equations can take a very large number of attempts. Whoever solves it will be rewarded in the form of a predetermined number of coins and the transaction will be recorded in a new block.
Thus, the hashrate represents the total computational power of the entire network, expressed in hash counts per second. At least in proof-of-work blockchains, such as ethereum and bitcoin.
For example, at the time of writing, the Ether hash rate is 408.13 terahashes per second (TH/s). However, there is also the hash rate of the individual hardware used to mine the cryptocurrency. It represents the total number of hash equations that a single piece of hardware can solve in one second. Different cryptocurrencies use different hashing algorithms, so the same GPU has different hashrates depending on the cryptocurrency you plan to mine.
In this article, we use the ethereum hashrate because this token is the most popular among miners. For example, RTX 3090 has a hash rate of 121 MH/s (million hashes per second). So, this GPU can solve 121 million hash equations per second, which is already a lot. RTX 3060 Ti has an arithmetic power of about 60 MH / s, but its MSRP is almost four times lower than RTX 3090. Now you know why you can’t find this card on store shelves. Miners love it.