What Is the Relationship between Hashrate Volatility and Network Security?
High hashrate volatility can temporarily compromise network security, especially for smaller coins. If hashrate suddenly drops, the network is vulnerable to a 51 percent attack until the next difficulty adjustment lowers the required hashrate for an attack.
Even for large coins, rapid fluctuations can lead to unpredictable block times. Stable, consistent hashrate is a sign of a healthy, secure network, as it implies a large, committed base of legitimate miners and reduces the window of vulnerability.
Glossar
Hashrate Derivatives
Instrument ⎊ Hashrate Derivatives are financial contracts, typically futures or options, whose value is derived from the underlying computational power dedicated to securing a Proof-of-Work blockchain, measured in hashes per second.
Hashrate Volatility
Measure ⎊ Hashrate volatility is a quantitative measure of the dispersion and rate of change in the total computational power securing a Proof-of-Work network over a defined time window.
Difficulty Adjustment
Mechanism ⎊ Difficulty adjustment is a crucial mechanism in proof-of-work PoW blockchain networks, particularly Bitcoin, that automatically recalibrates the computational effort required to mine a new block.
Required Hashrate
Hashrate ⎊ The required hashrate, within the context of cryptocurrency mining and associated derivatives, represents the minimum computational power, typically measured in hashes per second (H/s), necessary to maintain the security and operational integrity of a blockchain network.
Hashrate
Definition ⎊ Hashrate represents the total computational power per second that a miner or the entire network dedicates to solving cryptographic puzzles in a Proof of Work blockchain.