In blockchain terms, the term hash rate refers to the computing power required to process bitcoin transactions and the speed with which blockchain data is processed and confirmed to create new blocks.
When a transaction of data is requested by a blockchain network user, it must be confirmed by a node on that network. In order for the transaction to be confirmed, a complex mathematical problem generated by algorithms built into a blockchain application’s source must be solved using the computing power of a node on the network (a miner). A mode must make numerous attempts at solving the problem. Each attempt is known as a hash. The more hashes a node can perform within a given amount of time, the higher the chance of that node performing the correct hash before another node does.
When this task has been completed, the transaction is recorded in a new block. This newly-generated block is then confirmed against the blockchain’s public ledger. If the new block is confirmed, it is added to the blockchain. If it is not confirmed, it becomes an orphan block.
In a broader sense of the term, a hash rate may refer to the entire processing power of all nodes on a blockchain network combined.
Hash rates may affect blockchain applications in many different ways. In the case of some proof of work blockchain applications, the higher the hash rate of a node on the network, the higher the preference given to new blocks generated by node over blocks generated by other nodes for the same transaction. In this type of blockchain application, it is possible for a node to temporarily or permanently dominate a network if its hash rate makes up more than 50% of the blockchain network’s total hash rate (see: 51% attack). A node’s hash rate may also influence its access to new, unprocessed transactions recorded in the mempool.