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The GeoHash algorithm is used to simplify indexing of geographic coordinates and to provide a simple mechanism for grouping coordinates to be approximately within grid cells of environmental variables.
Precision
GeoHash algorithm uses a precision parameter to determine number of bits used to encode the coordinates, and so the geographic precision that can be represented by the hash.
For precision=7, the maximum error in coordinate representation is 0.005 which equates to about:
1 degree of latitude is about 69.172 miles 1 degree of longitude varies a lot, but is about 57.9 miles at 33 degrees latitude.
So 0.005 degrees corresponds to about 0.5 km latitude and 0.46 km longitude, so roughly 1/2 km precision is available with a precision parameter of 7 in the geohash algorithm.
Configuration
The site uses a precision of 7 for the geohash algorithm, and is set by the settings module entry "GEOHASH_PRECISION".