[Knowledge Mining Q&A] On March 12, there was no Bitcoin block for an hour. Was it because the miners shut down their computers?

On the evening of March 12, 2020, the block height of 621343 took 1 hour to be generated. Many netizens believe that this was caused by the sharp drop in the price of the currency, and the panic shutdown of miners, which led to an instant drop in computing power. Is this really the case?

01

Restoring the facts

Let’s restore the situation at that time.

The block time at that time:

(Figure 1) Source: https://btc.com

As can be seen from the above figure, the longest block generation time was 1 hour (block 621343#), and the shortest was 1 minute (block 621349#).

The computing power of the entire network at that time was:

(Figure 2) Source: http://tinyurl.com/td3fjrk

At that time, the computing power of the entire Bitcoin network did not fluctuate drastically due to the rapid drop in the price of the currency. Therefore, the reason why the block generation time of block 621343# was as long as 1 hour was not caused by the miners shutting down and causing a sudden drop in computing power.

Moreover, the block generation time of the next few blocks was only a few minutes. According to the above statement, the reason for this is the surge in computing power. This is obviously inconsistent with the actual situation. The fluctuation of block generation time is normal!

02

Fluctuations in Bitcoin block time

Bitcoin mining is an independent random event. Finding a result that meets the requirements through hash operations depends not only on the size of the computing power of the entire network, but also on luck (probability). Good luck and bad luck both correspond to low-probability events. For example, block 621349# in (Figure 1) was found in one minute, which is a low-probability event with good luck, while block 621343# took an hour to be mined, which is a low-probability event with bad luck.

There is a web page that can query the longest block time record. Two pages are intercepted as follows:

(Figure 3) Website: http://blockchainsql.io/wkeno3

As can be seen from the above figure, there are quite a few block times that exceed one hour, and some block times that exceed one day. In the case of no significant fluctuations in computing power, it is indeed a low-probability event that the block time exceeds one hour, but a low probability does not mean unreasonable. This situation of not being able to produce a block in one hour will happen again in the future. It may be that the computing power has really dropped, or it may just be a low-probability event of bad luck. If similar things happen in the future, don't panic blindly. You can first check the real-time computing power of the entire network and the average block time in the corresponding time period to learn the truth of the matter as soon as possible.

03

Bitcoin’s Difficulty Adjustment Mechanism

Let’s take a closer look at Bitcoin’s difficulty adjustment mechanism.

The average block time of Bitcoin is indeed related to the Bitcoin computing power. Bitcoin has designed a mining difficulty adjustment mechanism. The Bitcoin system stipulates:

The average block generation target time is 10 minutes.

The difficulty adjustment cycle of Bitcoin is 2016 blocks, so it is often said that the difficulty adjustment cycle of Bitcoin is 14 days;

The upper and lower limits of each difficulty adjustment are 4 times and 0.25 times the difficulty of the previous cycle respectively;

The Bitcoin network will adjust the next block based on the average block time of the previous difficulty adjustment cycle, but the range of adjustment is limited. For example:

For example, in the last difficulty adjustment cycle, the difficulty given by the system is D, and the average block time in this cycle is 8 minutes, which means that the computing power has increased in this cycle, making the average block time faster than 10 minutes. Then, in the next difficulty cycle, the Bitcoin system will adjust the mining difficulty to 1.25D, in order to maintain the average block time in the next difficulty adjustment cycle at 10 minutes. Conversely, if the average block time is greater than 10 minutes, the system will reduce the mining difficulty in the next difficulty adjustment cycle.

Difficulty adjustment formula D1 = D * target block time / actual block time of the previous block

Among them: D1 is the difficulty of the next difficulty cycle, and D is the difficulty of the previous difficulty cycle.

It can be seen that the adjustment of Bitcoin mining difficulty lags behind the actual changes in computing power.

The adjustable range of Bitcoin difficulty each time has an upper and lower limit, which is 4 times and 0.25 times the difficulty of the previous cycle respectively. Here is an example:

Assuming that in a certain difficulty adjustment cycle, the mining difficulty is D, the computing power surges, and the average block time is shortened to 1 minute, the difficulty of the next cycle can only be adjusted to 4D at most. If the computing power remains unchanged, the average block time in the next cycle will be 2.5 minutes. In the next difficulty adjustment cycle, the difficulty can be adjusted to 10D, and the average block time can then be restored to about 10 minutes.

Of course, given the current scale of computing power, the probability of this happening is extremely low. Even if it does happen, it can be dealt with after multiple adjustments.

On the other hand, if for various reasons, the computing power of Bitcoin plummets, causing the computing power of the entire network to drop, the rule that Bitcoin adjusts the difficulty every 2016 blocks will greatly extend the Bitcoin block time and significantly increase the congestion of on-chain transactions. Jiang Zhuoer has elaborated on the defects of this difficulty adjustment mechanism in the article "Talking about the Evolution of Bitcoin from the Perspective of Mining Difficulty Adjustment Algorithm".

Relatively speaking, the BCH difficulty adjustment algorithm is more adaptable in dealing with problems such as a sharp drop in computing power.

04

BCH’s Difficulty Adjustment Algorithm

The difficulty adjustment algorithm of BCH has a historical background. Because of different views on the development path of Bitcoin, supporters of large blocks forked BCH with a larger block limit. BCH inherited the mining difficulty of the original chain. At that time, the computing power supporting BCH was relatively small. Under the existing difficulty, the average block time would be much longer than 10 minutes. In order to cope with this unfavorable situation, the BCH difficulty adjustment algorithm attached a rule to the BTC difficulty adjustment algorithm. The modified difficulty algorithm is called EDA (Emergency Difficulty Adjustment Algorithm). The additional rules are as follows:

If the time difference between the production of six consecutive BCH blocks exceeds 12 hours, the difficulty coefficient will drop by 20%, and the activation condition will be after all 6 blocks are mined, not after 12 hours.

This algorithm allows BCH to survive in an unfavorable situation, but this algorithm also has obvious defects, which provides convenience for machine gun mining pool arbitrage. The difficulty of BCH decreases, and the income from mining BCH is higher. The computing power of the machine gun pool pours into arbitrage, the block time will be shortened, and the arbitrage space is gradually flattened. When the block height is an integer multiple of 2016, the difficulty will increase, and the computing power for arbitrage will be cut away, resulting in longer block time and lower difficulty. The computing power of the machine gun pool is cut back for arbitrage again, and so on and so forth, falling into the following cycle:

Difficulty decreases → arbitrage computing power flows in → block time shortens → difficulty increases → arbitrage computing power is cut away → block time increases → difficulty decreases…

It takes at most 2016 blocks to increase the difficulty, while it may only take 6 blocks to decrease the difficulty by 20%. This asymmetry of difficulty adjustment has led to BCH's block speed being much faster than BTC:

(Figure 4) BCH’s block generation speed is significantly higher than BTC

In the past three months, BCH has surpassed BTC by nearly 10,000 blocks, so the BCH difficulty adjustment algorithm was optimized based on EDA. The improved difficulty adjustment algorithm is called DAA algorithm, which took effect in block #504031. In short, it has the following features:

1. Adjust mining difficulty block by block;

2. The mining difficulty of each block is adjusted based on the computing power of the 144 blocks before it;

3. When the computing power changes exponentially, the network will quickly adjust the difficulty to ensure fairness

4. Avoid feedback oscillation caused by the mismatch between current computing power and target difficulty.

…

The above characteristics of the DAA algorithm ensure that even if the computing power drops by 50% instantly, it will only have a short-term impact on the BCH block speed. The DAA algorithm can quickly adjust the difficulty according to the actual computing power situation, so that the block time returns to normal levels.

By comparing the average block time under the two algorithms, we can see the advantages and disadvantages of the two algorithms in resolving computing power fluctuations:

(Figure 5) Data source: http://tinyurl.com/s3cd5q7

BCH's DDA difficulty adjustment algorithm is an optimized and iterated difficulty adjustment algorithm in an unfavorable environment. In an environment with a significant disadvantage in computing power scale, it has withstood the impact and test of large fluctuations in computing power. Compared with Bitcoin's existing algorithm, the DDA difficulty adjustment algorithm has stronger adaptability and vitality in dealing with large fluctuations in computing power.