The Bitcoin Mining Index has continued to grow in recent years. How will it perform in 2019?

Mining pools and ASICs change the rules of the game

Generally speaking, miners in large mining pools come from all over the world. Before 2010, people could mine Bitcoin with central processing units (CPUs); afterwards, an anonymous person named Artforz used graphics processing units (GPUs) to mine Bitcoin, which became a hot topic in the Bitcoin community. In July 2010, Artforz said he mined 1,700 Bitcoins in 6 days, accounting for about 4% of the world's computing power. In less than three months, someone claimed that "Artfarm" controlled 20-30% of the computing power of the entire network.

In September 2012, the second year of the nascent BTC network, the processing capacity was only 1000000000000 (10 trillion) hashes per second.

A year before Artforz created GPU Farm to mine Bitcoin, Satoshi Nakamoto said: "We should have a gentleman's agreement to postpone the GPU arms race as long as possible for the benefit of the network; new users can join without worrying about GPU drivers and compatibility, so they can get started quickly, and I am glad that now anyone with a CPU can participate in fair competition." In November 2010, the GPU arms race led to the establishment of mining pools, when Marek Palatinus (Slush) created the first mining pool, SlushPool. Due to the addition of GPU-enabled computers, mining became very difficult for others. Joining mining pools and sharing profits began to gradually become popular, and in the summer of 2011, FPGA appeared.

Artforz was one of the first individuals to set up a GPU mining farm, and was estimated to control 20-30% of the network's hashrate in 2010.

Many miners realized that once FPGAs were created, specific integrated circuits (abbreviated as ASICs) would soon be available. Unlike the machines used in the past, ASIC miners are integrated circuit miners with a specific task, which is to participate in mining using the SHA-256 algorithm; the emergence of ASIC miners and mining pools quickly turned Bitcoin mining into an industry, while amateur miners gradually disappeared with the passage of time; CPU, GPU and FPGA mining gradually faded and finally left the mining stage in 2013. Subsequently, Avalon released the first set of ASIC miners, and Bitcoin saw the birth of companies such as Bitmain, Kncminer, Hashfast, Bitfory, Cointerra and Butterfly Labs (BFL). From here, the mining ecosystem went into overdrive, and some large mining pools like Ghash.io and Btcguild gathered about 51% of the computing power of the entire BTC network. Although many mining pools have gone bankrupt due to poor management, companies like Bitmain, Bitfory and Slushpool have persisted and become more and more prosperous over the years.

It was not until January 2016 that the BTC network computing power reached 1EH/s.

Exahash Era

BTC hashrate is 75-80 EH/s on August 11, 2019.

Currently, the processing speed of both BTC and BCH chains is as high as 75-80 EH/s, BTC is 75 EH/s, and the BCH network is 2.24. There is no doubt that 80EH/s is an important milestone for the BTC network, and the indicator is steadily approaching 100 EH/s, which will be 20% of a Zetahash. One Zetahash per second (ZH/s) is 100000000000000000 (a sixth power) hashes per second. After the hash war in November 2018, the processing power of 4-5 EH/s was split into two parts (BCH and BSV), and both chains were below 1 EH/s. Today, the hashing power value of the BCH chain is gradually increasing, and in recent months, it has accumulated to more than 2EH/s.

BCH hashrate on August 11, 2019 – 2+EH/s.

In the second year of the BTC network, the processing capacity was only 1000000000000 (10 trillion) hashes per second (10 times/second). Due to great technological progress, the speed of a single mining machine can now exceed 10 times/second. After the second anniversary of the fork in 2017, the computing power of BCH increased to several thousand times the original. There are nearly 14~15 known mining pools on the BCH chain, and about 29% of the computing power comes from unknown mining pools. There are currently 12 known mining pools processing BTC transactions, and 14% of mining power is controlled by unknown mining pools. In addition, six well-known BTC mining pools also support the BCH chain, so there is always continuous computing power dedicated to both networks. The four largest BCH mining pools are btc.com, antpool, poolin, and bitcoin.com.

BTC and BCH hashrate distribution on August 11, 2019.

Mining Equipment Upgrade in 2019

The six most profitable SHA-256 mining rigs (average electricity cost of $0.13 per kWh) in August 2019.

It will be interesting to see how mining develops over the next 10 years. A lot of money and electricity resources will be used to mine SHA-256 cryptocurrencies. Many of the mining chip manufacturers mentioned above have made a lot of money from this and have become top IT companies in the world. As a result, last December, large mining companies such as Canaan and BIT filed for initial public offerings (IPOs) in the United States, and mining machine manufacturer EBON also submitted a draft IPO prospectus to the Hong Kong Stock Exchange (HEXEX).

You can connect your own mining machine to the world's most profitable mining pool, or earn profits by purchasing Bitcoin cloud computing power contracts.

The mining industry is also supporting the international technology roadmap for semiconductors by introducing machines designed with 7 nm (nanometer) nodes. Production of 256 Mbit SRAM semiconductors using the 7nm process began in Taiwan in 2017. Chinese mining machine manufacturers have released new mining machines using next-generation 7nm semiconductors. Bitmain released more than five different models of mining machines in 2019, with 7nm chipsets from Taiwan Semiconductor Manufacturing Company (TSMC). According to local Chinese reports, Bitmain recently ordered 30,000 7nm semiconductors.

7nm semiconductors play a big role in SHA-256 mining

Taiwan Semiconductor Foundries have reportedly expanded their 7nm semiconductor production capacity due to large orders from IT companies such as Bitmain. According to 2019 equipment specifications, the hashrate of SHA-256 miners using 7nm technology is between 30-70+TH/s. If mining continues to gain momentum and there is enough demand to improve the mining process and technology, we will see more and faster machines in the coming years. For example, Taiwan Semiconductor has announced an ongoing 6nm (N6) process that is scheduled to go into risk production in the first quarter of 2020.

At present, SHA-256 mining is still a lucrative industry. Since the birth of Butterfly Labs, Cointerra and Hashfast, the ecosystem has matured. People like Artforz who have a lot of computing power are gradually becoming a thing of the past, and news about large mining pools competing to increase computing power is no longer uncommon. But what is certain is that mining will continue to develop at an astonishing pace, and even the largest mining pools must always be vigilant and keep up with the development of the industry.