Bitcoin's hashrate rises and falls by 10% every day? That's luck at work

At the end of 2012, the total computing power of the Bitcoin network was less than 10T, which is about one-fifth of the computing power of a mining machine today.

Since the beginning of 2019, the computing power of the entire Bitcoin network has doubled. In July, the computing power of the entire network began to steadily reach the 70E mark.

There is an interesting phenomenon. If you check the blockchain browser, you will find that the computing power of the entire Bitcoin network has been fluctuating every day recently, and the amplitude is particularly large, often around 10E, which is equivalent to hundreds of thousands of mining machines constantly turning on and off. Which miner is so bored?

▲QKL123 Bitcoin average computing power chart (2019/1-today)

The above picture is a chart of the average Bitcoin computing power from January 2019 to July 21, 2019, shown by QKL123. You will find that the computing power shows an up and down jitter like an electrocardiogram.

Specifically, on July 9, it was 68EH/S, and on the 10th it was 59.8EH/S, a difference of 7.2EH/S, a decrease of 10.5%. After that, on the 19th, it was 54EH/S, and on the 20th it was 73.5EH/S, a difference of 19.5EH, an increase of 36%. Entering 2019, the daily fluctuations of 10E volume are increasing. At present, Ant S17 Pro is a new mining machine with a computing power of 56TH/s launched by Bitmain. Converting (1E=1024P, 1P=1024T, 1T=1024G, 1G=1024M, 1M=1024k), the rise and fall of 10E computing power is almost equivalent to 187,000 Ant S17 Pros turning on and off every day, which is obviously not "scientific".

We know that the block time of Bitcoin is set to about 10 minutes. Assuming that the computing power continues to grow, the block time of Bitcoin will be shortened. Therefore, the system will automatically adjust the difficulty every 2,016 blocks (about two weeks) to ensure that the block time of Bitcoin is ten minutes.

In fact, the total network computing power cannot be counted at all. The total network computing power currently displayed by the blockchain browser is actually an estimate based on the time interval between block production. In addition to the fixed difficulty, there are two dynamic factors that affect the block time of Bitcoin, one is computing power and the other is luck!

Therefore, the computing power calculated by the block time interval is inaccurate, as it ignores the random number of the luck value. The luck value of the computing power of the entire network will fluctuate around 100%. "It is normal for the computing power to fluctuate between 3% and 10%, which is affected by the luck value." said Shenyu, the founder of F2pool.

Currently, some analysts use the daily increase and decrease data of Bitcoin's computing power to analyze the "hotness" of the mining industry, which is a bit unscientific. The time dimension for checking the computing power of the entire network must be longer, so as to reduce the deviation caused by the luck value.

Of course, the daily increase or decrease in computing power is not meaningless, because it cannot be ruled out that there is some "wall-sitting computing power" that will switch mining between BTC, BCH and BSV based on the revenue.

But this luck value is very interesting, and it is related to the life and death of the mining pool. If calculated on an annual basis, even if the mining pool accounts for 2%-3% of the computing power, its luck value will most likely remain above 97%. But if calculated on a daily basis, it is terrible, because most mining pools now use the PPS model, which means that the mining pool needs to distribute income according to the computing power of the user, and the mining pool itself bears the risk brought by the luck value. Bad luck means long-term losses. This is also an important factor in the cessation of operations of the small mining pool Bixin.

“Mining pools with more computing power will have higher stability in producing blocks, and their cash flow will be more stable.” BTC.con CEO Zhuang Zhong said this in “8 Questions”.

The computing power of the entire network has risen to a historical high. Can it exceed 100E by the end of the year?

▲Figure 1

▲Figure 2

Figure 1 on the left is the Bitcoin network difficulty chart, and Figure 2 is the Bitcoin network computing power chart. It is not difficult to find that except for the decline in computing power from October to December 2018, Bitcoin computing power has been rising. This growth is terrifying. At the end of 2012, the Bitcoin network computing power was less than 10T, which is about one-fifth of the computing power of a mining machine now.

On July 20, data showed that the total network computing power was 73EH/S, which is almost the highest computing power of Bitcoin so far. The computing power in July 2017 was only 6EH/S, and it was 40EH/S at the beginning of 2019. Data shows that the difficulty will increase by 1.66% on the 23rd, indicating that the computing power is still growing.

The reason for the increase in computing power is simple. First, the price of Bitcoin has risen, the electricity cost has decreased during the flood season, and old mining machines have returned to the market. According to the statistics of F2Pool, based on the electricity fee of 0.28 yuan, a total of 52 mining machines have positive daily income, and 46 mining machines have daily income of more than 2 US dollars. Among them, Antminer V9 ranks last, with a daily income of 0.18 US dollars, and electricity costs account for 85%.

Second, high-computing power mining machines continue to be put into battle. At present, according to the official websites of Ant, Shenma, Yibit, Avalon, and Xindong, their high-computing power mining machines have been sold out. According to previous media statistics, Avalon 37T A10 series has been scheduled to September. Yibit E11 and E12 series have been scheduled to late October. Shenma M20S and M21 series futures are scheduled to November. Ant S17 series futures are scheduled to December.

As long as Bitcoin can maintain its current price, these mining machines will be put into operation without exception. However, as computing power increases and the flood season ends, the mining machines that currently have positive daily returns but are ranked low will undoubtedly gradually exit the stage of history.

At the time of upgrading, how much can Bitcoin computing power reach? Previously, Zhang Wencheng, sales director of Shenma Mining Machine, predicted that by the end of 2019, the total computing power of the Bitcoin network will rise to more than 100E.

Recently, the tech celebrity "Mobile Chip Expert" revealed that Bitmain has booked 30,000 7nm wafers from TSMC in the third and fourth quarters. Based on this, it can be inferred that Bitmain can produce about 625,000 7nm mining machines in two quarters with this order alone, and further infer that the computing power of these mining machines can be increased by about 30E in 2020.

Of course, speculation is meaningless, just as the price of Bitcoin is determined by the market, so is computing power.