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Bitcoin Hash Rate Hits New All-Time High of Nearly 100 EH/s

The Bitcoin mining hash rate has hit a new all-time high of 98.5 EH/s as of 10 September 2019. This is up roughly 300% since December when the hash rate dropped as low as 32 EH/s, coinciding with Bitcoin’s bear market low near USD 3,000.

Additionally, this new all-time high hash rate is 60% higher than the peak of 62 EH/s recorded in August 2018 before the bear market began to cause the mining industry to contract. In other words, the Bitcoin mining industry is now far healthier than ever before, and the security of the Bitcoin network is higher than ever before.

Bitcoin mining difficulty is also at a new all-time high of nearly 12 trillion, meaning it is harder than ever before to mine Bitcoin, or equivalently each unit of hash rate earns less Bitcoin. This is due to a new line of application-specific integrated circuits (ASICs) with 55 TH/s of mining power hitting the market this summer. If it is assumed that the hash rate rise since June is all due to these new 55 TH/s ASICs, that means over half a million of these top of the line mining rigs have come online, which would generate USD 1 billion of revenue for Bitcoin mining manufacturers.

It remains to be seen if the Bitcoin mining hash rate continues to rise from this all-time high. The Bitcoin price will have to rise off of the $10,000 level in order to make that happen.

 

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Bitcoin Mining Technology Approaching the Quantum Tunneling Limit

Bitcoin Mining Technology Approaching The Quantum Tunneling Limit

Bitcoin Mining Hash Rate Has Seen Nearly Exponential Growth Long Term

The Bitcoin mining hash rate has seen an explosive and nearly exponential increase long term, rising through 1 GH/s in July 2010, 1 TH/s in 2011, 10 TH/s in 2012, 1 PH/s in 2013, 100 PH/s in 2014, 1 EH/s in 2016, 10 PH/s in 2017, and as high as 80 PH/s in July 2019, equivalent to 80 million TH/s and 80 billion GH/s. This rapid rise in mining hash rate has been partially fueled by the price of Bitcoin increasing from USD 0.01 in 2010 to over USD 10,000 currently, causing people around the world to compete to get a share of the lucrative Bitcoin mining block reward, which amounts to over USD 100,000 every 10 minutes currently. The other reason that Bitcoin’s hash rate has been rising so rapidly is that the demand for mining technology has caused manufacturers to develop mining rigs with the newest, most powerful, and most efficient technology.

For example, 7 nm chips, meaning the transistors on the chip are 7 nm in size, are the most powerful chips used commercially today. By November 2018, Bitmain had already released mining rigs which utilize 7 nm chips. This was a major jump for the company, since previously 16 nm chips were the best that Bitmain offered. Currently, the most powerful mining rig that Bitmain produces is the Antminer S17 which has a hash rate of 53 TH/s, and this far exceeds the Antminer S1 which had a hash rate of only 0.18 TH/s.

We are officially announcing the release of our new 7nm miners which possess industry-leading hash rates designed to mine with the SHA256 algorithm. Two models will be offered, the Antminer S15 and T15. Available for purchase on 11/8. pic.twitter.com/m6HbWGZS1O

— BITMAIN [Not giving away ETH] (@BITMAINtech) November 6, 2018

Chips with Smaller Transistors Fueling Hash Rate Growth

This massive increase in hash rate is due to mining rigs using chips with smaller and smaller transistor sizes, up to the present-day, cutting-edge 7 nm chips. A very important aspect of decreasing the transistor size is that exponentially more transistors can be fitted onto a single chip, which increases the energy efficiency of mining rigs. For example, the Antminer S1 has an energy efficiency of 0.0005 TH/J, while the Antminer S17 has an energy efficiency of 42 TH/J. This represents an 8.4 million percent increase in energy efficiency from the Antminer S1 to the Antminer S17.

The increase in energy efficiency that results from mining rigs using chips with smaller and smaller transistors is what has paved the way for the explosive rise in Bitcoin mining hash rate. This is because the profitability of Bitcoin mining is primarily determined by the electricity cost, so if energy efficiency had not drastically increased from smaller transistors, then the profitability per hash rate would be much lower. Thus, the total Bitcoin mining network hash rate would be much lower in the absence of transistor size decreases.

Quantum Tunneling Suppressing the Evolution of Transistor Technology

Transistors will have to become smaller and smaller on chips in order to sustain the nearly exponential long term increase in Bitcoin mining hash rate. However, quantum tunneling is a problem for chips with transistors smaller than 7 nm.

Quantum tunneling can be explained by the concept of wave-particle duality. Essentially an electron, which is the fundamental building block of all computer systems, is both a particle and a wave simultaneously. For transistors of 7 nm and bigger an electron stays in its appropriate channels, and the computer functions properly. However, for transistors smaller than 7 nm, the wave nature of an electron can cause it to literally pass through barriers in a transistor, causing leakage of electrons.

In simple terms, if a transistor is small enough, then an electron can teleport through the physical barriers in a transistor. This results in the computer not functioning properly.

The immediate effect already being felt due to quantum tunneling is that Moore’s Law is breaking down. Moore’s Law states that the number of transistors on a chip doubles every two years, leading to an exponential long term increase in computer processing power. However, as transistor sizes decrease below 7 nm it is taking longer and longer to research, develop, and mass produce the evolved next generation of transistors.

For example, transistors from 22 nm to 7 nm use fin field-effect transistor technology (FinFET), but 5 nm transistors required a completely new technology called multi-gate field-effect transistors (MuGFET). The most cutting-edge 3 nm transistors, which are still in the research and development stage, have required yet another breakthrough called gate-all around field-effect transistors (GAAFET). Samsung aims to manufacture 3 nm transistors by 2021, although this is just a projection since it takes years to perfect new transistor paradigms.

Notably, 3 nm transistors are only expected to bring a 20% increase in power and performance, versus the 30% to 40% increase seen during previous transistor evolutions.

Essentially, scientists are developing completely new technologies in order to combat quantum tunneling and to try to stay on pace with Moore’s Law, but the time it takes to develop smaller transistors is increasing, and most importantly, these next generations of transistors are bringing lesser improvements in energy efficiency and processing power.

The Exponential Increase in Bitcoin Mining Hash Rate May Slow down Due to Quantum Tunneling

Therefore, Bitcoin mining technology appears to be approaching an imminent roadblock due to quantum tunneling, and this could slow down the rise in Bitcoin mining hash rate. That being said, Bitcoin mining hash rate also depends on Bitcoin’s price, so if Bitcoin’s price manages to rise strongly long term, then the hash rate could still increase nearly exponentially. On the other hand, if Bitcoin’s price increases slowly over the long term, then the hash rate would essentially plateau.

Also, it is possible that scientists could perfect quantum computing, which would allow Moore’s law to continue. That being said, quantum computing is still in its embryonic stages, and major technology companies are generally focused on making smaller classical transistors in order to increase the power and performance of computers, at least for now.

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Bitcoin Hash Rate Hits 4-Month High, Sparks Optimism

Bitcoin Hash Rate Hits 4 Month High, Sparks Optimism

Bitcoin’s hash rate has reached the highest levels seen since November 2018. The increase in mining power suggests profits available at the current spot price as well as potentially expectations for a future price increase.

Surpassing 52 quintillion hashes per second Tuesday 19 March, mining difficulty has changed little for the last month or so, meaning new miners have had an easier time bringing their rigs online.

As well as benefiting the security of the Bitcoin network by adding more hash power, it shows growing confidence in the network’s future as more resources are invested in mining operations.

Taking to Twitter to comment on hash rate movements last year, Casa CTO Jameson Lopp proclaimed:

”Hashrate follows price… Miners are speculators too!”

Hashrate follows price. Some folks believe price follows hashrate, possibly because hashrate doesn’t simply track ~spot~ price, but rather tracks some ~speculative~ future price. Miners are speculators too!

— Jameson Lopp (@lopp) June 23, 2018

Concerns were raised over low hash rates in alignment with price plummets in 2018 as less efficient mining rigs were disabled to avoid operating at a loss, although the remaining miners benefitted from steady difficulty rates.

Mining difficulty is expected to increase again shortly, however, given this hash rate peak with more miners expected to join the network.

 

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Bitcoin Mining Difficulty Sees Sharpest Decline in 7 Years

Bitcoin mining difficulty was adjusted downwards 15.13% on 3 December 2018, the sharpest percentage decrease in difficulty since November 2011, and by far the biggest downward adjustment in difficulty by magnitude. This follows a 7.39% downward adjustment on 16 November.

Overall, Bitcoin’s mining difficulty has fallen from 7.45 trillion in early October to 5.65 trillion currently. This has coincided with a decrease in Bitcoin’s hash rate from a record high of 62 EH/s to 32 EH/s as of 2 December. This implicitly suggests that 30 EH/s of Bitcoin’s mining hash rate, which represents billions of US dollars of mining equipment, has been turned off due to no longer being profitable. The driving force behind this is the fall in Bitcoin’s price from USD 6,500 to the USD 3,500-4,000 level during the latter half of November 2018.

The Bitcoin mining difficulty adjusts every 2,016 blocks, which is roughly every two weeks, in order to maintain Bitcoin’s block time at 600 seconds. This is because if Bitcoin’s hash rate rises, then block times become shorter at constant difficulty, and if Bitcoin’s hash rate decreases then block times become longer. Indeed, Bitcoin’s block time had risen to 700 seconds before the most recent difficulty adjustment took effect, so the Bitcoin network was much slower than usual this past week. Without difficulty adjustments, the total supply of 21 million Bitcoins would have been mined already, which would have led to strong downward pressure on Bitcoin’s price, as well as a quick end to the Bitcoin mining industry as we know it. Further, this would lead to the Bitcoin network being much less secure, which is unacceptable, and a primary reason as to why periodic mining difficulty adjustments are essential.

The downward difficulty adjustment is actually good news for Bitcoin miners that are still mining, since the 20% decrease in mining difficulty over the past month directly correlates to a 20% increase in Bitcoin mining revenues per unit of hash rate. Increases in mining profits will likely be short-lived, however, since a significant fraction of that 30 EH/s of rigs which have been shut off due to lack of profitably will likely be turned on again.

Logically, the 20% increase in Bitcoin mining profits per unit of hash rate is a good environment for new miners to enter the game, but the abundance of mining rigs in the world that are sitting idle will probably beat new miners to the punch.

 

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One of the Largest Cryptocurrency Mines in North America Begins Hashing

After months of planning, DMG Blockchain Solutions has begun mining for cryptocurrency at one of the largest cryptocurrency mines in North America. The mine is in a 27,000 square foot building in British Colombia, Canada, and has begun operations with 60 MW of power, with plans to ramp up to 85 MW – all clean hydroelectric energy that is off-grid. This is enough electricity to power 50,000 homes.

Assuming this new cryptocurrency mine uses the most efficient Bitcoin mining chips – the 7 nm chips that were developed by Bitmain which operate at 0.042 W/GH – the mine will operate at 1.4 Exahash/s at 60 MW, and 2 Exahash/s at 85 MW. With the current Bitcoin network hash rate averaging 50 Exahash/s, this represents 2.8-4% of the total hash rate. Doing a rough calculation, this new cryptocurrency mine would produce 50-70 Bitcoins per day, worth USD 320,000-440,000 per day. This may be an overestimate since the mining facility might not be using 7 nm chip technology, and some of the electricity may be used for other infrastructure associated with the mining farm.

One interesting thing to note is the creator of Bitcoin, Satoshi Nakamoto, was able to mine 50 Bitcoins every 10 minutes with a simple personal computer that barely used electricity. Ten years later today, it takes a 34-acre mining farm using 60 MW of electricity to produce 50 Bitcoins in a day.

It has taken a year to build this cryptocurrency mining supersite. A road and a new power substation had to be produced for the site, since the mining operation uses its own power grid fed by hydroelectric power, and does not interact with the normal consumer grid of British Colombia.

The CEO of DMG Blockchain Solutions, Dan Reitzik, said, “DMG now proudly owns one of the largest, most cost-efficient, bitcoin mining facilities in North America – and we’re doing it in a responsible way with the local community. It was an audacious undertaking, but DMG’s executive team has been in the mining space for years, and we have the know-how and connections with the utilities and government agencies to pull it off.”

On a final note, the creation of cryptocurrency mining supersites like this new one in British Colombia may be forcing individual miners out of the Bitcoin mining game permanently.

 

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Bitcoin Mining Hash Rate Plateaus Near 50 Exahash/s

The Bitcoin mining hash rate, a measure of the total mining power securing the Bitcoin network, has been at a plateau near 50 Exahash/s since August 2018. This follows three years of rapidly accelerating hash rate on the Bitcoin network, indicating a shift in the mining industry.

In late July, the Bitcoin mining hash rate first exceeded 50 Exahash/s but has not escaped that level since. For three straight months, hash rate has been consistently averaging 50 Exahash/s, dipping to as low as 40 Exahash/s, and reaching the all-time record 62 Exahash/s briefly.

There are three factors which impact the profitability of Bitcoin mining, which could explain this plateau in the hash rate: Bitcoin’s price, cost and efficiency of mining rigs, as well as mining difficulty. The higher the price of Bitcoin, the more money miners make. The price of Bitcoin is very clearly correlated to this hash rate plateau, since the last significant Bitcoin rally peaked at over USD 8,500 in late July, and was completely equalized by early August when the price returned to USD 6,500. That is when mining hash rate stopped increasing ad Bitcoin has been steady in the USD 6,000-7,000 range ever since.

Bitcoin mining difficulty has increased from 6 trillion in late July to over 7 trillion as of the beginning of November. The higher the difficulty, the less revenue each unit of mining hash rate receives. Considering that the hash rate has not risen for three months now, the relatively low price of Bitcoin combined with higher difficulty has likely made it unprofitable to expand mining operations, even for major companies like Bitmain. The mining difficulty actually declined from 7.45 trillion to 7.18 trillion throughout October 2017, the first decline in difficulty since November 2017.

Bitcoin mining technology has been improving, with the biggest announcement being 7 nm rigs being produced by Bitmain. These are the most efficient mining chips in history but apparently,

the increase in efficiency of Bitcoin mining rigs does not outweigh the lack of price increase and high mining difficulty.

It will probably take a significant Bitcoin rally to boost the mining hash rate above the 50 Exahash/s plateau.

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Bitcoin Mining Revenue Recording Highs but Profits Dwindle

Bitcoin mining revenue is at record levels according to Diar, with the first six months of 2018 exceeding all of 2017 due to increased Bitcoin prices. Through September 2018, there has been USD 1.4 billion more profits in 2018 than 2017, and there’s still a quarter of the year to go. However, rising hash rate combined with decreasing Bitcoin price throughout 2018 has caused profit margins for Bitcoin miners to decline drastically.

Bitcoin mining revenue is the same between 2017 and 2018 of course but on average, prices were higher in 2018, with prices ranging from USD 17,000 to USD 6,000 during 2018, while during the first nine months of 2017, prices were below USD 5,000. Miners have mined USD 4.7 billion of Bitcoin during 2017 so far, with more than USD 1 billion of profits during January 2018 alone when Bitcoin prices were highest.

Despite record Bitcoin mining revenue in terms of USD, hash rate has been continually increasing. Bitcoin mining difficulty has risen from 2 trillion to 7.5 trillion during 2018, as hash rate has increased from 13.8 Exahash/s to 53.4 Exahash/s. This means that Bitcoin mining has become 275% more difficult during 2018, while Bitcoin prices have simultaneously declined more than 60%.

This is a double whammy for Bitcoin miners, since Bitcoin miners have to buy more rigs to keep up, costing them more electricity, and there’s been generally less revenue month over month due to Bitcoin’s price decline. The popular S9 Antminer from Bitmain had an 86% profit margin in January 2018 if power costs USD 0.10 per KWh, and this has declined to practically 0% profit by September 2018. This means that all Bitcoin mining rigs less profitable than the S9 Antminer cost more electricity than the revenue they earn and are probably shut off at this point, and S9 Antminers might be unprofitable depending on local electricity costs.

This highlights a general trend that is occurring, where personal miners are being pushed out of the Bitcoin mining game. Large mining firms like Bitmain are building supersites that have tremendous amounts of mining power in one location, and are able to position their supersite in a location with cheaper electricity, and buy or build the rigs at prices below wholesale. Diar estimates that big mining operations are still making 50-60% profit, and this will drive a continued increase in Bitcoin’s network hash rate.

However, for personal miners, who often pay USD 0.10 per KWh or more for electricity and retail cost for rigs, Bitcoin mining is quickly becoming unprofitable. This represents a paradigm shift in the Bitcoin mining industry, from being a business anyone could profitable partake in with proper equipment, to being profitable only for massive mining companies.

 

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Bitcoin Network Healthier Than Ever as Hash Rate Rises Rapidly, Despite 60% Price Drop Since December

The Bitcoin network is healthier than ever as its hash rate continues to grow nearly exponentially in the long term, despite the tremendous 60% price drop from 20,000 USD to 7,500 USD since December 2017.

Miners cryptographically hash transactions into blocks and add them to the blockchain, and this is how the Bitcoin network is maintained and secured. Miners receive freshly minted from the block reward and transaction fees in return for their efforts, and this has become a very popular source of income in the cryptocurrency world.

The hash rate is the amount of cryptographic hashes processed by computers per second  and is a good measure of the total processing power Bitcoin miners are contributing and is perhaps a good measure of the health of the Bitcoin network for a couple of reasons. The difficulty of hashing increases as hash rate rises, and therefore as hash rate rises Bitcoin becomes more cryptographically secure. Also a rising hash rate indicates that Bitcoin is becoming more popular, since more people are dedicating processing power to trying to obtain Bitcoins through mining.

In the long term the hash rate has been rising practically exponentially, going from about 800,000 TH/s at the beginning of 2016, 2 million TH/s at the beginning of 2017, to 16 million TH/s at the start of 2018, and now sits near 31 million TH/s. This is a good metric of how Bitcoin has been spreading globally and it’s use rising exponentially during that time.

Bitcoin’s price hit an all-time record high near 20,000 USD per coin in early December 2017, and since then has been on a pretty swift decline which has brought it down to 7,500 USD per coin at the time of this writing. Hundreds of billions of dollars have exited the Bitcoin market as a result. Despite this huge 60+% price drop, the network hash rate has gone up approximately 140% from 13 million TH/s to 31 million TH/s at the same time.

This rapid rise in mining power on the Bitcoin network indicates that the consensus of miners think Bitcoin won’t be dropping in the long term, or they wouldn’t be investing tremendous amounts of money into their Bitcoin mining equipment.

The rise in hash rate also suggests that Bitcoin continues to be the #1 cryptocurrency and is the cryptocurrency that most miners decide to focus their efforts on since it has been and continues to be the gold standard of the cryptocurrency world.

Bitcoin is by far more widely used than any other cryptocurrency, since it is the first and truly the essence of what a cryptocurrency should be from the time it launched in 2009. It is cryptographically secure, and allows users to send money anywhere in the world instantly for anything they want to purchase, and is a lot more private than any other long-distance payment method like banks or Western Union.

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Bitcoin Mining To Comprise 0.5% of Global Electricity Consumption

A new study authored by Alex de Vries and published in Science Direct forecasts that Bitcoin mining will comprise 0.5% of total global electricity consumption by the end of 2018, and is currently consuming 2.5 GigaWatts. This is the first scientific peer-reviewed paper on Bitcoin mining energy usage, and the author hopes this study will be the impetus for getting the conversation started on the best way to handle this problem in the future.

Bitcoin is the most popular cryptocurrency in the world with a market cap of USD 137 billion and trading volume of several billion dollars per day as of this writing. It uses the proof of work (PoW) algorithm where computers cryptographically hash transactions and organize them into blocks, which are added to the blockchain in order to maintain and secure the network. Computers that participate in PoW calculations are called Bitcoin miners, and they receive Bitcoin for their efforts.

Mining Bitcoin has become an extremely popular way to earn Bitcoin, and the amount of processing power used to has snowballed. As more computers mine, each computer already mining Bitcoin receives less income, causing the people to buy more mining machines so that they remain competitive. This has turned into a self-sustaining positive feedback loop that has led to exponential growth of the Bitcoin mining hash rate.

Currently, over 32 million TH/s of processing power is maintaining and securing the Bitcoin network. This uses a tremendous 67 TWh of electricity per year, which is enough to power 6.2 million US households, and is approximately the same amount of electricity that the Czech Republic uses annually.

Fossil fuels burned for Bitcoin mining releases 33,000 kilotons of carbon dioxide into the atmosphere per year, which is contributing to global warming, not to mention the damage from other toxic pollutants that are released into the environment when burning fuel.

This environmental damage that Bitcoin mining is causing has brought up the question if there is a more energy efficient way to maintain and secure the Bitcoin network. One answer lies in switching to Proof-of-Stake (PoS) mining, which some believe is just as secure as PoW but uses almost no electricity in comparison. Any changes to the Bitcoin protocol are met with extreme controversy, however, and this is unlikely to happen. Miners would be particularly opposed, considering that PoW provides such a large amount of money to Bitcoin miners, and switching to PoS would take away their income and make all their mining rigs obsolete.

Bitcoin mining hash rate and electricity usage will continue to rise until the point is reached that the revenue earned from Bitcoin mining equals the amount spent on equipment plus electricity. Currently, Bitcoin electricity usage is more than doubling every year.

 

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