Bitcoin mining hash rate chart

JPMORGAN: Bitcoin miners are in a 'hash rate arms race'

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One of the more infuriating challenges when trying to do any sort of analysis of Bitcoin mining is to understand the current world-wide hashing rate and how this affects difficulty changes.

The very best "live update" websites seem to show the hash rate being all over the place. Large spikes occur frequently and it appears that huge amounts of hashing capacity have either come online or gone offline. This explanation may appeal to conspiracy theorists, and will sometimes be the real cause, but there is a much more mundane reason most of the time but nontheless surprising.

The first thing to look at is the way mining operates. The use of the SHA hash is intended to make it effectively impossible to predict what will or won't give a particular hash result without actually computing the hash and seeing if it solved a block. Essentially each minor change in the an attempt to solve a block gives a totally random effect, so trying one hash means that the next attempt is neither no more likely, or no less likely, to succeed!

This highly random nature means that mining is a Poisson Process. As each attempt to solve a block is unpredictable then in theory everyone might mine all day and never solve a block. Similarly it's also possible that a single miner might find 6 blocks in a succession. Both outcomes are possible, but both are staggeringly unlikely! Poisson Processes have some very well understood characteristics. We can prediction how many events finding blocks in our case will occur in a particular period of time when we know what the average number of events will be.

For Bitcoin mining where the difficulty isn't changing the hash rates are constant then we should see an average of 6 blocks per hour, per day, or per 2 weeks. The chart shows the probability between 0 and 1 for each block count in yellow and the cumulative probability in red.

Even though we might expect 6 blocks every hour we will actually see 2 or fewer blocks around once every 16 hours; we'll also see 10 or more blocks once every 24 hours too. It may seem surprising but once every 2. This originally stated When difficulty levels are increasing we see a change in the probabilities. Our original statistics are in red and the new ones are in blue.

It's now more likely that we'll see a slightly higher block finding rate, but we still see much lower and much higher numbers occurring quite frequently! Hash rate calculators have a huge problem as a result of the randomness shown by the statistics. All they can do is measure the event rate and make an estimate of the rate, based on the block finding rates. They have no way of telling if the statistics for any given period of time were normal, low, high, very low, very high, etc.

Difficulty changes occur every blocks. They play a very interesting role in hash rate statistics because they're computed by taking the time it took to find the previous set of blocks and to set the difficulty to a level where they would have taken 14 days to find. The scale here is different to our original graphs, and we're only looking at the numbers closer to the nominal blocks that should be found in 14 days.

There are some interesting markers shown. Of course the difficulty will be reset after anyway but in that case it would be set about 2.

In the next difficulty change period we will probably see that counteracted, but there's no actual guarantee since we may see two consecutive high estimates. They represent things that between them will happen about once every 2 years.

What's really important here is that even if the worldwide hash rate was constant we'd still appear to see significant difficulty changes occuring every blocks! This article was written with the help of data from a C language application that generates the probability distributions. The data was rendered into charts using Excel. The source code can be found on github:

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There are lots of videos and articles on what Bitcoin difficulty is, and lots of charts on how it has changed over the past couple of years. But this isn't really helpful if you're thinking about investing in cloud mining, or maybe even buying your own mining rig.

We focus on key factors that may affect Bitcoin's difficulty in this guide. If you're looking for how profitable ASIC miners are in , see this guide. So let's start by looking at how Bitcoin difficulty has changed every 4 months for the past 3 years:. Sep - As of 19th December , many difficulty charts, including the one above, seem to be displaying outdated data.

We've posted a video explaining the cause of this here. Looking at the Blockchain chart above for the past 2 years, it definitely looks exponential; e. But the figures for the past 3 years don't do that, they vary significantly. In it took around 11 months for the difficulty to double, in early around 6 months, in late around 8 months and then in between months.

Rather than doubling at a consistent interval, it seems to vary based on factors like available hardware and public interest. What we're suggesting is that the rate Bitcoin difficulty is increasing is not fixed, and can be anticipated. Right now, in December , Bitcoin is very popular, with thousands of new investors and miners every day - so significant difficulty increases are to be expected.

Many new people are interested in bitcoin mining, allowing hardware manufacturers to sell miners in larger quantities, causing more total hashpower to be available - driving Bitcoin difficulty up. The key relationship here is that the amount of new hardware becoming available is strongly linked to the demand for it.

A risk is that if the people making these miners produce too many, the difficulty will rise so fast that Bitcoin mining profitability goes down massively.

This occurred for Dash when the Antminer D3 came out. There are also scenarios that can cause Bitcoin's difficulty to decrease. August is a good example of this, where a lot of miners moved their hashpower to mine Bitcoin Cash as it was more profitable at the time. This decreased hashpower mining Bitcoin, causing Bitcoin's difficulty to decrease for 2 weeks. If you stay up-to-date with these types of scenarios and mine the more profitable coins Bitcoin Cash in this scenario , you can get extra coins for 2 weeks and sell them immediately for a great return on investment or just HODL them!

Another argument suggesting Bitcoin mining will remain profitable long-term is to look at it from the perspective of large mining operations. If you were a miner running a large setup, and Bitcoin mining was to no longer be profitable, then you'd likely start mining something else that was.

If there were no profitable coins for a long period of time, you'd likely have very high operating costs and be forced to shut down your operation eventually. For a smaller miner running just a few Antminers or some cloud mining, this would be less of an issue. So in theory as long as Bitcoin stays popular and its price continues to increase, if you can get cheap electricity Bitcoin mining should always stay profitable. This last argument in particular is very speculative, so be aware that for a worst-case scenario if Bitcoin's price was to fall for a long-period of time, even if you had cheap electricity, there's a risk that mining it would no longer be profitable.

In June , the reward for Bitcoin mining will half. This could cause big issues in the long-term as it essentially makes it half as profitable overnight. So if miners are only making a small profit prior to this, they'll then be running at a loss just after it.

At this point open-ended contracts on sites like Genesis Mining will likely no longer be profitable although they might not even last that long. This site cannot substitute for professional investment or financial advice, or independent factual verification. This guide is provided for general informational purposes only. The group of individuals writing these guides are cryptocurrency enthusiasts and investors, not financial advisors. Trading or mining any form of cryptocurrency is very high risk, so never invest money you can't afford to lose - you should be prepared to sustain a total loss of all invested money.

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Expected Bitcoin Difficulty in Sep 19th, Updated Jan 26th, Mining There are lots of videos and articles on what Bitcoin difficulty is, and lots of charts on how it has changed over the past couple of years. This guide has our thoughts on what will affect Bitcoin difficulty over So let's start by looking at how Bitcoin difficulty has changed every 4 months for the past 3 years: Rate of Bitcoin difficulty increase Looking at the Blockchain chart above for the past 2 years, it definitely looks exponential; e.

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