On January 18, 2016, the Bitcoin hash rate had made a gigantic leap towards one quintillion otherwise known as one exahash per second. The historical jump in hash rate hit 986,102,741 GH/s, which is almost making it to the one quintillion position, though the numbers have since subsided. The entire month of January has seen a significant increase in the measured factors of total network hashes.
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Cryptocurrency miners are needed to confirm transactions within the system, and are also used to acquire newly born bitcoins. Miners in the system use special software and hardware to solve math problems or hash functions. A hash function can represent any operation that is used to map data by computer software. In cryptography, a hash function takes an input and returns an alphanumeric string, which can be deliberately difficult or easy to reconstruct within messages, digital signatures, and checksums. The method miners use to solve the equations provides a difficulty to the ecosystem, and the rewarded bitcoin and fees are incentives for those who choose to secure the network.
Mining the digital currency typically involves high-tech gear and joining a pool of people grouped together as a team to find blocks. In the early days, mining bitcoins could easily be done with a Central Processing Unit CPU. Then following this period of time GPU mining rigs and farms joined the environment and quickly took over. As more time progressed structured application-specific integrated circuit (ASIC) and field-programmable gate arrays (FPGA) were introduced to the game. This changed everything as more advanced ASICs were built over time, resulting in increased difficulty and hash rate.
ASIC hardware introduced itself to the market in the summer of 2012 and has created mining giants within the space. In the early days, miners looking for blocks solo-mined them. As time progressed, more and more people decided it was better to pool their resources together and work as team. This had led some to believe the mining has become more centralized, but some feel these groups are ever changing in concentration. In July of 2012, hashrate had expanded and mining equipment parts began to get more difficult to access. At this time, some of the first ASIC companies such as Avalon and Butterfly Labs appeared on the market. The mining infrastructure businesses that followed over the years secured their spot within the circuit of competitors, though in 2016, the game looks very different.
In December of 2016, Bitfury revealed its new ASIC mining chip claiming it should top all current speeds in market hardware to date. The BitFury 16nm chip has the potential to compute 40 gigahash per second using less energy than ever before as well. This ASIC chip takes very little electricity from its operations and has been tested showing optimal performance. These new hardware proponents and groups of pools formed are pushing the hash rate ever upwards, becoming one of the largest computational processors in the world.
In September of 2013, the hash rate had hit 1 Petahash per second and has been gaining serious momentum during this period. You can see from various charts online, the increase from this point during that year has been massive and has increased exponentially since then. One exahash per second is a phenomenal speed and shows that mining operations are in a race to the top. The digital currency has seen a spike in price during Q4 2015 and could have possibly caused more miners to join the economy. Over the next few months, the hash rate may increase drastically from here as the great reward halving is coming in July of 2016.
Miners will most likely push as hard as they can to gain the 25 BTC reward as opposed to the coming 12.5 change in the protocol incentive this summer. The increase in hash rate is a good sign that many people are still invested in the future of this currency.
What do you think about the increased hash rate? Is this a positive sign? Let us know in the comments below.
Images courtesy of blockchain.info, bitcoinwisdom