In the article “What is Bitcoin miner, development and history?" Its Development and History”, we explained that the performance of a Bitcoin ASIC miner is determined by “how many calculation problems it can solve per second.”
The first ASIC miner sold commercially by Avalon was a ASIC miner that could perform 66 billion calculations per second. As of 2023, ASIC miners that can perform more than 100 trillion calculations per second are in the mainstream.
By simple arithmetic, 100 trillion times / 66 billion times = 1,500 times more computing power. With such an increase in performance, even if the first generation ASIC is used to mine Bitcoin, not only will it not be possible to mine Bitcoin, but you will end up paying only for electricity.
Bitmain's blockbuster Antminer S9 performs 14 trillion calculations per second. Recent flagship ASIC miners have a computing power of 100 trillion calculations per second, which is 7 times the computing power of the S9's 14 trillion calculations. In other words, the latest miner has the capacity of seven S9s.
|
ASIC Miner |
Manufacturer |
Computing power (hash rate) |
Power Consumption |
|
Avalon 1 |
Avalon Project |
66GHz/sec |
600W |
|
Antminer S9 |
Bitmain |
14TH/sec |
1,350W |
|
WhatsMiner M50 |
MicroBT |
114TH/sec |
3,306W |
When you buy an ASIC miner and start mining, do you know how much you can mine? It is important to predict this in advance, and the indicators that are important at that time are "hash rate" and "mining difficulty."
A. What is hash rate?
The total computing power of the ASIC miners currently being used to mine Bitcoin is called the "hash rate." (The computing power of an individual ASIC miner is also sometimes called the "hash rate.") As of September 2, 2024, the hash rate is 620EH/sec. This is equal to 622 exahashes per second.
One exahash is 1 million times 1 trillion (terahashseconds). There is a unit called "quintillion" which is 10,000 times "trillion", so one exahash is 100 quintillion. 622 exahash means that the entire ASIC miner is performing 62,200 quintillion calculations per second.
The relationship between hash rate and Bitcoin price
Bitcoin mining plays an important role in ensuring the security of the Bitcoin network. The hash rate, which is the total computing power of all miners used in Bitcoin mining, including our ASIC miners, is an important indicator of the health of the entire Bitcoin network.
Fluctuations in Bitcoin's hash rate are a barometer of whether Bitcoin miners are optimistic about the future of Bitcoin. An increase in hash rate indicates that miners are investing large amounts of capital and energy into Bitcoin mining. This is also evidence that miners have long-term confidence in the value of Bitcoin.
In the past, after the hash rate has risen, the price of Bitcoin has tended to rise as well, suggesting a pattern where those who participate in mining have a positive view of Bitcoin's value, which then influences the overall market, causing the price to rise.
Bitcoin hash rate (blue line) and Bitcoin price (black line, in US dollars)
Source: Blockchain.com
However, this pattern is not always consistent, and the hash rate and Bitcoin price do not move perfectly in tandem, but fluctuations in the hash rate do provide useful information about the Bitcoin market.
You can get an idea of the relationship between hash rate and Bitcoin price by watching this video.
#Bitcoin price vs hashrate 😮👀 pic.twitter.com/XjmELdXOZR
— Bitcoin News (@BitcoinNewsCom) June 11, 2023
https://twitter.com/BitcoinNewsCom/status/1667871789957935105?s=20
B. What is Mining Difficulty?
"Mining difficulty" is an index that indicates the computational difficulty required to mine Bitcoin. The higher the hash rate (the greater the computational power of the miners used to mine Bitcoin), You will be asked to do calculations that are difficult to solve.
The relationship between mining difficulty and hash rate is linked to a regulation system that keeps the interval between Bitcoin block generation (the process of connecting blocks containing new transaction data to the blockchain that stores past transactions) constant.
Specifically, as the overall hash rate increases (as the computing power of the miners used to mine Bitcoin increases), the speed at which new blocks are found increases. However, since Bitcoin is designed to generate new blocks (blocks that store transaction information) approximately every 10 minutes, if the overall hash rate increases, the difficulty of mining increases to prevent the block generation speed from increasing.
If the computing power of the miners used for mining is the same before and after the mining difficulty level increases, the calculations required for mining will become more difficult after the mining difficulty level increases, and it will take more time to solve them. In this way, when the hash rate increases, the mining difficulty level increases and the rate at which new blocks are generated returns to 10 minutes.
Conversely, if the overall hash rate decreases, the rate at which new blocks are found will slow down. In this case, the mining difficulty will be reduced to prevent the block generation rate from slowing down. This will bring the rate at which new blocks are found back to 10 minutes.
In this way, mining difficulty helps adjust the Bitcoin network so that blocks are generated in around 10 minutes.
C. Are increases in hash rate and mining difficulty bad for miners?
To be honest, in the short term, an increase in mining difficulty is not a very pleasant thing, as it means that miners with a certain level of computing power will receive fewer Bitcoins as a reward.
An increase in the hash rate and mining difficulty means that more ASIC miners are used in mining. Since the amount of Bitcoin issued is constant (as of September 2024, 3.125 BTC every 10 minutes), the number of competitors will increase, the competition to obtain the same Bitcoin will intensify, and the amount of Bitcoin you can receive will decrease.
However, in the long term, it's not all bad. An increase in hash rate and mining difficulty indicates increased security of the network. This increases the reliability and stability of Bitcoin, which may increase its value.
Also, as explained in "The relationship between hash rate and Bitcoin price", in the long term, the price of Bitcoin tends to rise after the hash rate rises. The market often interprets an increase in the hash rate as meaning that miners are bullish on the price of Bitcoin, so it can be said to be a signal that pushes up the price of Bitcoin.
Illustrative image of hash rate, mining difficulty, and Bitcoin prices
