Just half of the usual 144 daily bitcoin blocks have been mined in the past 24 hours according to our analysis of blockchain data.
The last block at the time of writing is 688,969. Counting to precisely 24 hours ago, block 688,892 was mined, making it a difference of 77 blocks in a day.
This is expected of course as bitcoin’s hashrate has fallen to 88 exahashes today as pictured above, with the weekly hashrate showing 101 exahashes, down from about 140 exahashes two weeks ago.
Difficulty is to adjust in about five days, or less than 500 blocks, with it estimates to fall by 22% according to the data by a blockchain explorer, but we’re not sure of this estimate and would suggest it will fall by at least 30% and considering hash has dropped a bit again, maybe by 40%.
The bitcoin network has an algorithm that sees every two weeks (2016 blocks) how much computing power all nodes have, and then either increases or decreases the amount of computing power needed to find a block to keep a target of 144 blocks a day or one every ten minutes.
There are theories and debates in regards to why two weeks, with some suggesting that’s the best tradeoff between security and liveness (the network keeps moving), while others say by the block is fine.
For those currently mining, there’s no difference in as far as they get the same amount of coins they would have gotten if the hash had not fallen, thus they maintain the same incentives to keep mining as prior to the hash fall.
In fact arguably they have even greater incentive because they want to get to the difficulty adjustment as soon as possible so that they can get twice the amount of coins they would have gotten last month when difficulty was at 180 exahashes.
We’re thus seeing the network operate as normal, albeit with a block roughly every 20 minutes rather than ten minutes, despite this halvening in hash and even in price.
History in the Making
It’s the first time ever since bitcoin’s invention in 2009 that 77 blocks are found in a day with reports suggesting there have been 24 hour periods with 73 blocks.
Previously there have been all sorts of speculation regarding what might happen in this kind of instance, including suggestions of a ‘death spiral’ especially during halvenings.
That has not been the case in practice, and even now that we’re getting a big and a pretty much instant almost halvening in hash, the network is still operating as usual with only a slight increase in block times to the point most can’t tell a difference because there’s general variance in any event.
Whether China’s Communist Party (CCP) wanted to test this is not clear, but their timing was perfect where difficulty is concerned with both instances starting the shutdown of bitcoin miners just after difficulty had adjusted, hence miners and the network had to and has to wait almost the full period of circa two weeks.
One point to note is that the adjustment happens in blocks, rather than human days or weeks. The bots understand only their language and therefore difficulty adjusts only if 2016 blocks have been found regardless of whether that takes a day or a year with Satoshi Nakamoto, bitcoin’s inventor, stating back in 2010:
“The proof-of-work difficulty can be seen by searching on ‘target:’ in debug.log. It’s a 256-bit unsigned hex number, which the SHA-256 value has to be less than to successfully generate a block. It gets adjusted every 2016 blocks, typically two weeks. That’s when it prints ‘GetNextWorkRequired RETARGET’ in debug.log.”
As these 2016 blocks have to be found based on the hashrate at the time of the difficulty adjustment, one can speculate during that 2016 blocks period more and more miners leave until the remaining hash takes a day, a week, a month, or even a year to find a block.
This academic theorizing however ignores the fact we have a “256-bit unsigned hex number” which can just be changed if there’s some calamity and/or the circumstances leads to a consensus with nodes then upgrading.
Without such consensus, your node is just ignored, or if its a group of nodes changing it, they are collectively ignored, with someone like Coinbase for example not recognizing it. And even if there is a circumstance where 99% think it should change, 1% might keep running on the unaltered difficulty if they can get the blocks to the difficulty adjustment.
So there are fail safe mechanisms in circumstances that realistically would only arise at a time when the world has a lot more to worry about than some geek money, and even then manual intervention probably wouldn’t be necessary unless the circumstances are far far worse than even during both the past global wars when miners in countries like neutral Switzerland or Argentina or even USA itself and in modern days bunker plentiful Albania could have kept bitcoin running largely as normal.
We’re thankfully at a time of general peace, so there’s absolutely no need for manual intervention as bitcoin currently is running perfectly fine and exactly as it should, but we’d be remiss if we didn’t thank CCP for providing us this one data point to see in actual action just how bitcoin handles a sudden 50% drop in hash.
Considering its current performance, we’d say it can probably handle just fine another 50% drop in current hash, so 75% from the previous adjustment, and we think it can handle another 50% drop from that again largely without any real problem and we’d add another 50% drop to that hugely reduced hash before one can start even considering manual intervention.
If our rough maths is correct, that would be a 90%-95% drop in hash from the previous adjustment with about two hours per block, with 2016 blocks taking about three months, during which time the network continues to move while being absolutely secure as for the entire three months it would be running at 100% the hashrate of the previous difficulty adjustment prior to its drop, until difficulty adjusts, as far as block finding and verification is concerned.
Making this a beautiful mechanism when one considers the many eventualities that can occur over decades and centuries, and thankfully the CCP has given us the privilege to see it in action during this fine time of great peace.