On 3 January 2009, the bitcoin network came to life with Satoshi Nakamoto mining the genesis block of bitcoin (block number 0), which had a reward of 50 bitcoins. Ever since that day more and more people have joined the network and it has grown exponentially since then. There are a lot of contributing factors to the network growth, which include new advances in Hardware and increase popularity over the years. Before we take a look into the Bitcoin’s mining network milestones, let’s get a better understanding of what’s causing it and why.
The Bitcoin hash rate is a measurement of the entire network’s computing power, generated by a vast system of miners who perform complex mathematical calculations in order to secure the blockchain, update and maintain the Bitcoin’s public ledger of all transactions that ever occurred.
The hash rate generally increases as more people join the network and because advances in hardware and software. There’s only so much BTC to be made by securing a single block and miners are in an arms race of computational power to claim as much of the block rewards as possible.
Source: blockchain.com
In the early days of Bitcoin mining you could only mine on a CPU “Proof-of-work is essentially one-CPU-one-vote, said Satoshi Nakamoto” but eventually people figured out that graphics cards were faster and more efficient at mining bitcoin. As you can imagine the network continue to grow over the years. As the time passed people started mining on fpgas and eventually An Application-Specific Integrated Circuit, or ASIC that now dominate the Bitcoin mining Network. As we look back in time on the chart you will see that large Bitcoin difficulty increases will correlate to new hardware being released on the market a lot of time but not always.
The first major mining milestone on the Bitcoin network was in June 2014, when the network for the first time exceeded 100 Petahash/sec. Which may have been contributed to by new hardware coming on the market (S5) or the US government auctioned the more than 29,000 bitcoins that had been seized from Silk Road. Most likely it was from increase awareness and adoption after the price per Bitcoin broke $1,000 just six months prior.
Less than 2 years later in January 2016, the network rate exceeded 1 Exahash/sec, which is 10 times more than it was in June 2014. The large jump in net hash could be attributed to the next generation Bitcoin miner the S7, which was initially released in the summer of 2015 and was at least three times more powerful than its predecessor the S5.
3 ½ years later in September 2019, the network rate exceeded 1 ZettaHash /sec, which is 1000 times more than it was in January 2016. That is an astonishing growth rate but we may have reached the hardware limits with the latest Hardware (S17) running 7 nanometers processors. Unlike in the past where were used to seeing three times more powerful bitcoin mining hardware coming out every couple of the year. This time around due to the hardware substructure limitations we will most likely just see incremental increases but only time will tell.
It will be interesting to see what the future holds for the Bitcoin network over the next 3 years, I personally don’t think we’ll see another thousand percent increase but if it’s not the hardware this time adoption could drive it up there too.