There are rumblings on the interwebs of a devastating hashrate crash that occurred yesterday as data sites were reporting hashrate below 70 EH/s after it had been well above 100 EH/s earlier in the week. Is Bitcoin doomed? Are miners shutting down? Or worse, being forced to shut down by the Chinese government?
The "hashrate crash" isn't real. Long block intervals are vastly overrepresented in fixed-period sampling
— James Prestwich (@_prestwich) September 24, 2019
This is because the interval is long. A 18-minute block has approximately the same likelihood as a 2-minute block, but affects time-based sampling 9x more (!!!)
There are rumblings on the interwebs of a devastating hashrate crash that occurred yesterday as data sites were reporting hashrate below 70 EH/s after it had been well above 100 EH/s earlier in the week. Is Bitcoin doomed? Are miners shutting down? Or worse, being forced to shut down by the Chinese government?
Eh, probably not. Around these parts, you'll often hear us say that Bitcoin blocks come in roughly every ten minutes. Roughly being the most important word in that string. Due to the nature of the randomness of finding a hash below a given difficulty target, it is impossible to guarantee that blocks come in exactly every ten minutes. The difficulty adjusts every 2016 blocks to make sure blocks are coming in every ten minutes, on average.
In reality, block intervals vary greatly and have a wide range. Here's a breakdown of last week's interblock time intervals courtesy of Nic Carter.
This is the last week's worth of blocks ordered by interblock time. The orange line is the 144-block moving average. That little bump is what people are panicking about pic.twitter.com/XYohIOWs85
— nic carter (@nic__carter) September 25, 2019
As you can see, interblock time varies greatly. Some blocks are mined less than a minute after the preceding block and some take as long as 75 minutes! Blocks that take longer to mine affect hashrate calculations much more than blocks that are mined more quickly. This is exacerbated by data providers that use small datasets and short look back periods that are severely impacted by outliers. Yesterday's "hashrate crash" is probably more accurately described as "normal and expected interblock time variance".
So go forth worry free! All is well in the world of probabilistic hash hunting.
Final thought...
Need to bring back the Martini Lunch. Keep it old school.
