Bitcoin Network Speed Breaks 1 Petahash per Second

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The bitcoin network reached another historic milestone milestone today, achieving an estimated total computational speed of 1 petahash per second (1 PH/s = 1,000,000 GH/s). The current speed is 40x faster than where we began the year, faster than 79% of the bitcoin community expected as of just seven months ago. The path to this point goes back to the genesis block itself and offers insight into the foundations of the world’s first digital currency.

In the Beginning

After Satoshi mined the genesis block on January 3, 2009, the first difficulty increase took nearly a full year, occurring on December 30. Bitcoin automatically adjust the difficulty in mining blocks to maintain an approximate 10 minute block time. The faster the total network gets the more difficulty it becomes to find blocks. At the time, CPUs were the de facto hardware used as the bitcoin community began its initial growth. While eventual advances in hardware technologies were all but inevitable by nature of the economic incentives, the initial use of CPUs was implemented by design of Satoshi.

By making mining profitable with a CPU, attracting new users would be easier than if customized or expensive equipment were required. The utility of GPU mining was recognized relatively early on, but intentionally delayed for the good of greater proliferation. While almost impossible to imagine now amidst the current ASIC bitcoin mining boom currently underway, the directive to remain with CPUs came directly from bitcoin’s creator:

“We should have a gentleman’s agreement to postpone the GPU arms race as long as we can for the good of the network. It’s much easer to get new users up to speed if they don’t have to worry about GPU drivers and compatibility. It’s nice how anyone with just a CPU can compete fairly equally right now.” – Satoshi Nakamoto, December 12, 2009.

Difficulty adjustments

 

2010 – Year of the GPU

Network Speed
January 1: 9 MH/s
December 31: 120 MH/s
Bitcoin Price
January 1: $0.01
December 31: $0.30

As the calendar rolled over into a new decade and both bitcoin’s community and value increased, the inevitable overtaking of ideology by economics became more prevalent in May 2010 when software for mining bitcoin with a GPU began to surface. GPUs can offer roughly 100x the hashing output of CPUs, depending on specific hardware specs. Additionally, mining with GPUs can be coupled with CPU mining on the same machine offering even greater total and taking advantage of advanced hardware that many in the community already had.

As the bitcoin economy continued its newly-formed arms race, optimizations of GPU mining software became increasingly valuable. As modifications to the open-sourced code were created, developers saw a new opportunity for profits. An early optimization that increased GPU hash rates by approximately 25%, depending on hardware specs, was introduced in September 2010 and offered for a 5 BTC commission of each block mined using it (10% of each 50 BTC block found). Bitcoin evangelists ultimately pushed for open sourcing of the software for the benefit of the community. Jeff Garzik, one of bitcoin’s core developers, paid 10,000 BTC – approximately $600 at the time) to have the software open sourced. Naturally, high end graphics cards saw a sharp increase in demand among the bitcoin community, with top-of-the-line AMD cards achieving up to 700 MH/s.

Later in 2010, the first pooled mining operation was created by Marek Palatinus, often referred to as ‘Slush’ in the bitcoin community. Bitcoin mining pools combine the hashing power of pool participants for a fee. By combining efforts the pool finds a greater number of total blocks which it divides proportionally among the contributors of hashing power in the group, offering a more steady and dependable payout schedule than if each miner (more info here). Slush’s pool found it’s first block on December 16, 2010, forever changing the structure of the bitcoin network.

2010 landmarks

2011 – Specialized Hardware Takes Shape

Network Speed
January 1: 120 MH/s
December 31: 9 TH/s
Bitcoin Price
January 1: $0.30
December 31: $4.72

By mid 2011, total networks speed had grown to 2 TH/s and field programmable gate array (FPGA) bitcoin mining hardware was introduced. FPGAs are generic hardware that can be configured via firmware updates after manufacturing, offering significant advantages to repurposed CPUs and GPUs.

The first FPGAs were initially announced on the bitcointalk forums and offered 100-400 MH/s. At the time FPGAs were first introduced, the cost/benefit was questionable with top-end GPUs able to run at 700 MH/s, but they did offer additional benefits. Notably, a single computer could run stacks of FPGA miners, compared with just a few GPUs under normal conditions.

fpga_farm

The introduction of FPGAs happened to coincide with bitcoin’s first major price boom. Bitcoin traded above $1 for the first time in February 2011 and climbed to $30 by early June, while network speed grew from 170 GH/s to 7 TH/s over the period. Price quickly fell back down to the $2 range by October of that year, but the majority of the network speed was maintained, falling only briefly at the end of 2011.

2011 landmarks

2012 – Rise of the ASIC

Network Speed
January 1: 9 TH/s
December 31: 25 TH/s
Bitcoin Price
January 1: $5.27
December 31: $13.51

By mid-2012 the price of bitcoin had again climbed to $10, sparking greater interest in mining and making viability of application-specific integrated circuits (ASIC) a reality. Bitcoin ASICs are custom hardware specifically built to calculate mining hashes. The now-infamous Butterfly Labs began taking orders for the first ASIC mining rigs in June which, at 5 GH/s, were poised to offer significant profitability to customers. Just a few months later in September, Avalon announced an alternative ASIC solution. The company would sell chips which could be mounted by either the customer or a third party vendor.

2012 landmarks

2013 – The ASICs Arms Race

Network Speed
January 1: 25 TH/s
Current: 1 PH/s
Bitcoin Price
January 1: $13.30
Current: $137.89

The tremendous growth in bitcoin’s network speed this year is directly attributable to the worldwide growth in ASIC mining units. Avalon shipped its first batch of ASIC units in January, putting custom bitcoin mining hardware in consumer hands on a broad scale for the first time. ASICMiner began its hashing with units paid for by investors who have reaped remarkable dividends since then, as well as selling hardware for consumer use. Even Butterfly Labs shipped their June 2012 pre-orders. There are now a dozen different companies offering consumer ASICs, as well as others offering investment opportunities for hosted mining.

For more info about recent events, see our mining section. If you’re considering a mining hardware purchase, be sure to consider all options.

2013 landmarks

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About the author  ⁄ Jonathan Stacke

8 Comments

  • Reply
    September 15, 2013

    I think the title is a little bit misleading as it’s the computational power which has achieved 1 Petahash/s not the bandwidth of the Bitcoin Network.

    I would change the title from “Bitcoin Network Speed Breaks 1 Petahash per Second” to something like “Bitcoin Computation power Breaks 1 Petahash/s barrier”.

  • Reply
    September 16, 2013

    Question is (or better a “bet”): What performance in GH/s will be required for the very last Bitcoin? :-) )

    • Reply
      Alex
      September 16, 2013

      And what will happen when the last bitcoin will be mined ?
      OK they say that there will be a mecanism of tax on each bitcoin transaction, but at which price ? If 1 bitcoin worth 1000$, ok maybe it will be profitable. If not… this will be the end of bitcoin. Because it will cost so much in term of time, electricity and CPU power that no one will plug a miner to mine blocks.

      And at the end if there is no more miner, the decentralized system of bitcoin will end, because not any miner will be fast enough or switched on to validate each bitcoin transaction.

      • Reply
        Titan
        September 16, 2013

        We’re talking about the year 2140 here.
        A.) It’s Probably not the most urgent issue to address with the network. We’ll be flying space craft into low orbit as a part of our daily commute by then and harvesting the moon for mineral deposits.
        B.) Any reasonable estimates of the volume of transactions by that point in time show that this is a non-issue. The transaction fees that get awarded to miners will far exceed the coins awarded by the algorithm LONG before we hit the last coin.

        Even if the transaction fees don’t amount to much, though… If bitcoins last that long, I think we’ll be able to agree on a solution to the problem way ahead of time.

      • Reply
        Jeremie
        September 17, 2013

        When you say “Because it will cost so much in term of time, electricity and CPU power that no one will plug a miner to mine blocks”, you clearly don’t understand that it will be a continuous process that can self-adjust (and over a long period of time). Price of bitcoin, and difficulty for miners will adjust according to miners’ willingness to mine. All miners are considering whether to mine or not continously, not all of sudden in the future!

  • Reply
    asdx
    September 16, 2013

    Bitcoin rocks.

    Satoshi Nakamoto is a fucking genius.

    Thank you Satoshi, whoever you are.

    • Reply
      September 16, 2013

      I know im a genius and your welcome

      • Reply
        Brian
        September 17, 2013

        haha, ya think any genius would know that the proper conjugation of you are is “you’re” not “your”

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