Bitcoin, Crypto currency, Blockchain

Freeze! How much Bitcoin of the Hash Rate is dependent?

Part of one reads of the disastrous effects of the sinking of the Hash Rate. Of the extremely slow transactions to the Freezing of the Blockchain. However, as the block time with the Hash Rate?

A few years ago there was a dreaded apocalyptic scenario: What happens if Bitcoin loses a significant portion of the Hash Rate? Pessimists saw this as a devastating chain reaction that could freeze Bitcoin. In times after a Bitcoin Halving, or a Hard Fork such a world are not being forced demise of ideas of something in the Background, are gone.

How likely is such a scenario? To clarify, here are two assessments. First, the Problem to be discussed about classical probability. In the connection it will be seen that a glance at the Performance confirmed the data of Bitcoin this assessment.

How does Mining just described?

To all the readers to take, whether to repeat, what is the block time, Difficulty and Hash Rate. For a more detailed introduction to the topic Mining, please refer to the appropriate Tutorial. As is well known Miner from practicing a Central role in the Bitcoin Ecosystem: your calculations ensure that, in a decentralized consensus, the Blockchain is built by creating new blocks for the Blockchain.

The Miner transactions. From these transactions, the Hash (checksum) of the preceding block, the timestamp and a counter variable (of the Nonce) is generated, a new Hash. The Bitcoin Protocol calls for this Hash to be of a certain Form: It must begin with a defined number of zeros. A measure of the probability of this Target to achieve, is the Difficulty. The Miner that finds a Hash that meets these criteria, receives for his efforts is a newly-generated Bitcoin and the transaction fees as a reward, and the thus-generated Block is accepted as a new Block in the Bitcoin Blockchain.

The Bitcoin Protocol optimized in this process with the objective that approximately every ten minutes, found a new Block. This happens faster, increase the requirements for newly generated blocks. This happens more slowly, to be adapted to these requirements, and thus the Difficulty as well.

Unlike other crypto-currencies, such as, for example, Monero is the Bitcoin Protocol adjusts the difficulty of all 2.016 blocks. In the case of a target average block time of ten minutes, the two weeks.

The Hash Rate , finally, is a measure of the computing power of the network. Should a break-in, the Hash Rate dramatically, it would mean that for about two weeks blocks are to be found slowly. This could lead to the end of the world scenario, more and more miners jump off – after all, the Mining would not be worthwhile without the further development of the Blockchain. At the end of a frozen Blockchain.

Mining or what we can learn from Dice

The search for a Target matching Block is a random iterative process. As a model system can be used to illustrate the System, according to the Motto “we make stupid us jans” as the dice game. Let’s say the goal would be to roll the dice a Six. With a cube in Hand, the probability of 1/6, with two Dice at just 31 percent. Three cubes will lead to a probability of 42%. With more Dice, the probability approaches 100 percent:

This connection could be also Vice versa. The mean duration to “Roll” a Six behaves anti-proportional to the roll of the Dice. The number of throws that you have to perform up to a Six, it decreases with the number of dice. This number of litters, in turn, is a measure of the duration needed to Find a Six:

In the considered model system, the number of litters would be doubled only if the number of dice falls to about 75 percent. The thought experiment can be applied to the Mining process of Bitcoin. Each cube would stand out in this analysis for a Miner, the Six would be the Target, and the average number of litters would correspond to the block time, if there are a sufficient number of Dice (say a high Hash Rate) in a litter. The result of this Model is to look at it is that only in the case of a removal of one of the dice increases the duration up to the Roll of a Six.

Viewing of the real system: As the Hash Rate will affect the block time?

Quickly you can find objections: Is the Situation in the thought experiment really with the mining comparable? To answer this question, we consider the real connection between Hash Rate Changes and block time. Thanks to the transparency of the Bitcoin network, it is known, how high the Hash Rate was in the past, and how long the Find of blocks lasted. On this Basis, one can determine the influence of a case, Hash Rate on the block of time.
Using Bitcoinity can rely interested on data up to 2009. The raw data for the block time, Difficulty and Hash Rate are as follows:

As you can see, moving the block of time in the observed period, mostly between five and 15 minutes. The Hash Rate increased largely and fell back only slightly. The ratio of Hash rates between the Hash Council looked at yesterday and today. We consider the logarithm of this difference:

Hash Rate increased (today) = log (Hash Rate(today)/Hash Rate(yesterday))

If the Hash Rate doesn’t change, we calculated an increase from zero in a case of the same a negative increase, and if the Hash Rate was greater, a positive increase.

To see the influence of a Hash-Rate of Change on the block time, you could plot the block time is on the increase. If you do this, and on Hash-Rate increases, non-zero is limited, is to see a little bit of surprising behavior:

The stronger the Hash Rate increases, the shorter the block time, and Vice versa. The data may be noisy, but that is definitely get from this.

Final modeling: How strong is the block time could increase?

The red line corresponds to a linear Fit, the result of which you can use to model the block-time dependence. On the Basis of this Fits, you can estimate the block time would change if the Hash Rate drops to a fraction of its current value. The image is reminiscent of the previous thought experiment:

According to this calculation, the Hash Rate would have to fall by 80 percent, to increase the block time to 20 minutes. Since 2010, the available data shows that the block time is like in the extreme case, to 20 percent. Accordingly, it will take some time until the Hash Rate falls to deep. And even if that is so, we speak of a doubling of block time. This is much, far, however, any Freezing of the Blockchain. In the times of the Lightning Networks with the concerns in order to slow confirmations to lose their importance.

In two Ways we were the Motto #DYOR: We have not called in case of an alarm of ballistic theory, just FUD, but in two Ways soberly discussed, whether this theory really has stock. The model-like examination of the probabilities and analysis of actual data regarding the Performance of Bitcoin to come to the same result. With Randall Munroe of xkcd, we can conclude so: Science. It works, bitches.

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