updated hash rate, difficulty and profitability metrics

ch10.asciidoc

@@ -794,10 +794,6 @@ Bitcoin's block interval of 10 minutes is a design compromise between fast confi
 
 === Mining and the Hashing Race
 
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-Update metrics
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 ((("hashing race", id="ix_ch10-asciidoc23", range="startofrange")))((("mining","hashing race and", id="ix_ch10-asciidoc24", range="startofrange")))((("processing power and hash racing", id="ix_ch10-asciidoc25", range="startofrange")))Bitcoin mining is an extremely competitive industry. The hashing power has increased exponentially every year of bitcoin's existence. Some years the growth has reflected a complete change of technology, such as in 2010 and 2011 when many miners switched from using CPU mining to((("graphical processing units (GPUs)","processing power of"))) GPU mining and((("field programmable gate array (FPGA)"))) field programmable gate array (FPGA) mining. In 2013 the introduction of((("Application Specific Integrated Circuit (ASIC)"))) ASIC mining lead to another giant leap in mining power, by placing the SHA256 function directly on silicon chips specialized for the purpose of mining. The first such chips could deliver more mining power in a single box than the entire bitcoin network in 2010.
 
 The following list shows the total hashing power of the bitcoin network, over the first five years of operation:
@@ -807,19 +803,21 @@ The following list shows the total hashing power of the bitcoin network, over th
 2011:: 16 GH/sec–9 TH/sec (562× growth)
 2012:: 9 TH/sec–23 TH/sec (2.5× growth)
 2013:: 23 TH/sec–10 PH/sec (450× growth)
-2014:: 10 PH/sec–150 PH/sec in August (15× growth)
+2014:: 10 PH/sec–300 PH/sec (3000× growth)
+2015:: 300 PH/sec-800 PH/sec (266× growth)
+2016:: 800 PH/sec-2.5 EH/sec (312× growth))
 
 In the chart in <<network_hashing_power>>, we see the bitcoin network's hashing power increase over the past two years. As you can see, the competition between miners and the growth of bitcoin has resulted in an exponential increase in the hashing power (total hashes per second across the network).
 
 [[network_hashing_power]]
-.Total hashing power, gigahashes per second, over two years
-image::images/msbt_0807.png["NetworkHashingRate"]
+.Total hashing power, terahashes per second (TH/sec)
+image::images/hash-rate.png["NetworkHashingRate"]
 
 ((("proof-of-work target","hashing power and")))As the amount of hashing power applied to mining bitcoin has exploded, the difficulty has risen to match it. The difficulty metric in the chart shown in <<bitcoin_difficulty>> is measured as a ratio of current difficulty over minimum difficulty (the difficulty of the first block).
 
 [[bitcoin_difficulty]]
-.Bitcoin's mining difficulty metric, over two years
-image::images/msbt_0808.png["BitcoinDifficulty"]
+.Bitcoin's mining difficulty metric
+image::images/difficulty.png["BitcoinDifficulty"]
 
 In the last two years, the ASIC mining chips have become increasingly denser, approaching the cutting edge of silicon fabrication with a feature size (resolution) of 16 nanometers (nm). Currently, ASIC manufacturers are aiming to overtake general-purpose CPU chip manufacturers, designing chips with a feature size of 14nm, because the profitability of mining is driving this industry even faster than general computing. There are no more giant leaps left in bitcoin mining, because the industry has reached the forefront of((("Moore's Law"))) Moore's Law, which stipulates that computing density will double approximately every 18 months. Still, the mining power of the network continues to advance at an exponential pace as the race for higher density chips is matched ((("data centers, mining with")))with a race for higher density data centers where thousands of these chips can be deployed. It's no longer about how much mining can be done with one chip, but how many chips can be squeezed into a building, while still dissipating the heat and providing adequate power.
 
@@ -833,11 +831,7 @@ In the last two years, the ASIC mining chips have become increasingly denser, ap
 
 ((("hashing race","mining pools", id="ix_ch10-asciidoc26", range="startofrange")))((("mining pools", id="ix_ch10-asciidoc27", range="startofrange")))In this highly competitive environment,((("solo miners"))) individual miners working alone (also known as solo miners) don't stand a chance. The likelihood of them finding a block to offset their electricity and hardware costs is so low that it represents a gamble, like playing the lottery. Even the fastest consumer ASIC mining system cannot keep up with commercial systems that stack tens of thousands of these chips in giant warehouses near hydro-electric power stations. Miners now collaborate to form mining pools, pooling their hashing power and sharing the reward among thousands of participants. By participating in a pool, miners get a smaller share of the overall reward, but typically get rewarded every day, reducing uncertainty.
 
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- Update metrics
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-Let's look at a specific example. Assume a miner has purchased mining hardware with a combined hashing rate of 6,000 gigahashes per second (GH/s), or 6 TH/s. In August of 2014 this equipment costs approximately $10,000. The hardware consumes 3 kilowatts (kW) of electricity when running, 72 kW-hours a day, at a cost of $7 or $8 per day on average. At current bitcoin difficulty, the miner will be able to solo mine a block approximately once every 155 days, or every 5 months. If the miner does find a single block in that timeframe, the payout of 25 bitcoin, at approximately $600 per bitcoin, will result in a single payout of $15,000, which will cover the entire cost of the hardware and the electricity consumed over the time period, leaving a net profit of approximately $3,000. However, the chance of finding a block in a five-month period depends on the miner's luck. He might find two blocks in five months and make a very large profit. Or he might not find a block for 10 months and suffer a financial loss. Even worse, the difficulty of the bitcoin proof-of-work algorithm is likely to go up significantly over that period, at the current rate of growth of hashing power, meaning the miner has, at most, six months to break even before the hardware is effectively obsolete and must be replaced by more powerful mining hardware. If this miner participates in a mining pool, instead of waiting for a once-in-five-months $15,000 windfall, he will be able to earn approximately $500 to $750 per week. The regular payouts from a mining pool will help him amortize the cost of hardware and electricity over time without taking an enormous risk. The hardware will still be obsolete in six to nine months and the risk is still high, but the revenue is at least regular and reliable over that period.
+Let's look at a specific example. Assume a miner has purchased mining hardware with a combined hashing rate of 14,000 gigahashes per second (GH/s), or 14 TH/s. In 2017 this equipment costs approximately $2,500 USD. The hardware consumes 1375 watts (1.3 kW) of electricity when running, 32 kW-hours a day, at a cost of $1 to $2 per day on very low electricity rates. At current bitcoin difficulty, the miner will be able to solo mine a block approximately once every 4 years. If the miner does find a single block in that timeframe, the payout of 12.5 bitcoin, at approximately $1000 per bitcoin, will result in a single payout of $12,500, which will not even cover the entire cost of the hardware and the electricity consumed over the time period, leaving a net loss of approximately $1,000. However, the chance of finding a block in a four-year period depends on the miner's luck. He might find two blocks in four years and make a very large profit. Or he might not find a block for 5 years and suffer a bigger financial loss. Even worse, the difficulty of the bitcoin proof-of-work algorithm is likely to go up significantly over that period, at the current rate of growth of hashing power, meaning the miner has, at most, one year to break even before the hardware is effectively obsolete and must be replaced by more powerful mining hardware. If this miner participates in a mining pool, instead of waiting for a once-in-four-years $12,500 windfall, he will be able to earn approximately $50 to $60 per week. The regular payouts from a mining pool will help him amortize the cost of hardware and electricity over time without taking an enormous risk. The hardware will still be obsolete in one or two years and the risk is still high, but the revenue is at least regular and reliable over that period. Financially this only makes sense at very low electricity cost (less than 1 cent per kW) and only at very large scale.
 
 Mining pools coordinate many hundreds or thousands of miners, over specialized pool-mining protocols. The individual miners configure their mining equipment to connect to a pool server, after creating an account with the pool. Their mining hardware remains connected to the pool server while mining, synchronizing their efforts with the other miners. Thus, the pool miners share the effort to mine a block and then share in the rewards.