As the bitcoin price has risen out of the $200’s over the past month, the price increase has driven another important event: more mining hardware is being brought online. Miners earn revenue two ways. The first is with the block reward, which is 25BTC approximately every 10 minutes. The other way is with transaction fees. The block reward also acts as the mechanism in which new supply of bitcoin is generated. Because mining tends to reward those that can do the most work, miners deploy increasing amounts of hardware to try to be the first to mine each block. To keep a steady block creation rate, Bitcoin creator Satoshi Nakamoto put in place a rule that updates the network difficulty every 2016 blocks, or approximately two weeks. According to Bitcoin Wisdom , the difficulty increase that took place today rose by 10.44%. The last time the difficulty increased by more than 10 percent was on November 5, 2014, when the difficulty increased by 10.05 percent. Further, Bitcoin Wisdom is predicting that the next bitcoin difficulty increase in 2 weeks will be 10.25%. The last time there were two double digit percentage increases in difficulty was August 19, 2014 and August 31, 2014. But the increase in difficulty makes sense. The next generation of bitcoin miners have been released by three of the top companies in the space. In August, Bitmain announced the launch of the Antminer S7 , which contains the BM1385 ASIC. Each S7 can generate upwards of 4,850 GH/s while only using 0.25 J/GH of power. In October, the Chinese mining firm BW announced that it was releasing its next stage bitcoin miner, which would contain a 14nm chip. Virgilio Lizardo Jr., head of international at Bitbank, told Bitcoin Magazine that the first batch of servers released […]
