On September 15, the Bitcoin network hit an important milestone, with total estimated computational speed reaching 1 PH/s.
That’s one million GH/s, or 40 times faster than what it was in January. Few expected such computational speed to be achieved this soon.
This new mark comes amid an all-out arms race among manufacturers of ASIC chips, the most powerful chips available for calculating the Bitcoin algorithm. Some manufacturers are so swamped with orders that deliveries are taking months.
Meanwhile, the value of each machine’s calculation speed decreases slightly every day, so getting to market takes on another degree of urgency for ASIC chip makers.
After Bitcoin’s genesis block was mined in the early days of 2009, it took until the very end of the year for the level of computational difficulty to increase. Bitcoin closed the year at $0.30.
In those days, mining could be done with a CPU and still be profitable. In fact, Bitcoin’s pseudonymous creator Satoshi suggested a “gentleman’s agreement to postpone the GPU arms race.”
That agreement did not last long. Since then, processing power has skyrocketed, and CPUs were replaced by GPUs, which were eventually overtaken by the ASICs in 2012.
In that year, the price per Bitcoin started at $5.27 and ended at a modest $13.51. The network’s computational speed increased almost three-fold, from 9 TH/s to 25 TH/s.
In January of 2013, Avalon began shipping ASIC units that allowed regular consumers to mine Bitcoins on a broad scale. This really accelerated the arms race. Now, at least a dozen companies are selling ASIC mining hardware, and consumers can also buy hosted mining as investments.
In nine and a half months, the network hashrate increased from 25 TH/s to the current 1 PH/s. During that time, the dollar value of the Bitcoins has fluctuated pretty wildly, taking off in the spring, coming back down, then rebounding in July.
The current value of about $130 represents a ten-fold increase, but network computational speed has increased 40 times over.