From: Michael Cassano <mcassano@gmail•com>
To: Anders <blabline@gmail•com>
Cc: Bitcoin Development Mailing List <bitcoindev@googlegroups.com>
Subject: Re: [bitcoindev] Double Exponential Hash Rate Growth and Difficulty Adjustment
Date: Thu, 19 Dec 2024 10:25:34 -0700 [thread overview]
Message-ID: <CAAg3Je1hVqcR_DGZEXhaeO7CEU1k-SLx_1QX=XmnS2Bn11joXw@mail.gmail.com> (raw)
In-Reply-To: <e86753f2-1c79-484d-8f61-47a5dd148b45n@googlegroups.com>
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Hi Anders,
Thank you for the question.
A solution is to keep miners on SHA256 (instead of switching to a hash that
allows for a larger range of difficulty targets) but to require them to
hash again to achieve a secondary difficulty target.
At max target difficulty miners would publish blocks when SHA256(header) ==
1 and when SHA256(SHA256(header)) <= secondary_target where
secondary_target adjusts up and down if primary_target is 1 (where
primary_target represents today's target difficulty).
Nodes then verify blocks by checking that SHA256(header) is == 1 and that
SHA256(SHA256(header) is less than secondary_target.
Best regards,
Mike
On Wed, Dec 18, 2024 at 6:21 PM Anders <blabline@gmail•com> wrote:
> Hi,
>
> I've been looking into the long-term implications of the Bitcoin hash rate
> growth for the difficulty adjustment mechanism, and I'd like to discuss a
> potential concern related to double exponential growth.
>
> As we know, the difficulty adjustment mechanism aims to maintain an
> average block time of approximately 10 minutes by adjusting the target
> value every 2016 blocks. This target value, when represented in
> hexadecimal, effectively determines the number of leading zeros required
> for a valid block hash.
>
> The Bitcoin hash rate has historically shown a strong exponential growth
> trend, driven by advancements in ASIC technology. However, some
> observations suggest that this growth might be accelerating, potentially
> exhibiting double exponential growth (meaning the rate of exponential
> growth is itself increasing exponentially).
>
> If the hash rate were to continue to grow at a double exponential rate,
> the difficulty would need to increase at an accelerating pace to maintain
> the 10-minute block time. This would mean the number of leading zeros in
> the target value would also need to increase at an accelerating rate.
>
> Since the target value is a 256-bit number (64 hexadecimal digits),
> there's a finite limit to the number of leading zeros it can have. With
> approximately 19-20 leading zeros currently observed, there are only about
> 44-45 zeros "left" before reaching this limit.
>
> My concern is that with double exponential hash rate growth, we could
> reach this limit much faster than a simple linear projection would suggest,
> potentially within a decade. Once this limit is reached, the current
> difficulty adjustment mechanism would become ineffective, potentially
> leading to unstable block times and network instability.
>
> My questions for the list are:
>
> 1. Has there been more formal analysis of the Bitcoin hash rate trend to
> assess the likelihood of double exponential growth? Are there any existing
> studies or analyses I should be aware of?
>
> 2. If double exponential growth continues, what are the most promising
> approaches to address this potential issue in the long term?
>
> 3. What are the trade-offs associated with different solutions, such as
> more frequent difficulty adjustments, changing the difficulty adjustment
> algorithm, or changing the proof-of-work algorithm entirely?
>
> Thanks,
>
> Anders
>
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next prev parent reply other threads:[~2024-12-19 19:48 UTC|newest]
Thread overview: 3+ messages / expand[flat|nested] mbox.gz Atom feed top
2024-12-19 1:19 Anders
2024-12-19 17:25 ` Michael Cassano [this message]
2024-12-19 20:00 ` Anders
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