Thanks for the clarification. Did some more research and you're right about the chart data. Was hoping there was more data available, but the network hash rate is mostly derived from the only metric that is public: Avg. time between blocks mined, which can vary quite a bit on a daily basis. 

The difficulty increase is a reaction to the network hash rate and since it computes looking back two weeks, it always lags. It is supposed to keep the average time between blocks around 10 minutes, but in all of 2013, it was around 8 minutes, so it is still lagging. When I ran the numbers, it was amazing to see a bi-weekly average of 34% growth for the network hash rate for 2013. 

The conventional wisdom is that at some point the "Law of big numbers" will take hold and we won't see the kind of growth in hash rate we saw in 2013.  I read another poster on another forum make this case and it was also put forward by Emmanuel (CEO of cloudhashing.com) at the https://www.youtube.com/watch?v=JkBu5_hZgWI Coinsummit conference in San Francisco last week. And the numbers seemed to be slowing down, but in the last 2 days the network hash rate has crossed 50 PetaHashes from a low of 37 PetaHashes which is mind-boggling.

Even though HighBitCoin is in the business of building 1+ PetaHash data center ready systems, it is difficult for us to explain a swing of 5-10 Peta Hashes in such time frame. With the exception of Bitfury which has gone dark, we know all the major ASIC mining hardware companies out there and roughly what the supply side of the equation looks like. 5 PetaHashes of network capacity is a huge data center with over 200 racks of systems and to see that kind of capacity switch on/off seems crazy.

A lot of what I did in my past life was analyze data and provide insights, so this aspect of the network hash rate troubles me. Leaving aside who is behind this increase, a few questions come to mind:

1. Do we trust the data (charts on blockchain.info and other places) and assume this wide fluctuation in network capacity is real?
2. Individual miners wouldn't act in concert to cause this massive increase/decrease in capacity. We are seeing a massive increase even though the price of bitcoin has dropped in the last few days, so I wonder whats behind sudden large increases in 48 hours as opposed to a gradual increase?
3. What is the incentive for even large scale miners to take their capacity offline especially when the price of bitcoin is not going down? (unless it is just before the timed increase of difficulty). There seems to be a weak correlation between hash rate and BTC price


Look forward to theories, speculation or ideas to help understand what's going on...

thanks for reading
Prakash
http://highbitcoin.com

It is mid-march and really unfortunate that the scam site continues to exist and continues to advertise heavily on Google. Wonder why Google is not heeding all the complaints and allows this website to be found. 

From our side, we've registered a police case in the city of Campbell and had a large banner on our website (highbitcoin.com) clarifying that we are not the same company. Unfortunately, these guys are really cunning, since they have a very legitimate looking website, with a Service Level Agreement and they use two legitimate addresses from two different companies to ensure that a basic Google map search will work:

1. Home Page lists HighBitCoin LLC's business registration address in Campbell
2. Terms and Conditions lists another company's real address in Redwood City (Equinix) to send mail to

We are looking into taking more aggressive action with the help of our lawyers after we received two customer emails recently about the same issue. One customer was very irate that he had lost 10BTC to these scam artists. I explained to him that we were both victims: HighBitCoin's identity is stolen and it affects our credibility when we are associated with these scammers, while customers continue to lose BTC and blame us thinking we are operating both sites.

I'm new to the Bitcoin community and to my role at HighBitCoin, so this forum has been invaluable to me as I come up to speed. From my years as a management consultant, one thing I do know is that trust takes a long time to build and only one misstep to be broken forever. So for those interested in Cloud Mining services, rather than give you some marketing stuff, let me say that we are looking into it, but we do not have anything to offer at this time. I'd suggest doing your own due diligence while we do ours: research providers here before putting down your BTC or entering into any contract. Definitely read some of the threads that raise some questions about the potential ROI involved in cloud mining and ...hope that BTC stays above $700

thanks
Prakash Aditham
Director of Product Marketing
HighBitCoin LLC