5 minute bitcoin blocks what the heck is going on?

[xzempt]

Bitcoin Block Time Halved To Five Minutes Amid Exponential Network Growth
Aug 13, 2013 Posted By Jonathan Stacke In Bitcoin 201, Economics, Featured, Mining, News, Security    Tagged Attack, Block, Chain, Transaction    Comments 11
 



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network growth
By now, bitcoin enthusiasts and professionals alike are aware of the tremendous growth of the bitcoin network so far this year. As millions of dollars (and bitcoin) are invested in increasingly powerful mining equipment, the cumulative hash rate of the network has continually blown by the periodic difficulty adjustments.

Earlier this year we explained the long-term implications of this, but the near term effects are being felt as well. Since that piece was published, the network has continued to grow, as has the growth rate, creating profound near-term effects. In particular, the average time between blocks has fallen to approximately five minutes on average, half the time bitcoin was originally programmed for.

[altcoinband]

I think the author got it wrong, it's the block's value which halved, not it's time.

[01BTC10]

I think the author got it wrong, it's the block's value which halved, not it's time.

Time between block is now 50% less because network don't have the time to readjust properly to exponential hashrate grow.

http://thegenesisblock.com/bitcoin-block-time-halved-to-five-minutes-amid-exponential-network-growth/

[BrianDeery]

The original poster is correct, the block time is indeed falling.  The reward value halved late last year, so that is not newsworthy.

This is happening because of the exponential rise in hashing power that the network is seeing due to all the ASIC being deployed.  I think it is disingenuous to say that bitcoin was programmed for 10 minutes.  The 10 minute figure is what the network tries to adjust to every 2 weeks or so.

Here is a graph showing the exponential rise in the hash power: http://blockchain.info/charts/hash-rate

When the rate is 5 minutes like the article says (twice as fast), the difficulty will be adjusted after 1 week (also twice as fast)

Here is the graph referenced in the article.  http://blockchain.info/charts/avg-confirmation-time

The article graph leaves off new information, that the time has recently jumped back up.  

There is a big uptick back to 7.4 minutes at the time of this post.  that is the network correcting itself, not quite to 10 minutes.  If no new asics were deployed it would correct back to 10 minutes in a little less than 2 weeks time.

[BrianDeery]

decrease block time due to increasing hash power is not what scares me.  As we see here, the network fixes itself quicker, the faster the rise in hash power.  A doubling of hash power is corrected in 1 week.

What I am scared of is a reduction in hash power.  If the hash power is decreased by 1/2, the network will take 4 weeks to correct itself.  That is a full month of 20 minute blocks. 

This is one of the effects that gives miners so much power.  If the network splintered into two camps following different policies, both sides would have to struggle though a period of less usability.  if one of the splinters had only 10% of the hash power as the previous unified chain, confirmations would take 100 minutes for 20 weeks.  This would make that splinter much less usable, punishing all the miners and users of the smaller splinter.