What happens if the hashrate drops by 50% at once?

[Wronsk]

We can imagine a war that causes a global blackout. So if the hash rate drops by 50%, assuming the next BTC difficulty adjustment is in 2000 blocks.
As the hash rate drops by 50%, each block will be mined in 20 minutes instead of 10 minutes. So, if the hash rate drops by 80/90/95%, it is possible that there will never be a new BTC difficulty adjustment because the time to find a nonce matching the current difficulty will increase. If my calculs are correct, for a drop of 95% of hashrate, each blocs will be mined in 200 minutes, so 277 days to reach a difficulty adjustment (considering 2000 blocs remaining).

There are an error ?

[1714537880]

1714537880

[NeuroticFish]

There are an error ?

You are pretty much correct. I won't go into details that there's an average of 10 minutes and so on. But yes, if the hash rate drops a lot, the next adjustment will come in ... much later.
But the thing is that realistically it's very unlikely to have such a major drop. This is the beauty of being decentralized. Many countries/regions. Many not even using electricity from the grid. They can't all just go down all together.

[HeRetiK]

We can imagine a war that causes a global blackout. So if the hash rate drops by 50%, assuming the next BTC difficulty adjustment is in 2000 blocks.
As the hash rate drops by 50%, each block will be mined in 20 minutes instead of 10 minutes. So, if the hash rate drops by 80/90/95%, it is possible that there will never be a new BTC difficulty adjustment because the time to find a nonce matching the current difficulty will increase. If my calculs are correct, for a drop of 95% of hashrate, each blocs will be mined in 200 minutes, so 277 days to reach a difficulty adjustment (considering 2000 blocs remaining).

There are an error ?

Luckily there's no such thing as a global power grid, so while large scale blackouts may happen, their effects will usually be somewhat localized (though admittedly the scale of that locale may be as large as Continental Europe or the East / West of the USA). At least if you ignore global catastrophic event like geomagnetic storms or nuclear war.

Apart from that your calculations are correct: If you cut the hashrate by 95%, average block interval increases to 200 minutes and the difficulty adjustment will take that much longer. However also keep in mind that this also assumes that none of that hashrate comes back within those 277 days. And as much as I love Bitcoin, in the unlikely case of a global blackout that knocks out 95% of the world's grid for almost a year, Bitcoin is going to be at the very bottom of my priorities

[o_e_l_e_o]

In addition to the answers above, in a completely extreme solution in which bitcoin becomes complete unusable, such as a loss of something like 99% of the hashrate semi-permanently, block times going to 16 hours and the next difficulty retarget being over a year away, then there is nothing stopping us from forking bitcoin in order to manually adjust the difficulty back down to a more reasonable level. We would then just let it self adjust again from that new level, and it would slowly creep back up over the coming months and years as humanity slowly recovers from whatever massive disaster has befallen us.

[casinotester0001]

Maybe this is possible too:

If the hashrate comes down so extremely the 'mining part of the world' would try to get any mining machine as the profitability would go up even for non-profitable miners. They would buy/ship all miners to these places. Even GPU/FPGA mining would become profitable again (for a short time). So my expectation is that the hashrate would rise again but we wouldn't reach the former hashrates. I can't imagine an average blocktime more than 30 minutes for a long period. The mining rentability would correct it.

[Wronsk]

Thanks for your answers, I understand that it is really unlikely that this will happen but wouldn't there be a way to improve BTC's algorithm to consider a large and fast variation of its hashrate (maybe with an average time of the last 50 blocks or any suitable system), some kind of security system to prepare BTC to fight against any eventuality. It seems that Ukraine has been without electricity for a few days and we can see a quite big variation in the hashrate of BTC since November 22nd, I don't know if it is due to Ukraine but we can imagine a situation where Europe and USA would be deprived of electricity and that would cause a big problem in the hashrate. Since 2009 this situation has not happened but the more time passes the more likely it is to happen, especially with the recent news. Another nice solution would be to better distribute the miners geographically but I'm sure that will happen over time, maybe even placing some in orbit.

[LoyceV]

As the hash rate drops by 50%

If this happens all of a sudden, I'd wonder if someone is trying to do a 51% attack with the remaining hash rate.

if the hash rate drops by 80/90/95%

In this scenario, a 51% attack becomes very likely. What if there's no global blackout, but instead, your country got disconnected from the rest of the internet? The miners in your country will continue, and maybe make up 5/10/20% of global hash rate, but the rest of the world will mine much faster. So the moment the (transatlantic) internet connection is restored, you won't have the longest chain, and your latest blocks will be orphaned and all transactions in there will be reorganised.

[hosseinimr93]

Thanks for your answers, I understand that it is really unlikely that this will happen but wouldn't there be a way to improve BTC's algorithm to consider a large and fast variation of its hashrate (maybe with an average time of the last 50 blocks or any suitable system), some kind of security system to prepare BTC to fight against any eventuality.

Note that with decreasing the difficulty adjustment period that much, we would decrease the accuracy of our estimation. To get a good average, we need enough samples.
Till now, difficulty adjustment algorithm has worked well and I don't think there is any need to change the difficulty adjustment period.

[o_e_l_e_o]

If the hashrate comes down so extremely the 'mining part of the world' would try to get any mining machine as the profitability would go up even for non-profitable miners.

Not until the difficulty adjusts, and if that isn't going to happen for a year then it makes no difference. If the difficulty is based on a hashrate of 200 EH/s, and you have 100 TH/s, then it will take you the exact same amount of time (on average) to find a block whether the other 199.9999 EH/s actually exists or not.

but wouldn't there be a way to improve BTC's algorithm to consider a large and fast variation of its hashrate (maybe with an average time of the last 50 blocks or any suitable system)

Some altcoins have attempted this, and it has often resulted in miners gaming the system to maximize their profits, generating lots of blocks in quick succession and then very few for a sustained period. Having a fixed difficulty adjustment also protect against some kinds of Sybil attack in which an attacker could trick you in to accepting a malicious chain.

[pooya87]

wouldn't there be a way to improve BTC's algorithm to consider a large and fast variation of its hashrate (maybe with an average time of the last 50 blocks or any suitable system), some kind of security system to prepare BTC to fight against any eventuality.

Such major change in the consensus rules that is also not backward compatible requires a hard fork. We are never going to have a hard fork for something that is highly unlikely to happen.

It seems that Ukraine has been without electricity for a few days and we can see a quite big variation in the hashrate of BTC since November 22nd,

Hashrate is mainly affected by the price. So any change you see is because of the highly volatile market and the huge market crash that we have had ever since the start of this war (from $70k to $16k).

imagine a situation where Europe and USA would be deprived of electricity and that would cause a big problem in the hashrate.

Not that much hashrate is located in Europe specially this year since electricity price has been shooting up.
As for US the same arguments apply, there is only a portion of the hashrate in US not all of it and not a significant percentage. And they are spread across USA and they use various electricity sources that includes for example solar power (that is not a grid to go down).

[fennic]

In my opinion that if hash rate Drops to 50% than A market could crash but hard for sometime but also this hash rate could again go to spike cause miners are all over the world and these miners cannot shut down in a single time frame.
As we know that in a single country that is possible cause if china holds 50% miners tha 20 to 25% has rate can be dropped for manipulation and that happened in 2020. And that's not just new.

[BlackHatCoiner]

Hashrate is mainly affected by the price. So any change you see is because of the highly volatile market and the huge market crash that we have had ever since the start of this war (from $70k to $16k).

About a year ago, at $70k we had 22.6 trillion difficulty. Currently, at $16k, we have 36 trillion difficulty. Apparently, hash rate isn't mainly affected by the price.

As we know that in a single country that is possible cause if china holds 50% miners tha 20 to 25% has rate can be dropped for manipulation and that happened in 2020. And that's not just new.

Two things need to be noted here. First, mining in China is illegal (nonetheless, some Chinese still mine), so it doesn't have the same large proportion. Second, the rest of the world isn't China.

[LoyceV]

About a year ago, at $70k we had 22.6 trillion difficulty. Currently, at $16k, we have 36 trillion difficulty. Apparently, hash rate isn't mainly affected by the price.

I think it's safe to assume the hash rate would have been much higher now if Bitcoin would have been at $100k now. The fact that it still went up is probably because new mining hardware got more powerful, but for sure miners have much less money to spend now.

[DaveF]

About a year ago, at $70k we had 22.6 trillion difficulty. Currently, at $16k, we have 36 trillion difficulty. Apparently, hash rate isn't mainly affected by the price.

I think it's safe to assume the hash rate would have been much higher now if Bitcoin would have been at $100k now. The fact that it still went up is probably because new mining hardware got more powerful, but for sure miners have much less money to spend now.

Makes you wonder how much gear is just sitting idle waiting for the price of BTC to go up or for enough for it to be worth it. And that if BTC does jump to $22000 or $25000 or something else how fast will we se a hashrate spike. No waiting on gear, no setup time, no configuration. Just however long it takes to drive to the datacenter and start powering up the miners and chillers.

I know there are a lot of places sitting idle since it just does not pay to mine at the current prices, add $6000 to $9000, which is a lot of swing up from where it is but still possible in a short span of time. And all of a sudden there is going to be a bunch of us looking at the hashrate going where the hell did those miners come from?

-Dave

[pooya87]

Hashrate is mainly affected by the price. So any change you see is because of the highly volatile market and the huge market crash that we have had ever since the start of this war (from $70k to $16k).

About a year ago, at $70k we had 22.6 trillion difficulty. Currently, at $16k, we have 36 trillion difficulty. Apparently, hash rate isn't mainly affected by the price.

You are right there are also other factors affecting the hashrate like the introduction of more efficient hardware, manufacturing and more importantly delivering these hardware to miners who filled an order a while ago (this could take months).

[LoyceV]

Makes you wonder how much gear is just sitting idle waiting for the price of BTC to go up or for enough for it to be worth it.

Not too much, I guess. New miners won't be ordered if they're not profitable at the moment, so only old miners can be idle. And considering the difficulty still went up this year, the share in hash rate from idle miners gets smaller until the moment they're not worth it anymore even if the Bitcoin price goes up a lot.

I know there are a lot of places sitting idle since it just does not pay to mine at the current prices, add $6000 to $9000, which is a lot of swing up from where it is but still possible in a short span of time. And all of a sudden there is going to be a bunch of us looking at the hashrate going where the hell did those miners come from?

Even if there's a sudden large increase in hash rate, that means some of them will drop out again after the next difficulty adjustment.

[BlackHatCoiner]

You are right there are also other factors affecting the hashrate like the introduction of more efficient hardware, manufacturing and more importantly delivering these hardware to miners who filled an order a while ago (this could take months).

Correct, and there's absolutely the price as a parameter, but I doubt it's number #1 priority for large farms, which are what consist most of the hash rate. I'm wondering, do we have a list of hardware efficiency overtime? We can verify that it's the more efficient hardware that drove the difficulty up. I haven't seen miners talking frequently about that.

[o_e_l_e_o]

If you look at the data from some of the largest miners, then you see that instead of them varying their hashrate depending on the price of bitcoin, they instead vary how much of their mining rewards they immediately sell to cover their costs and how much they simply hold on to. But on the other hand, several such miners are also starting to dip in to the reserves they built up when hashrate was lower and price was higher, so this kind of buffering can't go on forever. If the price doesn't go back up in the medium to long term, then eventually miners who are dipping in to their reserves will run out of their reserves and simply shut down, and hashrate will come back down again. I don't necessarily think that's a bad thing though - it is impossible to sustain an exponential hashrate growth forever.

[hZti]

Also if the hashrate drops like this, there will be many people that can power on their old miners again in the area that still has power. In any case there would be no possibility to use the bitcoin network if there is no power or no internet.