Why is the computing power unstable (inconsistent computing power)?

Why is the computing power unstable? Editor’s Note: This article comes from William’s Talk (ID: William1913), author: Chen William, authorized reprint from Odaily Planet Daily.

Computing power is a very important indicator because mining difficulty in the field of cryptocurrency is the highest. However, as the price of bitcoin rises and more and more users join this industry, the investment in computing power will also gradually increase. So, what is unstable computing power? Why is the computing power unstable? There are three reasons: 1. Due to the large volatility of bitcoin prices; 2. Due to the high transaction costs in the bitcoin network, a large amount of electricity is consumed to ensure network security and operation. 2. Due to the decline or zeroing of some mainstream coins in the current market, and the prices of these digital currencies have been continuously declining. 3. Bitcoin mining revenue will be greatly affected and may result in losses. Let’s take a look at the problem from two aspects. 1. The reason for the instability of bitcoin computing power is that the network transaction fees of bitcoin are calculated by continuously increasing the process of block confirmation. Generally, the processing speed of a new block is about 10 minutes, which allows miners to deposit their tokens and receive corresponding rewards (which we call “income” calculated according to normal levels), resulting in a certain inflation rate. However, in reality, when a new payment occurs, it still takes 1 hour to settle all balances, so this situation is easy to occur. 2. The volatility of the average computing power of the entire Bitcoin network generally means that each byte can only produce 4 output values (ticks) per second. This means that it is possible to determine whether the current total number of tokens received by the entire network is high enough by using only the total number of outputs generated in a specific period of time. If the value of this token is not enough to meet the needs of the entire network, it is difficult to restore the original issuance level (that is, only 21 million tokens can be produced per day); on the contrary, if you buy an old machine now and run it for more than a year, you may never get new tokens again. 3. Due to the large volatility of the average computing power of the entire Bitcoin network and the inability to completely cover the needs of the entire network, transaction costs in the Bitcoin network also follow. According to coinmarketcap data, the global Bitcoin network has completed more than 900 million transactions since its launch, nearly 5 times the previous year. Although the price of BTC has been on the rise recently, the market trend since 2018 has not been optimistic, especially in the bull market since the beginning of this year. The change in the computing power of the Bitcoin network mainly depends on the consensus of market participants, such as Chinese investors, foreign investment fund managers, and even institutional users. For most people, they believe that the computing power of Bitcoin has not changed much, but has just kept up with the market’s reaction.

Inconsistent computing power

According to reports, according to OKLink data, the on-chain transaction volume of BTC in the past 24 hours is settled with 5 sub-atomic quantum bits E1. Among them, the number of active addresses in ETH is 5077, a decrease of 15.31% from the previous day; the number of new addresses in BTC is 42100 (UTC + 8), an increase of 12.33% from the previous day.

The network difficulty is about 16.10T, an increase of 14.68% compared to yesterday. In terms of mining revenue, the current BTC earns $0.0956 per THash per day; the average block time of BTC is 3 minutes + daily production growth: 4.00%; when the block reward is halved, no new coins will be generated or the output of new coins will be reduced by half.