Bitcoin and blockchain technology is an area of ongoing interest for me. Although I’m not as involved in the space as I once was, I keep my eye on the news. The Bitcoin ecosystem can be quite insular, so I’m particularly interested in events that bubble up into the more conventional financial arena.
Last week saw a few news stories break about Bitcoin.
Winklevii Amend BIT S–1, Again
Tyler and Cameron Winklevoss – the twin Olympic rowers and Facebook litigants turned prolific Bitcoin investors – filed an amended S–1 on their Bitcoin Investment Trust (the BIT), the proposed Bitcoin ETF that’s thus far eluded SEC approval to trade on a major exchange.
Note: the Winklevoss’ BIT is not to be confused with the Greyscale Bitcoin Trust, which is traded under symbol GBTC on the OTCQX exchange.
Their S–1 amendment, the sixth to be filed since the initial filing on July 1, 2013, reflects the Trust’s decision to cease negotiations with NASDAQ, instead signaling intent to debut on the BATS exchange. At least according to Investopedia, which can sometimes be a bit iffy on coverage, BATS is one of the most popular exchanges for ETFs. The proposed security would trade under the BIT’s initial desired ticker symbol: COIN.
The best article I could find about this amendment is this one on Seeking Alpha. Toward the end, there are a series of bullet points explaining the state of Bitcoin, the BIT, and the rest of the cryptocurrency ecosystem. It’s definitely worth checking out.
Fun Update: The Bitcoin Network is now ~22,800x faster than the Top 500 supercomputers combined
In December 2015, I published a short post updating the findings of Forbes contributor Reuven Cohen from November 2013. He found that the Bitcoin network hashrate was 256x faster than the combined compute power of the Top 500 supercomputers.
Note: Before all the computer scientists reading this start writing angry emails, Cohen explained the slightly squirrelly conversions Bitcoinwisdom makes between floating point operations per second and SHA–256 hashes per second. These statistics are useful primarily for entertainment purposes only.
In December of ’15, the Bitcoin network hashrate was around 600 petahashes per second, allegedly equivalent to 7.06 million petaFLOPs of raw compute power. The November 2015 list of the Top 500 supercomputers had a combined peak performance (R_peak) of 642 petaFLOPS. Divide the Bitcoin network speed in petaFLOPS by the combined Top500 from November 2015 and you arrive at almost exactly 11,000x faster.
Today, the Bitcoin network hashrate has increased significantly, up 153% to ~1,516 petahashes per second in only 7 months. Again, using some jiggery pokery on the conversions, that’s equal to 19.25 million petaFLOPS.
In June, the new list of Top 500 supercomputers was released. I summed the R_peak speeds of all the systems on the list to arrive at a total of… 845 petaFLOPs. So, divide one by the other and you find that the Bitcoin network is humming along at a clip 22,800 times faster than the top supercomputers combined.
So this is all well and good, but because the conversion between hashes and FLOPS is more or less meaningless, for all practical purposes, here are some no-bullshit comparative takeaways:
- Remember that in 7 months, the Bitcoin network hashrate more than doubled in speed.
- In the same period of time, aggregate peak speed of the Top 500 supercomputers increased by a comparatively small 30%.
This is testament to the fact that in the Bitcoin space, although it’s stayed out of the mainstream news, the technical arms race for share of total network processing speed has kept up its astonishingly fast pace. Gordon Moore, eat your heart out.
“Satoshi’s Law,” anyone?
China: The Seat of Power In Bitcoin’s “Decentralized” System
New York Times journalist Nathaniel Popper published a really good article about how China became the seat of power in the Bitcoin ecosystem.
(Popper’s work dovetails nicely with the research work I did for my undergraduate thesis. I intend to share some or most of what I found out at some point in the near future.)