What's about to happen to the Dash Network

What's about to happen to the Dash Network

The Dash Network is about to experience a serious increase in hash rate which should have a very interesting effect on the Dash mining community. A large jump in hash rate will occur within the next few days increasing the hash rate due to the introduction of a Bitmain mining ASIC, the Antminer D3, to the network.

We estimate a 150% jump in hash rate – an addition of ~60 TH/s in a 2 week span – resulting in a new network hash rate of roughly 100 TH/s¹.

What’s so special about these new miners?

In the early days of Bitcoin, people mined with spare CPU resources. Similar to SETI@Home, early adopters would donate their spare laptop power to cryptocurrency networks. Once the capitalistic nature of cryptocurrency mining became more apparent and pronounced, those profit-seeking creative types realized you could mine significantly more efficiently using GPUs. In many cryptocurrency networks, such as Ethereum or Monero, GPU mining still is the predominate form of mining.

Then the engineers got involved. New miners were designed on FPGAs – field programmable gate arrays – which are essentially testbeds for trying out specialized hardware design. FPGA performance dominated GPU performance, and led to the creation of the single-purpose, truly specialized chip known as an ASIC – Application Specific Integrated Circuits. I’ve always liked to think of an ASIC as a computer algorithm etched directly into silicon. It can only do one thing, but it does it as fast as the electrons can move through the circuit. This arms race eventually led to the super-small, super-efficient miners we use today, which are orders of magnitude faster and cheaper to run than their GPU forbearers.

Running ASICs in a world where everyone else is using GPUs is like entering a horse race in an Indy 500 car. It’s not going to be fair.

OK, but how could we know this will happen?

In the early days of Bitcoin there were actually quite a few equipment providers. Some just never delivered. Some just didn’t have access to modern fabrication labs which would allow them to develop at cutting edge chipsets such as Bitmain’s current 16nm chips. As such it’s difficult to try to derive a similar analog in Bitcoin’s history.

Instead let’s look at a much more clear-cut example that occurred fairly recently: the introduction of Litecoin ASICs².

Bitmain first introduced the L3+ in April of 2017, with intended shipping in early May. Once the batch was completed, the fresh units began to undergo Bitmain’s “QA Process”, the shiny silver badge of honor you might have seen bestowed on the packaging your L3+ arrived in. This QA process presumably involves running the miner for a short while to make sure everything works – the most lucrative QA process you can imagine. See if you can guess when this process began:

 

Source: https://bitcoinwisdom.com/litecoin/difficulty

Right there on April 17th, the entire network hash rate rose almost 33% in a single day, an increase to 3.43 TH/s from 2.58 TH/s give or take a few hash.  People assumed Antpool was hacked, to explain the sudden rise in equipment voting for Segwit as Segwit was an active and heated topic of conversation at the time³. The hash rate continued to add an additional 2 TH/s to the existing global network that had been 2.58 TH/s. We can only speculate, but it’s quite plausible that such an acute increase may have been caused by the sudden addition of ~4000 504 MH/s Scrypt mining ASICs.

What does this mean for Dash?

The current network has been growing fairly linearly in 2017 with no major discernible spikes in hash rate. The first batch of Dash miners is expected to ship in September, indicating that the QA process is slated to begin any day. So drawing our poor-man’s-inductive-logic from our single data point, let’s apply these same statistics forward to Dash.

  • Current global Dash hash rate has stood somewhat stable between 30-40 TH/s for the last month or so.
  • Dash miners are quoted to be 15 GH/s.
  • Assuming a batch size of 4000 units
  • This would yield 60 TH/s added to the network, or an increase of 150%.

This is why you get ridiculous ROI results when plugging in current values to mining reward calculators. For a short while, it’s going to be stupid lucrative. What I won’t venture a prediction on might be the more important question to some of our readers: How will the price of Dash react to such a jump in hash rate?

So just like in Litecoin, we expect to see a 2-week gradual rise in hash rate, followed by a sudden decrease as they’re boxed up and shipped to clients. That two-week peak should represent the new normal, which will only increase as future batches of D3s are released. There’s already been several pre-sold.

We’ll be mining Dash when the ASIC revolution begins. Will you?

(1) Give or take – it’ll be a bell curve around 150 based on various factors that due to the fact that we have a single data point we can’t sharpen any further. Sample set of one and all…

(2) Some quick research shows that there may have been a few less efficient ASICs currently on the market such as the KnC Titan, but the incumbent equipment was orders of magnitude less efficient and didn’t have the reach and scalability of Bitmain’s production facilities.

(3) This likely was no coincidence. Jihan is playing the game at a whole ‘nother level.

6 Comments
  1. I agree with most of your article and it certainly provides valuable information that many miners. However, you state that the current global Dash hash rate has stood somewhat stable between 30-40 TH/s for the last month or so. Bitinfocharts.com shows the Dash hash rate increasing from 5 TH on July 1, 2017, to 37 TH on September 15, 2017. That is an increase of over 500% in just 2 1/2 months. The rapid increase in Dash hash rate has already started and there are now 5 manufacturers of Dash ASIC miners on the market.

  2. An impressive share! I’ve just forwarded this onto a coworker who had been conducting a little homework on this. And he in fact bought me breakfast simply because I stumbled upon it for him… lol. So let me reword this…. Thanks for the meal!! But yeah, thanks for spending the time to discuss this issue here on your web site.

  3. An outstanding share! I’ve just forwarded this onto a colleague who had been doing a little homework on this.

    And he in fact bought me dinner due to the fact that I found it for him…

    lol. So let me reword this…. Thank YOU for the meal!!
    But yeah, thanks for spending time to discuss this matter here on your web site.

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