With this exponential growth in difficulty lately I was wondering: Because the difficulty is adjusted each 2016 blocks and not some other measure of time, if there were a substantial decrease in network capacity wouldn't the blockchain get "stuck"? For example, say things keeps growing nicely and then the next reward split rolls around and half the miners decide to shut down their operations overnight because it's not profitable. It might go from 10 minutes to find a new block to 2 hours or more. Then it could take 168 days to reach 2016 blocks and have the difficulty readjust.
Is this a real danger, or an I missing something in the specification?
Thanks,
-Jay
Essentially that is a probability. We have seen this with alt coins already. Someone jumps on with a huge hash rate, jacks up the difficulty as they mine away block after block, then stops mining. The difficulty would adjust back down, but it has to find the blocks first, and with it so high, and not enough miners out there with enough hash power (and just pure luck) the difficulty never comes back down because no one is finding blocks to get help it get to the next difficulty adjustment.
However, I dont think anyone sees this happening with BTC just yet. What you might see is that there are less and less miners, and more and more mining companies in which you would buy shares in.