Bitcoin Forum

http://www.bitcoinfuturesguide.com/uploads/6/4/6/5/64656757/3422624_orig.png

Every 2016 blocks, bitcoin protocol's difficulty adjusts which determines how much computing power miners need to use to solve the subsequent set of blocks.

And today the difficulty which was 163,491,654,909 dropped 5,064,451,142, or 3.1%, to 158,427,203,767.

Is the market reacting to this at all? It's correlating with a bearflag as we have had price falling:

http://www.bitcoinfuturesguide.com/uploads/6/4/6/5/64656757/8836428_orig.png

If anything, the price decline would hurt the difficulty, not the other way around, as the fiat value of the block reward declines, then miners are less likely to throw computing power at the network to chase it. Similarly, as we have doubled in price from the last 6 months in Bitcoin, the difficulty has risen, as the miners are chasing a higher fiat block reward value:

http://www.bitcoinfuturesguide.com/uploads/6/4/6/5/64656757/1063777_orig.png

If price continues to fall, it could lead to more pressure on miners and reduced computing power thrown at the network and continued drop in difficulty

see web version here: http://www.bitcoinfuturesguide.com/bitcoin-blog/bitcoin-has-first-downward-difficulty-adjustment-since-june-2015-as-hashrate-stabilizes

Could it be some form of preparedness for the upcoming block reward halving? I was reading an article somewhere where there was a concern there might be a sudden shutdown of mining power after the halving as the reduced reward would not offset the expenses for many miners, assuming the price does not rise enough to compensate. If this were to occur too suddenly, we would end up in a situation with difficulty too high for efficient solving of blocks, and thus drag out the time between blocks to unacceptable levels. Or maybe some miners are already being squeezed by the increased difficulty and the falling price and were thinking of shutting down during the halving anyway, are just getting an early start.

It is more than normal that the difficulty has gone down.

Just look at how much it has increased the last months. It is insane.

The price of $400-$450 does not really justify a difficulty this high.

If we stay around the $390-$420 for another month, then I can see another difficulty decrease coming.

Once people have invested in miners, they just have to evaluate the electricity cost vs the price of bitcoins they get.
They may not invest in new miners, but their existing miners will keep running.
Once the price increases (and people feel that it will remain that way), we may see some more investment in miners and then the difficulty will go up.

Shit that is a big drop. I hope that we fix it up and we can get back on track. This doesn't really seem like a big deal though.

anyone remember the stress testing last year and the stress testing in the last 2 weeks..

think about it..

No I don't think it's related to recent fall down of market price, plus were up to 2% just for today and currently standing on $405 value. Most likely that,someone just switched off his mining farm (regardless of upcoming reduce in reward) or rather sold it to someone else instead (couple of days to ship so the difficulty remains lower than usual), so we should wait for the next 2 weeks to see if it gets recovered or not. Also I don't see why miners would switched their mining rigs at the moment (not until the halving passes by at least).

It went down then skyrocketed hard..

Are you suggesting a massive increase in hashing soon?

probably. bitmain just started shipping its batch 11 miners last week.. most people will get them monday or tuesday.

Nice... looks like the topping up of mining hashrate came to an halt. It's a good thing. The mining market is oversaturated with miners that want to get their share of the reward and while bitcoin became quite the non-green tech because of it, this is maybe a sign that miners will think more carefully about this goldrush thing.

I mean all this talk about miners being underpaid, that we need higher fees and all. The only problem is that too many miners take part. Each taking away a reward share from all others. Raising fees will only mean more miners until it is saturated again.

If half the miners would stop then the other half would earn double the reward.

It's a market. No need to artifically raise rewards. There is no right on buying a miner and earning a certain return. Miners should calculate carefully before such a buy.

Though I think it is a sweet news for every miner mining now.

I'm turning on my s1s and s3s, time to mine with dropping difficulty. I gotta milk out every bit of this difficulty drop. Perhaps the difficulty has peaked and it'll slowly fall and rise again. For one of the first times. THis is soo interesting and i'll have to monitor this so I can tell my kids that I witnessed bitcoin difficulty fluctuation. :p

:D

Well, though it might be that you are not the only one who thinks the same way. You might observe the hashrate development in the next days. Might very well be that it is rising now because many hopes are awakened.

It is  closer to spring and people can not justify running miners due to warmer weather.

I am not talking about s-7's or avalon 6's


I mean   s-3's, s-5's avalon 4.1's  it has become warmer so running an s-3 to keep your home warm is not worth doing. 

You might be right. I once hosted some miners in my living room. They heated the whole flat... :D

I think some miners will take that into their calculation of profitability.

That's a proven good way to heat a room without electricity.. And it turns out no ac and just miners in a house or apartment does pretty good for your ROI and heating costs. Although miners are not the best way to heat a house, it may help you roi. Keep in mind summer is coming and those miners heating your house will need to be turned off and ac back on again. :D extra profit in the winter...
Still that's not big enough to cause a difficulty drop..

This sums up the points I have made in other posts perfectly.  The biggest flaw in Bitcoin is powering a trust & confidence network by human greed.  Eventually left to it's own devices, it will consume itself with self-interest.  This is because their are many different views on the right course of action so we have no consensus.  We have no real stewardship when it comes comes to proper action.   

With that said, I really don't have a better answer then keep doing this until the network fully centralizes or use the "nuclear option" to force change.  Take S1 and S3 (no offense to the OP) but they really have no place on the network at this difficulty, but in his defense, he purchases them and have every right to mine with them for his own speculative purposes.

The only thing we can hope for is for the network to shake out more hobby miners until the majority is mining by professional miners and they are being very deliberate in the deployment of new mining hardware with some reasoning behind new capacity.  But in the end it comes to my final thesis.   The network will be run by the ASIC chip manufacturers in the end for the most part and each purchase is just fueling that outcome.  You can see this evidence by the fact all the Chip Makers run their own mining operation privately with or without retail sales to the public at large.

I could be wrong but I speculate it as a fluke and one time deal.  I don't see getting lucky enough to get 2 negatives in a row.  I doubt that will happen but love to be wrong if we really get 2 negative.

I still yet have seen a good valid reason why it happened.  We know we had a negative.... but good question is why?

it could be because everyone with a s3 or s5 switched to peercoin and digitalcoin? i know i did. :/

Ssh I am up to 900 PPC. I actually hit one block with my 12 compac sticks.

Not to mention five blocks with my avalon6 four pack.

Congrats I got 3 blocks so far one compac and 2 s3s and almost 300 dgc blocks. Tomorrow I get my s7 and its going on peer coin solo.

so they want to kill the last margin remaining from their asic s7, or they are already privately mining with the new 14/16nm?

I too suspect Bitmain shipping the current batch has had an effect, as it takes time for them to get shipped outside of China.
Seems like every time they start shipping a new batch the last few months, there's been a dip in the hashrate - just not quite this long of one.

BW might have finished building it's current batch of B-Elevens using up all the chips it bought to do so, and might have decided to not bother making any more chips with their newer chip in the wings in a few months (this is just a guess though).

 Avalon sales on the 6 I'm certain are a small blip comparatively, that unit was never competative and I seriously doubt a lot of folks ever bought them.



 No, I'm NOT betting that the hashrate has suddenly gone stable - I'm betting it's a short-term abberation.


 Bitmain hasn't announced sales on "used" S7 units yet, so I'd bet they're still mining with them - for now.


 P.S. the hashrate is starting to head up again. Let's see where it goes the rest of the week.



 I heated my entire HOME this winter with my miners - and still had to keep 2 windows open the whole time to avoid overheating (with thermostat-controlled fans, and during the one bad cold snap both windows were only open a VERY little).
 Yes, I DID take this into consideration when I was figuring on if my S5s and SP20 ever achieved RoI (they did, but barely, per my calculations - would have done a LOT better if I'd managed to buy them 1-3 months sooner).

I wonder what you wanted to say? That you welcome centralization or seeing it as a problem at which point we would have to change something?

I mean you are right that the network is something you surely can't name decentralized. The worst thing for me is that satoshi awaited this from the start. I only can assume he thought that the companies would not meddle with the network at one point because the potential profits coming from that could never outweight the profits they would get from mining. Beside that it looks like a central point of attack vector.

Though even POS is no solution. The whales rule there too. There is no real decentralization yet because of the reward.

I wonder if it will be a problem at one point.

Well, for some centralization of development of bitcoin protocol looks like a problem at the current point in time. Decentralization is left with nodes and with the userbase. Both groups have some form of power. Nodes by being able to chose which blocks to forward, though that does not help when miners connect to nodes that forward and maybe reach over 50% that way, and the userbase who theoretically has the choice to fork when they want.

Well, I think interesting times we bitcoiners live in, we have at least. :D I feel like Yoda got me here. :D

I think think there isn't any good answer SebastianJu.  I don't see how you can prevent centralization through the use of code.   This has to be assumed a natural progression when the majority of hardware is ASIC.   Then you have a profit incentive and open competition.  Don't think there is anyway to avoid it.   Is it desirable to be centralized, from the merchants perspective, to a certain point it is so they know transactions will be processed in a timely manner.  If if you changed the algo from SHA-256, you would only buy you some time before people would make ASIC.  This must if been intended and known to be unavoidable as an outcome.

-D