Bitcoin Forum

Now that Bitcoin prices just plummeted, what will happen to difficulty adjustment?

Per http://bitcoindifficulty.com (http://bitcoindifficulty.com) it is currently at 908 million and predicted to hit 1 billion difficulty.

Because of the massive Bitcoin price decrease won't many miners stop mining? And won't this mean less hash rate, but a super high difficulty?

How quickly does Bitcoin adjust for something like this crash?

Most people ordered their miners before the price skyrocketed. I am sure they will mine and the difficulty wouldn't drop.

Unless the electricity to run the miners costs more than the BTC they generate, people will run them.

Unless I'm mistaken, if the price drops enough that it makes it untenable to mine, then miners will pull the plug. The difficulty won't drop until the 2000 blocks are found. If mining slows, then that could take a long time at the higher difficulty. It could take a long time for transactions to confirm. This may be an unintended attack on the Bitcoin network.

This is what I was wondering. This could potentially put us in a frozen blockchain state...

A solution could be to have the blockchain re-adjust after 2016 blocks OR after 2 weeks, whichever is sooner. Wouldn't that solve the problem? This would at least allow the blockchain to unfreeze itself. Has this already been suggested?

Oh god, "frozen blockchain state" are you fucking kidding me?

This crash is no bigger or different than April...did the difficulty or mining stop then?

Cut it out with the "running around like a chicken with your head cut off" routine and think a bit.

My miners will be running 24/7 until the cost efficiency is negative...and then I will mine some more.

No one is turning off their ASIC because of this crash. I don't care what the price is, my only goal as a miner is to obtain more XBT so when it goes back up....and as inevitably as the tide it will...I am holding as much as I can get my hands on.

Try not to get too emotional.

I'm interested in how things work. Hypothetically what about a huge crash, from like $1000 down to $50 or something.  That would force a lot of a miners off.

With ordered miners i don't expect much changes. But with lots off people that got a few 5 ghz miners or 10 20 if all those people turn them off earlyer then it has effect. A buddy off mine is already seeing effect in mining.

Want to watch the same effect go back to the gpu age when a btc was 30$  i thought and dropped to almost 6$ for a few months. Then the hash power slowed down temporary.

There are those who mine for present value, and those who mine for future value. As long as people are mining for a future value they have in their head, they will not stop mining. To them, if they think the price is $10,000 per coin, they will keep mining until their cost is higher than that

No ASIC anywhere will ever be idle. If it does not recoup electricity costs, they will just sell them to someone who can mine for free at work. They will never go offline, and the diff will never drop again.

When GPU's were usable, it could drop because the cards could be retasked. Not so with asics.

I've ~80GH now.  I pay nothing for electricity.  I'll be mining until these things burn out and stop working.

We notice the price is dropped by at least 50% from a Grand (MTGOX).


People think the being should be priced at USD 1,500 so they will keep doing until the selling price is not acceptable (USD 199 per 1 BTC). I am able to get double in fiat(Based with USD 500 per 1 BTC), but they like to seek At least Decies (That is 5 Grand per 1 BTC)

it could affect the pre-orders, now that bitcoin price is plummeting. I think many people pre-order at exorbitant cost new miners thinking btc price will contiinue skyrocketing. Now that the rocket has fallen, those who can cancel will do so.

Yep , I just ordered 1 day before it plummeted , and now I will not be sending my payment . I think its better to use the cash to buy coins . I had already looked at ROI and the amount of coin the miner could produce before it became unprofitable , and at the current rate , I could just buy the coins right now , and not have to worry about mining .

I never looked at it this way. Very good point.

Even though it would be more worthwhile to buy the btc instead of mining at lower btc prices, people will still mine away. I'd have to concur. I would do the same myself unless it became drastically unviable. And even then I might still continue mining lol.

My conclusion after putting nearly $10k into miners is to never do it again. It is always better to buy btc itself, especially with the huge lag times of payment to shipping time.

Ugh, logic rears its ugly head again ;)

Not quite.
BlockEruptors on eBay! Cheap! (http://www.ebay.com/itm/USB-ASIC-Block-Erupter-Eruptor-336MH-s-Bitcoin-BTC-Miner-/171194525115)
Zero bids.

Boy, oh boy.
What a week.

I was on cloud-9 when I got my Jupiter a month ago.  Now I'm sitting here wondering how high my electricity bill is going to be this month.
How things change in Bitcoinland.  I certainly wish there was a bit more stability to this, but I undestand why it is the way it is. 
With that said, I think we see Bitcoin hitting $1000 in the next 6 months.

A Jupiter will mine ~10 BTC in December, and consumes less than 1000 watts / hour.

If electricity is 15 cents per kilowatt hour, the Jupiter will cost around $100 a month to run 24/7 and earn ~$5000 per month at the current BTC price of $500 per coin.

Just be happy, and keep hashin' !

 ;D ;D

Correct me if I am wrong..  BTC price has no direct impact on difficulty. Only hashrate, and that is not going to go down.

If network hashrate went from 3500 Ths to 5000 Ths in November (15k increase, and difficulty went from 400M to 600M)....

And.... in the first 18 days of December, hashrate has increased from 5000 Ths to 9000+ Ths.(additional 4000+ and counting Ths's, with expected difficulty rise to 1.1B or so, up ~300M, due in a couple days.

And.... there has been few large shipments of new equipment(is that right? Maybe some Antminers or cubes?)

Then.... Where is all this hashing power coming from?  5 Petahashes in 3 weeks? MY assumption is that one of, some of, or all of (Neptunes, Prosperos, Terraminers, Coincrafts, Sierras etc..) are coming online as we speak, i.e. for testing or flat out raking in BTC.
If hashrate increases are coming from bitfury chips and old idle eruptors/hobbyists, and all the new equipment is truly still in production to be shipped as scheduled Q1 (or not, lol), difficulty will go absolutely crazy, and be much, much higher than the 30% increases going forward the next few months. Does anyone have an educated guess as to how much hashing has been preordered?
 
However, I don't think that's the real picture.  This spreadsheet has been pretty good so far
 https://docs.google.com/spreadsheet/ccc?key=0Auya3iRE6az1dDc0UVgwMU52YVpTazVjSHByOGNiWHc&usp=sharing#gid=8
(I'm sorry I don't remember the author, but thank you!)
Even if it's slightly and self-admittedly pessimistic, I see no reason to believe it's not going to be a decent ballpark estimate going forward, which means to me, all(or alot of) the new equipment promised/paid-for is already hashing, and more coming online everyday, and going to continue until sometime in April, when the manufacturers decide they are done teasing everybody with those fashionably late "February Batch" or "Q2" machines, and they decide to start production of their first petahash units.  At which point they'll empty the warehouse a little more freely, fully knowing those units are almost useless. 
So, my guess is that it would make sense if the difficulty increases will be close to 30% near-term with an upside bias (So Jan 1 guess something like up 500M, then 600M, 700M, and 800M until everything is hashing (yet, we won't have, or will slowly get, all that new hashrate)

But "IF" that spreadsheet is even close: You'll lose thousands in 12 months of mining with even top-of-the-line equipment (even if it puts out more than advertised), at which point electricity costs exceed returns, and you have to throw it out.  http://mining.thegenesisblock.com/a/f56883f7cb
UNLESS.... BTC goes back over $1000 and you manage to break even.  (That could be stressful depending on WHEN , or possibly "if", it goes back over $1000)
So I still don't know the answer, but I do think the game is rigged to some extent.

Big question for me is "Is this the pipe dream, carrot dangling, get rich quick scheme I've been looking for?"  Or is it truly history in the making.  Whats after 28nm 500ghs asic chips?  Where does the technology hit the wall?  Are they gonna let me pre-order these 14nm cpus they'll be stuffing in my smartphone in 2014 that can hash as well as any ASIC chip and tell me I can get a group buy for 100 of them for $25 ea so that I can populate my wasp and hive with, getting 2 gazillion hs's?  But hey, if BTC is $100,000, that's a deal maker, right?

was roflol when I saw this post. You nailed it. The "frozen chain state" is the most comical thing I've heard all week.

Exactly. The network wont slow down as long as mining revenue is above marginal (ie electricity) cost. Bitcoin price would have to drop well below $10 before asic miners would start shutting down some machines at todays difficulty.

Whatever happens to the price of bitcoin, considering the amount of gear that has been preordered already (20+ PH), there is pretty much zero chance of the network rate going down over the next months. Even if bitcoin would crash to below $10, those mining rigs would end up at miners that have dirt cheap or free electricity.

Price crashing could become a minor issue in 12-18  months or so.  Assuming by that time we approach the point where mining is only marginally profitable, ie electricity cost is close to mining revenue. If in that scenario we get a massive bitcoin price crash, the network hashrate would likely follow as miners pull the plug. Just like we are now getting "too fast" transaction confirmations (ie, under 10 minutes) because we are so far above marginal profitability, we would be getting really slow confirmations until the difficulty has followed. Hardly dramatic, but it would be slightly annoying. Probably no where near as annoying as the crash itself though :).

What is this plummeted you speak of?

Difficulty will continue to march up to 3 billion or so. Nothing is stopping that train.

I understand it is unlikely that the hashrate would drop suddenly, and i'm sure this has been asked before, but in the case that it did drop drastically and suddenly (for whatever reason), what would the bitcoin network do? I am unfamiliar with how it handles this situation. Does difficulty adjust downwards eventually, or does it just stay where it is?

It will adjust downwards. But the hash rate isn't going to drop.

The bitcoin network would also slow to a crawl. This exact same scenario of difficulty adjusting dramatically downward has already killed or severly weakened a number of alt coins.

difficulty better adjust downwards... just upped my hashing up 200GH/s.   ;D