Bitcoin Forum

If you are a BTC miner, you will have to keep on buying more tech to keep up with the rise in the difficulty? Also does it always go up by a certain percentage? Or just by random? If its by random, how is it selected? I would like to see what your answers are.  :)

Mining hasn't been profitable for the vast majority, for a long time...

Really? Seems to be profitable for some people. Maybe it depends on the right rig.  :o

Mining difficulty is determined by the amount of time it takes to solve 2016 blocks. Every 2016 blocks, the nodes calculate how long it took since the previous adjustment.

If it took less than 20160 minutes, then the blocks are coming too fast (faster than an average of one every 10 minutes). The nodes then increase the difficulty by the same percentage as the excess speed. This increase in difficulty makes it so that if there is no additional hash power added to the network, the next 2016 blocks will take 20160 minutes.

If it took more than 20160 minutes, then the blocks aren't coming fast enough (slower than an average of one every 10 minutes).  The nodes then decrease the difficulty by the same percentage as the missing speed.  This decrease in difficulty makes it so that if there is no additional hash power added to the network, the next 2016 blocks will take 20160 minutes.

Since miners are always trying to increase their income, they keep adding hash power to the network.  This increase in hash power speeds up the blocks and causes the next adjustment to increase the difficulty.  Eventually it will reach a point where the miners are spending more on hash power than they are earning from mining.  At that point mining is no longer profitable for those who have the highest expenses per hash.  Many of them will shut down their equipment, which will reduce total hash power on the network and difficulty will drop.  This could happen in a few months, or it may not happen for a few decades.  Regardless, when it does happen, the difficulty will increase and decrease as miners add and remove hardware to try to maintain profitability.  Eventually an equilibrium will be reached, at which time difficulty will slowly increase in response to incremental advancements in technology leading to cheaper hashing.

No, eventually an equilibrium will be reached at a level that will make the network reasonably immune agaisnt a 51% attack

In simple a difficulty is consequence of rising hash power. So when no new mining devices will be connected to network, diff. could stay.

Well of course there's no answer to it, but the general consensus is that it will until we will reach a point where the increase in hashing is negligible since the price will stabilize. If nothing else it will because we can only produce a finite amount of power from our universe (at least for what we know today). :D

Because more andmore people are mining bitcoin ( mostly big companys )

Difficulty will stabilize at a certain price level
The question is when that will occur, in my opinion it might be at the next halving or the one after that where the Bitcoins generated from rewards decrease and the incentive structures decrease as well.
That said if the price keeps rising difficulty will lead the way ahead.

Thanks for the explanation!  :) 

It is readjusted every 2016 blocks based on the timing between each blocks for the last 2016 blocks and attempt to adjust the timing to 10 minutes. It is possible for the difficulty to go down if a lot of miners get shut down due to the profitability or other factors. If the miners begin to ship or a large farm comes online, the difficulty would rise much higher than normal.

The tech will improve until it can no longer.
(more efficient power consumption)
Margins will erode.
Difficulty will stabilize.
Mining will be less sexy.
Mining will be less lucrative.

And this is called detailed and professional explanation. Thank you very much!
I always have problems to explain this details .. Now i will have link to your post like an answer  8) ;D

From what I hear its how long it takes for blocks to be solved. So if it takes too long the difficulty will actually go down.

It all depends on what rigs we have and how powerful they become

and of course on price of Bitcoin..

To me and smart miners yes.  But there are some that still run obsolete equipment.   I won't mention company but one is trying to sell their old miners advertised as using for heating your house.   I think it makes more sense to use one that is not obsolete for heat if you do it.  But that is just me.

All that 30 MHz Scrypt that use 1000 watt stuff for example will make maybe 40 cents a day at 10 KWh.   If there is any heat extraction chances are  you lose money on those. 

Thanks for all the answers!  :D They were great, this topic pretty much gave me all the answers I need.

Difficulty will keep going up forever but at a slower pace. I believe we would see a drop when after the bitcoin halving..

Since there is always to race to manufacture more efficient miners, difficulty will always keep rising even if the Bitcoin value stabilizes or drops slowly.

In far future a mobile sized miner may be providing the total hash we are seeing now.

you need to mine with a different tactic. you need to understand under volt  and under clock are your friends. as is cold winter.

  and you need to realize this is a 100 to 200 dollar a month profit for the home miner at best.

That isn't actually true according to what I have read.  It fluctuates according to how many blocks are found at a given speed.  So if blocks are not being found fast enough,  the difficulty will actually decrease to make it so that blocks are found more easily, I believe the time they try is every 10 minutes, someone can please correct me if I am wrong though.

the new question should be, will the difficulty will keep going up down forever ?

The question to be asked will the GAW-ZEN-PAYCOIN GROUP destroy or damage bitcoin as much as they did to LTC

If they succeed with the tactics and methods they used against lite coin they will surprise me. I would say they could be

A) good for us all
B) bad for us all
C) somewhere in the middle _______________________ this is my best guess.  they hang around do okay and bleed off some bitcoin users.  thus rates stay okay  for btc

Lol. Why do you keep insisting that Paycoin MINING will have anything to do with the BTC network hashrate? POW mining for XPY is done on Friday. All ASICs will switch back to BTC as soon as that happens. And that will the last we hear of Paycoin.  ;)

if paycoin works and is legit it is a better product in many ways. for me I prefer BTC  but many people in the world would rather the ease of using paycoin over the harder to use bitcoin.

 So if paycoin delivers on the promise of easy acceptance with a visa card concept people will want it over bitcoin. Thus harming BTC 's perceived value.  Think of how FaceBook really hurt MySpace.

Oh c'mon now! Don't most of us know that Paycoin/GAW is just a sophisticated long con? Homero "Jeff" Garza will go down as the Bernie Madoff/Enron of crypto currency.

No!  no one know's that .  boy lots of no's   .

 It is a probability game.    Now if you are one  my mining buddies in south jersey  you have more then 15k on the line saying he is not Bernie Madoff.  Plus 2k in mining gear for other coins. So he is 15 to 2 in his favor.

If you are me you have 10k in btc coins  and  the gear to mine more btc with under .5k  with paycoin    so I am 20 to 1 against him.

Gaw also made about 2k  for me back in August-Sept.  I took it out and switched it to btc.

So do I know they are a fraud no.  but I hold only a little of it just in case.

This part seem's pretty high to me.  The sheer amount of hardware you would need to pull a $100-$200/month profit (even with dropping difficulty) is still enormous.  I really doubt most houses/apt's are wired for 15+kwh's. Agree with the undervolting/underclocking statements though :)

Agreed, I think if BTC drops below $300 for an extended period, the mining farms that just focus on bitcoin and nothing else, will have to start shutting down mining equipment. I think the sub $500 price is why we are seeing difficulty drop. I think the large farms are either redirecting hashing to altcoins or turning it off.

It is most likely turning mining for alts. Closing is just loss ..

closing or mining other alts is definitely loss-loss  situation, one loss more than the other

How are people converting the altcoins to BTC or USD?

crypto exchange ???

Closing down mining operations and selling all of the equipments may allow user to gain some money back. Mining profitable alt coins which are profitable and a non pump and dump scheme could yield some profits if electrical cost and price of equipment is low enough. Both of them includes risk as bitcoin price may rise in the future but Bitcoin difficulty could very well remain close to the current difficulty. The altcoin could crash overnight and you would have wasted time mining that alt coin.

There are very few SHA256 alt coins out there (they are mostly scrypt) so anyone that is not able to mine profitably with their bitcoin ASIC is not going to be able to mine the majority of the altcoins