I have a model based on "expected" price based on difficulty (what is the historical difference ratio between difficulty and price).  If that "expected" price gets too low, then difficulty increases will be smaller (or even negative).  If expected price gets too high, then difficulty will rise more.

Right now the ratio is 2.26 between price and expected price.  2/18 we saw the only ratio close to this, which was 2.017.  The next difficulty rise was 50% after that. It was followed by a 37% difficulty rise (in a 1.32 ratio), then the ease in difficulty of 9%.

I'm predicting around a 60% rise in difficulty which tapers down to a constant rate of 18% in my 18% growth model (it hits 20% by 8/4).  It eventually levels out to 18% once the ratio gets near a stable value of 1.086.

In my 7% model, I am predicting difficulty rises of 50%, 38%, 26%, 19%, etc... down to 7% where it levels out.

My model is actually fairly optimistic, since the predicted increase in difficulty tends to rise more even when the ratio is below 1 between my "expected" price vs. real price.

It is a model and it's only based on a few historical data points (23 sets of 2016 blocks since August), and I'm looking mostly at data since 12/21, so that's only 12 data points.  I averaged all transactions in each set of block difficulties to try to model the next difficulty.  It could be way off, and there are so many things that could really screw up the model (new cards that are faster, FPGAs, etc...).

I spent all day working numbers on different projections of the price and difficulty for the next year.

There is a fundamental problem in setting up mining rigs- other miners are not acting as if they are running a business and tend to overinvest in rigs.  This drives difficulty up, even if the price stalls.  The only model I could come up with that made mining more profitable than buying was when miners backed off faster when the price : difficulty ratio dropped to low levels, although historically this doesn't hold.  If the price of bitcoins goes up significantly (equal to the current rate of 18% per difficulty level), you are way better off buying (73% more profitable buying coins).  This is based on a 30 million difficulty in 1 year, and $425/Bitcoin in 1 year.  I modeled difficulty increases based on the current price and difficulty to get the difficulty level.

Based on more conservative estimates, (1.07% increase in the price of bitcoins), I came up 35% more profits on buying vs. mining ($25/BTC in 1 year, 3.2million difficulty in 1 year).

Based on no growth, mining was more profitable (9% ROI vs. 0%).  (600k difficulty, $3.50 BC target).

Based on -1% growth per 2016 blocks, mining loses 14% vs. 25% buying. (2.62 BTC target, 467k difficulty)

Based on -5% growth per 2016 blocks, mining loses 66% vs. 77% buying ($.79 BTC target, 173k difficulty)

Based on -10% growth per 2016 blocks, mining loses 77% vs. 95% buying ($.16 BTC target, 49k difficulty) (in this case, electricity costs more than its worth to mine and you stop mining pretty early)

If you are bullish on BTC futures, you are far better off buying now.  The more bearish you are, the more rigs make sense.  Also there is some residual value in your equipment if you abandon mining, so there's at least some recouping of your investment.

With the release of 6990s, the difficulty I'm projecting could go up quite a bit more than my model, which hurts miners quite a bit.

Of course, my models could be garbage, and the difficulty might not increase beyond a certain linear amount, in which case mining becomes more profitable.

But if you expect rising prices of BTC, you are going to be a lot better off just buying coins now.  If you already have equipment and mining is more profitable than what you pay for electricity, mine away!

Yes, they could.  How many are actually available to buy at Bitcoinmarket?

I've been working on a difficulty model, it needs some work, but I'm predicting November 8, 2011.

So tell me how you detect collusion using that rule?  And why wouldn't the colluders just fold on the end to avoid detection?

It doesn't detect anything except for figuring out what people folded, giving you more information on how they play.  The rule doesn't protect collusion at all.

BTW- I have played at several online sites that do not show hands at the end.  Much more enjoyable than the bot-fest infected FTP and PS.

Please don't do this.  Just because a lot of online sites do this doesn't mean it's a good idea.  If you do this in live poker, you'll get a kick in the nuts if you do it too much.  Although this rule is supposedly designed to prevent collusion, it is very rare that it actually is.  However, a lot of nits like it since they get to see what people had.

Well, doesn't quite have $1M, since if he actually tried to sell them, he'd drive the price down to like $.25/BTC.

Let randoms use my internet and degrade my connection because maybe they will let me use theirs? LOL.

The biggest gap I think there is is that people think that people who hate the state don't care about poor people.  People who hate the state generally do so BECAUSE they care about the little guy.

Sure, you can find a present value of them now, I suppose.  Just picking a random date and saying "these are priced in, these are not!" is weird to me.

If those extra 100M coins weren't going to be produced for some time, then it wouldn't matter too much, but if they came tomorrow, it would be huge.

I've seen rational debate with the right people.  It may or may not be possible here, or all the time here.  But it certainly is possible.

The other interesting thing is, although the person you are arguing with rarely changes his position, people reading threads DO change their positions more.

I disagree.  5 years ago, I was "lol anarchocapitalists'.

I don't know enough about Satoshi to know his motivations, but it could be an example.

Perhaps people will get states.  If you destroyed every church, would religion go away?  Of course not.  You need to actually convince people not to be religious for it to be meaningful.  The state is just another religion.  Can you convince enough people?  Maybe, maybe not.

And if those people are in the minority, life will not be pleasant for them.  If they are in the majority, then they will get away with it.

Again, tear down churches, new churches will be built.  Convince people to abandon religion, and they will not.


Again, see above.  Yes, if people reject violence on the whole, everyone will laugh at the next Caesar or Charlemagne.  If people support violence, then of course they will return.



While the pragmatic belief that we cannot convince people may be true, it won't stop me from trying.  The Koch brothers, lol, like they support anarchy.  They just want *their* version of the state.

Fought and died for the services the state now render us?  If someone was stupid enough to get themselves killed so I could get a monopoly of service from someone, let them roll in their graves.  I do support those who died to *keep* a monopoly of power from interfering in our lives, though.

But you do not need to convince everyone.  You just need to convince a few people.  They can convince a few more.  Eventually it will grow, or it will not.  Eventually it will hit a genius who will invent something to make it so it does not matter what other people think, and we can live our lives without interference.

But there is no harm at all in teaching people that violence is wrong, even when its done by people with special uniforms.

Having a way to automatically set up ACH transfers would be so much more useful for medium transfers.  With neteller, I gave them my routing and bank account number, they would confirm my account, and I could send money in and out super easy.

However, you are going to need to do this through a US bank, and then have to worry about all those regulations.

mtgox allows for ACH pushes, but an ACH pull would be pretty damn good to have.  My banks don't support ACH pushes, so I'm opening a new account just for this.

And it comes down to what the people are willing to accept.  If you have a culture that accepts violence, you end up with a lot of violence.  If you centralize power, it makes it that much easier to make even more violence, and harder to stop.  If people do not accept violence, then a centralized system it still is hard to stop, but at least it can be possible.  It is virtually impossible to make it very far with violence.

But if the main fork goes down a bad path, then forks become desirable.  If there was a critical problem in the Bitcoin protocol or an improvement to be made, a fork would be a good thing.  But no one is forced to use any individual fork, so whatever is best will tend to win out.  But sometimes there is room for forks.  See: OpenOffice.

The other thing is, the most violent gangs and criminals absolutely dwarf the level of violence that the state has been able to get away with.  Look at how many people have been outright murdered by states.  Compare that to all regular criminals in history, including gangs.  It's not even a close comparison.

While most states can rule people peacefully and with their will, occasionally states turn so bad and violent that they absolutely slaughter millions of people.  I'm willing to deal with Mad Max if it means no Pol Pots, no Stalins, no Hitlers, no Bushes, no Trumans, no Qadaffis, etc...