Bitcoin difficulty may actually go down in ~7 days!

[Bitsaurus]

Looks like a bad luck streak for the network since we only moved 30 blocks in 7 hours.  We should stay under 20 billion easily, about a 4% increase.

[TheJuice]

bitcoinwisdoms diff algos rely heavily of the previous change. Thus early on in an adjustment period it is basically saying the diff will inc by the prev amount. Right now my models show 2% increase.

My models rock.

Next difficulty looks like 7-9% based on expected delivery.

Actual increase was 8.08%. Rock on new models.

Next predicted difficulty increase: 4-6%

And yet again I land squarely in the center of my range. 4.9

Look for a 3.5% to 5.5% increase next adjustment.

[xstr8guy]

bitcoinwisdoms diff algos rely heavily of the previous change. Thus early on in an adjustment period it is basically saying the diff will inc by the prev amount. Right now my models show 2% increase.

My models rock.

Next difficulty looks like 7-9% based on expected delivery.

Actual increase was 8.08%. Rock on new models.

Next predicted difficulty increase: 4-6%

And yet again I land squarely in the center of my range. 4.9

Look for a 3.5% to 5.5% increase next adjustment.

What does your crystal ball say about the adjustment after this one?  Or is that the 3.5-5.5%. If so, we can only hope.

[philipma1957]

bitcoinwisdoms diff algos rely heavily of the previous change. Thus early on in an adjustment period it is basically saying the diff will inc by the prev amount. Right now my models show 2% increase.

My models rock.

Next difficulty looks like 7-9% based on expected delivery.

Actual increase was 8.08%. Rock on new models.

Next predicted difficulty increase: 4-6%

And yet again I land squarely in the center of my range. 4.9

Look for a 3.5% to 5.5% increase next adjustment.

yeah these 3 to 8% jumps rock. really help with roi.

my 200 day models are

 25%  june 2013 to dec 2013

18%  dec 2013 to july 2014  

 we  should do 12% july 2014  to jan 2015   if btc stays at 550-650 usd

[iglasses]

%5.3 

*This averages the 6/29 fiasco down to %10.34 over the last four increases which is way more in line.

[philipma1957]

%5.3 

*This averages the 6/29 fiasco down to %10.34 over the last four increases which is way more in line.

and close to my hopeful 12%

200 day guess.

[cloverme]

This is a nice little plateau of slight increases, who knows how long it will last though.  I'm not seeing any huge jumps in hashing power on asics anymore, just more 400gh and 1th models from different manufacturers. Some are just cramming more chips into larger boxes but also doubling the power requirement, so no real gains there. Plus, the huge farms that invested in Q1, Q2, and the start of Q3 still have to pay off their equipment, so I don't think a lot of large farms are upgrading at the moment. Just my guessing though

[philipma1957]

This is a nice little plateau of slight increases, who knows how long it will last though.  I'm not seeing any huge jumps in hashing power on asics anymore, just more 400gh and 1th models from different manufacturers. Some are just cramming more chips into larger boxes but also doubling the power requirement, so no real gains there. Plus, the huge farms that invested in Q1, Q2, and the start of Q3 still have to pay off their equipment, so I don't think a lot of large farms are upgrading at the moment. Just my guessing though

unless prices jumps to 1000 usd really fast or a .3 watt a gh asic comes out.  flat numbers will abound.

[SMB-2525]

This is a nice little plateau of slight increases, who knows how long it will last though.  I'm not seeing any huge jumps in hashing power on asics anymore, just more 400gh and 1th models from different manufacturers. Some are just cramming more chips into larger boxes but also doubling the power requirement, so no real gains there. Plus, the huge farms that invested in Q1, Q2, and the start of Q3 still have to pay off their equipment, so I don't think a lot of large farms are upgrading at the moment. Just my guessing though

I wonder how a game theory specialist would think this through?

This is like an arms race. There is a large (perhaps huge) investment in current generation mining hardware held by the big players.
If difficulty skyrockets, that investment decreases rapidly in value. The big player can stay with declining returns (and eventually retire from the game) or reinvest.  If reinvesting, the player reups for another round of the game. They always face the risk of losing in the next round. This is the same decision a small miner faces.

So at the current difficulty level, the big players have to decide how much to bank and how much to reinvest. If difficulty level increases slow down, IMHO, there is a strong incentive to bank more and reinvest less. Among other incentives, a player might hope to skip an ASIC generation. Similarly, ASIC developers and manufactures face the same question: will I make money or break even on the next round of development?

Another question is when will the flow of fiat funds into the BTC economy going to stop (or at least significantly slow)? The economics of developing new hardware changes as fewer new miners arrive with their initial fiat investments in mining hardware.

We have seen something similar in the post Cold War arms race - weapons advances are much slower and are very targeted - UAVs and survivability among others niche: new versions of guns, tanks and planes are rolling out at a much slower rate..

[cloverme]

This was a good article on it that was on reddit and worth a read. https://freedom-to-tinker.com/blog/felten/game-theory-and-bitcoin/

[philipma1957]

 read the reddit article .  it is somewhat  dated . it was written in nov 2013.

since then btcguild suffered a confirmed withholding event.  supposed to be accidental .  it did happen and it clearly shows bitcoins  weakness is that a wealthy miner and or pool can attack a smaller pool and kill the luck.

pools have not fixed this.  on any day any pool can be hurt.  more likely a bigger pool attacking  a smaller pool.
.  once again making a solo mined major pool

of which none exist  the only true defense since only the witholder of the block is punished when the witholder makes a block

I suspect that more then one miner has quit mining once they understand this problem.

 Since solo mining and expecting  to hit a block means  a huge investment.

this may be one more factor in mining being slower to grow.

[SMB-2525]

since then btcguild suffered a confirmed withholding event.  supposed to be accidental .  it did happen and it clearly shows bitcoins  weakness is that a wealthy miner and or pool can attack a smaller pool and kill the luck.

OK, I read up on the withholding attack. Does the bolded statement mean a pool can launch the attack, or individuals supporting the larger pool join the targeted pool and withhold?

I am confused about the distinction between individual and pool behavior.

[klondike_bar]

since then btcguild suffered a confirmed withholding event.  supposed to be accidental .  it did happen and it clearly shows bitcoins  weakness is that a wealthy miner and or pool can attack a smaller pool and kill the luck.

OK, I read up on the withholding attack. Does the bolded statement mean a pool can launch the attack, or individuals supporting the larger pool join the targeted pool and withhold?

I am confused about the distinction between individual and pool behavior.

theoretically both can withold but the pool witholding hurts all its members and the pools luck %. doesnt make sense to do.

but a user with 5% of the pool's hashrate withholding winning blocks will cause the pool to get 5% fewer rewards, but that user will probably get paid out 94.8% of what they would have, while hurting everyone else in the pool and keeping network difficulty down slightly

[balanghai]

Doesn't this pose a threat to the network just because we are slowing down? And the attacker will know how much resources to pull to do the attack?

[lightfoot]

I wonder how a game theory specialist would think this through?

Dollar auction? Queen's race?

Very good observations BTW.

[philipma1957]

since then btcguild suffered a confirmed withholding event.  supposed to be accidental .  it did happen and it clearly shows bitcoins  weakness is that a wealthy miner and or pool can attack a smaller pool and kill the luck.

OK, I read up on the withholding attack. Does the bolded statement mean a pool can launch the attack, or individuals supporting the larger pool join the targeted pool and withhold?

I am confused about the distinction between individual and pool behavior.

Okay  lets pick the guy with the bad luck soft ware.  It has been proven to exist. I track him down buy it from him.  I now put myself out as a hit man.

 So to speak I live in Washington or Oregon  Or any place with cheap power.  I sub-contract my bad luck system   to pools like cex.io or btcguild or eligus  they trust me the super villain of BTC and  pay me to hit smaller pools with my bad luck gear.

 So I run 100th or 200th at bitminter a smaller pool and  while they have 1200th of good gear they now have 1400th.

  1200 good and 200 bad.  It only takes 45 sp30's to do this or 450 s-3's .  or 200 dragon miners..  do it for a week in a row and the cost is my power.  say  4000 kwatts a day

that is  200 usd a day thats all in power cost.  so a one month cost against bitminter is   6000 in power  and they will have  a 12/14 or

 85 percent luck of normal not 100 percent.. forget the lost btc I know people say whattt.      but the incentive to attack smaller pools is huge.

think of someone with low power cheap gear and the correct software.  he does not need to be a pool.  he could be and individual hired by bigger pools. to attack smaller pools.

Now does he exsist?  I do not know.

Does cex.io attack small pools? I do not know

Does anyone do this join a pool with bad luck gear/software for the purpose of attacking that pool?  I do not know.

But it did happen to one pool BTCguild and  most likely to Eligus pool.  Accident well maybe on purpose well maybe.   I am on many pools.

[lightfoot]

Sure, but you're not really impacting the pool at all. The other 1200Th of miners are getting exactly the same amount they would if you were not there, you don't contribute 200th you're basically clogging the stats. But you don't change the payouts by one satoshi, the only thing you're doing is making profits for the local electric utility.

Weird way to live, but whatever.

[philipma1957]

Sure, but you're not really impacting the pool at all. The other 1200Th of miners are getting exactly the same amount they would if you were not there, you don't contribute 200th you're basically clogging the stats. But you don't change the payouts by one satoshi, the only thing you're doing is making profits for the local electric utility.

Weird way to live, but whatever.

you steal from the pool if you are not found out. since the pool tnimks you mined with 200 th.

so you get 2 shares of the 14 the others get 12 shares of the 14.

and all  miners think the smaller pool sucks. 

[lightfoot]

so you get 2 shares of the 14 the others get 12 shares of the 14.

and all  miners think the smaller pool sucks. 

No, from what I understand, if you withhold the block you get nothing. You can't turn it in for anything, so it's a complete loss to do it. But I see that if someone else finds a block in the pool you still get a percentage of that, so in a way you are being a less than productive load on the pool.

Hm.

[philipma1957]

so you get 2 shares of the 14 the others get 12 shares of the 14.

and all  miners think the smaller pool sucks. 

No, from what I understand, if you withhold the block you get nothing. You can't turn it in for anything, so it's a complete loss to do it. But I see that if someone else finds a block in the pool you still get a percentage of that, so in a way you are being a less than productive load on the pool.

Hm.

Semantics but your wording is exactly what I am trying to say.  Since I am not big enough to solo mine I use 3 to 5 pools to guard against this danger