Negative Difficulty (Difficulty DEcrease)

[philipma1957]

Imagine seeing 0.00% .. when's the last time that happened?

I would like that !

[TheRealSteve]

Dec 02 2014
40,007,470,271
-0.73%
286,384,627 GH/s

well, it went down!

[philipma1957]

Dec 02 2014
40,007,470,271
-0.73%
286,384,627 GH/s

well, it went down!

works for me.

[Rival]

It seems odd that so few understand the dynamics of exponential growth on even a basic level.

The difficulty level cannot continue to double every few months forever. You can start with the laws of thermodynamics, and realize that in just a 5 more years of doubling it would utilize the entire energy output of the sun for hashing with even quantum computing. It had to stop increasing at that rate, and it did.

Additionally, from a commercial standpoint, many endeavors were built with a specific BTC/$ value. If you built out a large mining operation based upon $500/btc you are bleeding and will probably shut down in the near future. However, if you bought a miner for your home and are running it, you are dancing in the street. You can watch the $/btc rate jump from $100 to $1000 and back to $100 and afford to keep hashing. You can hold pretty much forever, unlike an ongoing major mining concern. And when the difficulty steadfastly refuses to increase, the life of your gear just got extended, and so does your ROI.

My crystal ball predicts a movement towards decentralization of mining. Larger mines find it difficult of survive large $/btc swings for extended periods.

PS: Try running a mining calculator on some current devices where the difficulty increases around 2% per cycle and see what happens. It's raining ROI like never before for devices you can have delivered in a few days on the secondary market. Expect prices on second-hand devices to go through the ceiling shortly. Even at current prices, a 1Th machine with 1KW usage will make around $85/month after electricity costs. Projections at 2% per cycle says 100% ROI in 3 months, and profits continue well into 2016.

[xstr8guy]

It seems odd that so few understand the dynamics of exponential growth on even a basic level.

The difficulty level cannot continue to double every few months forever. You can start with the laws of thermodynamics, and realize that in just a 5 more years of doubling it would utilize the entire energy output of the sun for hashing with even quantum computing. It had to stop increasing at that rate, and it did.

Additionally, from a commercial standpoint, many endeavors were built with a specific BTC/$ value. If you built out a large mining operation based upon $500/btc you are bleeding and will probably shut down in the near future. However, if you bought a miner for your home and are running it, you are dancing in the street. You can watch the $/btc rate jump from $100 to $1000 and back to $100 and afford to keep hashing. You can hold pretty much forever, unlike an ongoing major mining concern. And when the difficulty steadfastly refuses to increase, the life of your gear just got extended, and so does your ROI.

My crystal ball predicts a movement towards decentralization of mining. Larger mines find it difficult of survive large $/btc swings for extended periods.

I disagree with most everything you said. Yes, growth of the network had to slow eventually. But home miners are still incredibly disadvantaged compared to large scale mining operations especially the ones who design and build their own miners and enjoy extremely low electricity rates.

Hobbyist home miners may be able to continue to mine at a loss if they have lots of excess income and/or super cheap electricity. But a more serious miner with a significant investment in a home mining operation can't continue to profit with average electricity costs. They'll soon face serious losses.

For example, I don't have much excess income at the moment and need to sell BTC every month to pay ridiculously high electricity bills. I'm lucky if I break even and my electricity costs are only .11/kWh. I certainly won't continue mining when I'm in the negative. And I'm definitely not the only person who is in this situation. I can afford to keep a couple of my most efficient machines running but the vast majority of my gear will get tossed in the bin when that day soon arrives.

[Rival]

You are a microcosm of why small miners will reap benefits. As you are forced out, those who do not need to sell BTC to continue mining will find their ROI increasing as the difficulty increases decline. I think you just much proved my point. I (or someone like me) will likely buy your gear at a discount and be quite happy.

It seems odd that so few understand the dynamics of exponential growth on even a basic level.

The difficulty level cannot continue to double every few months forever. You can start with the laws of thermodynamics, and realize that in just a 5 more years of doubling it would utilize the entire energy output of the sun for hashing with even quantum computing. It had to stop increasing at that rate, and it did.

Additionally, from a commercial standpoint, many endeavors were built with a specific BTC/$ value. If you built out a large mining operation based upon $500/btc you are bleeding and will probably shut down in the near future. However, if you bought a miner for your home and are running it, you are dancing in the street. You can watch the $/btc rate jump from $100 to $1000 and back to $100 and afford to keep hashing. You can hold pretty much forever, unlike an ongoing major mining concern. And when the difficulty steadfastly refuses to increase, the life of your gear just got extended, and so does your ROI.

My crystal ball predicts a movement towards decentralization of mining. Larger mines find it difficult of survive large $/btc swings for extended periods.

I disagree with most everything you said. Yes, growth of the network had to slow eventually. But home miners are still incredibly disadvantaged compared to large scale mining operations especially the ones who design and build their own miners and enjoy extremely low electricity rates.

Hobbyist home miners may be able to continue to mine at a loss if they have lots of excess income and/or super cheap electricity. But a more serious miner with a significant investment in a home mining operation can't continue to profit with average electricity costs. They'll soon face serious losses.

For example, I don't have much excess income at the moment and need to sell BTC every month to pay ridiculously high electricity bills. I'm lucky if I break even and my electricity costs are only .11/kWh. I certainly won't continue mining when I'm in the negative. And I'm definitely not the only person who is in this situation. I can afford to keep a couple of my most efficient machines running but the vast majority of my gear will get tossed in the bin when that day soon arrives.

[SMB-2525]

Additionally, from a commercial standpoint, many endeavors were built with a specific BTC/$ value. If you built out a large mining operation based upon $500/btc you are bleeding and will probably shut down in the near future. However, if you bought a miner for your home and are running it, you are dancing in the street. You can watch the $/btc rate jump from $100 to $1000 and back to $100 and afford to keep hashing. You can hold pretty much forever, unlike an ongoing major mining concern. And when the difficulty steadfastly refuses to increase, the life of your gear just got extended, and so does your ROI.

I think another consideration for the commercial operations is they are not data centers. Or even homes. So I suspect they have a higher hardware mortality rate, further reducing ROI.

[mmeijeri]

Additionally, from a commercial standpoint, many endeavors were built with a specific BTC/$ value. If you built out a large mining operation based upon $500/btc you are bleeding and will probably shut down in the near future.

If you've already bought the hardware, the only thing that matters is running costs vs dollar value of the bitcoins mined. People will stop buying new hardware long before they switch off old gear.

[freedomno1]

It seems odd that so few understand the dynamics of exponential growth on even a basic level.

My crystal ball predicts a movement towards decentralization of mining. Larger mines find it difficult of survive large $/btc swings for extended periods.

PS: Try running a mining calculator on some current devices where the difficulty increases around 2% per cycle and see what happens. It's raining ROI like never before for devices you can have delivered in a few days on the secondary market. Expect prices on second-hand devices to go through the ceiling shortly. Even at current prices, a 1Th machine with 1KW usage will make around $85/month after electricity costs. Projections at 2% per cycle says 100% ROI in 3 months, and profits continue well into 2016.

I actually look forward to seeing hashing units back online at this rate of growth
(Honestly first time in a long time I have even considered looking at mining)
Stable generation and cheap units with to my knowledge little in way of new units for a while means their is a chance at ROI given the lower bitcoin prices and the stable difficulty.

That said it was a heck of a long rise this time around.

[elduderino]

So, it appears that as long as the $/BTC exchange rate stays where it is, the difficulty growth should remain (somewhat) low, as there is very little incentive for large concerns to spend the capital on building/converting/renovating facilities and procuring the miners with which to fill them... Makes sense... I guess we'll see how that plays out.

It would be nice for the home miner to actually achieve a positive ROI.

[freedomno1]

Imagine seeing 0.00% .. when's the last time that happened?

I would like that !

That would be a pretty damn cool
Last time that happened was when difficulty was 1 or perhaps that period after the difficulty finally increased from 1 for a bit lol.

[Adrian-x]

It seems odd that so few understand the dynamics of exponential growth on even a basic level.

The difficulty level cannot continue to double every few months forever. You can start with the laws of thermodynamics, and realize that in just a 5 more years of doubling it would utilize the entire energy output of the sun for hashing with even quantum computing. It had to stop increasing at that rate, and it did.

Additionally, from a commercial standpoint, many endeavors were built with a specific BTC/$ value. If you built out a large mining operation based upon $500/btc you are bleeding and will probably shut down in the near future. However, if you bought a miner for your home and are running it, you are dancing in the street. You can watch the $/btc rate jump from $100 to $1000 and back to $100 and afford to keep hashing. You can hold pretty much forever, unlike an ongoing major mining concern. And when the difficulty steadfastly refuses to increase, the life of your gear just got extended, and so does your ROI.

My crystal ball predicts a movement towards decentralization of mining. Larger mines find it difficult of survive large $/btc swings for extended periods.

PS: Try running a mining calculator on some current devices where the difficulty increases around 2% per cycle and see what happens. It's raining ROI like never before for devices you can have delivered in a few days on the secondary market. Expect prices on second-hand devices to go through the ceiling shortly. Even at current prices, a 1Th machine with 1KW usage will make around $85/month after electricity costs. Projections at 2% per cycle says 100% ROI in 3 months, and profits continue well into 2016.

+1 we're heading into a decentralization of mining stage - untill the next price growth spurt.

if the price sits around this level for a while I think mining equipment cost will drop.

[Adrian-x]

So, it appears that as long as the $/BTC exchange rate stays where it is, the difficulty growth should remain (somewhat) low, as there is very little incentive for large concerns to spend the capital on building/converting/renovating facilities and procuring the miners with which to fill them... Makes sense... I guess we'll see how that plays out.

It would be nice for the home miner to actually achieve a positive ROI.

Over the last 2 months I think many got a ROI on hardware costs. I think you're bang on when it comes to centralized mining, they won't invest big untill there is a big opportunity - not happening at this price point.

_____

on a separate note does anyone have any ideas as to why difficulty is dropping so much? 
Are those southern hemisphere miners powering down for the summer? (no need for the old heater!) 

[funtotry]

on a separate note does anyone have any ideas as to why difficulty is dropping so much? 
Are those southern hemisphere miners powering down for the summer? (no need for the old heater!) 

Being that this is the speculation section I would speculate that since few manufacturers have recently created new (and more efficient) hardware as well as the fact that the price of bitcoin has declined (which has caused the effective, after electric cost amount that miners to mine to decline) 

[Adrian-x]

on a separate note does anyone have any ideas as to why difficulty is dropping so much? 
Are those southern hemisphere miners powering down for the summer? (no need for the old heater!) 

Being that this is the speculation section I would speculate that since few manufacturers have recently created new (and more efficient) hardware as well as the fact that the price of bitcoin has declined (which has caused the effective, after electric cost amount that miners to mine to decline) 

I totally agree with your speculation but the energy input cost is still well below market price, so given all, I'd expect it to stabilize or increase with the increase of new hardware sales. Declining (maybe this decline is just noise) is not happening and difficulty is just stagnant.