Long-Term Difficulty Speculation Thread

[armedmilitia]

I was feeling inspired by phillipma's shorter term threads, so let's talk about the grand scheme of things here.
Where do you think the difficulty is going to be on May 1st, 2016, and why? I'm interested in seeing your thoughts.

Let's try to keep price speculation out of this thread--instead just assume that the btc price remains at a constant $220 USD until then.

[alani123]

Several factors to take into account actually. A prediction would need a lot of luck to be correct because bitcoin's price is also an important factor in this and it's hard to predict what's going to happen long term.

I think that the affordability of miners also depends on how more efficient can mining hardware get. From the moment ASICS came into existence we saw hardware getting gradually more efficient but also bigger and more expensive. S5s have 0.51W/ and that is probably the most efficient we have at the moment. But we've also seen the price of bitcoin declining from November 2014

I believe that efficiency of miners won't really get much better from here on. If that's the case, it leaves it up to the price for miners to be profitable. Some had speculated that the halving would help the price get out of the extended downtrend that haunts the markets, but that comes after may.

I see a lot of home miners being unplugged until the happening unless of course we see an upward spike in the price. It's unlikely for the mining power to face a massive drop at some point but if we don't see bitcoin's price getting better some decreasing is inevitable. You say that we should assume the price remains 220$, if that's the case we shouldn't see huge changes in the difficulty. That has been the case for the last some time now actually.



TL;DR May 2016 is before the halving. I think miners aren't going to get much more efficient. If the price remains the same we're not going to see many things changing for mining.

[philipma1957]

Well If it stays at 220usd   difficulty will go up slowly.  My guess is Washington state will be a haven for miners.

100th in s-5's earns 3140 a month with 10 cent power

100th in s-5's earns 5000 a month with  5.1 cent power

Quite simply gear will move to 5 cent power   anyone with more then 87 s-5's should be in Washington State .

Tag on the 2880 watt beasts Finksy sells  you get 94% efficiency.

Now I have done a lot of calculations based on f2pool on how many miners are bigger then 100th.

I  downloaded a 453 page  pdf of f2pool  they have 70 to 85 ph   each page is 20 payments  and the first 5 pages are 100 miners they earned .85 btc or more.

Since the most reliable  pool is this pool as they pay 1 time a day  and they pay 96% of what you would earn on this calculator.  to say the 100 miners over .85 btc are at 100th is reasonable.

  so 100 out of 9000 is close   since the pool is 25% of the network  maybe only 400 to 600 people mine with 100th or more.

   We all know they all can't go to  Washington State and get the 5 cent power.  But people will move.

If you are single   and free to move to a 5 cent place some will do it..

To me this is the only way the network reaches more then 100 diff in 1 years time.  A vast relocation of miners  to cheap  power places.

  Assuming prices are stuck at 190 to 250 usd.

I am thinking we are at 80 to 100 diff next May,  but WTF do I know?

[notlist3d]

I predict we gain a few percent most weeks until next gen.  I think once next gen miners come out it will change the game.

I think that we could see double digits first weeks after the next get is successfully being made.  I think we will first see it from big mining centers, and eventually it will lead to sales to home miners.  But the biggest bump will be the professional data centers switching out old gear.

That is my guess.

[ezeminer]

I predict we gain a few percent most weeks until next gen.  I think once next gen miners come out it will change the game.

I think that we could see double digits first weeks after the next get is successfully being made.  I think we will first see it from big mining centers, and eventually it will lead to sales to home miners.  But the biggest bump will be the professional data centers switching out old gear.

That is my guess.

If next gen jumps to 20nm or smaller processes (or ever gets released) we would probably see a large jump for a couple of cycles then hold steady till the halving. Assuming halving isn't sped up to be three months earlier than the predicted of July.

[cooldgamer]

I don't think we're going to be seeing too much of a jump soon, even when next-gen miners come out.  For people to upgrade it has to be somewhat worth the investment, and at the current price I just don't see that happening.  Not much big investment going into mining right now, so we're not going to be seeing the kinds of increases that we did when massive farms were coming online.  We may even see it go down as some of those farms close down operations and sell the space/use it for different things

Until we have another price bubble, we won't have one for difficulty either.

[mrhelpful]

Overall i think the price will hike in a longer view, cause the difficulty to find these damn things will cost more hashes for miners.

Some overlook the whole situation, and debate but if you see its like a gold mine similar to finding gold you`ll hold it when its difficulty is much harder to find coins.

[NUFCrichard]

I don't think we're going to be seeing too much of a jump soon, even when next-gen miners come out.  For people to upgrade it has to be somewhat worth the investment, and at the current price I just don't see that happening.  Not much big investment going into mining right now, so we're not going to be seeing the kinds of increases that we did when massive farms were coming online.  We may even see it go down as some of those farms close down operations and sell the space/use it for different things

Until we have another price bubble, we won't have one for difficulty either.

For just that reason I think we will have a mining peak again.  I think the price will organically rise and the cloud miners that have switched off will decide to switch back on.
That, along with new mining tech, will result in a doubling of the network over the next year.

If the price stays the same, then I can see difficulty staying the same too.

[alani123]

For just that reason I think we will have a mining peak again.  I think the price will organically rise and the cloud miners that have switched off will decide to switch back on.
That, along with new mining tech, will result in a doubling of the network over the next year.

If the price stays the same, then I can see difficulty staying the same too.

I don't really think that miner technology is going to keep developing with the rate it did during 2013-14. So many manufacturers are out of the game, with so many companies developing asics going bankrupt there's even less competition for bitmain. So unless KNC overcome their mischief and actually create the 16nm chip they were talking about I don't see the technology improbing that much.

[alh]

While there are many valid comparisons to Gold mining, the fundamental difference is the difficulty adjustment mechanism. With Gold mining, once you hit a good vein, the harder you mined the more Gold you got. Even if there was zero competition amongst miners, the difficulty adjustment prevents even a single miner from rapidly mining Bitcoin beyond a certain pace, regardless of input effort. And then 10-12 days later, the benefit of all your extra input hash has been dissipated

The one most interesting comparison that resonates with me now: Supposedly in the Gold Rush days, the folks that profited the most were the ones selling mining equipment. While I have no way to validate that assertion, it seems really ironic if correct. 

[Jamphone]

I'm seeing a lot of trouble at large mines with heat and space issues. This is a direct result of the collapse of margins of many hosters. We're still seeing some hosters in less optimal places closing shop.

I believe that hosting, rather than the production of miners, is going to be the real bottle neck during the next rally. To add another 200-250MW of hosting space, which a rally to $500 would require to restore mining equilibrium, will take at least 6 months, maybe longer.

If there is no rally, you'll see more hosting centres close and more miners burn out and not be replaced.

[philipma1957]

Some longer term numbers.

June 29th 2014  ------- 16,818,461,371----------------------preorders for the s-3

May   3rd  2015 ---------47,xxx,xxx,xxx     ------------------ tomorrows rate.  we averaged about 3.9%




Nov 18 2014----------40,300,030,328--------------------------preorders for the s-5

May  3 2015 ----------47,xxx,xxx,xxx --------------------------tomorrows rate.      we averaged about 1.9%


 A year  from now    I see no reason  to go faster then  2 to 4 %.

[bomberb17]

Taking the 2 following facts into consideration

• BTC/USD volatility for the last couple of months is almost zero (I think that even EUR/USD has now higher volatility!)
• Mining difficulty has also stabilized at around 47 Billion (next difficulty change will be about +0.05%, a number so close to zero also never seen before)

I think that unless a cataclysmic and/or huge-impact event happens, or we move to 14nm miners or sub 0.3Watt/GH/s efficiency, the mining difficulty will remain about the same, which brings marginal profits to the miners.
One might say that some new mining hardware will be produced, but don't forget that some of the current running mining hardware will be offline (due to inefficiency or they might just stop working).

[philipma1957]

Taking the 2 following facts into consideration

• BTC/USD volatility for the last couple of months is almost zero (I think that even EUR/USD has now higher volatility!)
• Mining difficulty has also stabilized at around 47 Billion (next difficulty change will be about +0.05%, a number so close to zero also never seen before)

I think that unless a cataclysmic and/or huge-impact event happens, or we move to 14nm miners or sub 0.3Watt/GH/s efficiency, the mining difficulty will remain about the same, which brings marginal profits to the miners.
One might say that some new mining hardware will be produced, but don't forget that some of the current running mining hardware will be offline (due to inefficiency or they might just stop working).

Seems to be what will happen.  The only thing that will push diff faster is a huge sustained price rally.

Not impossible.  I guess we need a price thread.  What will prices be in 6 months, 9 months, 12 months  ,18 months ,24 months ?

[gallery2000]

Don't bank on Washington as a cheap source of power.  The main reason they are that cheap is because of hydropower.  However, Washington governor just declared STATED OF EMERGENCY because of the DROUGHT.  Power companies are planning on price hiking so I am not surprised to see 8 cents a kwh. http://www.ecy.wa.gov/drought/wenatchee.html

I would rather see my water go to feed apples and cows then to mine btc.  

Well If it stays at 220usd   difficulty will go up slowly.  My guess is Washington state will be a haven for miners.

100th in s-5's earns 3140 a month with 10 cent power

100th in s-5's earns 5000 a month with  5.1 cent power

Quite simply gear will move to 5 cent power   anyone with more then 87 s-5's should be in Washington State .

Tag on the 2880 watt beasts Finksy sells  you get 94% efficiency.

Now I have done a lot of calculations based on f2pool on how many miners are bigger then 100th.

I  downloaded a 453 page  pdf of f2pool  they have 70 to 85 ph   each page is 20 payments  and the first 5 pages are 100 miners they earned .85 btc or more.

Since the most reliable  pool is this pool as they pay 1 time a day  and they pay 96% of what you would earn on this calculator.  to say the 100 miners over .85 btc are at 100th is reasonable.

  so 100 out of 9000 is close   since the pool is 25% of the network  maybe only 400 to 600 people mine with 100th or more.

   We all know they all can't go to  Washington State and get the 5 cent power.  But people will move.

If you are single   and free to move to a 5 cent place some will do it..

To me this is the only way the network reaches more then 100 diff in 1 years time.  A vast relocation of miners  to cheap  power places.

  Assuming prices are stuck at 190 to 250 usd.

I am thinking we are at 80 to 100 diff next May,  but WTF do I know?

[philipma1957]

Me too  I like Delicious  Apples from Washington State

 Back to topic  this could be a big event  for Washington mining.

Don't bank on Washington as a cheap source of power.  The main reason they are that cheap is because of hydropower.  However, Washington governor just declared STATED OF EMERGENCY because of the DROUGHT.  Power companies are planning on price hiking so I am not surprised to see 8 cents a kwh. http://www.ecy.wa.gov/drought/wenatchee.html

I would rather see my water go to feed apples and cows then to mine btc.  

Well If it stays at 220usd   difficulty will go up slowly.  My guess is Washington state will be a haven for miners.

100th in s-5's earns 3140 a month with 10 cent power

100th in s-5's earns 5000 a month with  5.1 cent power

Quite simply gear will move to 5 cent power   anyone with more then 87 s-5's should be in Washington State .

Tag on the 2880 watt beasts Finksy sells  you get 94% efficiency.

Now I have done a lot of calculations based on f2pool on how many miners are bigger then 100th.

I  downloaded a 453 page  pdf of f2pool  they have 70 to 85 ph   each page is 20 payments  and the first 5 pages are 100 miners they earned .85 btc or more.

Since the most reliable  pool is this pool as they pay 1 time a day  and they pay 96% of what you would earn on this calculator.  to say the 100 miners over .85 btc are at 100th is reasonable.

  so 100 out of 9000 is close   since the pool is 25% of the network  maybe only 400 to 600 people mine with 100th or more.

   We all know they all can't go to  Washington State and get the 5 cent power.  But people will move.

If you are single   and free to move to a 5 cent place some will do it..

To me this is the only way the network reaches more then 100 diff in 1 years time.  A vast relocation of miners  to cheap  power places.

  Assuming prices are stuck at 190 to 250 usd.

I am thinking we are at 80 to 100 diff next May,  but WTF do I know?

[armedmilitia]

Don't bank on Washington as a cheap source of power.  The main reason they are that cheap is because of hydropower.  However, Washington governor just declared STATED OF EMERGENCY because of the DROUGHT.  Power companies are planning on price hiking so I am not surprised to see 8 cents a kwh. http://www.ecy.wa.gov/drought/wenatchee.html

I would rather see my water go to feed apples and cows then to mine btc.  

Me too  I like Delicious  Apples from Washington State

 Back to topic  this could be a big event  for Washington mining.

Well If it stays at 220usd   difficulty will go up slowly.  My guess is Washington state will be a haven for miners.

100th in s-5's earns 3140 a month with 10 cent power

100th in s-5's earns 5000 a month with  5.1 cent power

Quite simply gear will move to 5 cent power   anyone with more then 87 s-5's should be in Washington State .

Tag on the 2880 watt beasts Finksy sells  you get 94% efficiency.

Now I have done a lot of calculations based on f2pool on how many miners are bigger then 100th.

I  downloaded a 453 page  pdf of f2pool  they have 70 to 85 ph   each page is 20 payments  and the first 5 pages are 100 miners they earned .85 btc or more.

Since the most reliable  pool is this pool as they pay 1 time a day  and they pay 96% of what you would earn on this calculator.  to say the 100 miners over .85 btc are at 100th is reasonable.

  so 100 out of 9000 is close   since the pool is 25% of the network  maybe only 400 to 600 people mine with 100th or more.

   We all know they all can't go to  Washington State and get the 5 cent power.  But people will move.

If you are single   and free to move to a 5 cent place some will do it..

To me this is the only way the network reaches more then 100 diff in 1 years time.  A vast relocation of miners  to cheap  power places.

  Assuming prices are stuck at 190 to 250 usd.

I am thinking we are at 80 to 100 diff next May,  but WTF do I know?

Holy quote wall batman.

Very very interesting how you guys are talking about washington power hikes. What do you guys think about labrador, CAN? There's already a few datacenters being built there (GND comes to mind, I host some hardware up there), and power is dirt cheap (2.5c/kwh).

I think its very much possible that even with no increase in efficiency of hardware that the hashrate can still skyrocket, if bitmain can "spam" cheap miners and host them in places with ultra-cheap electricity. I think the key reason that they don't do this is because of a huge amount of uncertainty about bitcoin's future--after all, if btc dies for whatever reason then they will have overinvested in paperweights!

[crazyivan]

No need to speculate. It ll go UP. As soon as the new generation of miners gets out, it ll go up.
Until we reach block halving. At that point he price needs to go up big time for the mining to still be profitable. So I would expect a short term decline until the price picks up and then it ll go up again.

[philipma1957]

…

Holy quote wall batman.

Very very interesting how you guys are talking about washington power hikes. What do you guys think about labrador, CAN? There's already a few datacenters being built there (GND comes to mind, I host some hardware up there), and power is dirt cheap (2.5c/kwh).

I think its very much possible that even with no increase in efficiency of hardware that the hashrate can still skyrocket, if bitmain can "spam" cheap miners and host them in places with ultra-cheap electricity. I think the key reason that they don't do this is because of a huge amount of uncertainty about bitcoin's future--after all, if btc dies for whatever reason then they will have overinvested in paperweights!

Well price under 2.5 cents is a winner.

As for bitmain 'spamming' cheap miners I do not think so  they are pretty smart.   
 Spamming scrypt miners cheaper and cheaper killed scrypt mining.
I THINK  bitmaintech know better.  I hope they know better.

[s1gs3gv]

I think difficulty will double at least 7 times in the next 5 years. The numbers and rationale for this prediction can be found here:

https://bitcointalk.org/index.php?topic=1053412.msg11324501#msg11324501

We won't see the introduction of mining equipment orders of magnitude more powerful than at present, we will see the introduction of many many orders of magnitude greater numbers of low power devices in the 200ghs range, most likely by or in association with a public utility.