25BTC reward but.. no drop in hash rate!

[organofcorti]

Some drop already observed ~24TH now, interesting, how low will it drop?

The network hashrate is only an estimate based on the number of solved blocks in a given time period and also on Difficulty. Variance is expected, and a change in the short term average hashrate doesn't necessarily reflect a change in the number of hashes submitted to the network.

Apart from the rules of bitcoin there is absolutely nothing predictable about it.

That has been my observation also. 

That is not true. The network hashrate has been quite predictable. I've correlated changes in difficulty with changes in MTGOXUS$ exchange rate and written models that predict the hashrate reasonably well most of the time. I posted results here:

http://organofcorti.blogspot.com/2012/11/101-price-drives-difficulty.html
http://organofcorti.blogspot.com/2012/11/102-forecasting-network-hashrate.html
http://organofcorti.blogspot.com/2012/11/103-canaries-coal-mines-and-black-swans.html
http://organofcorti.blogspot.com/2012/12/104-long-range-forecasts-of-network.html


These models will probably break down while the ASIC hashrate is being added. Block reward halving I'm not sure about, but my guess is that in the short term there won't be a significant effect on the network hashrate or difficulty.

[aqrulesms]

The hashrate of the network is already beginning a decline as people shut off their rigs.

[organofcorti]

The hashrate of the network is already beginning a decline as people shut off their rigs.

You can't tell yet. The network hashrate you see in various places is an estimate based on the number of blocks solved by the network in a given time period and on the network mining Difficulty. The shorter the time period over which this average occurs, the greater the possible error.

If you see huge swings in the network hashrate over short periods of time. it's more likely these are due to variance rather than a change in the number of hashes being submitted to the network.

[superfastkyle]

it seems to me its more accurate to look at the larger pools listed hashrates, than the average based on block times listed on some. I see no decrease in Eclipse, or Bitminter. Maybe a slight decrease with deepbit. I'm not familiar with slush's average rate though. It will probably be at least a week until we see any decrease

[organofcorti]

it seems to me its more accurate to look at the larger pools listed hashrates, than the average based on block times listed on some. I see no decrease in Eclipse, or Bitminter. Maybe a slight decrease with deepbit. I'm not familiar with slush's average rate though. It will probably be at least a week until we see any decrease

Using block solve times and network difficulty for a week results in a fairly accurate estimation of the network hashrate over the week. Hourly averages will have a much larger variance from the actual (unknowable) network hashrate.

[DiCE1904]

The hashrate of the network is already beginning a decline as people shut off their rigs.

only 22.79Th/s now

[AngelusWebDesign]

The hashrate of the network is already beginning a decline as people shut off their rigs.

only 22.79Th/s now

only a 4% estimated increase right now for the next difficulty reset.

EDIT: I should also add that if the BTC/USD price went up by 4% as well, the price would go from $12.30 to $12.79. We haven't seen that yet.
So the BTC price isn't even keeping up with the post-halving diff increase -- nevermind making up for the halving.

[bitCooper]

I think the hashrate will be below 20 Thash within a week. Where will we be within 3 weeks?

[FreeMoney]

I think the hashrate will be below 20 Thash within a week. Where will we be within 3 weeks?

I bet it will dip below 20 but be above that in 3 weeks. A slight price increase and a slight difficulty drop will go a long way imo.

[DobZombie]

I think the hashrate will be below 20 Thash within a week. Where will we be within 3 weeks?

I bet it will dip below 20 but be above that in 3 weeks. A slight price increase and a slight difficulty drop will go a long way imo.

That's why I've been keeping my fingers crossed!

[ewhenn]

Responses bolded.

You hit the nail on the head.

Fact: Many Americans are bad at math (look at the popularity of the Lottery!)
I could say the same thing about Europeans and Aussies. ( http://au.pfinance.yahoo.com/moneyandyourlife/managing-debt/article/-/9802241/world-s-biggest-gambling-nations/ ).  You guys top the charts at gambling.  Gambling is a sucker bet, just like the lottery.  Of course, saying Euros/Aussies are bad at math because they like to gamble is pretty dubious.  Claiming that Americans are bad at math because they have fun playing the lottery is just as dubious.


Fact: Many Americans live paycheck-to-paycheck. This shows an inability to budget, live below one's means, insufficient attention to financial detail, etc.
That's pretty common all over the world, I don't think Americans have a monopoly on that

Fact: Many Americans have to LEARN how to be frugal from websites, etc. It isn't something in their bones, or something they grew up with.
Yeah, frugality is genetic.   

Fact: America has much cheaper electricity than, say, Europe -- so a good % of miners are going to be in America right now
I'd agree that this is likely due to the geographic distribution of coal and natural gas, but since I haven't studied the average electric rate in Europe I cannot confirm it's accuracy.

Fact: Americans don't read books. Should I assume that they studiously read over their electric bill and understand it?
http://stephenslighthouse.com/2011/04/28/who-reads-books/
I'm an American. I read a book about 2 months ago.  Since your statement pertains to Americans without restriction, by definition that would include *all* Americans, requiring only one American to deviate from the statement to make it false.  As previously stated, I read a book, therefore your "fact" isn't a fact, instead it's a fallacious slur that appears to be rooted in some type of undeserved hatred towards Americans.

Fact: Young Americans are notorious for NOT being frugal. In fact, they are known for wasting their money on all manner of things ($18 for a cotton T-shirt with something specific printed on it?)
Yup, because American's (specifically young ones) are the only ones that waste money.  Since we're talking young people, I guess that 20 Euro Vodka Lemon in Ibiza is value priced! 

....

In fact, because men (let's face it -- the majority of miners) run on ego, I'd also expect them to brag online about how much they're making right now after the block halving. Who's going to verify it anyhow? They could be losing $5 a day and they could still fire up their browser and type in, "I am profitable all the way down to $5/Bitcoin!". Who would be the wiser?
A) People bullshit all the time, this isn't something new.
B) I mine based on profitability. It's really quite simple: (BTCGeneratedDaily*BTCPrice) - (KWHConsumedDaily * KWHPrice).  I'll mine until the number is 0 or less, actually I'll probably stop when it gets close to 0 due to variance. Though it's winter now, so I'd even run it then for reduced priced heat.


Something to consider: the average American mining bitcoin isn't some guy in his trailer. The vast majority of American bitcoin miners are relatively "geeky", to us math is cool, and so is learning.

[superfastkyle]

Why would people still mine at profitability close to zero? makes no sense to me. My 5970's I bought a little over a year ago when Newegg got them back in stock for that promo code. I paid 500 for the first one and 400 for the second. now they are worth $220 at the most that's $460 I lost, or about 51%. So in reality $40 a month from approx 1400m/hash was breaking even. Add to that the approximately $30 a month in electricity at 0.08 a kwh. $70 a month was breaking even. Now most months I made between over $100 a g/hash net so I did profit. But at this difficulty with the block halving seems to me everyone but people with free power are losing money

when you figure in power costs, profits were cut substantially more than 50%. The only reasons I can see we haven't seen a huge decrease in hash rate is either people still think the price is going to double, or they think the used market for video cards has bottomed out and they want to make a few more bucks towards paying off their equipment. Well I can almost guarantee we haven't even begun to see the fire sale on gpu's yet

[BkkCoins]

Many miners treat it the same as buying bitcoins. It makes sense to mine down to breakeven anyway. I'm just slightly above breakeven so I'm continuing just because it supports Bitcoin and because it's a somewhat decent gamble that the price will go up.

Below breakeven there is still some advantage for some people. They should just go buy bitcoins but if they don't want to give out ID info, or would have to pay a fee, or just don't have ready access to a market (like me in a distant location) - then I can see them still mining.

For me the halving was useful in that it prompted me to evaluate my efficiency and try to improve it. I should have done this a year ago as it turns out I've been burning more electricity than I had to.

I mined for a year 930MH/s @ 560W, net profit in the $40-$100 /month range.
Before tweaking I was at the low end of about $44/mo.
After tweaking things I found 750MH/s @ 375W netted me the same $44/mo.
Also the fans hardly run and the noise is lower on hot days here. Big improvement.

In the first case I would be losing money now due to higher electric costs but in the second I'm around $4 net above water. Not that I care about making $4/mo. but I'll just accumulate bitcoins until it actually drops below as I've already got everything setup and running.

Next I'm going to explore running P2Pool as that's more beneficial for the network.

[Badonkadonk]

Why would people still mine at profitability close to zero? makes no sense to me. My 5970's I bought a little over a year ago when Newegg got them back in stock for that promo code. I paid 500 for the first one and 400 for the second. now they are worth $220 at the most that's $460 I lost, or about 51%. So in reality $40 a month from approx 1400m/hash was breaking even. Add to that the approximately $30 a month in electricity at 0.08 a kwh. $70 a month was breaking even. Now most months I made between over $100 a g/hash net so I did profit. But at this difficulty with the block halving seems to me everyone but people with free power are losing money

when you figure in power costs, profits were cut substantially more than 50%. The only reasons I can see we haven't seen a huge decrease in hash rate is either people still think the price is going to double, or they think the used market for video cards has bottomed out and they want to make a few more bucks towards paying off their equipment. Well I can almost guarantee we haven't even begun to see the fire sale on gpu's yet

cause people are hoping that the price will skyrocket some day, making up for the fact that they may even have lost some bucks here and there.

diff will go down, cause of block halving and ppl not making enough to break even.
price will go up, because of supply and demand (less miners)
diff will go back up again. cause miners fired up there rigs again since the price went up.
its the way of the world 

[Nite69]

Why would people still mine at profitability close to zero?

I already have hardware, my house heats up with electircity (which is cheap). Why not mine until summer when no heating needed anymore?

[monstrs]

Mining until coinotron offers loyality points to redeem.

[aqrulesms]

Why would people still mine at profitability close to zero?

I already have hardware, my house heats up with electircity (which is cheap). Why not mine until summer when no heating needed anymore?

Well, by reducing the lifespan of your hardware then it is no longer a good deal.

[rograz]

still making a profit, not much but still a profit. Besides it's -10 C outside and I've got to heat the house somehow :p

[meebs]

I see that 50btc.com is down from 5500 to 4300... and btcguild also seems to have lost a TH as well.

[ElectricMucus]

Why would people still mine at profitability close to zero?

I already have hardware, my house heats up with electircity (which is cheap). Why not mine until summer when no heating needed anymore?

Well, by reducing the lifespan of your hardware then it is no longer a good deal.

Plus heating with electricity usually means a two way heat exchanger which have an "efficiency" of excess of 100%. Cases of classical electrical heating are rare.