Three days out, and network hashrate unaffected?

[jermwerty]

This has been making me curious.  

With the block reward halving that makes most of Europe, much of America (Cali, NY) unprofitable for BTC mining with GPUs.  I assume GPUs are a majority of the BTC mining base.

But from looking at http://bitcoin.sipa.be/ I would say we are statistically about even with the normal swings we saw before.

So are people just mining anyway just to see if BTC prices go up?  At what point might we see a decrease in network hashrate?

Conspiracy theory on the "now normal" wild network hash swings:
Someone has ASICs running and keeps adding more as they notice GPUs exiting the market to keep overall network hashrate on par...
(I know that's been pretty much debunk'd but still I can't help but wonder...)

Do we need a poll?  Are you:
A Still mining
B Partially quit
C Turned off rigs

Based on what I see today seems like A would be the response...

[Stephen Gornick]

Do we need a poll?  Are you:
A Still mining

Baffling, isn't it?

I'm suspecting inertia.  When the next power bill comes in and the bitcoins earned don't cover it there'll be some GPUs going dark.

[BoardGameCoin]

The network hash rate is twice what it was in the $5 BTCUSD stable period, but prices are 2.4 times what they were then. I suspect for many its still profitable, not to buy new cards but to keep mining with old cards. As for me, I mine with my single card not for profit but just to participate in the mining.

[Audriux9]

Do we need a poll?  Are you:
A Still mining

Baffling, isn't it?

I'm suspecting inertia.  When the next power bill comes in and the bitcoins earned don't cover it there'll be some GPUs going dark.

Regarding Litecoin - same situation. Payout from Litecoin now roughly equals payout from Bitcoin.

After Bitcoin reward halved, Litecoin difficulty increased sharply (almost doubled), seems more than 1,000 GPU moved from Bitcoin mining to Litecoin mining...

[AngelusWebDesign]

Blocks   210543
Total BTC   10.514M
 
Difficulty   3438909
Estimated   3584782 in 1137 blks
 
Network total   26.699 Thash/s
Blocks/hour   6.51 / 553 s


Still looking at an increase in difficulty, almost halfway through the 2012 block period.
The BTC price is hovering between $12.48 and $12.59. Not much of an increase in price -- it was $12.30 before the Halving.

Seems that for each person turning off his rigs (few in number), there is twice as much hashing power being switched on somewhere else...

Very strange. ASICs?

[-ck]

There was a huge spike in hashrate just before the block halving as people tried to get the "last block" and the "first block" and then that stopped. Since then, the hashrate is pretty close to what it was before the spike. What's actually happening is the vast majority of miners are still hanging in there. It will just take time for the reality of mining at a loss to get through to them. There are an awful lot of miners that are just hopeful the value will go up, and there are still a heap of miners who honestly don't even know the reward has halved. It will just take time for the new steady state to be reached, but by then ASICs will have honest and truly hit, so there may well be no significant drop in hashrate at any stage. Don't underestimate the power of inertia on human nature.

[organofcorti]

tl;dr The network hashrate is an estimate. The longer the time period over which this estimate is taken, the more accurate the estimate is. Daily estimates are subject to significant possible error.

One thing everyone seems to forget is that the network hashrate is an estimate, and that with such an estimate are sometimes quite large confidence intervals. In this case the confidence intervals indicate the possible values the actual hashrate could be based on the measures hashrate. There's not much point looking at changes in the hashrate over a day unless they're quite large changes.

To give you an idea of how large the confidence intervals (and possible error) can be, I've posted a couple of charts. The shaded areas are the 95% confidence interval for the actual (unknowable) network hashrate. It not that obvious (given the differing scales) but the possible estimate error is much smaller in the first chart (weekly average hashrate) than in the second chart (average hashrate per 144 rounds).

Although the actual number of weekly rounds are used for the first chart, here's a general idea of how the estimate error decreases:

The 95% CI  for 144 rounds: 84.3% to 117% of the estimate
The 95% CI  for 1008 rounds: 93.9% to 106.3% of the estimate

From http://organofcorti.blogspot.com/2012/12/2nd-december-weekly-pool-and-network.html

[bitboyben]

Lots of testimonials of people shutting down and selling GPUs but the evidence is lacking so far.
Maybe people believe in bitcoins a little too much. Willing to mine for a loss on price optimism.

Edit:
Ok now that I see the charts looks like a few pools have had some recent drop offs in hash rate.
I guess it will take a few more blocks to see any fall out.

[dust]

Lots of testimonials of people shutting down and selling GPUs but the evidence is lacking so far.
Maybe people believe in bitcoins a little too much. Willing to mine for a loss on price optimism.

Edit:
Ok now that I see the charts looks like a few pools have had some recent drop offs in hash rate.
I guess it will take a few more blocks to see any fall out.

If someone is optimistic about the future price of BTC and is mining at a loss, they should turn off their rigs and buy BTC instead.

I think many people are overestimating the number of GPU miners that became unprofitable due to the block halving.  A dual 5970 rig is still profitable up until $0.15/kWh.  It is winter for most miners, so the heat generated is a benefit and not a cost driver.

[AngelusWebDesign]

organofcorti --

Impressive charts and all, but one can't deny that difficulty is set to rise 4.86% as of the current estimate right now. And we're talking halfway to a reset, which is a pretty accurate reading.
You can't write off a 5% rise in difficulty averaged over 7 days to "variance".

[Stephen Gornick]

A dual 5970 rig is still profitable up until $0.15/kWh.  It is winter for most miners, so the heat generated is a benefit and not a cost driver.

That configuration ranks up there as far as being on the high end of Mhash/J.  A whole lot of hardware is probably at a third less.   And few care to mine just to break even -- unless the waste heat serves a purpose as you described.

 - http://www.bitcoinx.com/profit/

The number of people whose marginal electric rate is $0.07 per kWh or less is a pretty small number.

[2GOOD]

Lots of testimonials of people shutting down and selling GPUs but the evidence is lacking so far.
Maybe people believe in bitcoins a little too much. Willing to mine for a loss on price optimism.

Edit:
Ok now that I see the charts looks like a few pools have had some recent drop offs in hash rate.
I guess it will take a few more blocks to see any fall out.

I just don't get those guys mining at 0 profit, it's way better to sell the cards and buy coins with the money if they believe so much in bitcoin price.

[AngelusWebDesign]

I just shut down all my rigs and cleaned up each piece of each machine. Took about 3 days!

I have just 2 cards running now for a total of 770 MH/s.

I don't want to run these clean cards, because getting them all dusty again for $1 or $2 a day just isn't worth my time. Maybe if I were 16 again, sure. Maybe if it weren't 80 degrees in the part of Texas I live, sure.

But $1 or $2 a day isn't worth it.

And when you factor in the difficulty going up even before ASICs hit the market, I feel like I'm just bowing to the inevitable. I'm just getting out about 3-6 weeks before I'm forced to.

I'm not worried about Bitcoin and the network. It will do just fine without me.

I might rebuild an efficient rig or two for Winter heat -- but Winter hasn't started yet. Winter in this part of Texas lasts about 4 weeks, and we might not get one this year 

[andrew12]

The hashrate is actually increasing, the difficulty is estimated to increase by about 5-6% at the next retarget. Though that estimate seems to be decreasing... People probably haven't turned off yet because they haven't gotten their power bills, or maybe most of the network doesn't pay for their electricity, or maybe they believe in Bitcoin and don't want to leave it just because they wouldn't be profiting.

[organofcorti]

organofcorti --

Impressive charts and all, but one can't deny that difficulty is set to rise 4.86% as of the current estimate right now. And we're talking halfway to a reset, which is a pretty accurate reading.
You can't write off a 5% rise in difficulty averaged over 7 days to "variance".

I can.

The 95% confidence interval for 1008 blocks is 0.94 to 1.063. I think you'll find a 5% increase is contained within those limits. Even the difficulty change can be affected by variance - the 95 % confidence interval for the hashrate mean over 2016 blocks is 0.957 to 1.044.

 A difficulty change mostly reflects a change in network hashrate, but if the change is in the 95% confidence interval, then we can't be certain that any of that change is due to a change in network hashrate.

[AngelusWebDesign]

organofcorti --

Impressive charts and all, but one can't deny that difficulty is set to rise 4.86% as of the current estimate right now. And we're talking halfway to a reset, which is a pretty accurate reading.
You can't write off a 5% rise in difficulty averaged over 7 days to "variance".

I can.

The 95% confidence interval for 1008 blocks is 0.94 to 1.063. I think you'll find a 5% increase is contained within those limits. Even the difficulty change can be affect by variance - the 95 % confidence interval for the hashrate mean over 2016 blocks is 95.7 to 1.044.

 A difficulty change mostly reflects a change in network hashrate, but if the change is in the 95% confidence interval, then we can't be certain that any of that change is due to a change in network hashrate.

I agree with your mathematics and reasoning, but still...
With variance like that, who needs people adding more capacity to the network?

[organofcorti]

I agree with your mathematics and reasoning, but still...
With variance like that, who needs people adding more capacity to the network?

Sorry, I don't follow. Did you mean "who knows if more people are adding capacity to the network"?

[Herodes]

I had about 3 GPU rigs running at one point, then it became unprofitable for me, but I still had one rig running in the garage. It went on for months and months, and then one day it just died. And that was the end of the mining for me. Have been thinking about getting some new gear, but at the moment I haven't ordered anything.

[purelithium]

Since there's been less than 140 blocks produced in the last 24h, I would say that the hashrate is going down.

[AngelusWebDesign]

I agree with your mathematics and reasoning, but still...
With variance like that, who needs people adding more capacity to the network?

Sorry, I don't follow. Did you mean "who knows if more people are adding capacity to the network"?

I was paraphrasing the saying, "With friends like this, who needs enemies?"

In other words, a 5% diff increase is pretty significant, especially when margins are razor thin. It doesn't really matter WHY it happened, even if it's raw chance.
If variance can jack up difficulty by 5%, it doesn't matter that no one is adding capacity.

I find it odd that variance isn't just-so-happening to bring the total hashrate DOWN, even though several people have stated their rigs are now silent.

I personally took 5 GH/s off the network several days ago, and others have done the same.