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Author Topic: Correlation of price and difficulty  (Read 686 times)
Sword Smith
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April 02, 2013, 03:40:02 PM
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Dear forum

I was wondering if any decent work on the correlation between network difficulty and price of a BTC in $/BTC has been made. Maybe there is a graph showing this relationship somewhere?

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Sword Smith

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Sword Smith
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April 02, 2013, 05:04:05 PM
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I guess what I need is to be able to get the information contained in these graphs as tabulated data:
http://blockchain.info/da/charts

Is that possible somehow?

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April 02, 2013, 11:47:19 PM
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I guess what I need is to be able to get the information contained in these graphs as tabulated data:
http://blockchain.info/da/charts

Is that possible somehow?

yeah. click the graph you want the data from the page you linked. on the new page with the large chart, use your browser menu and view the source for the webpage. the raw data will stick out like a sore thumb. ---- if you're using chrome as your browser, maybe with other browsers, you can also right click the plotted line, and select inspect element. it will show you a tag named "path"... the data is encapsulated by that tag.
Sword Smith
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April 03, 2013, 12:47:44 AM
 #4

I guess what I need is to be able to get the information contained in these graphs as tabulated data:
http://blockchain.info/da/charts

Is that possible somehow?

yeah. click the graph you want the data from the page you linked. on the new page with the large chart, use your browser menu and view the source for the webpage. the raw data will stick out like a sore thumb. ---- if you're using chrome as your browser, maybe with other browsers, you can also right click the plotted line, and select inspect element. it will show you a tag named "path"... the data is encapsulated by that tag.
Great. Thank you! it is presented in an unfortunate format but MatLab can fix that. Now I can do all sorts of calculations!  Grin

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April 03, 2013, 01:49:25 AM
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The difficulty is related to total hashing power (e.g. electricity if most of the miners have access to similar mining technology), and daily electricity cost won't be higher than daily coin output value, so there is some correlation. The question is: which is the cause, difficulty or price?

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April 03, 2013, 02:16:22 AM
 #6

The difficulty is related to total hashing power (e.g. electricity if most of the miners have access to similar mining technology), and daily electricity cost won't be higher than daily coin output value, so there is some correlation. The question is: which is the cause, difficulty or price?
As you say, one cannot say anything about causality. Sorry for the formatting but it is late now. I might look more into this later.



niko
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April 03, 2013, 02:21:11 AM
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Use the forum search function, this topic has been discussec in depth. Historically, cross-correlation has shown that difficulty follows price, not the other way around. It's several weeks worth of delay. Need to correct network hashrate for technological leaps, of course (cpu-gpu-fpga-asic).

They're there, in their room.
Your mining rig is on fire, yet you're very calm.
||bit
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April 03, 2013, 06:07:33 AM
 #8

The difficulty is related to total hashing power (e.g. electricity if most of the miners have access to similar mining technology), and daily electricity cost won't be higher than daily coin output value, so there is some correlation. The question is: which is the cause, difficulty or price?
As you say, one cannot say anything about causality. Sorry for the formatting but it is late now. I might look more into this later.

I suspect there is a bit of both affecting each other, among other influences, but between the two mentioned it seems it would moreso be that prices lead to an acceleration of network-hash-rate.

Here's an idea for you:
Plot the ROI's of the most efficient (GigaHash/$spent) hardware (at any one time) over time (CPU's, GPU, FPGA's to ASIC's). I'll guess that you will likely see a cycle of up and down with a average around 10 months ROI that is causing people to react. For example, if ROI's go below 10 months (b/c of increased bitcoin value) it will attract more miners and accelerate hash rate. When ROI's become too long, then people will find other ways to invest their money beside mining or apart from bitcoin. There's probably a balance point of ROI's, but I don't think it will ever stabilize. Assume, for example, ROI's stabilized to 10 months. Prices stabilized..etc... then outside demand will be the only driving mechanism.

Also, what miners are expecting is important. Do they just want to mine and sell on a regular basis? or Do they largely prefer to hold, maybe until bitcoin reaches some (super?) high target?
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