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Author Topic: Assuming 50% difficulty increases every 14 days  (Read 3774 times)
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June 15, 2011, 04:43:35 PM
 #1

Is that even reasonable?

But let's assume it is.  

Let's assume a new miner has enough hashing power to bust out 1 BTC per day given the current 850K difficulty

Also assume it takes 14 days to get to the next difficulty level, and then 14 more days after that to hit the next one, and the next (3 difficulties, 42 days of mining).

Difficulty 1 (1st 14 days)
# Coins/Day: 1
# Days: 14
# Coins: 14
-------------

Difficulty 2 (2nd 14 days, I'll use a 50% increase in difficulty, resulting in 1/3rd less coins per day)
# Coins/Day : .66
# Days: 14
# Coins: 9.3

-------
Difficulty 3 (3rd 14 days, again same increase)
# Coins/day: .44
# Days: 14
# Coins: 6.22

Total coins for 42 days: 29.55 coins

Current value per coin ~$20.

So... in 42 days, a reasonable expectation is $600 in the next 42 days, provided you are currently putting out 1.0GHash and get coins at a rate of 1/day.

Today is June 15, so 42 days from now is July 27th.

Does that sound right?  If so, at most I'd want to put $600 in, right now, to break even in 1 months time?

Edit: 42 days, lol, not 32.


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June 15, 2011, 05:15:07 PM
 #2

sorry but you are wrong.

why?

because if you estimate a 50% increase, it will not take 14 days until diff change, it will take 10-11 days (or less) Smiley


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June 15, 2011, 05:20:57 PM
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One thing wrong with your calculations --

You assume the difficulty resets every 14 days. WRONG!

The difficulty reset this morning, 6/15.  The last difficulty reset was 8 days ago, on 6/7.

If the difficulty goes up by 50%, it also means we (the entire mining community) mined the next 2012 blocks too early.

If it took 14 days to mine 2012 blocks, the difficulty would be unchanged! If it took more than 14 days, it would go down.

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June 15, 2011, 05:22:21 PM
 #4

Also you are not counting electricity.
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June 15, 2011, 05:28:38 PM
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So many things wrong with this:

1) The amount you put in does not effect the length of time to repay (excepting that you can make more efficient mining rigs with more money, by maxxing GPUs / other components).

2) 50% increases would mean 7-9 days between difficulty changeovers, not 14 days.

3) 50% Increases without any change in coin value are completely illogical to assume. Why would you keep piling on more miners onto an ever decreasing profitability system? You will probably see a 15-25% difficulty increase round max (as price has DROPPED > $10/BTC since people started last wave of building, and stagnated there for days) with respect to the latest VERY LARGE difficulty change.

4) No one knows the future, $20 could shoot to $40 or it could drop to $1. A reasonable expectation is to never see any of your money ever again. That's how investing works, you have to be able to live without your investment for a risk to be reasonable.
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June 15, 2011, 05:32:13 PM
 #6

Good input guys : )

I am new, so any input is always appreciated.

So increased difficulty typically correlates to new miners.  However, there are more and more miners each week, and ATI supply is basically insta-sold.

Is it unreasonable to continue to expect more miners to be showing up as bitcoins become more widely known?

Also on the price.  I assumed $20 stayed constant for 42 days, but I hope it would go up, ; )

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June 15, 2011, 06:50:21 PM
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Good input guys : )

I am new, so any input is always appreciated.

So increased difficulty typically correlates to new miners.  However, there are more and more miners each week, and ATI supply is basically insta-sold.

Is it unreasonable to continue to expect more miners to be showing up as bitcoins become more widely known?

Also on the price.  I assumed $20 stayed constant for 42 days, but I hope it would go up, ; )

Increased difficulty correlates to more hashing power being put on the network. Hashing power is expensive, even AMD. A GOOD MHash/$ ratio is about 2.2, or $/Mhash of .45; meaning an increase of 50% difficulty is an increase of 50% hashing power. Currently we're at about 6.5THash? So 50% diff inc is about 3.25THash added to the network, or $1,462,500 in gpus alone (not counting the psus and cases and mobos, and whatnot). And that's IF you can even find such efficient miners (stock is thinning, most people will only be able to find 6xxx series cards that are about .55 $/MHash). Compound the fact that a 50% increase in difficulty means you would produce 67% as many coins as you made last difficulty round (and if you see another 50% difficulty increase, thats 45%), and you can quickly see why without an increase in coin price, it is very unreasonable to expect the network to continue to grow.

This can be a good thing or a bad thing. But as profits diminish you will definitely see something big changing, rather than a static model like you'd like.
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June 15, 2011, 07:09:35 PM
 #8

Here's a little tidbit --

670 MH/s is a little less than you'd get from (2) 5870's (decently, but not super-aggressively "I don't care if the card only lasts 3 weeks", overclocked)

670 mh/s =    1.39 BTC (6/6/11 12:30 AM)
      1.07 BTC (6/7/11 9:00 AM)
      0.691 BTC (6/15/11 9:00 AM)

The latest line (0.691) equals $13.82 at today's exchange rate (roughly $20/BTC)

The estimated BTC income is/was taken from Deepbit's website. A good, apples-to-apples comparison.
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June 15, 2011, 07:24:22 PM
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Here's a little tidbit --

670 MH/s is a little less than you'd get from (2) 5870's (decently, but not super-aggressively "I don't care if the card only lasts 3 weeks", overclocked)

670 mh/s =    1.39 BTC (6/6/11 12:30 AM)
      1.07 BTC (6/7/11 9:00 AM)
      0.691 BTC (6/15/11 9:00 AM)

The latest line (0.691) equals $13.82 at today's exchange rate (roughly $20/BTC)

The estimated BTC income is/was taken from Deepbit's website. A good, apples-to-apples comparison.


Ok, so my 1.0Ghash = 1.0BTC is a good comparison with the current difficulty.


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June 15, 2011, 07:27:11 PM
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Increased difficulty correlates to more hashing power being put on the network. Hashing power is expensive, even AMD. A GOOD MHash/$ ratio is about 2.2, or $/Mhash of .45; meaning an increase of 50% difficulty is an increase of 50% hashing power. Currently we're at about 6.5THash? So 50% diff inc is about 3.25THash added to the network, or $1,462,500 in gpus alone (not counting the psus and cases and mobos, and whatnot). And that's IF you can even find such efficient miners (stock is thinning, most people will only be able to find 6xxx series cards that are about .55 $/MHash). Compound the fact that a 50% increase in difficulty means you would produce 67% as many coins as you made last difficulty round (and if you see another 50% difficulty increase, thats 45%), and you can quickly see why without an increase in coin price, it is very unreasonable to expect the network to continue to grow.

This can be a good thing or a bad thing. But as profits diminish you will definitely see something big changing, rather than a static model like you'd like.

While I see what you're saying, increased hashing on the network can be achieved by new miners simply installing guiminer.  There are tens of millions of gamers with 'ok' video cards. 

As word of bitcoin spreads, people like me come onto the network with reasonable cards and start adding hashing power to the network.

My argument, then, is that the $ in GPU's is closer to 0 than to 1.4 million, because the cards already exist and are not being used 24/7.   People who work during the day can run 8-10 hours of guiminer, and start adding to the network.

Given the somewhat quadratic nature of growth of the network so far, I don't see it being unreasonable to expect 50% difficulty increases for the next 3-4 difficulties. : )

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June 15, 2011, 07:56:21 PM
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AngelusWebDesign its 2016 blocks not 2012
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June 15, 2011, 08:40:46 PM
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I was mixing it up with the end of the world. Sorry  Wink
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June 15, 2011, 09:08:09 PM
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I was mixing it up with the end of the world. Sorry  Wink

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June 15, 2011, 10:51:07 PM
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And the price will not remain static of course, it may go up or down wildly.

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June 15, 2011, 11:38:42 PM
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It's unprofitable with a single GPU alright.

However if you happen to have multiple ones sitting idle, you may still find mining profitable for quite a while.

When earnings drop to under 1 BTC per day at 5ghash/s+, then the vast majority of the community will prob. stop mining if the price doesn't keep up. At these hash rates there are maybe a few hundred miners at best, and a lot of those are semi-professional ops.

IMO price is everything when difficulty increases. It will determine the total hashrate of the network. If price just plummets or stays at $20 then yes there will be much less miners in 3-4 months when difficulty is 7-8 million.

The hashing power doesn't come out of charity or goodwill, to keep it secure. Miners have expenses too and blocks are meant to be a reward. If it spreads out too thin and the value doesn't go up, people will find they are wasting their time.

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June 16, 2011, 12:20:20 AM
 #16

Whoa 5ghash. I am happy with my 350mhash ><

I just hope I can pay off my single GPU in the next 42 days. It is looking less and less likely though (no doomsaying) unless those BTC's go up in value like they did last week.

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