Massive jump in FRC coin output. Anyone know why?

[No_2]

Just looked at http://dustcoin.com/mining.

Monday had FRC output for my rigs (1200MH/s) at about 130 per day. Two days later it is at 36.8 coins per day.

Anyone know why this may be?

[Equate]

difficulty increased to 148449

[No_2]

difficulty increased to 148449

Thanks, how often does the FRC difficulty adjust?

[Wilderness]

ahh I noticed that as well, seems dramatic to have a difficulty increase and be mining less than half previously.
If the price doesn't go up that will discourage mining now right?

[ehoffman]

What happened is that 2 major exchanges started accepting FRC trades at about the same time, that is vircurex.com and bter.com.  This had a huge opt-in effect, and trading prices was extremely high (like 500% profitability vs. Bitcoins, i.e. you would mine 100FRC in X amount of time which, once exchanged to BTC, would be worth 5 times more than if you mined BTC in the first place).

So, everyone jumped at mining FRC.  FRC retarget every 2016 blocks, like BTC.  FRC also has a nominal block rate of 1 per 10 minutes, like BTC.  However, in reality, with everyone mining it (a big rush in), a block was found in approx 2 to 2.5 minutes.  After 2016 blocks later, at the next retarget, the FRC difficulty adjusted to the maximum allowed (4 times higher).  And, previously, in the last 1 or 2 days, profitability had settled down to about 130~140%.  So, difficulty increase 4 times (you mine 4 times less coins), exchange rate stay the same, you end up having profitability getting hit down by a factor of 4, ending up at around 35%.

Now what... Either one of 2 scenarios really
1 - Exchange rate increase by a factor of 3 to 4.  This way, you get around the same profit.  This is good for people who mined and kept the FRC before difficulty increase.  They will get 3~4 times more BTC than if they traded before the increase.
2 - Or, exchange rate don't follow.  Mining is simply unprofitable anymore.  People abandon FRC mining.  This has the perverse effect of instead of finding 1 FRC block per 10 minutes, a block get found in 20 minutes, 30 minutes, etc.  People don't mine, and the ones who still mine don't have a total hash power to find a block in a timely fashion.  Since retarget won't happen until 2016 blocks later, you get a blockchain stall.

Scenario 1 means continuity for FRC.  Scenario 2 pretty much means death for it.  Currently, we are looking more toward scenario 2 than scenario 1.  However, FRC got that crisis a few months ago.  It took 3 months to retarget from ~9500 down to ~2375 (4 time less, maximum jump in difficulty again).  People mined it like crazy at the beginning, and then just abandoned it.  It was taking forever for any transactions from 1 FRC address to another (it takes like 6 to 10 confirmations, which is tied to the number of blocks being generated;  no blocks found, transactions takes forever).

Hope this clarify a bit

[keepinithamsta]

Current difficulty retarget is somewhere in October if the hashrate doesn't change in either direction.  The price is slowly chasing after the difficulty and it's only been less than 24 hours since the retarget.  Profitability could return within 2 weeks if this pace keeps up.  But then we just get back into the problem where everyone jumps back on it, forces a quick retarget with a major dip in difficulty, and then stay with it while the retarget after that is a major jump only to ditch it again.  Then we're back into the same place we're talking about right now.

[markm]

Wow, it seems so weird to have coins still using the retarget system that was already so long long ago shown by namecoiun to have this problem. I thought all the alt-coins immediately fixed that, didn't they?

So why is anyone going back to the old broken retarget routines this many years later?

-MarkM-

[ehoffman]

Because FRC is old and at the time, this was not seen as a possible problem, and also because of lazyness of developers that could have fixed it by now but didn't :-)

[Impaler]

Were finalizing a new difficulty adjustment algorithm which may get released into this slump to break out of it.  In hindsight using BTC default difficulty algorithm has been a mistake, our general philosophy has been to stick as close to BTC norms as possible and only change things that were of economic importance such as demurrage and foundation distribution.

Also most alt coins have launched with flawed difficulty too, TRC had the same issues and had to patch its way out, NMC went merged mining, and most of the recent Scrypt coins just copied LTC algorithm which is fundamentally just like BTC's and they have suffered for it, only very large and established coins can survive with such sluggish difficulty adjustments.  FRC will recover because it has an actual development team that can make a patch and fix an issue like this ware as a fly-by-night clone coin is dead as soon as it falters.

[erk]

Were finalizing a new difficulty adjustment algorithm which may get released into this slump to break out of it.  In hindsight using BTC default difficulty algorithm has been a mistake, our general philosophy has been to stick as close to BTC norms as possible and only change things that were of economic importance such as demurrage and foundation distribution.

Also most alt coins have launched with flawed difficulty too, TRC had the same issues and had to patch its way out, NMC went merged mining, and most of the recent Scrypt coins just copied LTC algorithm which is fundamentally just like BTC's and they have suffered for it, only very large and established coins can survive with such sluggish difficulty adjustments.  FRC will recover because it has an actual development team that can make a patch and fix an issue like this ware as a fly-by-night clone coin is dead as soon as it falters.

FTC was the best example of the failed BTC difficulty adjustment algorithm, took off like a rocket, then died, 16+ days until next re-target, which effectively killed the FTC mining. Don't follow the same mistake with FRC, make sure the difficulty can drop in a day or so when mining falls off.

[ehoffman]

Basically, this problem occurs because there's only one established currency, that is Bitcoins (BTC).

Every other currency are 'Based' on itself vs BTC price.

So, BTC price itself have little influence.  People will mine it if it's either 200$ or 50$.  So, unless it goes like 0.01$, where even ASIC will be power-inefficient, then BTC go on.

However, for the other coins, that's a different story.  Their prices are compared to BTC.  It's all a matter of if it's more or less profitable than the established BTC.  If it's a lot higher, like FRC lately, people mine the cr@p out of it.  Then, when difficulty sky-rocket suddenly, and profit get cut, people abandon it.

I think that to suceed for altcoins, the adjustment must be made gradual, not 4x in one shot.  But also, it should be made so that it does not bounce like TRC did a while ago.  In the end, it's really complicated!