predicting difficulty

[slavix]

Hello,
I am waiting on a BFL ASIC that hopefully will arrive some time this summer. I am told end of July is likely. I would like to find out if there is any calculator out there that can make a reasonable prediction of the expected bitcoin network difficulty some time into the future using existing data about the network growth rate.
What difficulty can be expected 1st of august, 2013?

[1714919932]

1714919932

[1714919932]

1714919932

[Amph]

35 m

[slavix]

I like your prediction Hopefully you are right.

[Oknocaps]

End of july...I would say 40 ish

[ripple]

This is past data for mining difficulty:

Date          % Increase   Difficulty

23-Jan-13    8.64%    2,968,775
08-Jan-13     8.64%    3,249,550
05-Feb-13    10.33%     3,275,465
18-Feb-13    11.47%    3,651,012
01-Mar-13     19.63%    4,367,876
14-Mar-13    10.98%    4,847,647
24-Mar-13    38.13%    6,695,826
05-Apr-13    14.59%    7,673,000
30-Apr-13     12.28%    10,076,293
14-May-13    11.03%   11,187,257

If difficulty increases at 15% per two weeks at next increase then at End July difficulty will be 22,501,570.  If you have a Jalapeno arriving at end-July your total estimated profit would be $1,100, if you run the unit 24/7 till end 2014 year.

28-May-13   15%   12,865,346
11-Jun-13   15%   14,795,147
25-Jun-13   15%   17,014,419
09-Jul-13   15%   19,566,582
23-Jul-13   15%   22,501,570
06-Aug-13   15%   25,876,805

If difficulty increases at 18% per two weeks then at End July difficulty will be 25,593,734.  If you have a Jalapeno arriving at end-July you will possibly make $750 profit, if you run the unit 24/7 till end 2014 year.  At $120 per BTC your break-even date of arrival is 29th Oct, and if it arrives after this date you will make a loss. At $100 per BTC your break-even date of arrival is 15th Oct, and if it arrives after this date you will make a loss.

28-May-13   18%   13,200,963
11-Jun-13   18%   15,577,137
25-Jun-13   18%   18,381,021
09-Jul-13   18%   21,689,605
23-Jul-13   18%   25,593,734
06-Aug-13   18%   30,200,606
20-Aug-13   18%   35,636,715
03-Sep-13   18%   42,051,324
17-Sep-13   18%   49,620,562
01-Oct-13   18%   58,552,263
15-Oct-13   18%   69,091,671
29-Oct-13   18%   81,528,172
12-Nov-13   18%   96,203,242

With the present sales of ASIC chips in bulk from a competitor, Avalon, in lots of ten thousand to distributors, new miner units could reach retail customers by late July.   If so this extra estimated 84 TH/s, at around $2.8 million in chip value, could have an enormous impact on mining output and difficulty levels thereafter.

Lets hope Butterfly Labs Inc. deliver as promised, and you are not one of the unlucky ones that will be mining just to cover their payment to Butterfly labs.

Good luck.

[Amph]

how can he make a loss with a jalapeno, with a consumption of only 30 watt?
he eventually will catch up the difficulty and make roi, sooner or later...

[GigaWave]

I know this forum software sucks, but come on. This exact question/thread was just posted the other day....literally.  People need to learn how to research. This stuff has been cover extensively.

[slavix]

This is past data for mining difficulty:

Date          % Increase   Difficulty

23-Jan-13    8.64%    2,968,775
08-Jan-13     8.64%    3,249,550
05-Feb-13    10.33%     3,275,465
18-Feb-13    11.47%    3,651,012
01-Mar-13     19.63%    4,367,876
14-Mar-13    10.98%    4,847,647
24-Mar-13    38.13%    6,695,826
05-Apr-13    14.59%    7,673,000
30-Apr-13     12.28%    10,076,293
14-May-13    11.03%   11,187,257

From where did you collect these numbers for historical difficulty at those dates?

[ripple]

slavix,

I obtained the historic data from 50btc.com, an excellent and very easy to use mining pool.

www.50btc.com

They show a fair amount of statistics to assist miners.

This is past data for mining difficulty:

Date          % Increase   Difficulty

23-Jan-13    8.64%    2,968,775
08-Jan-13     8.64%    3,249,550
05-Feb-13    10.33%     3,275,465
18-Feb-13    11.47%    3,651,012
01-Mar-13     19.63%    4,367,876
14-Mar-13    10.98%    4,847,647
24-Mar-13    38.13%    6,695,826
05-Apr-13    14.59%    7,673,000
30-Apr-13     12.28%    10,076,293
14-May-13    11.03%   11,187,257

From where did you collect these numbers for historical difficulty at those dates?

[ripple]

Amph,

If difficulty increases at an average of 18% then on 29th October 2013 difficulty will be 81,528,172.
At difficulty 81,528,172 and BTC of $120, a Jalapeno chugging away at 5.5 Gh/s will earn $3.95 per day.

Difficulty will continue to rise. If difficulty increases at an average of 18% then:
By 18/02/2014 difficulty will be 306,452,918 and earnings $1.05 per day.
By 02/09/2014 difficulty will be 3,109,652,526 and earnings $0.10 per day.
By 23/12/2014 difficulty will be 11,688,746,014 and earnings $0.03 per day.

The unit costs $312.  ($274 + $38 shipping).
You have to recover $312.  The unit becomes scrap after this as it can only be used for mining.  Its not a graphics card like a 7970 you can use for gaming afterwards.

Electricity costs on average $0.15 per KW hour. So a Jalapeno chugging away at 5.5 GH/s using 30w per hour, is using 0.03 Kw/h x 24 hours which will cost $0.11 per day.

So at $120 per BTC your break-even date of arrival is 29th Oct, and if it arrives after this date you will make a loss as your future earnings will not cover the initial cost of the Jalapeno.  Consideration must also be given to whether electricity can be obtained free in which case you could carry on running the unit a while longer.

If you are more optimistic about difficulty levels...
If difficulty increases at 15% per two weeks at next increase then at End July difficulty will be 22,501,570.  
If difficulty increases at an average of 15% then on 10th December 2013 difficulty will be 91,031,400.
If you have a Jalapeno arriving at end-July your total estimated profit would be $1,100, if you run the unit 24/7 till end 2014 year.  At $120 per BTC your break-even date of arrival is 24th Dec, and if it arrives after this date you will make a loss. At $100 per BTC your break-even date of arrival is 26th Nov, and if it arrives after this date you will make a loss as your future earnings will not cover the initial cost of the Jalapeno.

No one can accurately predict difficulty levels, however past data should allow an estimate of the future.

Neither can Bitcoin levels accurately be predicted. Bitcoin has no intrinsic value other than the opportunity cost of using it relative to transaction costs of other payment mediums. This means that there is no guaranteed upside potential other than during speculative bubbles. The price of Bitcoin seems to have stabilized around USD 120 after its wild swings in the past two months, and it is quite reasonable to use $120 as an estimate of future price.  However investors in mining rigs need to consider scenarios where the price drops $100 or $80.

A Jalapeno is a cheap flutter and for most people if they are only buying one or two Jalapenos it's really a fun gamble rather than a serious investment. Butterfly Labs has very cleverly pitched their price at $274 as this has allowed them to obtain tens of millions of dollars in pre-order deposits, and at this price they believe buyers are not going to make too much of a fuss even if they get their items very late.

how can he make a loss with a jalapeno, with a consumption of only 30 watt?
he eventually will catch up the difficulty and make roi, sooner or later...

[slavix]

I obtained the historic data from 50btc.com, an excellent and very easy to use mining pool.

I plugged numbers from 50btc.com into a spreadsheet and came up with this prediction graph using avg change in difficulty for last 10 periods to predict future changes.

http://db.tt/LIOIvUbW

not sure how to insert image here, just providing a link.

If these predictions hold up we can expect about 50m by the end of summer and close to 250m by end of the year.

[ripple]

Slavix,

Your graph looks good.

While it's an estimate only, I hope it will allow readers to realise that difficulty increases dramatically over time and when making a decision to make or purchase a mining rig they need to factor in this continuous two-week increase into their calculations.

During the next month the exact sales figures of bulk lot sales of ASIC chips may allow a more accurate estimate of future hash rates and difficulty levels.

I obtained the historic data from 50btc.com, an excellent and very easy to use mining pool.

I plugged numbers from 50btc.com into a spreadsheet and came up with this prediction graph using avg change in difficulty for last 10 periods to predict future changes.

http://db.tt/LIOIvUbW

not sure how to insert image here, just providing a link.

If these predictions hold up we can expect about 50m by the end of summer and close to 250m by end of the year.

[FCTaiChi]

Oh I guess a lot of people have done this, well maybe this format helps..
https://bitcointalk.org/index.php?topic=209750.msg2197347#msg2197347

[ashaw596]

The problem with using a percentage to calculate future difficulty is that right now, really for the first time, we're going to have asics flooding the market (it was a trickle before) that can mine 10-100 times faster then gpus or fpga's for the first time. So difficutly is probably going to skyrocket whenever these companies can actually deliver. It won't be a percentage increase, but it will depend on the number of asics sold. If anyone has the chance, try to do a calculation for the hash rate increase the asics will cause. (I can't find the sales numbers. Maybe one of you can.)

[Syke]

Neither can Bitcoin levels accurately be predicted. Bitcoin has no intrinsic value other than the opportunity cost of using it relative to transaction costs of other payment mediums. This means that there is no guaranteed upside potential other than during speculative bubbles. The price of Bitcoin seems to have stabilized around USD 120 after its wild swings in the past two months, and it is quite reasonable to use $120 as an estimate of future price.  However investors in mining rigs need to consider scenarios where the price drops $100 or $80.

That's why it makes far more sense to eliminate the fiat exchange rates and calculate profits based solely on bitcoins spent to purchase the equiment and bitcoins generated by the equipment. A Jalapenos pre-order purchased for 25 btc needs to generate 25 btc to break even.

[FCTaiChi]

That's why it makes far more sense to eliminate the fiat exchange rates and calculate profits based solely on bitcoins spent to purchase the equiment and bitcoins generated by the equipment. A Jalapenos pre-order purchased for 25 btc needs to generate 25 btc to break even.

Definitely on the same page with you here.  Only reason I even keep the price when I do this is so people can easily see what fits their price range.

The problem with using a percentage to calculate future difficulty is that right now, really for the first time, we're going to have asics flooding the market (it was a trickle before) that can mine 10-100 times faster then gpus or fpga's for the first time. So difficutly is probably going to skyrocket whenever these companies can actually deliver. It won't be a percentage increase, but it will depend on the number of asics sold. If anyone has the chance, try to do a calculation for the hash rate increase the asics will cause. (I can't find the sales numbers. Maybe one of you can.)

I've been looking around for these projected numbers, as ASIC's come in.  I know that I've seen them before.  It will be interesting to see what happens on the 26th when it recalculates. 

[Nemo1024]

Predicted difficulty is 11988429 in 1.9 days according to iPhone app BitCoinGold

[FCTaiChi]

7% increase?  that sounds fishy..  hasn't been under 10% since January, why go down on this block when so many ASICs are coming out?

[Nemo1024]

That's a ballpark estimate based on the average time between blocks. And it's creeping up, now reading 12022644 in 1.6 days.

[Nemo1024]

It ended up being 12153412 or 8.64% up. First time single-digit increase in a long time.