New Difficulty - 57% Increase. 1 GH/s = .656 BTC

[[Coins!]]

You are incorrect. Your method multiplies 57% by the current payout - this would mean that we now get 57% of the blocks we did before in a given time period. This means the mining rate is (1/0.57)-1 = 75% slower, which conincides with a 75% increase in difficulty.

Here is the correct calculation:

average time = difficulty * 2**32 / hashrate (straight from bitcoin wiki)

Hashrate is constant, only variable is difficulty. So in calculating increase in time per block for a difficulty we can simplify this to:

delta (avg. time) = delta (difficulty)

If difficulty is 57% more, then average time per block is 57% more. So if it took 1 day to get a block before, now it takes 1.57 days. Thus, your payout per day is now 1 block / 1.57 days or .636 blocks/day. Or in our case, payout was 1.146 BTC per day, it is now 1.146/1.57 = 0.73 BTC per day.

In the future it'd be good if you didn't insult before you knew you were right...

I stand corrected.  

0.73 is actually significantly more than .65 btc/day.  

Should have used the alloscomp calculator!

7M difficulty at 1.0Ghash is 0.14 BTC/day.  That is 75% more than I had previously calculated (0.08).  Looks like I will be in this game for 7 more difficulties, not 5 more : )

Thanks Talldude et al (srs).  I am reworking my #'s.  I might end up with 10 BTC after all at my 330mhash.

[AngelusWebDesign]

I don't think it's that unreasonable to calculate using Deepbit's PPS either.
You don't think Deepbit got so big because they were just another Proportional pool with instant payout, did you?

BTCguild has 0% fees (donation only) and they have insta-payout up to 2x a day.

The *only* reason you have to go to Deepbit is if you want PPS payout. I'm guessing a lot of their customers go with it.

For those curious, I use Deepbit, Slush, *and* BTCguild, myself.

Matthew

[Teej]

I know this question might sound like a n00b just got let loose from the newbie pen on the forum, but do you think the general trend for BTC value will increase overtime as the difficulty increases? I'm not talking short term, im talking 1-2 years from now.

And won't these BTC value increases compensate for the increased mining difficulty?

Jim

At this point in time, despite intentions to the otherwise, BTC is primarily a speculative cryptocommodity.  As such, difficulty will follow price, with a lag.  Not the other way around.  That lag may be months behind the price, not days or weeks.  I think the difficulty is just now catching up with the influx of miners that came around (including me) in the rise up through $10-15 BTCs.  We're nowhere near the difficulty we'd hit with a sustained $30. 

JMHO as a latecomer to the game who did his research and planning before jumping in.  I've known about BTC for a while, but didn't do anything with it until this year.  Didn't even sign up on the forum obviously until really recently.

I'm small potatoes.  I don't have the coins or dollars invested to move the market.

[cvicisso]

Just for reference, and in case it helps anyone, I'm hashing at about ~910-930MH/sec consistently on Slush's Pool (read: LESS than 1 GH/sec), and over the last four days my rewards have been:

24 June: 0.92087392 BTC
23 June: 0.89964206 BTC
22 June: 0.92484342 BTC
21 June: 1.06128044 BTC

WAY off your calculations.

In my [humble] experience, equations are just models used to approximate what's happening in the real world (the world is continuous/analog not discreet/digital).  Happily, this time, they appear to fall short in our favor.   

[||bit]

Isn't it reasonable to expect the value of bitcoins to increase with increased mining difficulty? Think about it. If you are now mining twice as hard for bitcoins (e.g. doubled efforts). Are you more willing or less willing to sell them at recent prices (e.g. $15 per bitcoin)? Also, that might need to assume demand is steadily increasing.

However, I'm not sure on how long it should take the higher ask prices to reflect in the BTC exchange.

If this is all correct, with just a steady linear demand increase, the profitablility will probably return....followed by higher mining efforts....followed by increased difficulty.... and perhaps this will prove to be the cycle.

[n0ne]

Isn't it reasonable to expect the value of bitcoins to increase with increased mining difficulty? Think about it. If you are now mining twice as hard for bitcoins (e.g. doubled efforts). Are you more willing or less willing to sell them at recent prices (e.g. $15 per bitcoin)? Also, that might need to assume demand is steadily increasing.

However, I'm not sure on how long it should take the higher ask prices to reflect in the BTC exchange.

If this is all correct, with just a steady linear demand increase, the profitablility will probably return....followed by higher mining efforts....followed by increased difficulty.... and perhaps this will prove to be the cycle.

This guy makes sense. It's obvious, byt some people think that you can't ask for more money for your BTC. Well you can. If I want I can ask $1000 each. It could catch on too.

Hmm...

[jme621]

by the time you all get done complaining and what not, the diff will increase again and you will need new thread lol

[MaGNeT]

Just for reference, and in case it helps anyone, I'm hashing at about ~910-930MH/sec consistently on Slush's Pool (read: LESS than 1 GH/sec), and over the last four days my rewards have been:

24 June: 0.92087392 BTC
23 June: 0.89964206 BTC
22 June: 0.92484342 BTC
21 June: 1.06128044 BTC

WAY off your calculations.

In my [humble] experience, equations are just models used to approximate what's happening in the real world (the world is continuous/analog not discreet/digital).  Happily, this time, they appear to fall short in our favor.   

Difficulty went up yesterday...

[zpinto]

This is why i moved to Namecoins 

[relmeas]

btw current estimation is only 1.44m, has growth stopped finally?

or just some kind of bug.

[MaGNeT]

btw current estimation is only 1.44m, has growth stopped finally?

Could be... I'm not investing in rigs anymore... Just wait a month and if it isn't more profitable, I quit mining...
There's much more to earn in trading BTC... At least, when MtGox doesn't Gox us again...

[mpfrank]

Won't the law of supply and demand ensure that mining remains profitable (if just barely)?  This is because, if difficulty rises disproportionately to price, so that mining becomes unprofitable for some players, then those players will stop mining, causing difficulty to fall to the point where it is profitable again.

In fact, this has happened already before, see for example https://i.imgur.com/rMrdY.png which is from http://forum.bitcoin.org/?topic=7427.0.  The price leveled off in mid-February, but difficulty kept rising, so by mid-March it was above 100,000x the BTC price in USD.  At that point mining was probably unprofitable for many players, and indeed, mining activity fell soon afterwards, to the point where it was less than 100,000x the price again.

This month, mining speed and difficulty has been catching up to the recent price bubble (where it went up to 30 in early June), but now (just in the last few days) mining activity is leveling off in response to the decreased profitability - as can be seen in this chart:  http://bitcoin.sipa.be/speed-lin-2k.png.  If the price doesn't go up soon, then before long the difficulty will fall, and mining will become more profitable again.

Bottom line is, don't worry about it - the invisible hand of the market will take care of the problem.

[gentakin]

Won't the law of supply and demand ensure that mining remains profitable (if just barely)?  This is because, if difficulty rises disproportionately to price, so that mining becomes unprofitable for some players, then those players will stop mining, causing difficulty to fall to the point where it is profitable again.

Don't forget miners with free electricity. I fear no invisible hand can prevent them from mining when their employer (or parents/etc.) pays for them.

Also, my power is significantly more expensive than in the US, so I'm out first. Again, no invisible hand to help me.

[talldude]

Won't the law of supply and demand ensure that mining remains profitable (if just barely)?  This is because, if difficulty rises disproportionately to price, so that mining becomes unprofitable for some players, then those players will stop mining, causing difficulty to fall to the point where it is profitable again.

Don't forget miners with free electricity. I fear no invisible hand can prevent them from mining when their employer (or parents/etc.) pays for them.

Also, my power is significantly more expensive than in the US, so I'm out first. Again, no invisible hand to help me.

That my friend, is the invisible hand. Because it is not profitable for you, you will drop out of the market...

[ivank2139]

Well at least I have three very nice video cards.....

I can always put them to work on the SETI project, maybe the LHC and Climate predictions....  There are lots of ways to burn electricity with GPU cards that is contributory but perhaps not profitable.

[Mousepotato]

At this point in time, despite intentions to the otherwise, BTC is primarily a speculative cryptocommodity.  As such, difficulty will follow price, with a lag.  Not the other way around.  That lag may be months behind the price, not days or weeks.  I think the difficulty is just now catching up with the influx of miners that came around (including me) in the rise up through $10-15 BTCs.  We're nowhere near the difficulty we'd hit with a sustained $30.

I'm not sure I understand this.  We're not exactly talking about the chicken or the egg argument.  BTC difficulty clearly preceded price since bitcoin exchanges didn't even exist during the first difficulty period.  Difficulty came first, followed by price a ways down the road after it.

[Grouver (BtcBalance)]

Difficulty came first, followed by price a ways down the road after it.

Yes, thats why price is not booming up directly right now.
It has a lag, but it will follow the difficulty.
This is since the difficulty only affects miners.
And miners do not really determine the average price.

If the market grows also the price will but the miners affect this with a tiny bit.

[Teej]

At this point in time, despite intentions to the otherwise, BTC is primarily a speculative cryptocommodity.  As such, difficulty will follow price, with a lag.  Not the other way around.  That lag may be months behind the price, not days or weeks.  I think the difficulty is just now catching up with the influx of miners that came around (including me) in the rise up through $10-15 BTCs.  We're nowhere near the difficulty we'd hit with a sustained $30.

I'm not sure I understand this.  We're not exactly talking about the chicken or the egg argument.  BTC difficulty clearly preceded price since bitcoin exchanges didn't even exist during the first difficulty period.  Difficulty came first, followed by price a ways down the road after it.

There was no speculative value then.  Would you spend 10,000 bitcoins when they're almost worthless if you had any suspicion that'd be worth (at least in a bubble) over a quarter of a million dollars a year later?

Come on.  Seriously. 

A:  Not every miner immediately rushes to sell every coin they get.
B:  Even if they did, in 14 hours Gox had over 22,000 btc change hands.  In that time only 4200 were mined (on average).

Imagine walking into a store that had 800 oranges for sale for $.20 each and shouting "Hey guys, I've got 200 fresh oranges here.  They're getting harder and harder for me to grow, so I want a buck each."

Now imagine after buying those $.20 oranges, everyone went home, traded 'em for something else (or hung onto 'em a while) and came back to resell 'em and they were still perfectly good as new.

The only time you're gonna get to choose the price for your oranges is when the rest of the market is gone.

[sunnankar]

Won't the law of supply and demand ensure that mining remains profitable (if just barely)?  This is because, if difficulty rises disproportionately to price, so that mining becomes unprofitable for some players, then those players will stop mining, causing difficulty to fall to the point where it is profitable again.

Don't forget miners with free electricity. I fear no invisible hand can prevent them from mining when their employer (or parents/etc.) pays for them.

Also, my power is significantly more expensive than in the US, so I'm out first. Again, no invisible hand to help me.

This is pretty funny discussion. Even excluding those with free electricity, some of us can mine bitconis at a loss and make a profit. 

[harik]

That my friend, is the invisible hand. Because it is not profitable for you, you will drop out of the market...

What?  No.   That's rational actor.   The Invisible Hand is how Adam Smith thought that people would buy locally instead of cheap imports.   It's invisible because it doesn't exist.