How To Get Difficulty Down?

[wareen]

Just wait for late 2012 when the world ends the block reward is halved

Nonsense, that is just equivalent to a 100% difficulty increase. We've had increases close to that. Except unlike a normal difficulty increase, this will actually reduce the supply of bitcoins, which should increase the price. I doubt anyone will be quitting then.

Difficulty will increase as long as it is profitable for new miners to enter the market - if miners suddenly only get half of their reward, most miners would operate at a loss and therefore stop mining. Difficulty will drop until it is profitable again. If the price doesn't suddenly double (which is highly unlikely), difficulty will effectively drop noticeable at block 210.000.

You are right, halving the block reward is equivalent to a 100% increase in difficulty - but if miners already operate close to their costs then a 100% increase in difficulty would also lead to a decrease again on the next retarget.

As the time at which this happens is known upfront, speculators will already have factored in the anticipated shortage of new coins which is why prices probably won't change suddenly.

I honestly don't want to spread nonsense so I'd appreciate if you could point out where I'm wrong.

[DamienBlack]

Just wait for late 2012 when the world ends the block reward is halved

Nonsense, that is just equivalent to a 100% difficulty increase. We've had increases close to that. Except unlike a normal difficulty increase, this will actually reduce the supply of bitcoins, which should increase the price. I doubt anyone will be quitting then.

Difficulty will increase as long as it is profitable for new miners to enter the market - if miners suddenly only get half of their reward, most miners would operate at a loss and therefore stop mining. Difficulty will drop until it is profitable again. If the price doesn't suddenly double (which is highly unlikely), difficulty will effectively drop noticeable at block 210.000.

You are right, halving the block reward is equivalent to a 100% increase in difficulty - but if miners already operate close to their costs then a 100% increase in difficulty would also lead to a decrease again on the next retarget.

As the time at which this happens is known upfront, speculators will already have factored in the anticipated shortage of new coins which is why prices probably won't change suddenly.

I honestly don't want to spread nonsense so I'd appreciate if you could point out where I'm wrong.

It just seems like this has already been tested. About a month ago difficulty went up 40% followed by 80%, and no one left. As a miner myself, I know that I can expect a 100% difficulty increase about every month, and that has been the case for the past long while. But no one is leaving. I just don't see the reward decrease to 25 as that big a deal. It isn't a particularly special compared to the difficulty increases miners are always faced with. In fact, it is better than standard difficulty increases because it will actually make new bitcoins more rare. This might not double the price, but it will have an offsetting factor that normal difficulty increases don't have.

My point is that difficulty already doubles (sometimes triples) about every month. One extra doubling isn't going to scare people away.

[giszmo]

What was the question again? How can you get more BTC per rig? How about a slightly modified rig?

The business plan goes as follows:
Set up TOR exit nodes for BTC. Everybody who wants to run his own TOR exit node but fears the trouble now can pay you to run it. The management is insanely simple from the user's perspective:
* Send coins to XY
* check at myTorNode.com/XY how much traffic it is handling

Many BTC early adopters like the TOR project and might pay coins easily.

... just an idea ...


I'm a small miner, too and know how the hassle of setting up the hardware was too much of an effort to now switch off and see how it would have been worth it when BTC hits 50$ in 2 weeks. Sorry but you can count on me mining the next months at least

[dinker]

An EMP discharge which knocks out all PC's in the US

Starcraft ? We need to have a forums only Starcraft 2 tourney so I can own all of you guys. I am preatty sure we can play SC2 with fully maxed settings running the shit we're running lol.

Great idea! I'll prolly just do some 6pool pwnage on everybody and head back to mining right after. 

[Klestin]

Hope for a crash in BTC exchange rates.  That might make some miners reconsider, or at least maybe put off some hardware purchases.

[wareen]

It just seems like this has already been tested. About a month ago difficulty went up 40% followed by 80%, and no one left.

That's because price jumped up before that dramatically, making mining very profitable all of a sudden. Difficulty followed suit and currently seems to slowly reach the "normal" level again, where it is only slightly profitable for the average miner.

As a miner myself, I know that I can expect a 100% difficulty increase about every month, and that has been the case for the past long while. But no one is leaving.

Ok but just how many further 100% difficulty increases can you accept until it's not profitable for you anymore? I doubt it will be more than 2 or 3 given current price levels.

Of course, if you also expect that prices double every month then difficulty would continue to follow but I honestly doubt that (would be a whopping 5 million USD Bitcoin by the end of next year )

I just don't see the reward decrease to 25 as that big a deal. It isn't a particularly special compared to the difficulty increases miners are always faced with.

Oh but it is special in that the difficulty increase equivalent is due to Bitcoin's law and not due to the high increase in profitability for mining.
All previous difficulty increases were driven by increasing prices which suddenly increased the profitability for mining. The difficulty increase equivalent at block 210.000 will be the first to not happen because it has become more profitable for miners to mine, therefore miners will stop the mining until it becomes profitable for them again.

In fact, it is better than standard difficulty increases because it will actually make new bitcoins more rare. This might not double the price, but it will have an offsetting factor that normal difficulty increases don't have.

Maybe, but anticipated "bad" news for the market often don't affect the price because they are, well, anticipated.

[DamienBlack]

All good points wareen. A very good argument.

I would just like to point out though that "anticipated" events don't effect prices because they have already effected prices in the past.

All said and done, the reaction to the new block reward will probably be mixed and subtle. It is anticipated, so most will have already planned for it. I doubt big swings in any direction. It may be the first time difficulty decreases significantly. But I don't think it'll be drastic.

[makomk]

LOL! Seriously, how many girls read the Bitcoin forum? I mean I'm progressive and down with that "equality" shit, but chicks don't know squat about FPGAs and such wonders.

Tell me, have you ever heard of a woman called Jeri Ellsworth?

[bonker]

LOL! Seriously, how many girls read the Bitcoin forum? I mean I'm progressive and down with that "equality" shit, but chicks don't know squat about FPGAs and such wonders.

Tell me, have you ever heard of a woman called Jeri Ellsworth?

What's this? Your counter-arguement based on one or two freak examples pulled out your ass? Sorry buddy, if you want to
 preach fantasy egalitarian commie bullshit then you're in the wrong place.

Chicks = kitchen

That's the only equation that applies here.

[Mousepotato]

LOL! Seriously, how many girls read the Bitcoin forum? I mean I'm progressive and down with that "equality" shit, but chicks don't know squat about FPGAs and such wonders.

I don't even know what an FPGA is, but I've been an avid gamer for a while now.  D2/WoW/StarCraft.  The hardware side of gaming kind of led me to Bitcoins.

[aral]

What was the question again? How can you get more BTC per rig? How about a slightly modified rig?

The business plan goes as follows:
Set up TOR exit nodes for BTC. Everybody who wants to run his own TOR exit node but fears the trouble now can pay you to run it. The management is insanely simple from the user's perspective:
* Send coins to XY
* check at myTorNode.com/XY how much traffic it is handling

Many BTC early adopters like the TOR project and might pay coins easily.

I like this idea.  It has merit.

[bonker]

LOL! Seriously, how many girls read the Bitcoin forum? I mean I'm progressive and down with that "equality" shit, but chicks don't know squat about FPGAs and such wonders.

I don't even know what an FPGA is, but I've been an avid gamer for a while now.  D2/WoW/StarCraft.  The hardware side of gaming kind of led me to Bitcoins.

A fair point well made. I stand partially corrected.

[Mousepotato]

No worries.  I only browse these forums when I'm not in the kitchen

[OgNasty]

Chicks = kitchen

That's the only equation that applies here.

No, that's why you're a virgin.

Women = Bedroom (or maybe kitchen counter?)

Pay attention and learn something son.