Difficulty level increases.

[Rluner]

Hi guys, I'm a newbie to these forums and I have only just figured out that I need to make a post here before I can add some comments to the rest of the forums.

I've only been aware of bitcoin for a little over two months but I have followed it with great interest and thanks to these forums I feel I have learned a lot. However knowledge never stands still.

The difficulty level interests me. We should all know now why it rises but what I find amazing is that at some point in the future it has to slow down its massive increases. Ie if everyone on earth was already mining there would be increases as more users bought more miners, which is different from now in that ATM more users are buying more miners just as previously stated, but also more users are constantly finding out about bitcoin and themselves buying miners. These increase are on top of increase miner machines performances too.

I guess what I'm saying is IMHO the difficultly is being mainly driven ATM by at increase in awareness, as well as an advance in mining machines. Does this makes sense or have I waffled to much?

Thanks for reading and a big thanks to the many users who have written some excellent posts on this forum.

Ps can I have my "gold star" please now Mr Board Admin.

[CEG5952]

asics en masse taking over.....

[xaxidk]

I believe a lot of the difficulty increase is caused by the increased prevalence of ASIC miners. Hopefully the difficulty increase rate will slow down as GPU/FGPA miners pull out because they can no longer maintain a positive ROI.

[rigel]

Don't consider it a bad thing: the more difficulty grows, the more BTC system gets secure.

[Light]

Don't consider it a bad thing: the more difficulty grows, the more BTC system gets secure.

True, the only possible bad thing about an increase in difficulty is the reduction in profits of miner's, but that is rather unavoidable and should have been factored in by any diligent miner.

[udet4food]

I believe the difficulty increase will slow down and later next year there will be stable difficulty

[User705]

Don't consider it a bad thing: the more difficulty grows, the more BTC system gets secure.

True, the only possible bad thing about an increase in difficulty is the reduction in profits of miner's, but that is rather unavoidable and should have been factored in by any diligent miner.

miner profits are exactly the same if not more because of faster blocks.

[qwertyGuy]

miner profits are exactly the same if not more because of faster blocks.

Yes, but they have to buy expensive hashing units, if they want continue to mine something

[User705]

miner profits are exactly the same if not more because of faster blocks.

Yes, but they have to buy expensive hashing units, if they want continue to mine something

Those that have to buy.  I'm sure Asic companies are "testing" units as we speak.

[niko]

Hi guys, I'm a newbie to these forums and I have only just figured out that I need to make a post here before I can add some comments to the rest of the forums.

I've only been aware of bitcoin for a little over two months but I have followed it with great interest and thanks to these forums I feel I have learned a lot. However knowledge never stands still.

The difficulty level interests me. We should all know now why it rises but what I find amazing is that at some point in the future it has to slow down its massive increases. Ie if everyone on earth was already mining there would be increases as more users bought more miners, which is different from now in that ATM more users are buying more miners just as previously stated, but also more users are constantly finding out about bitcoin and themselves buying miners. These increase are on top of increase miner machines performances too.

I guess what I'm saying is IMHO the difficultly is being mainly driven ATM by at increase in awareness, as well as an advance in mining machines. Does this makes sense or have I waffled to much?

Thanks for reading and a big thanks to the many users who have written some excellent posts on this forum.

Ps can I have my "gold star" please now Mr Board Admin.

It is realively easy to discern the two effects.

(1) Assuming a constant cost of mining power (in terms of $s/hash and J/hash), and constant ratio of miners/users, difficulty follows the general rate of adoption, which is in turn reflected in the exchange price.
Throughout most of Bitcoin history, this has been so - give or take.  Ergo, most of the time difficulty follows the exchange rate with a few weeks of delay.

(2) Whenever mining technology is transitioning (CPU, GPU, better GPU, FPGA, ASIC), we have an additional and temporary upward drift in the difficulty curve on top of what is described in (1), and which can be attributed to the technological leap.

[wearepoor]

I believe a lot of the difficulty increase is caused by the increased prevalence of ASIC miners. Hopefully the difficulty increase rate will slow down as GPU/FGPA miners pull out because they can no longer maintain a positive ROI.

I doubt the increase rate slowdown will happen because GPU/FGPA miners pull out, it will happen when much less mining units will be purchased/preordered

[Matumaru]

I think it's not just the big mining machines, there's also a lot of people who got interested in mining in the last 6 months. They saw the business but normally don't want to assume the risks of high invest. So, what do we got? A bunch of Erupters getting 4EUR/month? All this people will gave up finally as a forgot hobbie.

Might be not such a big amount of hashing but sure it will balance the diff increase. As well, the owners of GPU rigs and other Scrypt compatible miners are moving to LTC market because of profit.

In 6 months BTC mining will be a onlyASIC place, and hope you have more than a Jalapeno!

[odolvlobo]

I believe a lot of the difficulty increase is caused by the increased prevalence of ASIC miners. Hopefully the difficulty increase rate will slow down as GPU/FGPA miners pull out because they can no longer maintain a positive ROI.

I would be surprised if there are any GPU miners left. A top-of-the-line GPU won't even earn 0.1 BTC this month, and that won't cover the cost of electricity.

I think the difficulty will continue to climb at a high exponential rate until the cost of power becomes a significant factor and that will happen within 6 months.