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Author Topic: Difficulty are going down - No question about it - New price target 3-4 dollars  (Read 4704 times)
dissipate
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August 22, 2011, 05:05:32 PM
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First indicator that someone has no idea what they are talking about: they think difficulty drives price.
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August 22, 2011, 06:05:03 PM
 #42

First indicator that someone has no idea what they are talking about: they think difficulty drives price.

HAHA. And you think you know what you are talking about?
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August 22, 2011, 06:17:18 PM
 #43

Anyone have a graph that compares difficulty with price over time (on a logarithmic scale)?
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August 22, 2011, 07:16:06 PM
 #44

Wake me up when it hits 3-4 dollars.

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August 25, 2011, 06:35:24 AM
 #45

Has the difficulty dropped yet?  It lags the block creation rate by weeks, but it ought to have dropped a bit by now.
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August 25, 2011, 06:43:04 AM
 #46

First indicator that someone has no idea what they are talking about: they think difficulty drives price.

HAHA. And you think you know what you are talking about?

fastandfurious, I've read your posts, and it's obvious you don't know what you are talking about.  For you to stick out in my mind, you must have said some pretty stupid things.  There's only 4 or 5 people on this forum that automatically trigger a "don't listen to him" reaction in me, and you are one of them. 

Price drives difficulty.  Not the other way around.  That's the way it is.

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August 29, 2011, 04:28:05 PM
 #47

Price drives difficulty.  Not the other way around.  That's the way it is.

I'm going to respectfully disagree with that, to an extent.  There was a time when difficulty increased when Bitcoins had absotively no USD price at all (pre-MtGox). Price alone doesn't drive difficulty, otherwise we would have seen a significant drop in difficulty by now from the time when the BTC was $32.  Yet all we've seen are marginal drops in difficulty that could have been affected by almost anything.  People become disillusioned and pull out, and to a degree it's balanced out by people who are just finding out about Bitcoin and by people who are adding to their hashing power.  I think it would be more accurate to say that what drives difficulty is awareness and speculation.

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August 29, 2011, 08:44:24 PM
 #48

Price drives difficulty.  Not the other way around.  That's the way it is.

Sorry, this is wrong.  Actually, thinking of this sort doesn't even relate enough to reality to be merely wrong.

The exchange rate does not drive difficulty.  However, the difficulty also does not drive price.

Price, difficulty and a bunch of other factors form a complicated system of non-linear differential equations.  In short, they all drive each other in a chaotic way.  And I'm using chaotic in the technical sense here, meaning deterministic but unpredictable, like the weather.

A quick glance at a difficulty chart and an exchange price chart should make it perfectly obvious that there is no simple relationship between the two, so I can't imagine why people keep insisting that one causes the other.

References that you should probably read before replying:

Chaos theory
Newton's Method for finding roots of equations.  A ridiculously simple system that is often totally unpredictable.
Lotka Volterra a very simple model with only two equations.  Pay attention when you get to the part about the atto-fox.

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