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Author Topic: BTC difficulty going down  (Read 3010 times)
benjamin07
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January 23, 2014, 12:41:20 PM
 #1

Hi,

Assumption:
1. Difficulty rises because blocks are being found faster.
2. Block are being found faster because historically the following happened:
2.1 People started creating mining rigs.
2.2. People started to pool those rigs.
2.3. ASIC miners were added to the pools
2.4. ASIC technology now pushed to the limit creating some pools of 6 PHs (e.g. CEX.io)

Now 6,000,000,000,000,000 lottery tickets per second is a lot. Difficulty will certainly increase to reach the new balance. In the game of numbers, difficulty does not care, it can increase to a point where all the silicon in the world would not be enough. It's like the enemy the more you hit it the stronger it becomes.

What if people quit the pools and went back mining solo? CEX.io (and i'm not taking a shot at the guys, just an example), will drop from:
6,000,000,000,000,000
to
    44,000,000,000,000

this will be the largest single mining source and difficulty will come down to match their rate of generation.
Everyone mining solo is trying their luck. Say there are 10 people each mining at 1 GHs, each one has a given chance to find the block. All 10 of them has the same chance, they are not together, the chance is not 10 times that of one person.

Payout wise it is the same: the amount of BTC you expect to make solo in X time, and the time you have to spend on a pool making BTCs, are the same values numerically. One is a lump sum, the other is installments.

Any comments on this?
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ssbn506
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January 23, 2014, 12:52:59 PM
 #2

Hi,

Assumption:
1. Difficulty rises because blocks are being found faster.
2. Block are being found faster because historically the following happened:
2.1 People started creating mining rigs.
2.2. People started to pool those rigs.
2.3. ASIC miners were added to the pools
2.4. ASIC technology now pushed to the limit creating some pools of 6 PHs (e.g. CEX.io)

Now 6,000,000,000,000,000 lottery tickets per second is a lot. Difficulty will certainly increase to reach the new balance. In the game of numbers, difficulty does not care, it can increase to a point where all the silicon in the world would not be enough. It's like the enemy the more you hit it the stronger it becomes.

What if people quit the pools and went back mining solo? CEX.io (and i'm not taking a shot at the guys, just an example), will drop from:
6,000,000,000,000,000
to
    44,000,000,000,000

this will be the largest single mining source and difficulty will come down to match their rate of generation.
Everyone mining solo is trying their luck. Say there are 10 people each mining at 1 GHs, each one has a given chance to find the block. All 10 of them has the same chance, they are not together, the chance is not 10 times that of one person.

Payout wise it is the same: the amount of BTC you expect to make solo in X time, and the time you have to spend on a pool making BTCs, are the same values numerically. One is a lump sum, the other is installments.

Any comments on this?

Don't know what reply you are expecting but I will do my best. If everyone went solo I don't think it would effect the diff as the hash rate would be the same. The same amount of blocks would be found I would think it would just take years for sum people to ever find one. Pooling just  lets people get a small steady flow of BTC vs the jackpot every few days, months, years depending on hashing power. But even if I am wrong you are kind of saying if every corporation would just split up into 10 person mom and pop business what would happen. Well it wont ever happen so I don't think many people burn to much energy trying to figure out how it would work.
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January 24, 2014, 09:10:14 AM
 #3

If everyone went solo, those who have found blocks before will continue to find blocks, and we will be paid infrequently in large chunks (25btc). Those who have less hashing power may need to mine for months or years to find one block, and ultimately will not mine at all. So, the network hash rate will drop due to less people mining, but difficulty will not be affected much.

ssbn506
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January 24, 2014, 01:18:47 PM
 #4

If everyone went solomining I think it could effect the diff. The hashrate is still the same, yes, but diff is not calculated from hashrate, but from the time it takes to find 2016 blocks.

 it won't happen, but we can talk about that here, it's speculation thread  Grin

I hope i wasn't suggesting we shouldn't discuss it just that it is a bit out there. I would put pool mining stopping on the same leval of speculating what would happen if every bitcoin hardware manufacture went out of business. If either were to happen it would be because of another huge influence that would be way more devastating or innovative. 

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January 24, 2014, 01:35:38 PM
 #5

+22.5%
jesus

I only have a signature because I'm allowed.
mestar
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January 24, 2014, 01:40:28 PM
 #6

Hashrate doesn't drop. But diff could,

No, hashrate stays the same, difficulty stays the same.

ssbn506
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January 24, 2014, 01:43:31 PM
 #7

+22.5%
jesus

I am just happy it isn't 30%+ and that is a bit sad that i am happy to see 22.5.
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January 24, 2014, 01:55:38 PM
 #8

+22.5%
jesus

I am just happy it isn't 30%+ and that is a bit sad that i am happy to see 22.5.

I still say the h/w guys are screwing miners.  I read 100 threads a day about how no one can get the very expensive equipment that they pre-ordered months and months ago yet the network hashrate is going up insane amounts.

I only have a signature because I'm allowed.
ssbn506
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January 24, 2014, 02:13:31 PM
 #9

+22.5%
jesus

I am just happy it isn't 30%+ and that is a bit sad that i am happy to see 22.5.

I still say the h/w guys are screwing miners.  I read 100 threads a day about how no one can get the very expensive equipment that they pre-ordered months and months ago yet the network hashrate is going up insane amounts.

I agree the next 6 to 9 months will be insane. Miners are screwing themselves and the h/w guys are benefiting.  It will self correct in a few months but like everything there will be no ease money for the average person and their shouldn't be.

As for pre-orders  if everyone shipped today the diff would be 7 to 10b in a mater of hours so wither they ship now or 6 months from now it is all the same. Only if sum ship now but not all will anyone make any quick money. It is a race and only the first few get the big returns.
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January 24, 2014, 05:43:42 PM
Last edit: January 24, 2014, 05:57:18 PM by JackANSI
 #10

+22.5%
jesus

I am just happy it isn't 30%+ and that is a bit sad that i am happy to see 22.5.

I still say the h/w guys are screwing miners.  I read 100 threads a day about how no one can get the very expensive equipment that they pre-ordered months and months ago yet the network hashrate is going up insane amounts.


There is no incentive for a mining hardware company to ship any of their hardware to pre-order customers after it is built, except maybe to avoid a lawsuit. 

1: They know their customers just spent all the money they had on their hardware.  So a lawsuit is going to be a far off, if ever, kind of thing.  Not that courts are fast enough to do anything about it anyway.

2: Now that the mining hardware company has a boat load of BTC income (mining) and regular old money (customer) they can drag any lawsuit out for a pretty long time at a lower cost than giving up the hardware, at least on the scale of how fast the courts move vs the difficulty.

3: If they get taken to court and lose/settle, they settle for an even refund with the customers (who are glad to just get their money back at all).  Since it was a pre-order there is shaky legal ground for any customers to get damages above refund.  Or even worse, the per-order people get their, now sadly, outdated "fully tested" hardware.


Here is how that conversation goes from the viewpoint of the mining hardware maker: "Why ship something on-time when we can "test" it for months, make a pile of BTC, and when we come up with the next step up, we ship out the "old" hardware that made us a boatload up front and during our months of "testing".  The suckers, err.. customers, won't have a leg to stand on legally if they come after us anyway, heck it'll be too late for them by the time they figure this out!".


Anyway, the difficulty ~could~ go down... but Moore's law, which might apply, suggests that will never happen with respect to hardware power in the future. 

It would take a concerted effort by all miners to keep the difficulty from going up.  If that were to happen, the guy/pool/whatever who breaks rank will be rewarded handsomely, possibly with a chance for a 51% attack.  No one else would want to see that happen, so they will all mine at full tilt no matter what.  Analogous to the concept of mutually assured destruction...
mgio
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January 24, 2014, 11:27:03 PM
 #11

Hashrate doesn't drop. But diff could,
No, hashrate stays the same, difficulty stays the same.
If you distribute hashpower from big pools to much greater number of nodes, those individual nodes now have less hashrate and need more time to generate new blocks.
Diff is then adjusted.

I don't think you understand. Why would the indiviudal nodes have less hashrate? The total hashrate would still be the same. The only way that would happen would be if some shut off their miners.
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January 25, 2014, 12:18:41 AM
Last edit: January 25, 2014, 12:28:54 AM by ujka
 #12

If you divide pool hashrate to greater number of individual nodes, then each node has less.
With less power, nodes need more time to generate blocks. There is now greater number of nodes generating blocks instead that one pool before, yes, but on average I think they all will generate new blocks at slower speed. And diff is calculated from the speed (time) new blocks are generated, not from the total hashrate of network. Total hashrate is only estimated, baased on current diff and, again, the speed of generation of the new blocks.
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January 25, 2014, 04:12:27 PM
 #13

If you divide pool hashrate to greater number of individual nodes, then each node has less.
With less power, nodes need more time to generate blocks. There is now greater number of nodes generating blocks instead that one pool before, yes, but on average I think they all will generate new blocks at slower speed. And diff is calculated from the speed (time) new blocks are generated, not from the total hashrate of network. Total hashrate is only estimated, baased on current diff and, again, the speed of generation of the new blocks.

Epic math fail.

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January 25, 2014, 04:48:25 PM
 #14

If you divide pool hashrate to greater number of individual nodes, then each node has less.
With less power, nodes need more time to generate blocks. There is now greater number of nodes generating blocks instead that one pool before, yes, but on average I think they all will generate new blocks at slower speed. And diff is calculated from the speed (time) new blocks are generated, not from the total hashrate of network. Total hashrate is only estimated, baased on current diff and, again, the speed of generation of the new blocks.

Epic math fail.
Care to explain?

Nope. I'm having more fun watching you dig yourself into a deeper and deeper hole.

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ujka
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January 25, 2014, 04:52:00 PM
Last edit: January 25, 2014, 06:11:51 PM by ujka
 #15

Eh, don't be so harsh.  Grin Help a guy out.
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January 25, 2014, 04:54:03 PM
 #16

If you divide pool hashrate to greater number of individual nodes, then each node has less.
With less power, nodes need more time to generate blocks. There is now greater number of nodes generating blocks instead that one pool before, yes, but on average I think they all will generate new blocks at slower speed. And diff is calculated from the speed (time) new blocks are generated, not from the total hashrate of network. Total hashrate is only estimated, baased on current diff and, again, the speed of generation of the new blocks.
Actually, now I think they all won't generate ANY new blocks at that same diff.
In effect, it is like they all shut off their miners.

That's like saying that noone will win the lottery because the chance is too small.

Your claim (difficulty goes down if people switch from pools to solo mining) is simply wrong. Every time a pool finds a block, there is a single miner somehwere mining on that pool that calculated the hash that finds the block. This will happen if the miners are pooled but also if they're not pooled. If a pool finds 1 block per hour and has 10 miners with equal hashrate, then those miners mining solo would each find 1 block every 10 hours. The average yield is the same for a miner to use a pool or to solo-mine, but pool mining gives steady income, while solo mining gives you a long time of nothing and suddenly a 25 BTC block.

Again, if miners go solo, the time to find blocks will not go down network-wide and the difficulty won't be affected.
ujka
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January 25, 2014, 05:02:19 PM
 #17

Thank you! That's an explanation!
Now this thread can rest in history.
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January 28, 2014, 10:35:35 AM
 #18

Difficulty will not go down, because network doesn't care how you mine it. Pools or solo does not matter, its number of shares per second what counts. Other point is that no one quit the pool, because it make no sence to solo mine now, unless you have couple of petahashes.
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January 28, 2014, 12:44:01 PM
 #19

Difficulty will not go down, because network doesn't care how you mine it. Pools or solo does not matter, its number of shares per second what counts. Other point is that no one quit the pool, because it make no sence to solo mine now, unless you have couple of petahashes.

a++
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January 28, 2014, 01:29:14 PM
 #20

Difficulty will not go down, because network doesn't care how you mine it. Pools or solo does not matter, its number of shares per second what counts. Other point is that no one quit the pool, because it make no sence to solo mine now, unless you have couple of petahashes.

a++


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