Proof-of-work difficulty increasing

[ichi]

I value Bitcoin as an anonymous digital currency.  Although I'm not expecting to get rich, I'd like the ability to continuously generate enough Bitcoin to purchase desired services.

Is there any expectation that economic value per khash/sec (or client) per day will be at least somewhat stable?  Difficulty just increased 300%, and USD/Bitcoin just increased about 500% (although that may turn out to be a spike).  I do get that there's no necessary relationship.  However, perhaps there's an economic basis for one (however approximate it might be).

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[Insti]

I value Bitcoin as an anonymous digital currency.  Although I'm not expecting to get rich, I'd like the ability to continuously generate enough Bitcoin to purchase desired services.

Is there any expectation that economic value per khash/sec (or client) per day will be at least somewhat stable?  Difficulty just increased 300%, and USD/Bitcoin just increased about 500% (although that may turn out to be a spike).  I do get that there's no necessary relationship.  However, perhaps there's an economic basis for one (however approximate it might be).

Try the Bitcoin Economics Forum
You should be able to find many discussions about this topic there.

This thread is about the proof of work difficulty number.

[satoshi]

New difficulty factor 244.213223092
+35%

I updated the first post.

date, difficulty factor, % change
2009          1.00
30/12/2009    1.18   +18%
11/01/2010    1.31   +11%
25/01/2010    1.34    +2%
04/02/2010    1.82   +36%
14/02/2010    2.53   +39%
24/02/2010    3.78   +49%
08/03/2010    4.53   +20%
21/03/2010    4.57    +9%
01/04/2010    6.09   +33%
12/04/2010    7.82   +28%
21/04/2010   11.46   +47%
04/05/2010   12.85   +12%
19/05/2010   11.85    -8%
29/05/2010   16.62   +40%
11/06/2010   17.38    +5%
24/06/2010   19.41   +12%
06/07/2010   23.50   +21%
13/07/2010   45.38   +93%
16/07/2010  181.54  +300%
27/07/2010  244.21   +35%

[knightmb]

It's a good thing all those phantom super-clusters went off line a few weeks ago or who knows how high the difficulty would have jumped to? 

[mizerydearia]

I designed a page to show history of difficulty values and published the code at http://bitcointalk.org/index.php?topic=587.0

[Syke]

Ugh, from 23 to 244 in 3 weeks. No wonder my 2600 khash/s system is over 10 days on the current block!

[Vasili Sviridov]

I wonder if that's due to bigger swarm, or heavier iron, or both...?

[flix]

Next increase in difficulty in est. 14 days...

 

[theymos]

This topic brings back memories...

I generated 5 blocks today on my Pentium processor. Two of them were within 3 minutes of each other.

Heh.

[knightcoin]

Thats should go to the history text book

[Sonny]

Ugh, from 23 to 244 in 3 weeks. No wonder my 2600 khash/s system is over 10 days on the current block!

The good old days.  

[2double0]

This topic brings back memories...

I generated 5 blocks today on my Pentium processor. Two of them were within 3 minutes of each other.

Heh.

Damn, hey theymos: Wanna send me a few? ahhahah  why hadnt I heard of btc back then

[hilariousandco-rapped]

We are poised to reach ~44.6 billion and can potentially reach 100 billion difficulty by the end of the year. Over the past year the network has seen huge increases in security.

[bornil267645]

It was designed to become tougher and tougher as more and more people got involved, wasn't it? At least that's what basic indicates.

[Lorenzo]

I thought about that but there wasn't a practical way to do smaller increments.  The frequency of block generation is balanced between confirming transactions as fast as possible and the latency of the network.

The algorithm aims for an average of 6 blocks per hour.  If it was 5 bc and 60 per hour, there would be 10 times as many blocks and the initial block download would take 10 times as long.  It wouldn't work anyway because that would be only 1 minute average between blocks, too close to the broadcast latency when the network gets larger.

Wouldn't this only be true if the total transactions contained in the 1 minute blocks had the same size as the total transactions contained in the 10 minute blocks? And as long as the global transactions per second (tps) doesn't change, there shouldn't be a huge difference between 1 minute blocks and 10 minute blocks in terms of blockchain size, no?

As for whether or not a 1 minute block time would work, I think that really depends. You would certainly see more orphan blocks and more confirmations would be required to achieve the same level of security but I don't think it's completely infeasible. Over 95% of nodes have a network latency of <40 seconds and by 1 minute, I'd expect this number to be over 97%.

Just out of curiosity but what do you think is an appropriate trade off between latency and block generation time? And how do you think number of nodes affects average network latency? Correct me if I'm wrong but shouldn't best and average case latency to be reduced (or at least scale with O(log n)) with a larger network size since all nodes in the network would attempt to increase their share of connections instead of forcing transactions to require more hops? (assuming this is how you implemented it. I could be wrong on this.)

[www.Gambler.Casino]

How interesting it is to plunge into the past and imagine how it all began.