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Author Topic: Bitcoin Difficulty Prediction [NOW - MARCH]  (Read 3034 times)
nezarkadhem
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January 28, 2014, 09:32:56 PM
 #1

Trend line prediction for Bitcoin difficulty in the next two months:

Date                % change   difficulty
January 15, 2014      2.13%   1,866,409,213
January 16, 2014      2.13%   1,906,084,808
January 17, 2014      2.13%   1,946,614,160
January 18, 2014      2.13%   1,988,015,853
January 19, 2014      2.13%   2,030,308,880
January 20, 2014      2.13%   2,073,512,651
January 21, 2014      2.13%   2,117,647,004
January 22, 2014      2.13%   2,162,732,214
January 23, 2014      2.13%   2,208,789,000
January 24, 2014      2.13%   2,255,838,541
January 25, 2014      2.13%   2,303,902,480
January 26, 2014      2.13%   2,353,002,936
January 27, 2014      2.13%   2,403,162,519
January 28, 2014      2.13%   2,454,404,334
January 29, 2014      2.13%   2,506,751,996
January 30, 2014      2.13%   2,560,229,642
January 31, 2014      2.13%   2,614,861,939
February 1, 2014      2.13%   2,670,674,102
February 2, 2014      2.13%   2,727,691,897
February 3, 2014      2.14%   2,785,941,663
February 4, 2014      2.14%   2,845,450,319
February 5, 2014      2.14%   2,906,245,377
February 6, 2014      2.14%   2,968,354,957
February 7, 2014      2.14%   3,031,807,801
February 8, 2014      2.14%   3,096,633,286
February 9, 2014      2.14%   3,162,861,436
February 10, 2014   2.14%   3,230,522,941
February 11, 2014   2.14%   3,299,649,167
February 12, 2014   2.14%   3,370,272,175
February 13, 2014   2.14%   3,442,424,734
February 14, 2014   2.14%   3,516,140,338
February 15, 2014   2.14%   3,591,453,223
February 16, 2014   2.14%   3,668,398,379
February 17, 2014   2.14%   3,747,011,574
February 18, 2014   2.14%   3,827,329,366
February 19, 2014   2.14%   3,909,389,122
February 20, 2014   2.14%   3,993,229,038
February 21, 2014   2.15%   4,078,888,153
February 22, 2014   2.15%   4,166,406,372
February 23, 2014   2.15%   4,255,824,486
February 24, 2014   2.15%   4,347,184,188
February 25, 2014   2.15%   4,440,528,094
February 26, 2014   2.15%   4,535,899,766
February 27, 2014   2.15%   4,633,343,731
February 28, 2014   2.15%   4,732,905,506
March 1, 2014      2.15%   4,834,631,614
March 2, 2014      2.15%   4,938,569,611
March 3, 2014      2.15%   5,044,768,110
March 4, 2014      2.15%   5,153,276,801
March 5, 2014      2.15%   5,264,146,477
March 6, 2014      2.15%   5,377,429,058
March 7, 2014      2.15%   5,493,177,620
March 8, 2014      2.15%   5,611,446,414
March 9, 2014      2.15%   5,732,290,897
March 10, 2014      2.15%   5,855,767,760
March 11, 2014      2.15%   5,981,934,952
March 12, 2014      2.16%   6,110,851,709
March 13, 2014      2.16%   6,242,578,586
March 14, 2014      2.16%   6,377,177,483
March 15, 2014      2.16%   6,514,711,677
March 16, 2014      2.16%   6,655,245,851
March 17, 2014      2.16%   6,798,846,130
March 18, 2014      2.16%   6,945,580,106
March 19, 2014      2.16%   7,095,516,878
March 20, 2014      2.16%   7,248,727,082
March 21, 2014      2.16%   7,405,282,928
March 22, 2014      2.16%   7,565,258,231
March 23, 2014      2.16%   7,728,728,451
March 24, 2014      2.16%   7,895,770,731
March 25, 2014      2.16%   8,066,463,929
March 26, 2014      2.16%   8,240,888,662
March 27, 2014      2.16%   8,419,127,343
March 28, 2014      2.16%   8,601,264,223
March 29, 2014      2.16%   8,787,385,429
March 30, 2014      2.16%   8,977,579,011
March 31, 2014      2.16%   9,171,934,981

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January 31, 2014, 08:38:22 PM
 #2

What information are you basing this prediction on? 

organofcorti
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January 31, 2014, 10:46:41 PM
 #3

Trend line prediction for Bitcoin difficulty in the next two months:
<snip>

By definition, this is wrong - difficulty doesn't change per day or any particular time period, it changes per 2016 blocks.

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nezarkadhem
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February 05, 2014, 04:58:22 AM
 #4

Trend line prediction for Bitcoin difficulty in the next two months:
<snip>

By definition, this is wrong - difficulty doesn't change per day or any particular time period, it changes per 2016 blocks.

Yes, it doesn't change per day. But if you take the change estimated on the 24th of Jan, we are only about 2% off. So you'll need to look at the estimations on the day the difficulty changes, and compare.

Awaiting the Neptune & Viper
nezarkadhem
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February 05, 2014, 05:00:09 AM
 #5

What information are you basing this prediction on? 

We've taken the history of bitcoin's difficulty over the last month, 3 months, 6 months, and a year. Then we plotted a trend line over the average of those. We've done the same for other SHA coins, like PPC, TRC, and FRC. It's pretty accurate actually. PM if you want the excel sheet.

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organofcorti
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February 05, 2014, 05:05:59 AM
 #6

Trend line prediction for Bitcoin difficulty in the next two months:
<snip>

By definition, this is wrong - difficulty doesn't change per day or any particular time period, it changes per 2016 blocks.

Yes, it doesn't change per day. But if you take the change estimated on the 24th of Jan, we are only about 2% off. So you'll need to look at the estimations on the day the difficulty changes, and compare.

Part of difficulty forecasting is when difficulty changes. If you can forecast the changes in difficulty, then you can forecast the dates when the changes occur and how much they are. Come on, don't be lazy! Do it right!


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nezarkadhem
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February 05, 2014, 05:27:35 AM
 #7

Trend line prediction for Bitcoin difficulty in the next two months:
<snip>

By definition, this is wrong - difficulty doesn't change per day or any particular time period, it changes per 2016 blocks.

Yes, it doesn't change per day. But if you take the change estimated on the 24th of Jan, we are only about 2% off. So you'll need to look at the estimations on the day the difficulty changes, and compare.

Part of difficulty forecasting is when difficulty changes. If you can forecast the changes in difficulty, then you can forecast the dates when the changes occur and how much they are. Come on, don't be lazy! Do it right!



Fair enough. We put together these numbers to identify the difficulty in March, April, etc. So we could see if a mining rig would be profitable.

At least since November, the difficulty almost always changes between 11-13 days. How do you suggest we predict the *day* the difficulty changes? Should we simply estimate 12 days (historical average)?

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MANofthePEOPLE
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February 05, 2014, 05:30:25 AM
 #8

Maybe we're not looking at 100% diff increase each month but surely it will be higher than ~60%? So much hardware coming online this spring, 22% increases sounds more like a fantasy to me.
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February 05, 2014, 05:36:31 AM
 #9

Trend line prediction for Bitcoin difficulty in the next two months:
<snip>

By definition, this is wrong - difficulty doesn't change per day or any particular time period, it changes per 2016 blocks.

Yes, it doesn't change per day. But if you take the change estimated on the 24th of Jan, we are only about 2% off. So you'll need to look at the estimations on the day the difficulty changes, and compare.

Part of difficulty forecasting is when difficulty changes. If you can forecast the changes in difficulty, then you can forecast the dates when the changes occur and how much they are. Come on, don't be lazy! Do it right!



Fair enough. We put together these numbers to identify the difficulty in March, April, etc. So we could see if a mining rig would be profitable.

At least since November, the difficulty almost always changes between 11-13 days. How do you suggest we predict the *day* the difficulty changes? Should we simply estimate 12 days (historical average)?

No, it's trickier than that. The increase in difficulty is the inverse of the time taken for the previous difficulty divided by 86400*14. So if the increase in difficulty is say 120%, then the time between retargets immediately prior to the increase will be 86400*14/1.2 seconds. It'll write up something a bit more clear and post a link to it when I have some time.

But why not forecast cumulative earnings for the month? That's what I do for the most part. Difficulty prediction is tricky and tends to have unexpectedly wide confidence intervals past one or two retargets, but the cumulative earnings plot tend to be quite smooth and easy to trend-ify.

For example, if you plot date of deployment vs total income after three months, you get a very nice smooth chart that is easy to extend.


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nezarkadhem
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February 05, 2014, 05:38:42 AM
 #10

Maybe we're not looking at 100% diff increase each month but surely it will be higher than ~60%? So much hardware coming online this spring, 22% increases sounds more like a fantasy to me.

You got the math wrong friend. See it's exponential growth. Here's an example:

1 * 2% = 1.02
1.02 * 2% = 1.04

... 60 days later

3.03 * 2% = 3.09

60 days later, the growth is about 209%.

Awaiting the Neptune & Viper
MANofthePEOPLE
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February 05, 2014, 05:44:42 AM
 #11

Maybe we're not looking at 100% diff increase each month but surely it will be higher than ~60%? So much hardware coming online this spring, 22% increases sounds more like a fantasy to me.

You got the math wrong friend. See it's exponential growth. Here's an example:

1 * 2% = 1.02
1.02 * 2% = 1.04

... 60 days later

3.03 * 2% = 3.09

60 days later, the growth is about 209%.

 Embarrassed

Fortunately, I never claimed to be a math genius  Wink

So you predict around 100% diff increase/month?

(probably gonna end up looking like even dumber now)
nezarkadhem
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February 05, 2014, 05:50:15 AM
 #12

Trend line prediction for Bitcoin difficulty in the next two months:
<snip>

By definition, this is wrong - difficulty doesn't change per day or any particular time period, it changes per 2016 blocks.

Yes, it doesn't change per day. But if you take the change estimated on the 24th of Jan, we are only about 2% off. So you'll need to look at the estimations on the day the difficulty changes, and compare.

Part of difficulty forecasting is when difficulty changes. If you can forecast the changes in difficulty, then you can forecast the dates when the changes occur and how much they are. Come on, don't be lazy! Do it right!



Fair enough. We put together these numbers to identify the difficulty in March, April, etc. So we could see if a mining rig would be profitable.

At least since November, the difficulty almost always changes between 11-13 days. How do you suggest we predict the *day* the difficulty changes? Should we simply estimate 12 days (historical average)?

No, it's trickier than that. The increase in difficulty is the inverse of the time taken for the previous difficulty divided by 86400*14. So if the increase in difficulty is say 120%, then the time between retargets immediately prior to the increase will be 86400*14/1.2 seconds. It'll write up something a bit more clear and post a link to it when I have some time.

But why not forecast cumulative earnings for the month? That's what I do for the most part. Difficulty prediction is tricky and tends to have unexpectedly wide confidence intervals past one or two retargets, but the cumulative earnings plot tend to be quite smooth and easy to trend-ify.

For example, if you plot date of deployment vs total income after three months, you get a very nice smooth chart that is easy to extend.



When you do write something up, please share!

Cumulative earnings require difficulty, don't they? Earnings require you to predict the number of minded coins * price. And of course the hashrate and reward, but it's fair to assume those are constant.

I'm using this formula: 24/(D*232/(H*10ˆ6)/60/60)*C
D= difficulty, H=hash, and C=reward

I have my forecasted commutative earnings, and actual (I monitor this day to day). My columns go something like this:

Date | Hashing Power | % Change | Predicted Difficulty | Actual Difficulty | Predicted BTC price | Actual BTC Price | Predicted Revenue | Actual Revenue

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nezarkadhem
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February 05, 2014, 05:52:35 AM
 #13

Maybe we're not looking at 100% diff increase each month but surely it will be higher than ~60%? So much hardware coming online this spring, 22% increases sounds more like a fantasy to me.

You got the math wrong friend. See it's exponential growth. Here's an example:

1 * 2% = 1.02
1.02 * 2% = 1.04

... 60 days later

3.03 * 2% = 3.09

60 days later, the growth is about 209%.

 Embarrassed

Fortunately, I never claimed to be a math genius  Wink

So you predict around 100% diff increase/month?

(probably gonna end up looking like even dumber now)

Yes, malheureusement (french for unfortunately Wink)

Awaiting the Neptune & Viper
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February 05, 2014, 06:28:55 AM
 #14

Maybe we're not looking at 100% diff increase each month but surely it will be higher than ~60%? So much hardware coming online this spring, 22% increases sounds more like a fantasy to me.

You got the math wrong friend. See it's exponential growth. Here's an example:

1 * 2% = 1.02
1.02 * 2% = 1.04

... 60 days later

3.03 * 2% = 3.09

60 days later, the growth is about 209%.

 Embarrassed

Fortunately, I never claimed to be a math genius  Wink

So you predict around 100% diff increase/month?

(probably gonna end up looking like even dumber now)

Yes, malheureusement (french for unfortunately Wink)

That's some sad numbers indeed. You are keeping your neptune preorder why exactly? :p
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February 05, 2014, 07:56:32 AM
 #15

 Shocked i just seen a tweet...

http://btc.re

see 'next difficulty estimate'

SHOLY HIT BATMAN.

tips    1APp826DqjJBdsAeqpEstx6Q8hD4urac8a
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February 05, 2014, 10:12:54 AM
 #16

Trend line prediction for Bitcoin difficulty in the next two months:
<snip>

By definition, this is wrong - difficulty doesn't change per day or any particular time period, it changes per 2016 blocks.

Yes, it doesn't change per day. But if you take the change estimated on the 24th of Jan, we are only about 2% off. So you'll need to look at the estimations on the day the difficulty changes, and compare.
At last diff change (feb 5th), trendline is more than 10% off.
I see that in your trendline increase is 'accelerating', goes from 2.13% to 2.16% per day, but charts at sipa.be are showing 'deceleration':
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February 05, 2014, 09:38:31 PM
 #17

Trend line prediction for Bitcoin difficulty in the next two months:
<snip>

By definition, this is wrong - difficulty doesn't change per day or any particular time period, it changes per 2016 blocks.

Yes, it doesn't change per day. But if you take the change estimated on the 24th of Jan, we are only about 2% off. So you'll need to look at the estimations on the day the difficulty changes, and compare.
At last diff change (feb 5th), trendline is more than 10% off.
I see that in your trendline increase is 'accelerating', goes from 2.13% to 2.16% per day, but charts at sipa.be are showing 'deceleration':

Yes, it's 9.801% off. Hashfast and Cointerra just shipped. Sit back and watch....

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February 05, 2014, 10:11:15 PM
 #18

Maybe we're not looking at 100% diff increase each month but surely it will be higher than ~60%? So much hardware coming online this spring, 22% increases sounds more like a fantasy to me.

You got the math wrong friend. See it's exponential growth. Here's an example:

1 * 2% = 1.02
1.02 * 2% = 1.04

... 60 days later

3.03 * 2% = 3.09

60 days later, the growth is about 209%.

 Embarrassed

Fortunately, I never claimed to be a math genius  Wink

So you predict around 100% diff increase/month?

(probably gonna end up looking like even dumber now)

Yes, malheureusement (french for unfortunately Wink)

That's some sad numbers indeed. You are keeping your neptune preorder why exactly? :p

Maybe to mine some then sell at 120% of the preorder price  Grin

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February 05, 2014, 11:03:14 PM
 #19

At last diff change (feb 5th), trendline is more than 10% off.
I see that in your trendline increase is 'accelerating', goes from 2.13% to 2.16% per day, but charts at sipa.be are showing 'deceleration':
Yes, it's 9.801% off. Hashfast and Cointerra just shipped. Sit back and watch....
Hashfast is shipping, Cointerra not jet - just some PR BS (two units Huh - that's not shipping).
There is also Bitmine, promising to ship. 'Next' week.
Next step has to be >40% to catch up with trendline.
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February 06, 2014, 12:15:48 PM
 #20

When you do write something up, please share!

OK, hopefully this is understandable: http://organofcorti.blogspot.com/2014/02/917-estimating-future-bitcoin-mining.html

Cumulative earnings require difficulty, don't they? Earnings require you to predict the number of minded coins * price. And of course the hashrate and reward, but it's fair to assume those are constant.
What I mean was that you can forecast income - for example you can use your "trendline" method on your historical earnings and forecast that directly.

I'm using this formula: 24/(D*232/(H*10ˆ6)/60/60)*C

Is that meant to be "2^32" instead of "232"?




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