Mining difficulty slowing down over the next 3 months?

[iglasses]

taipo,

Totally agree.  Especially if you have to buy more PSU power to turn them on.  I am sitting on 11 S1's and that's it for me.  AORN the diff. looks like it will take another big jump this week (over 15%) and that's just too much for an S1 to ROI.

Gotta sideline adding power for a bit.

[samsonn25]

Difficulty will never go down.

Not necessarily.
If bitcoin price is stable and difficulty keeps increasing, sooner or later, people with less efficient equipment and high electricity cost will shut down their machines. The difficulty will then drop, until it reach an equilibrium.

In august when diff is 30 billion difficulty

[Hqen2000]

One thing to factor in is at the moment a lot of the hashrate is coming from small miners like myself (running just 3 Ants). As the difficulty increases the power usage will become cost prohibitive and many will stop (i'd expect) that would be fore anyone running under 1th or so. I'd imagine this accounts for a fair amount of the overall rate. I can't imagine this not balancing itself like any market does. The hashrate CANT increase forever unless the BTC does as well...

[samsonn25]

There are many other companies and farms mining secretly also. Like knc bitfury asm cointerra and chinese independent  companies etc.

[klondike_bar]

Well I can't explain the next diff jump. I mean every ASIC on the market ROIs very very hard. Even S1. So who keeps adding power?

Might be ASIC companies that couldn't sell their gear like Spoondolies. Maybe even Black Arrow started mining with their X3. Some S2 were sold, some S1 and some SP-10 but they don't account for the upcoming 14-18% jump.

asicminer chips are just now getting out into the wild - its likely some of these companies are premining with the chips and/or building private farms before they focus on public sales (hashratio.com for example, which seems to have mimicked the S1 design, but can probably achieve 300-400GH in the same power/footprint

[taipo]

Well I can't explain the next diff jump. I mean every ASIC on the market ROIs very very hard. Even S1. So who keeps adding power?

Might be ASIC companies that couldn't sell their gear like Spoondolies. Maybe even Black Arrow started mining with their X3. Some S2 were sold, some S1 and some SP-10 but they don't account for the upcoming 14-18% jump.

When you're a huge mining operation - and there are hundreds of these operations now, and you have committed millions to an operation that is in effect, depreciating every 12 - 14 days, you do not have much other choice but to expand with every spare cryptocoin you have left - and hope every other player eventually gives in or you yourself will go to the wall.

Mining operations big or small are probably attempting to expand their operations by 15% every 2 weeks to keep up with the rising difficulty, thus leading to a further 15% rise...

Doesn't take a crystal ball worker to figure this one out, we've already seen this happen in every other arena of supply / demand.

Hashrates will continue to rise and rise...its a case of who blinks first...usual case, biggest bankrolled operations will win.

[lightfoot]

SO what you're describing here is a dollar auction. Heh heh. That's a fuuuun game.

[taipo]

We should have a gentleman’s agreement to postpone the GPU arms race as long as we can for the good of the network. It’s much easer to get new users up to speed if they don’t have to worry about GPU drivers and compatibility. It’s nice how anyone with just a CPU can compete fairly equally right now.

The original idea was a good one, Satoshi probably did envisage this type of arms race of sorts, but I can see this turning from an ASIC arms race into a rather dirty cyber war if enough large corporations get involved and the future of their corps are staked on profits from mining and profits flatline to the point multi-million operations are running at a loss.

Some of that is probably already happening now, but I think we have yet to see anything that comes close to how bad it is going to get.

[samsonn25]

Well I can't explain the next diff jump. I mean every ASIC on the market ROIs very very hard. Even S1. So who keeps adding power?

Might be ASIC companies that couldn't sell their gear like Spoondolies. Maybe even Black Arrow started mining with their X3. Some S2 were sold, some S1 and some SP-10 but they don't account for the upcoming 14-18% jump.

When you're a huge mining operation - and there are hundreds of these operations now, and you have committed millions to an operation that is in effect, depreciating every 12 - 14 days, you do not have much other choice but to expand with every spare cryptocoin you have left - and hope every other player eventually gives in or you yourself will go to the wall.

Mining operations big or small are probably attempting to expand their operations by 15% every 2 weeks to keep up with the rising difficulty, thus leading to a further 15% rise...

Doesn't take a crystal ball worker to figure this one out, we've already seen this happen in every other arena of supply / demand.

Hashrates will continue to rise and rise...its a case of who blinks first...usual case, biggest bankrolled operations will win.

On the contrary I think mining operations will be dying down by end of Year.   The only ones standing will probably be the ones run by the asic chip manufacturers themselves.  Because there will come a time soon where they cant sell below their cost and that is when difficulty is so high buyers dont want to pay the high prices for the machines that dont roi and are better off buying the coins.

I see BFL bankrupt soon, Cointerra is late to the game, as is Bitmine, Black Arrow.  Spondoolies is good tech but too expensive.  KNC will go private.

[taipo]

On the contrary I think mining operations will be dying down by end of Year.   The only ones standing will probably be the ones run by the asic chip manufacturers themselves.  Because there will come a time soon where they cant sell below their cost and that is when difficulty is so high buyers dont want to pay the high prices for the machines that dont roi and are better off buying the coins.

I'm with you on the timeframe...before the 'blinking' begins, i just don't see it dying down, but rather peaking, and then sloshing between the balance of the cost to run and profits as the fiat value of BTC bounces around, the type of balance that can only be maintained by large mining operations who have the least amount of overheads - which as we assume, is the asic manufacturers themselves, but also any operation that has managed to get bankrolled rather than the mine and build method. But as in anything, its just a guess.

I see BFL bankrupt soon, Cointerra is late to the game, as is Bitmine, Black Arrow.  Spondoolies is good tech but too expensive.  KNC will go private.

BFL will probably just get rebranded under another name, and shift their focus like most ASIC miner manufacturers to cloud hosting, hash reselling if they haven't already done so already.

[samsonn25]

Yes cloud hosting and others have said before that market forces will centralize mining for the most part.

[BSIG]

It'll be on an upward scale, I'd buckle up and get ready for it. 

[mikerbiker6]

It'll be on an upward scale, I'd buckle up and get ready for it. 

100 Petahash hitting soon

[taipo]

How long before 1 exahash? Probably somewhere around the 100B range or more?

[skuser]

How long before 1 exahash? Probably somewhere around the 100B range or more?

Using any of gazillions calculators out there like http://www.asicminersguide.com/bitcoin-calculators/ will tell you that 1 exahash will cause the difficulty be at about 140 billions. But that will be pretty long road 

[samsonn25]

Who can even mine at those difficulty levels.

At 20 Billion there will be alot of used miners on ebay starting.

[ujka]

Who can even mine at those difficulty levels.

At 20 Billion there will be alot of used miners on ebay starting.

https://www.asic-hardware.com/product/lketc-dragon-miner/

$1700 (3btc) for 1TH.
I think it will mine back that 3btc in 3-4 months.

[taipo]

Estimated Next Difficulty:   11,758,159,195 (+12.46%)
Adjust time:   After 4 Blocks, About 33.7 minutes

[taipo]

When you're a huge mining operation - and there are hundreds of these operations now, and you have committed millions to an operation that is in effect, depreciating every 12 - 14 days, you do not have much other choice but to expand with every spare cryptocoin you have left - and hope every other player eventually gives in or you yourself will go to the wall.

Mining operations big or small are probably attempting to expand their operations by 15% every 2 weeks to keep up with the rising difficulty, thus leading to a further 15% rise...

Example Mining Operation:
- 100 TH/s,
- 50 x 2 TH/s miners, $5000 USD each, $250,000 hardware investment
- plus hosting costs

At the old difficulty of 10,455,720,138 a mining rig of 100 TH/s would have been minting 4.81 BTC per day on avg. After the latest rise of difficulty ( 11,756,551,917 ) that will drop to something like 4.278 BTC per day. But our fictitious mining operator saw this coming and worked out what that equated to in miners, and ordered another 6 x 2 TH/s miners which will arrive around about the time of the next difficulty rise or just before.

The total fiat value every 14 days for this rig is about $42,000 at the current USD conversion of $640, of which our operator has to turn $30,000 back into their business to keep up with the hashrate and increased hosting costs.

Meanwhile smaller miners that have traditionally made up the bulk of the BTC network, will blink first and drop off, followed shortly by anyone not expanding their rigs to meet the difficulty increases.

Every difficulty jump, the gap between the upgrade cost and total minted coin closes. At some point unless there is a serious improvement in hashrate / kW, those two will come close enough together that these large mining operations will cease expanding to stay ahead of the difficulty rise. Some will fold, others that have financial backers will stay up.

By then they will be the primary producers of hash on the network, and the difficulty factor will peak and stabilise.

You can get a sense of the hardware upgrades by looking at the miner stats for instance at Eligius. Most large operations show a hashrate increase just before or at the same time as the difficulty jumps.

[samsonn25]

A  Big chunk of the profits being mined are re-invested into more equipment to offset the rising hashrate.  But the initial investment is not 100% recouped.