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Author Topic: How can i know the correlations between prices and dif ?  (Read 601 times)
polokiost
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March 26, 2012, 06:39:35 AM
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Hi everyone , i have  question like title .
With dif  1498294 and network total 12.467 Thash/s  , what's price of btc on the future ?
thanks!
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BadBear
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March 26, 2012, 06:43:18 AM
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In general, difficulty follows price. However, with low power solutions (FPGAs/ASICS) coming out I would expect to see difficulty start to outpace the price, making any correlation even less relevant.

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TomatoCaqe
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March 26, 2012, 06:56:18 AM
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its very hard to predict the outcome of btc
polokiost
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March 26, 2012, 07:09:00 AM
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In general, difficulty follows price. However, with low power solutions (FPGAs/ASICS) coming out I would expect to see difficulty start to outpace the price, making any correlation even less relevant.
thank ,but i still don't understand . Can you tell me more ?
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March 26, 2012, 07:15:02 AM
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There is no direct correlation between difficulty and price, but difficulty follows price.

Difficulty is set by hashing power.  The network attempts to maintain an average time between blocks of 10 minutes.  If hahsing power rises (people deploying new miners) then avg time will fall.  The network correct that by raising difficulty and thus the new hashing power isn't any faster (combined) at finding blocks then it was before.  

Say difficulty is 10 TH/s. As an example if 10% more hashing power comes online (~1.0TH/s, or 11 TH/s total), time between blocks at current difficulty falls to ~9 minutes.  At the next difficulty adjustment difficulty will rise 10% and the 11 TH/s network will find blocks in 10 minutes (no faster than the 10TH/s network did).

So what keeps difficulty from going to elventy bazillion?  Economics.  GPU cost a certain amount, and use a certain amount of power.  Thus price rising leads to rising difficulty (as new miners chase higher profits) and price falling leads to lower difficulty (as marginal miners quit).  Trying to predict difficult OR price is a fools errand but the relationship between price AND difficulty is relatively stable:


Over last 90 days 1 GH/s of hashing power has earned between $3.00 and $6.00 per day (minus electrical costs).

When price/difficulty gets too low (either due to rising difficulty or falling price) it becomes unprofitable and some miners quit raising price/difficulty.  When it gets too high it encourages new hardware spending and price/difficulty falls.

BadBear was indicating that over the long run FPGA change that.  They have high upfront cost but low operating cost.  Thus once bought they can remain online and profitable even when price/difficulty falls to levels that would idle a GPU.  Since they don't idle that is going to put downward pressure on price/difficulty.   As more and more FPGA are deployed one would expect the price/difficulty ratio to fall (network getting mrore efficient).
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March 26, 2012, 11:50:38 AM
 #6

Hi everyone , i have  question like title .
With dif  1498294 and network total 12.467 Thash/s  , what's price of btc on the future ?
thanks!
No one knows.
There is no correlation, price can do what the hell it wants to do  Wink Difficulty just follow
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March 26, 2012, 06:51:24 PM
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DeathAndTaxes, very informative post. Thank you.

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