Difficulty slowdown: Is this turning into a long-term trend? [Discussion Thread]

[xstr8guy]

If you are mining now and are still making more in btc than you are spending in electricity you are dancing in the streets. The lifetime of your miners just got increased, as did your profit. No one realistically bought miners expecting less than 5% increases when the did the calculations. The longer it stays subdued the more gravy gets poured on the current miners.

yep and all the big boys need to do is stand pat and do their best to limit  network growth under 3%.
 
Just do some 1% 2% 3% growth in jumps on bitcoinwisdom's calculator's and mining look good.  So basically the big boys so not need to expand much.

Oh they can replace a 1 watt miner with a .8 watt miner then a .6 watt miner but they are building there own so they do not need to sell much just a little bit at a time.

Your last sentence isn't a real life scenario. Developing increasingly more efficient miners isn't "a little bit at a time" endeavor. To develop more efficient miners is a massive outlay of cash. And to recoup that investment, they would need to produce a lot of machines.

And really, does everyone think that these companies are happy to keep equilibrium in the mining game? These companies are each out to grow their share of the network and kill everyone else. We're in a lull, that's it. None of the big companies have put significant amounts of PHs on the network for 45 days. But this will change soon. Guaranteed.

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[mmeijeri]

yep and all the big boys need to do is stand pat and do their best to limit  network growth under 3%.

I think you're trying to talk them into something that's good for you, but bad for them.
 

Oh they can replace a 1 watt miner with a .8 watt miner then a .6 watt miner but they are building there own so they do not need to sell much just a little bit at a time.

Why would they replace a miner that's profitable (on a sunk-cost basis, which is the proper criterion to use) with a new one? If you've already paid for it, the logical thing to do is to keep it running until its revenues drop below electricity and hosting costs. Buying new hardware makes sense if you expect to recoup your costs, which are much lower if you produce your own miners and already have your mask set. If anything, if they bought new hardware, they would be running it in parallel with their old hardware, unless they ran out of space / power in their data center.

As for selling, I don't think we're ever going back to a situation where miners hoard a substantial portion of their mined bitcoins. Bitcoin mining is a fiat game, and the rational thing to do is to sell it all.

[philipma1957]

yep and all the big boys need to do is stand pat and do their best to limit  network growth under 3%.

I think you're trying to talk them into something that's good for you, but bad for them.
 

not really as I do not mine much any more I buy coins.

today coins dropped to about 350.

they (the big 5 or big 6 asic builders) take on big risks by large build outs.  build a 20mw farm running 30ph in 45 days like bitfury did in august.  

then have coins drop to 200 usd.  big risk.

slowly switch out  your older gear at .8 or 1 watt with .6 or less newer gear. Then  sell the older gear to miners call it a  c-1  or a s-4 instead of s-3.  This repackaging is being done right now by bitmaintech  overcharge just a little so it slows the pace and let that pay for the newer build.   win for the builders at  almost no risk.

 
BTW either way is bad for the home miner.


There is No need for fast expansion for the builders.  2 exceptions would be finding a .1 watt a gh method or big rise in btc price.

[Nagle]

Even at the new, "slow" rate, difficulty is growing over 100%/year. ROI declines accordingly.

[philipma1957]

Even at the new, "slow" rate, difficulty is growing over 100%/year. ROI declines accordingly.

well   we don't know the new rate.    we had .98 % we had 2.81%

 right now  we have 1.65% for bitcoinwisdom and .25% for bitcoincharts.


so at 2.81% diff in a year diff jumps from 35985 to 69980 that is 94.4 %  which is how you most likely got your 100% number.

but at .98% diff in a year the diff jumps from 35985 to 45475 that is 26.3 % which would be amazingly low.

The numbers are very simple the slower and lower network growth is at the 350 usd btc price the better it is for the big builders that are mining.

realistically   I find .98% a jump for 26.3 % in 1 year hard to believe in.    Times are very interesting right now.

also zen-gaw miners are attempting to attack btc with a new coin so if btc drops to 200-250 I could see the network shrink.

[BTCish]

if difficulty keeps growig slowly, there is a chance to get Roi even for small miners.

[philipma1957]

if difficulty keeps growing slowly, there is a chance to get Roi even for small miners.

maybe the top 5 companies had been reading these threads and decided to slow growth down. would be nice to see 1-5% for 10 jumps in a row.

[mavericklm]

I thing this is just a temporary slow down. We will stil have 15%up or more spikes.

This slowing down of difficulty rising is just silence before storm. Look to the summer increases, 3small and on august 19, BAM! 20% jump! New farms or upgrades of the older ones are taking place for sure!

Down spikes? only and maybe! after begining of 2016, when next halving will take place!

My prediction are: 5%, 15% and constantly around 10% untill summer time! But i hope for 0% increase

[Puppet]

In the past year we've literally seen a 100x increase in network speed. We wont be seeing anything like that ever again, but neither are we anywhere close to a ceiling at todays btc exchange rate.

Bitfury recently announced they secured funds to expand their mine to 100MW. With their current chips, that means a few 100PH. With the 0.2J/GH they claim for their 28nm chip by the end of this year (0.1J/GH next year), that means ~500PH and possibly ~1EH next year. Thats BF alone.

KnC have said they will gun for 20% of the network, up from <4%.  In the past 24 hr they appear to have doubled their hashrate, so I guess thats starting. Then there is AM sitting on a huge pile of chips that will find their way to the network one way or another,  Spondoolies 28nm, etc.

I posted this chart over a year ago:



and got mostly ridiculed both for the conclusions and the assumptions, which turned out to be pretty darn accurate (considering the >100x increase it predicted). But to predict the next few years, they are outdated given that efficiency will likely be 3-5x better than that, and price per GH will drop below $0.2/GH according to at least spondoolies. So lets see what happens then:




If you pick a conservative electricity cost $8c/KwH and double BF and SP most optimistic efficiency projections from 0.1J/GH to 0.2, you end up somewhere around 1700PH. If you expect bitcoin to rise in value, you can increase those numbers proportionally.

[trek27]

Interesting charts.
What they say is actually the reason why I'm skeptic about possibility of important increase of btc/usd price in medium term - large miners tend to sell a lot of mined bitcoins to cover capital costs and fund new capacity.

[fairglu]

So price needs to get near $200/BTC in a few months for things to even out?
(ignoring any unforeseen external factors for the sake of the argument)

[philipma1957]

So price needs to get near $200/BTC in a few months for things to even out?
(ignoring any unforeseen external factors for the sake of the argument)

those charts say that.  right now coins are 331 and growth for this jump is about 4.5%.  I for one think 200 is too low.  I think 300 is the cutoff as I think the big guys want a better margin of error.

[Puppet]

So price needs to get near $200/BTC in a few months for things to even out?
(ignoring any unforeseen external factors for the sake of the argument)

those charts say that.  right now coins are 331 and growth for this jump is about 4.5%.  I for one think 200 is too low.  I think 300 is the cutoff as I think the big guys want a better margin of error.

What charts? My charts? They dont say anything of the kind. They cant predict BTC exchange rate at all, they can only predict network hashrate given assumptions like the BTC exchange rate.

[fairglu]

they can only predict network hashrate given assumptions like the BTC exchange rate.

I'm meaning the "zero benefits zero losses" point, where hashrate, energy costs & BTC exchange rate would mean neither benefits nor losses for miners. The market price would obviously be at any point above or below.

[philipma1957]

So price needs to get near $200/BTC in a few months for things to even out?
(ignoring any unforeseen external factors for the sake of the argument)

those charts say that.  right now coins are 331 and growth for this jump is about 4.5%.  I for one think 200 is too low.  I think 300 is the cutoff as I think the big guys want a better margin of error.

What charts? My charts? They dont say anything of the kind. They cant predict BTC exchange rate at all, they can only predict network hashrate given assumptions like the BTC exchange rate.

Relax internet sucks for a detailed discussion we all write in a shorthand of sorts.   We are voicing an interpolation of your charts as to how growth will be.

fairglu sees flat diff  increase at  a price  of 200 usd by looking at your charts.

  I see flat diff increase at 300  since I think your charts shows a flat diff at 200 and I think the big builders want a safety margin  of sorts.



I see the big builders being able to move the network 100% bigger in under 60 days.  I see them not doing it since they think it is a losing move. Due to the fact they are mining more then half the coins as I type.

BTW coins are 336 right now .  I just purchased 1 from coinbase.  As I am still bullish on them.

[TheJuice]

We're where we were 2years ago pre asic. expect diff to rise only with price changes.

[philipma1957]

We're where we were 2years ago pre asic. expect diff to rise only with price changes.

close enough.

 Although if it all crashed and burned then gpus had usefulness.  if it all crashes now my house full of s-3's are not very valuable for anything else but a space heater.

[armedmilitia]

I wonder if any new hardware will ROI right now.... Any of you guys want to help compile a list of whats shipping ATM? I'll start with 5 random ones, feel free to add on. I assumed spondoolies shipping was free, but I'm not sure. Correct me if I'm wrong.

Spondoolies SP35 "Yukon"
1.94 BTC/TH  (PSU INCLUDED, SHIPPING INCLUDED)
0.66 W/GH
Delivery November*
Very good specs, but will it ship?

Spondoolies SP20 "Jackson"
2.05 BTC/TH (NO PSU, SHIPPING INCLUDED)
0.9 W/GH
Shipping.
Shitty SP35 for more money. Don't buy this.

ASICMINER Prisma
~1 BTC/TH (NO PSU, SHIPPING NOT INCLUDED, NO CONTROLLER)
0.75 W/GH
Shipping, with significant lead time.
Cheap and efficient, but PSU and shipping needs to be factored in to your cost. As well, there may be a few weeks lead time if you buy now.

Antminer S4
~1.79 BTC/TH (PSU INCLUDED, SHIPPING NOT INCLUDED)
0.69 W/GH (Can be downclocked)
Shipping.
A more expensive miner, as shipping costs are quite high with this unit.

Cointerra Aire
~1.786 BTC/TH (NO PSU, SHIPPING NOT INCLUDED, NO CONTROLLER.)
0.225 W/GH (CLAIMED)
Shipping Q1 2014*
Very expensive for the ship date. However, the claimed power efficiency is the best I've seen. These claims are nothing but hot AIRE until they start shipping though, especially with Cointerra's "meh" track record.




*Estimated by the manufacturer, this is often bullshit.

[mavericklm]

Newly bought miner negative roi
Second hand miner maybe positive roi
atm

[philipma1957]

Newly bought miner negative roi
Second hand miner maybe positive roi
atm

most likely correct