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Author Topic: Difficulty increase - 60%  (Read 5325 times)
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May 18, 2011, 04:22:42 PM
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Will BTC catch $10 mark next week?
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May 18, 2011, 04:25:25 PM
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Difficulty does not drive price, only the reverse is true.  However, an increase in press exposure and interest may cause a rise to $10 next week.

Cryptocoin Mining Info | OTC | PGP | Twitter | freenode: dust-otc | BTC: 1F6fV4U2xnpAuKtmQD6BWpK3EuRosKzF8U
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May 18, 2011, 04:30:04 PM
 #3

Same exposure drives difficulty up too.
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May 18, 2011, 04:31:02 PM
 #4

Is there some page somewhere that lists the difficulty history? And possibly, what date/time each jump occurred?

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May 18, 2011, 04:59:45 PM
 #5

Is there some page somewhere that lists the difficulty history? And possibly, what date/time each jump occurred?


At one time I was able to get that info from here:  http://nullvoid.org/bitcoin/difficultiez.php

But the site doesn't work anymore.
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May 18, 2011, 05:04:57 PM
 #6

Is there some page somewhere that lists the difficulty history? And possibly, what date/time each jump occurred?


I had this before my computer crashed Sad  I wrote a script that looked at Block Explorer.  If you really want to, you can use block explorer and go every 2016 blocks.
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May 18, 2011, 05:06:19 PM
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http://bitcoin.sipa.be/
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May 18, 2011, 05:12:13 PM
 #8

Is there some page somewhere that lists the difficulty history? And possibly, what date/time each jump occurred?
http://blockexplorer.com/q/nethash

I know this because Tyler knows this.
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May 18, 2011, 05:13:52 PM
 #9

Difficulty increase due in about 4-5 hours from the time of this posting   
240K
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May 18, 2011, 06:06:48 PM
 #10

Difficulty increase due in about 4-5 hours from the time of this posting  
240K

Next question then: How does one find out in advance what the difficulty is going to be 5 hours into the future?

I uploaded a page at http://bitcoindifficulty.com a few weeks ago but I'd like to add a little more info there.

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May 18, 2011, 06:13:08 PM
 #11

Difficulty increase due in about 4-5 hours from the time of this posting  
240K

Next question then: How does one find out in advance what the difficulty is going to be 5 hours into the future?

I uploaded a page at http://bitcoindifficulty.com a few weeks ago but I'd like to add a little more info there.


If you're on IRC, /msg gribbl ;;bc,stats
Current Blocks: 124943 | Current Difficulty: 157426.20628986 | Next Difficulty At Block: 124991 | Next Difficulty In: 48 blocks | Next Difficulty In About: 4 hours, 38 minutes, and 24 seconds | Next Difficulty Estimate: 242650.45956159

As we slide down the banister of life, this is just another splinter in our ass.
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May 18, 2011, 06:33:02 PM
 #12

theymos's site

http://blockexplorer.com/q/estimate

http://blockexplorer.com/q
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May 18, 2011, 06:37:48 PM
 #13

Difficulty increase due in about 4-5 hours from the time of this posting  
240K

Next question then: How does one find out in advance what the difficulty is going to be 5 hours into the future?

I uploaded a page at http://bitcoindifficulty.com a few weeks ago but I'd like to add a little more info there.


I look at http://bitcoincharts.com
Difficulty   157426
Estimated   242936 in 43 blks
Blocks/hour   12.72

and count from there

Thanks for the irc command, yrral86! One day I'll hop in there, haven't been on irc networks in ages
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May 18, 2011, 06:44:28 PM
 #14

Difficulty does not drive price, only the reverse is true.  However, an increase in press exposure and interest may cause a rise to $10 next week.

The miners that sell their bitcoins on mt. gox are about to have 60% less to sell. Unless there's suddenly a random 60% drop in demand then of course the price will go up. Press exposure is the biggest determiner of price but supply has an effect as well.
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May 18, 2011, 07:01:58 PM
 #15

Difficulty does not drive price, only the reverse is true.  However, an increase in press exposure and interest may cause a rise to $10 next week.

The miners that sell their bitcoins on mt. gox are about to have 60% less to sell. Unless there's suddenly a random 60% drop in demand then of course the price will go up. Press exposure is the biggest determiner of price but supply has an effect as well.

Err... the amount of "new" bitcoins to sell will always try to be the same (difficulty aims for 6 blocks an hour), they will just be spread among more miners.
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May 18, 2011, 07:05:19 PM
 #16

Difficulty does not drive price, only the reverse is true.  However, an increase in press exposure and interest may cause a rise to $10 next week.

The miners that sell their bitcoins on mt. gox are about to have 60% less to sell. Unless there's suddenly a random 60% drop in demand then of course the price will go up. Press exposure is the biggest determiner of price but supply has an effect as well.

That is true.  Some of them are currently selling cheap too! 

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May 18, 2011, 07:05:38 PM
 #17

Difficulty does not drive price, only the reverse is true.  However, an increase in press exposure and interest may cause a rise to $10 next week.

The miners that sell their bitcoins on mt. gox are about to have 60% less to sell. Unless there's suddenly a random 60% drop in demand then of course the price will go up. Press exposure is the biggest determiner of price but supply has an effect as well.

Err... the amount of "new" bitcoins to sell will always try to be the same (difficulty aims for 6 blocks an hour), they will just be spread among more miners.

Not true.

Right after the difficulty is adjusted, 1 block will be generated approximately every 10 minutes.

As miners join the network, more power is thrown at the problem. With more power, block generation time goes down.

Thus, while difficulty is increasing, block generation time is lowest right before a difficulty increase.

Right now the network is doing 12.63 blocks per hour. Compare that the the 6 that it should be doing. After the difficulty increase, we'll be much closer to 6.
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May 18, 2011, 07:05:52 PM
 #18

Difficulty does not drive price, only the reverse is true.  However, an increase in press exposure and interest may cause a rise to $10 next week.

The miners that sell their bitcoins on mt. gox are about to have 60% less to sell. Unless there's suddenly a random 60% drop in demand then of course the price will go up. Press exposure is the biggest determiner of price but supply has an effect as well.

The coins sold on mtgox are not just mined coins.  There has been around 30-40k orders per day on mtgox.  At most, 12,000 of those were from coins mined per day.  The other 28,000 come from somewhere.  Some might be the same ones recycled (someone trading in and out for profit).  But if we drop from 12,000 per day down to 7,200 per day, It's a 12% drop in the coins available for selling (assuming all 12,000 were sold quickly).  It's going to be much less dramatic than you might think.  My guess is those with large holdings are selling off small amounts to get some money now, rather than new miners, who may be selling but aren't a huge factor.

The difficulty increase should be priced in, since it's not going to be a surprise.  People expect there to be fewer available in the future so they'll buy now, driving the price back up.  If the market is priced well, we shouldn't see any change.  Obviously it's not, but it's too hard to say which way it's incorrectly priced.

rezin- although the amount aims to be the same, it isn't always the case.  The last few days have been mining 10 blocks/hour instead of 6.  That will change when difficulty increases.
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May 18, 2011, 07:12:18 PM
 #19

Difficulty does not drive price, only the reverse is true.  However, an increase in press exposure and interest may cause a rise to $10 next week.

The miners that sell their bitcoins on mt. gox are about to have 60% less to sell. Unless there's suddenly a random 60% drop in demand then of course the price will go up. Press exposure is the biggest determiner of price but supply has an effect as well.

Err... the amount of "new" bitcoins to sell will always try to be the same (difficulty aims for 6 blocks an hour), they will just be spread among more miners.

Not true.

Right after the difficulty is adjusted, 1 block will be generated approximately every 10 minutes.

As miners join the network, more power is thrown at the problem. With more power, block generation time goes down.

Thus, while difficulty is increasing, block generation time is lowest right before a difficulty increase.

Right now the network is doing 12.63 blocks per hour. Compare that the the 6 that it should be doing. After the difficulty increase, we'll be much closer to 6.

Well that's why I said "try" to be once every 10 minutes. We are just talking about lag.
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May 18, 2011, 08:52:05 PM
 #20

Difficulty does not drive price, only the reverse is true.  However, an increase in press exposure and interest may cause a rise to $10 next week.

The miners that sell their bitcoins on mt. gox are about to have 60% less to sell. Unless there's suddenly a random 60% drop in demand then of course the price will go up. Press exposure is the biggest determiner of price but supply has an effect as well.

Err... the amount of "new" bitcoins to sell will always try to be the same (difficulty aims for 6 blocks an hour), they will just be spread among more miners.

Not true.

Right after the difficulty is adjusted, 1 block will be generated approximately every 10 minutes.

As miners join the network, more power is thrown at the problem. With more power, block generation time goes down.

Thus, while difficulty is increasing, block generation time is lowest right before a difficulty increase.

Right now the network is doing 12.63 blocks per hour. Compare that the the 6 that it should be doing. After the difficulty increase, we'll be much closer to 6.

Well that's why I said "try" to be once every 10 minutes. We are just talking about lag.

There is no try.  Do or do not.

Fact is, the number of coins coming on the market from miners will decrease in all likelihood.  How much of the market that represents is anyone's best guess.  Perhaps miners are mostly hoarding and old investors are selling, so it might not affect anything.  Maybe almost all are selling quickly and it will affect a lot.
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May 18, 2011, 09:03:04 PM
 #21

Good lord, this graph is scary:



Based off of that, hashing growth isn't going to taper off any time soon.  I only hope that USD valuation can keep up to some extent... else by three difficulty increases from now (assuming difficulty in the ~900k range), mining won't even pay for my electricity!
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May 18, 2011, 09:17:55 PM
 #22

I get that there will still be a block solved very 10 minutes or so. the thing is, 60% will be taken away from the miners CURRENTLY selling on mt gox and given to the new miners. some of the new miners will inevitably sell their coins and some will inevitably not. If 100% of the new miners sold their coins then there would be no change in supply, otherwise, supply will go down when difficulty goes up. When supply goes down, price goes up.
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May 18, 2011, 09:28:47 PM
 #23


Based off of that, hashing growth isn't going to taper off any time soon.  I only hope that USD valuation can keep up to some extent... else by three difficulty increases from now (assuming difficulty in the ~900k range), mining won't even pay for my electricity!

The rise in difficulty is driven by the rise in relative value, not the other way around.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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May 18, 2011, 09:42:36 PM
 #24


Based off of that, hashing growth isn't going to taper off any time soon.  I only hope that USD valuation can keep up to some extent... else by three difficulty increases from now (assuming difficulty in the ~900k range), mining won't even pay for my electricity!

The rise in difficulty is driven by the rise in relative value, not the other way around.
I know that.  That doesn't mean I can't hope that the USD valuation keeps up with difficulty.
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May 18, 2011, 09:44:25 PM
 #25

Good lord, this graph is scary:

Based off of that, hashing growth isn't going to taper off any time soon.  I only hope that USD valuation can keep up to some extent... else by three difficulty increases from now (assuming difficulty in the ~900k range), mining won't even pay for my electricity!

Eventually, it will barely cover electricity costs.  That's kind of the point.  But by that point, if you are one of the most power efficient miners, you will remain (the less efficient will stop mining).  That is assuming they pay for their electricity and act rationally.

I'll take the under for 900k difficulty in 3 increases.  Eventually difficulty will be limited by how much is actually being produced that can mine, and that doesn't increase exponentially.
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May 18, 2011, 09:45:04 PM
 #26

Same exposure drives difficulty up too.

totally understand that logically price drives difficulty and not the other way around but was thinking that because starting to mine is easier than buying bitcoins (at the moment) has the recent glut of press exposure driven hashing rate (and thus the soon to be increased difficulty) more than it has driven a price rise.

we may still see a price rise due to the press exposure but it could be delayed compared to the more immediate impact on hashing rate.
what do you think?
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May 18, 2011, 09:55:12 PM
 #27

Is there some page somewhere that lists the difficulty history? And possibly, what date/time each jump occurred?

  Google Docs Spreadsheet
  http://bit.ly/fylSv8
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May 18, 2011, 10:09:45 PM
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Sorry! I kind of dumb! but...what do you mean i will lose 60% of my bitcoins? are they going to remove my coins?Huh
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May 18, 2011, 10:17:53 PM
 #29

Sorry! I kind of dumb! but...what do you mean i will lose 60% of my bitcoins? are they going to remove my coins?Huh

it means that the difficulty of generating bitcoins is going to increase by ~60%. so unless you upgrade your mining hardware it will take 60% longer time to generate the same amount of coins as you currently are.
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May 18, 2011, 10:24:20 PM
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Sorry! I kind of dumb! but...what do you mean i will lose 60% of my bitcoins? are they going to remove my coins?Huh

it means that the difficulty of generating bitcoins is going to increase by ~60%. so unless you upgrade your mining hardware it will take 60% longer time to generate the same amount of coins as you currently are.

ohh! right! thanks!
I have a 6950, so if price doesnt go up with this new difficulty, i might step out when the next difficulty comes, because it wont compensate cause of the electricity bill.
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May 18, 2011, 10:39:40 PM
 #31

yeah with 1.2 g/hash mining speed i can only get 4.5 coins per day @ 6.5 usd per coin,  29 dollars a day is not really worth it anymore

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May 18, 2011, 10:50:12 PM
 #32

Same exposure drives difficulty up too.

totally understand that logically price drives difficulty and not the other way around but was thinking that because starting to mine is easier than buying bitcoins (at the moment) has the recent glut of press exposure driven hashing rate (and thus the soon to be increased difficulty) more than it has driven a price rise.

we may still see a price rise due to the press exposure but it could be delayed compared to the more immediate impact on hashing rate.
what do you think?

That's understood, difficulty doesn't affect value in a straight way to drive cost up or down.

I think you are right, if any new funds may be flowing in after recent press exposure, we haven't seen impact yet.
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May 18, 2011, 10:51:51 PM
 #33

yeah with 1.2 g/hash mining speed i can only get 4.5 coins per day @ 6.5 usd per coin,  29 dollars a day is not really worth it anymore

you already own the hardware I'm guessing. Is $29 dollars/day still not more than the electricity costs? why would it not be worth it any more.

excuse me if I'm missing some sarcasm. can't tell either way.
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May 18, 2011, 11:02:20 PM
 #34

yeah with 1.2 g/hash mining speed i can only get 4.5 coins per day @ 6.5 usd per coin,  29 dollars a day is not really worth it anymore

you already own the hardware I'm guessing. Is $29 dollars/day still not more than the electricity costs? why would it not be worth it any more.

excuse me if I'm missing some sarcasm. can't tell either way.
Hey, don't try to convince him otherwise... the fewer people mining, the more bitcoins for the rest of us.  Smiley
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May 18, 2011, 11:04:47 PM
 #35

Hey, don't try to convince him otherwise... the fewer people mining, the more bitcoins for the rest of us.  Smiley

Hey, I like mining, but I like Bitcoins more. I say let the miners come (as long as they don't all go in one pool...), I want network security. I want it to cost billions of dollars to even come close to hurting the Bitcoin network.
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May 18, 2011, 11:22:19 PM
 #36

Where on earth is all this new hardware coming from? Cry

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May 18, 2011, 11:31:14 PM
 #37

Blocks per hour before the difficulty change: 12.5
Blocks per hour after a 60% increase in difficulty: 12.6

Can someone explain to me why there was essentially no change? Shouldn't the number of blocks per hour immediately drop by a significant amount, and then recover?
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May 18, 2011, 11:33:57 PM
 #38

Where on earth is all this new hardware coming from? Cry

Just imagine your avatar speaking this. It's worth it.
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May 18, 2011, 11:35:23 PM
 #39

Where on earth is all this new hardware coming from? Cry

Seti@home recently took a hit, I think. And I'm sure there are F@H people mining with nVidia as long as the exchange rate makes it worthwhile.

Why does it make you unhappy? Yeah, I like easy money too, but I would much rather see the Bitcoin network grow as strong as possible.
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May 18, 2011, 11:36:17 PM
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Where on earth is all this new hardware coming from? Cry

Presumedly from ATI's manufacturing plants in China.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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May 18, 2011, 11:56:15 PM
 #41

Blocks per hour before the difficulty change: 12.5
Blocks per hour after a 60% increase in difficulty: 12.6

Can someone explain to me why there was essentially no change? Shouldn't the number of blocks per hour immediately drop by a significant amount, and then recover?
I think it uses some sort of moving average.  Maybe a 24 hr average.  So over the last 24 hrs, there has been 12.6 blocks/hr found.  We should see that number drop in the coming hours, and even out to the new blocks per hour average after a day or two.  Alongside of that, the difficulty ratio will also change, since the difficulty is ultimately determined by how many blocks/hr are found at the current difficulty level.
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May 19, 2011, 12:13:14 AM
 #42

Where on earth is all this new hardware coming from? Cry

Seti@home recently took a hit, I think. And I'm sure there are F@H people mining with nVidia as long as the exchange rate makes it worthwhile.

Why does it make you unhappy? Yeah, I like easy money too, but I would much rather see the Bitcoin network grow as strong as possible.

I forgot about SETI shutting down. Not really unhappy just rather hot Embarrassed
Double the hashing power in 3 weeks is quiet amazing is all and Im not objecting to it just curious where it all came from.
Im all for Bitcoin succeeding for many reasons on a global scale and for myself. The current economic system has put a hurting on me.

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May 19, 2011, 12:44:28 AM
 #43

I've been running about 500 MH/s for about a month - as soon as I can convert enough bitcoin, I'll probably be doubling that with another card, hopefully in a few weeks - if bitcoin prices hold, I'll add more as funds arrive - got the space, the juice and a cool room... it's a no brainer....
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May 19, 2011, 01:33:18 AM
 #44

I've been running about 500 MH/s for about a month - as soon as I can convert enough bitcoin, I'll probably be doubling that with another card, hopefully in a few weeks - if bitcoin prices hold, I'll add more as funds arrive - got the space, the juice and a cool room... it's a no brainer....

Are you sure about that? We just had a huge jump in difficulty. If it continues, two weeks from now your bitcoin production for a given Mhash will be ~30% of what it was yesterday (before the increase). Even then, that value will only hold another 10 days before it falls again.
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May 19, 2011, 04:03:48 AM
 #45

I'm not sure what people were expecting.

Even after this difficulty increase, annualized ROI of slapping a new video card in an old system and sticking it on deepnet is somewhere between 500 and 650%.  Bitcoin has a very efficient and open exchange system.  I'd be surprised if mining difficulty didn't increase at a rate of 50+% every two weeks until we're down to a more reasonable ROI, not adjusted for risk, of 10-30%.  That's another 4-7 increases of 50+%, assuming bitcoin prices don't dramatically increase to compensate...in which case, it will last even longer.
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May 19, 2011, 07:57:30 AM
 #46

I'm not sure what people were expecting.

Even after this difficulty increase, annualized ROI of slapping a new video card in an old system and sticking it on deepnet is somewhere between 500 and 650%.  Bitcoin has a very efficient and open exchange system.  I'd be surprised if mining difficulty didn't increase at a rate of 50+% every two weeks until we're down to a more reasonable ROI, not adjusted for risk, of 10-30%.  That's another 4-7 increases of 50+%, assuming bitcoin prices don't dramatically increase to compensate...in which case, it will last even longer.

How about after the next one, and the one after that, etc?  Are you including the shortness of the retarget cycle into your projections?

I just picked up a bunch of capacity at the alarmingly good rate of 1.7 Mhash/sec per dollar.  I don't expect to ever get that money back.  I actually think that the magic day of no return was a couple of weeks ago.

Then again, if the exchange rate improves, which I find highly unlikely, new gear purchased today could still pay off.  Maybe.

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mouser98
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May 19, 2011, 11:52:56 AM
 #47

Double the hashing power in 3 weeks is quiet amazing is all and Im not objecting to it just curious where it all came from.

hmmm, double the hashing power in 3 weeks... cannot find 5850s anywhere....  can the two be connected?
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May 19, 2011, 03:16:38 PM
 #48

I'm not sure what people were expecting.

Even after this difficulty increase, annualized ROI of slapping a new video card in an old system and sticking it on deepnet is somewhere between 500 and 650%.  Bitcoin has a very efficient and open exchange system.  I'd be surprised if mining difficulty didn't increase at a rate of 50+% every two weeks until we're down to a more reasonable ROI, not adjusted for risk, of 10-30%.  That's another 4-7 increases of 50+%, assuming bitcoin prices don't dramatically increase to compensate...in which case, it will last even longer.

How about after the next one, and the one after that, etc?  Are you including the shortness of the retarget cycle into your projections?

I just picked up a bunch of capacity at the alarmingly good rate of 1.7 Mhash/sec per dollar.  I don't expect to ever get that money back.  I actually think that the magic day of no return was a couple of weeks ago.

Then again, if the exchange rate improves, which I find highly unlikely, new gear purchased today could still pay off.  Maybe.


Here's my rationale, and note that I specifically was talking about putting a new video card in an old system:
1.  The difficulty increase of 60%, by itself, does not mean hardware won't be profitable.
2.  If we extrapolate this difficulty increase out indefinitely, however, it does.
3.  Because of this, people are going to let off putting in new hardware, which will moderate the difficulty increases down to somewhere in the 20-40% range within a cycle or two.
4.  At that point, we will have reached a 'reasonable' return for a risky venture in the area of 10-30% annually.

I misspoke saying that they would increase at 50%+ every two weeks for some time.  I think it's more likely we'll see one, maybe two more increases at that rate, then slower, but significant increases for the foreseeable future thereafter.  That's what it will take to get bitcoin mining profitability in line with ventures of comparable risk.  However, this most recent difficulty increase should not have surprised anyone, given how much more coins cost now than they used to.
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May 20, 2011, 05:57:42 AM
 #49

Here's my rationale, and note that I specifically was talking about putting a new video card in an old system:
1.  The difficulty increase of 60%, by itself, does not mean hardware won't be profitable.
2.  If we extrapolate this difficulty increase out indefinitely, however, it does.
3.  Because of this, people are going to let off putting in new hardware, which will moderate the difficulty increases down to somewhere in the 20-40% range within a cycle or two.
4.  At that point, we will have reached a 'reasonable' return for a risky venture in the area of 10-30% annually.

I misspoke saying that they would increase at 50%+ every two weeks for some time.  I think it's more likely we'll see one, maybe two more increases at that rate, then slower, but significant increases for the foreseeable future thereafter.  That's what it will take to get bitcoin mining profitability in line with ventures of comparable risk.  However, this most recent difficulty increase should not have surprised anyone, given how much more coins cost now than they used to.

This is exactly what I think will happen as well eventually. However, with the current crop of miners, I predict that difficulty increases will level of way before we reach the level of 10-30% annual returns, because many are in it for a quick buck, and don't realize that something like 30% ROI annually is actually a pretty damn good investment. But like you said, difficulty has still a lot of room to grow before we reach that point.

At some point in far future mining will be saturated with miners who are in it for a long haul, driving the profitable hash/W ratio higher and higher. There may come time, when FPGA/ASIC miners are the only game in town.. Not for a while though.
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