The difficulty HAS BEEN REDUCED!!!!

[davejh]

It might be a tiny reduction, but I think that the start of a new era is now becoming more obvius. We kept seing mining becoming more centralised, mining at home kept becoming harder while the difficulty was constanly rising and the price was around 350. I believe that this reduction was caused by home miner being pulled off the wall because of not being profitable anymore.

It's possible that there was a genuine reduction in capacity, but with this small a difficulty change it's also pretty likely that it's just a result of statistical variances and we have no real way of knowing whether the network is expanding or contracting. In a network where there's no actual change in capacity, variances of +/-5% are pretty likely: http://hashingit.com/analysis/28-reach-for-the-ear-defenders

Indeed it is, but mining used to be an arms race. The total network hashrate was constantly increasing for more than a year until this point.

It's still an arms race, but the slowdown in hash rate expansion was predictable (I did predict it :-)) once everyone was running close to state-of-the-art hardware with low supplier margins and energy costs had been reduced as far as possible. Things can still move with a technology shift (such as when 16nm ASICs or more power efficient 28nm/20nm devices come online) or if the BTC price increases though. The hash rate will ultimately absorb every optimisation possible!

[RD965]

It might be a tiny reduction, but I think that the start of a new era is now becoming more obvius. We kept seing mining becoming more centralised, mining at home kept becoming harder while the difficulty was constanly rising and the price was around 350. I believe that this reduction was caused by home miner being pulled off the wall because of not being profitable anymore.

It's possible that there was a genuine reduction in capacity, but with this small a difficulty change it's also pretty likely that it's just a result of statistical variances and we have no real way of knowing whether the network is expanding or contracting. In a network where there's no actual change in capacity, variances of +/-5% are pretty likely: http://hashingit.com/analysis/28-reach-for-the-ear-defenders

Indeed it is, but mining used to be an arms race. The total network hashrate was constantly increasing for more than a year until this point.

It's still an arms race, but the slowdown in hash rate expansion was predictable (I did predict it :-)) once everyone was running close to state-of-the-art hardware with low supplier margins and energy costs had been reduced as far as possible. Things can still move with a technology shift (such as when 16nm ASICs or more power efficient 28nm/20nm devices come online) or if the BTC price increases though. The hash rate will ultimately absorb every optimisation possible!

Respect to the price, everybody is calling the bottom both for BTC and LTC, so mine, hold and wait for the train to leave the station 

[johny08]

It might be a tiny reduction, but I think that the start of a new era is now becoming more obvius. We kept seing mining becoming more centralised, mining at home kept becoming harder while the difficulty was constanly rising and the price was around 350. I believe that this reduction was caused by home miner being pulled off the wall because of not being profitable anymore.

It's possible that there was a genuine reduction in capacity, but with this small a difficulty change it's also pretty likely that it's just a result of statistical variances and we have no real way of knowing whether the network is expanding or contracting. In a network where there's no actual change in capacity, variances of +/-5% are pretty likely: http://hashingit.com/analysis/28-reach-for-the-ear-defenders

Indeed it is, but mining used to be an arms race. The total network hashrate was constantly increasing for more than a year until this point.

It's still an arms race, but the slowdown in hash rate expansion was predictable (I did predict it :-)) once everyone was running close to state-of-the-art hardware with low supplier margins and energy costs had been reduced as far as possible. Things can still move with a technology shift (such as when 16nm ASICs or more power efficient 28nm/20nm devices come online) or if the BTC price increases though. The hash rate will ultimately absorb every optimisation possible!

Respect to the price, everybody is calling the bottom both for BTC and LTC, so mine, hold and wait for the train to leave the station 

Haha. No. Mining will ne cheaper by factor 5x so the bitcoinprice will fell, before the hashrate unfold 5x. I would not either hold until 2017 halving. Not 100%. Maybe speculate with 5%

[RD965]

It might be a tiny reduction, but I think that the start of a new era is now becoming more obvius. We kept seing mining becoming more centralised, mining at home kept becoming harder while the difficulty was constanly rising and the price was around 350. I believe that this reduction was caused by home miner being pulled off the wall because of not being profitable anymore.

It's possible that there was a genuine reduction in capacity, but with this small a difficulty change it's also pretty likely that it's just a result of statistical variances and we have no real way of knowing whether the network is expanding or contracting. In a network where there's no actual change in capacity, variances of +/-5% are pretty likely: http://hashingit.com/analysis/28-reach-for-the-ear-defenders

Indeed it is, but mining used to be an arms race. The total network hashrate was constantly increasing for more than a year until this point.

It's still an arms race, but the slowdown in hash rate expansion was predictable (I did predict it :-)) once everyone was running close to state-of-the-art hardware with low supplier margins and energy costs had been reduced as far as possible. Things can still move with a technology shift (such as when 16nm ASICs or more power efficient 28nm/20nm devices come online) or if the BTC price increases though. The hash rate will ultimately absorb every optimisation possible!

Respect to the price, everybody is calling the bottom both for BTC and LTC, so mine, hold and wait for the train to leave the station 

Haha. No. Mining will ne cheaper by factor 5x so the bitcoinprice will fell, before the hashrate unfold 5x. I would not either hold until 2017 halving. Not 100%. Maybe speculate with 5%

Theres still just 21m coins dude noone is talking short term here

[SMB-2525]

It's still an arms race, but the slowdown in hash rate expansion was predictable (I did predict it :-)) once everyone was running close to state-of-the-art hardware with low supplier margins and energy costs had been reduced as far as possible. Things can still move with a technology shift (such as when 16nm ASICs or more power efficient 28nm/20nm devices come online) or if the BTC price increases though. The hash rate will ultimately absorb every optimisation possible!

The issue with the arms race metaphor is this is a profit and loss business.

Everybody experiences equipment dropout over time due to breakage. There is a difficulty level at which it is no longer economic to replace the equipment that wears out. Especially after the next halving. After the halving, I would expect a slow decrease in difficulty to a new normal.

There is now huge uncertainty in future difficulty increases.

The big players are facing huge uncertainty in their investment decisions.

I suspect what will happen is, if difficulty stays flat for a few increases, there will be another round of investment putting us back on the upward trajectory. If it even starts increasing at 5%, the investment decisions get much harder at this BTC price.

[btckold24]

almost everyone I know has taken their s1-s3s offline in california as the electricity is to much especially when btc price is at less than 400$  - If it went down about 20% I think some people may turn it back on but this was just a small one.

[Kprawn]

Well I see no difference, but as I always say... A reduction is better than a increase. 

It just shows me, everything is working like clockwork!

[Furio]

Well I see no difference, but as I always say... A reduction is better than a increase. 

It just shows me, everything is working like clockwork!

What I don't understand, the people selling their HW, is someone taking them to the shredder? Because you have alot of countries wheere power is next to free, so the old mining HW can still be efficient in other places, so why isn't anyone exploiting this?

[mudiko]

i think it will not go down a lot and start rising fast

[sherbyspark]

Well I see no difference, but as I always say... A reduction is better than a increase. 

It just shows me, everything is working like clockwork!

What I don't understand, the people selling their HW, is someone taking them to the shredder? Because you have alot of countries wheere power is next to free, so the old mining HW can still be efficient in other places, so why isn't anyone exploiting this?

People staying in the states, might find it not worth to ship or go start their mining operation in countries, where mining is profitable, due to very low power prices.

[RD965]

i think it will not go down a lot and start rising fast

You really are a clever being 

[gkv9]

Does negative difficulty indicate that there is a slight reduction in the amount of total miners?

[RD965]

Does negative difficulty indicate that there is a slight reduction in the amount of total miners?

"Slight" not exactly, a farm shut or so, but yes youre on the right track 

[gkv9]

Does negative difficulty indicate that there is a slight reduction in the amount of total miners?

"Slight" not exactly, a farm shut or so, but yes youre on the right track 

Was awaiting from minutes for this answer, thanks for the same though...

[davejh]

Does negative difficulty indicate that there is a slight reduction in the amount of total miners?

It's not quite that simple - it might mean that, but it's equally possible that the previous estimates of the global hash rate were too high and the new ones are more realistic. Hash rate measurements aren't precise - they're inferred and there's enough noise in the results to make it very unclear about what's really happening:

http://hashingit.com/analysis/27-hash-rate-headaches
http://hashingit.com/analysis/28-reach-for-the-ear-defenders
http://hashingit.com/analysis/30-finding-2016-blocks

Even if hash rates are falling it's more likely to be that older equipment that fails isn't being replaced rather than large scale infrastructure being shut down.

[TracerX]

Does negative difficulty indicate that there is a slight reduction in the amount of total miners?

It's not quite that simple - it might mean that, but it's equally possible that the previous estimates of the global hash rate were too high and the new ones are more realistic. Hash rate measurements aren't precise - they're inferred and there's enough noise in the results to make it very unclear about what's really happening:

http://hashingit.com/analysis/27-hash-rate-headaches
http://hashingit.com/analysis/28-reach-for-the-ear-defenders
http://hashingit.com/analysis/30-finding-2016-blocks

Even if hash rates are falling it's more likely to be that older equipment that fails isn't being replaced rather than large scale infrastructure being shut down.

I bookmarked your site, Dave--I appreciate your insights.

[abyrnes81]

Interesting thing , but  I don't think this is the first time that the diff. has been reduced ? Or am I wrong ?

[TracerX]

Interesting thing , but  I don't think this is the first time that the diff. has been reduced ? Or am I wrong ?

You are correct, but it's the first time we've seen a decrease in almost two years.

[FlyForFun]

Hopefully the difficulty will last few more months. I am sick of seeing the difficulty halt for 2 weeks and jump even more then the last month added up.

[TracerX]

Hopefully the difficulty will last few more months. I am sick of seeing the difficulty halt for 2 weeks and jump even more then the last month added up.

It looks like it may remain low, or even decrease again in seven days.  That said, there's no telling when a new mine will come online.