Mining difficulty rate!!

[anisoptera]

This is great for us. Seriously.

As the bitcoin economy grows, the value contained in it rises - we see this in the exchange rate.

The high exchange rate pushes people to mine. More miners means the computer power securing the network is larger. We see this in the difficulty rate.

The strength of the network should rise proportionally to the value contained in it. And this is proving to be the case.

In general the exchange rate and difficulty rise should provide for the same amount of value produced from mining, even if the numbers are smaller.

[Chucksta]

Yeah, you said it comrade. Keep the red flag flying high 

Hey, so I'm a capitalist communist? Cool!

Hmm, didn't think of that.. the Chinese have proven that combination seriously rocks

[fasti]

Many people might just stop getting more after getting that 1-2 gpu upgrade for their ~gaming pc.

[Freakin]

Many people might just stop getting more after getting that 1-2 gpu upgrade for their ~gaming pc.

And others will continue to jump on board and do the same 1-2GPU upgrade for their gaming rig.  Still others will build high powered dedicated mining rigs and not realize until a month from now that they'll never pay them off.

[DarkKnightNomeD]

I have some questions, basically whats causing the EXPLOSION of difficulty?

is someone with a couple of million dollars blow, mining bitcoins???

second, basically, whats causing the value of bitcoin to go up?

as a noob to all of this, i would assume the value would go up with difficulty

[rezin777]

I have some questions, basically whats causing the EXPLOSION of difficulty?

Lagged reaction to high exchange rate. When Bitcoin hit USD 7+ it was insanely profitable to mine.

second, basically, whats causing the value of bitcoin to go up?

as a noob to all of this, i would assume the value would go up with difficulty

The value goes up because people value it, that simple. Whether it's a long term investment, or short term speculation, it's hard to say.

Price drives difficulty, not vice-versa. Demand creates supply. Supply does not create demand.

[SgtSpike]

I have some questions, basically whats causing the EXPLOSION of difficulty?

is someone with a couple of million dollars blow, mining bitcoins???

second, basically, whats causing the value of bitcoin to go up?

as a noob to all of this, i would assume the value would go up with difficulty

The cause?  A huge influx of people buying up video cards in hopes of making a fortune with bitcoins.  There is lag time involved in getting video cards up and running, so people who bought two weeks ago are still setting up their new systems, etc.

[smooth]

Price drives difficulty, not vice-versa. Demand creates supply. Supply does not create demand.

Neither demand creates supply nor does supply create demand.  Higher demand raises price, lower supply also raises price, etc.

What people don't understand is that increasing difficulty doesn't decrease supply because supply is fixed (300/hour), at least over a long enough time period for difficulty to adjust.   In the short term there are fluctuations in the block rate.

[Gameover]

if everyone sells their cards difficulty may go down if I understand the process correctly.

Correct, but why would you expect everyone to sell their cards?

I am only referring to the cards that were specifically bought for mining, what are you going to do with 4, 8, or 30 graphics cards?  Selling them is the best option.

LOL, yeah, I was trying to be a bit optimistic. I've still got £200 pounds to go before my rigs are fully paid for, and am making £40 to £50 per day (1 BTC = $7, that is)... so I should get my money back before the profitable mining runs out..... pray

So you are only 5 days out at the current difficulty, and 7-8 days out after the difficulty bump in a 2 days, you will definitely pay for your rig.  The more interesting question is was it worth it?  Only the future value of bitcoin can decide that, and since your return is based on the value of bitcoin increasing you probably should have simply bought bitcoins?  You will have roughly 10-15 days of profit at half of current profit levels (due to difficulty increases).  Beyond that if bitcoin value doesn't increase profits will be minimal and bitcoin will quickly merge to a value of electricity or below since there are many people who get their electricity in offices and apts for free.

[Gameover]

The cause?  A huge influx of people buying up video cards in hopes of making a fortune with bitcoins.  There is lag time involved in getting video cards up and running, so people who bought two weeks ago are still setting up their new systems, etc.

Is there any data to back this up?  I find it more likely the huge increases are being caused by hoards of new miners with unused GPUs rather than dedicated miners buying many cards.  If you have 1000 dedicated miners buying 4 cards each that is 4000.  On the other side of the coin news of bitcoin in the media reaches millions of people, if only a fraction of those mine that is going to blow by the 1000 dedicated people upgrading very quickly, and it has the exponential effect, they tell N friends, those friends tell N friends and so on, that's how things increase exponentially.  If it were mainly people upgrading the increase would be much more linear or flat.  Of course the real world sees increases from both groups, but the explosion part is from new people, not upgrades.

[DarkKnightNomeD]

i have another question, who out there right now, is the top person telling people about bitcoins on radio station networks and on TV Media

and do you think that pooled mining will ultimately be the end game for bitcoin mining after the difficulty gets to a certian xxxxxxxx difficulty?

[rezin777]

Price drives difficulty, not vice-versa. Demand creates supply. Supply does not create demand.

Neither demand creates supply nor does supply create demand.  Higher demand raises price, lower supply also raises price, etc.

What people don't understand is that increasing difficulty doesn't decrease supply because supply is fixed (300/hour), at least over a long enough time period for difficulty to adjust.   In the short term there are fluctuations in the block rate.

I should have been more specific, I didn't think it was necessary. Demand sets price ceiling, supply sets price floor. But this isn't exact, people can lose money. Yes, with Bitcoin the supply attempts to be fixed, but without demand, the coins are worthless.

What we have with Bitcoin is people competing to grab that limited supply. The only reason for competition would be a healthy demand for Bitcoins.

[rezin777]

i have another question, who out there right now, is the top person telling people about bitcoins on radio station networks and on TV Media

and do you think that pooled mining will ultimately be the end game for bitcoin mining after the difficulty gets to a certian xxxxxxxx difficulty?

Who knows? Many people are promoting Bitcoin.

Pooled mining only reduces variance. If a pool is charging a fee, and you have enough hashing power to mine solo, you will make more coins solo in the long run. At some point it becomes pointless to mine solo, because the difficulty will increase before you are likely to find the next block.

[SgtSpike]

The cause?  A huge influx of people buying up video cards in hopes of making a fortune with bitcoins.  There is lag time involved in getting video cards up and running, so people who bought two weeks ago are still setting up their new systems, etc.

Is there any data to back this up?  I find it more likely the huge increases are being caused by hoards of new miners with unused GPUs rather than dedicated miners buying many cards.  If you have 1000 dedicated miners buying 4 cards each that is 4000.  On the other side of the coin news of bitcoin in the media reaches millions of people, if only a fraction of those mine that is going to blow by the 1000 dedicated people upgrading very quickly, and it has the exponential effect, they tell N friends, those friends tell N friends and so on, that's how things increase exponentially.  If it were mainly people upgrading the increase would be much more linear or flat.  Of course the real world sees increases from both groups, but the explosion part is from new people, not upgrades.

*shrug*

I think the sudden out-of-stock status of many popular mining video cards indicates a good deal more than normal buyers are out there.  I'm certain it is both a combination of new miners using existing hardware and existing miners using new hardware, but there's definitely a LOT of video card buying going on out there.

Heck, between myself and 4 friends who got interested in bitcoins, we've bought 10 video cards.

[Gameover]

What we have with Bitcoin is people competing to grab that limited supply. The only reason for competition would be a healthy demand for Bitcoins.

Not necessarily healthy demand, hoarding is unhealthy demand, because once all coins are hoarded there is nothing more to hoard and the bottom falls out.

[Chucksta]

i have another question, who out there right now, is the top person telling people about bitcoins on radio station networks and on TV Media

and do you think that pooled mining will ultimately be the end game for bitcoin mining after the difficulty gets to a certian xxxxxxxx difficulty?

Simple word of mouth is more than enough to pull in soo many miners that it will not be long before it costs more to run your rigs than your are earning from them. I'm afraid I am a good example. As soon as I found out about this, a couple of months ago, I told just about everybody I know. Most didn't bother with it, but some did. And one of those has just configured all the computers in the labs at the University where he works to run as miners overnight !!!

Just imagine the people he knows (other Universities), and if they act on this. No overheads to pay, and a shed load of hardware !!!

[Gameover]

i have another question, who out there right now, is the top person telling people about bitcoins on radio station networks and on TV Media

and do you think that pooled mining will ultimately be the end game for bitcoin mining after the difficulty gets to a certian xxxxxxxx difficulty?

Simple word of mouth is more than enough to pull in soo many miners that it will not be long before it costs more to run your rigs than your are earning from them. I'm afraid I am a good example. As soon as I found out about this, a couple of months ago, I told just about everybody I know. Most didn't bother with it, but some did. And one of those has just configured all the computers in the labs at the University where he works to run as miners overnight !!!

Just imagine the people he knows (other Universities), and if they act on this. No overheads to pay, and a shed load of hardware !!!

this is true but it isn't feasible long term, as soon as that computer lab sees their power bill go up by 500% you bet your ass that student is going to get caught, they have surveillance most likely.

[carp]

i have another question, who out there right now, is the top person telling people about bitcoins on radio station networks and on TV Media

and do you think that pooled mining will ultimately be the end game for bitcoin mining after the difficulty gets to a certian xxxxxxxx difficulty?

Simple word of mouth is more than enough to pull in soo many miners that it will not be long before it costs more to run your rigs than your are earning from them. I'm afraid I am a good example. As soon as I found out about this, a couple of months ago, I told just about everybody I know. Most didn't bother with it, but some did. And one of those has just configured all the computers in the labs at the University where he works to run as miners overnight !!!

Just imagine the people he knows (other Universities), and if they act on this. No overheads to pay, and a shed load of hardware !!!

I bet you or he think this is a really original idea. I worked as an admin at a University, where some idiot tried to run "seti @home" on the main computational server. We caught him, and when he did it again, sent him in for disciplinary action. The lab computers are for everyones use and chewing up their resources will get noticed.

By the time he did it with Seti @Home, it wasn't original. I saw a friend of mine (dating myself here) get caught trying it with... deschall (http://www.interhack.net/projects/deschall/what.html) .

[Chucksta]

this is true but it isn't feasible long term, as soon as that computer lab sees their power bill go up by 500% you bet your ass that student is going to get caught, they have surveillance most likely.

LOL, yeah, very true.

He's part of the tech support team. No way a student could do that. There's no access to most of the labs after a certain time. I believe one is available for students out of hours, but they must use their ID/access card to enter.

I bet you or he think this is a really original idea. I worked as an admin at a University, where some idiot tried to run "seti @home" on the main computational server. We caught him, and when he did it again, sent him in for disciplinary action. The lab computers are for everyones use and chewing up their resources will get noticed.

By the time he did it with Seti @Home, it wasn't original. I saw a friend of mine (dating myself here) get caught trying it with... deschall (http://www.interhack.net/projects/deschall/what.html) .

Who cares about originality. The only thing that matters is that it works

[BurtW]

Check out the latest numbers:

Network: 6.996 Thashs/s !!

Current difficulty:  434,883

Next difficulty in 2010 blocks:  1,102,949 !!

Also the largest growth was in the "other" category (not any one coop).  In fact deepbit is now less than 25% and could be as low a 20%!

Sources:  http://bitcoincharts.com/markets/ and http://bitcoinwatch.com/

Wild, check out this chart: http://bitcoin.sipa.be/speed-lin-10k.png