Mining difficulty rate!!

[vuce]

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

those numbers are wrong.

[BurtW]

Are you saying the sipa chart is wrong?  What is wrong with the numbers?  They are all from reputable sources AFAIK.

[Nythain]

Are you saying the sipa chart is wrong?  What is wrong with the numbers?  They are all from reputable sources AFAIK.

Its too soon after the difficulty adjustment. All calculations are averages and there's not enough to deal with for accurate numbers right now. Wait about 24 hours or a couple hundred blocks and you will see much more accurate numbers for network hashrates and estimated next difficulty.

[kjj]

Notice how there are wild swings in the 1 day estimate after the difficulty increases?  Basically, those aren't real.  They show up because the estimation formula doesn't have enough data to smooth out short term variance.

[allinvain]

Difficulty is slowly but surely catching up to price. Makes me wonder if we're going to see another rally in price. This is not to say that the two are related but just maybe new people will come on board and drive up the price up again...we shall see.

[BurtW]

Notice how there are wild swings in the 1 day estimate after the difficulty increases?  Basically, those aren't real.  They show up because the estimation formula doesn't have enough data to smooth out short term variance.

Thanks for the clarification.  The point still remains that the Thashs/s and difficulty are going up exponentially and the dwindling supply of video cards seems to be the only thing that will slow down the growth rate short term.

[Dobrodav]

Network total estimated from dificulty. It relays on assumation, that interval between blocks are 600 sec.
But remember, when you last time seen rate of 6 block per hour ?
Pools report their actual total. So, difficulty grows - network total hops to reflect that grow (and again, that is shown lower than it is), deepbit ans Slushi pools are the same, other - huge up.

[xenon481]

Are you saying the sipa chart is wrong?  What is wrong with the numbers?  They are all from reputable sources AFAIK.

The Sipa chart is correct; the BitcoinCharts numbers are always incorrect immediately after a difficulty change.

Notice that the Sipa chart says ~4THash/s while BitcoinCharts says ~7THash/s.

[BurtW]

... interval between blocks are 600 sec. But remember, when you last time seen rate of 6 block per hour? ...

This brings up a question I have been wondering about for a while.  Since the system is targeting an average of 6 blocks per hour and we have seen about double that for a while wouldn't is stand to reason that the difficulty will eventually have to be such as to bring the production down below 6 per hour in order to maintain an average 6?  Is this part of the algrorithm?

[TurboK]

At this rate, it's getting impossible for single card users to make more than a couple dozen bucks with 24/7 mining. I'm down to 0.8 btc or so a day with my 380mhash/s 6950. Which means I will just about make 10btc by the next difficulty increase - that's ~80$ IF the prices stay well above 8$ (which I doubt since they are peaking right now).

By the next difficulty increase, mining won't be profitable anymore with midrange cards, and will only make a little money with high end ones. If the difficulty increase keeps up, systems with 3-4 5870s won't make a btc a day by the end of the july.

[smooth]

At this rate, it's getting impossible for single card users to make more than a couple dozen bucks with 24/7 mining. I'm down to 0.8 btc or so a day with my 380mhash/s 6950. Which means I will just about make 10btc by the next difficulty increase - that's ~80$ IF the prices stay well above 8$ (which I doubt since they are peaking right now).

By the next difficulty increase, mining won't be profitable anymore with midrange cards, and will only make a little money with high end ones. If the difficulty increase keeps up, systems with 3-4 5870s won't make a btc a day by the end of the july.

You are only looking at part of the equation.  Price is also increasing.  Last year it took 10,000 BTC to buy a pizza.

The BTC you can mine in a day are actually worth more $ than before, despite the difficulty increases.  

http://forum.bitcoin.org/index.php?topic=7427.0

At some point there will be an issue of electricity costs, but we aren't there yet, and many people don't pay for electricity or have very low rates.

If you are smart and efficient you can make as much money mining as almost any time since December.  Note that money made by mining and then holding the BTC while their value increased does not count as mining profit.

[xenon481]

You are only looking at part of the equation.  Price is also increasing.  Last year it took 10,000 BTC to buy a pizza.

And when price is increasing, it is more profitable to purchase BTC than it is to purchase hardware for mining. If you have existing hardware, the decision comes down to whether or not the electricity cost is lower than the value earned mining. And if you have excess hardware, it might be more profitable to sell the excess hardware to purchase BTC.

[smooth]

You are only looking at part of the equation.  Price is also increasing.  Last year it took 10,000 BTC to buy a pizza.

And when price is increasing, it is more profitable to purchase BTC than it is to purchase hardware for mining. If you have existing hardware, the decision comes down to whether or not the electricity cost is lower than the value earned mining. And if you have excess hardware, it might be more profitable to sell the excess hardware to purchase BTC.

Sorry, let me restate that more clearly:

"Price has also increased."

So the ratio between price and difficulty really has not changed much since December and in fact is higher than average.  Saying that it doesn't make sense to mine any more because the difficulty has gone up so much is wrong given that the price has gone up even more.

This does not mean that you should (or should not) buy mining hardware. 

It also does not mean prices are (or are not) going to increase in the future.

[TurboK]

You are only looking at part of the equation.  Price is also increasing.  Last year it took 10,000 BTC to buy a pizza.

The BTC you can mine in a day are actually worth more $ than before, despite the difficulty increases.  

http://forum.bitcoin.org/index.php?topic=7427.0

At some point there will be an issue of electricity costs, but we aren't there yet, and many people don't pay for electricity or have very low rates.

If you are smart and efficient you can make as much money mining as almost any time since December.  Note that money made by mining and then holding the BTC while their value increased does not count as mining profit.

I was talking about the last few weeks, not last year. Difficulty quadripled, while price has stayed in the 6-9$ range. If the current difficulty increase keeps up, then in a month, single card users won't make a large enough quantity of btc for it to be worth bothering. And by the end of summer, electricity costs won't be covered either.

Of course, this won't be the case if price shoots up from 9$ to 30$, but it has been stagnating for quite a while now, so I find that a little unlikely.

[swerving]

I'm personally worried that the BTC will see some downward pressure as difficulty increases. This is just speculation so take it with a grain of salt, but I'm sure that there are more than a few miners that will sell all their bitcoins they've accumulated as soon as it becomes unprofitable to mine.

Hopefully if this happens it will just be temporary dips, though.

[smooth]

I was talking about the last few weeks, not last year. Difficulty quadripled, while price has stayed in the 6-9$ range.

Yes, but that was after a huge increase in price without a huge increase in difficulty.

Look at the graphs I linked.   There is nothing unusual about the relationship between difficulty and price right now.

If the current difficulty increase keeps up, then in a month, single card users won't make a large enough quantity of btc for it to be worth bothering. And by the end of summer, electricity costs won't be covered either.

Only if price doesn't increase.   Historically, the relationship between price and difficulty has tended to stay in a fairly narrow range, which suggests either price will increase along with difficulty or difficulty won't increase that much.

[rezin777]

Difficulty quadripled, while price has stayed in the 6-9$ range.

Difficulty lags behind price. Here is what caused the difficulty quadrupling.



When mining suddenly becomes insanely profitable, like it did then, it takes time for new hardware to hit the network (whether it be from newcomers seeing the amount of money to be made, or previous miners seeing the amount of money to be made). You don't just see the price go nuts, then turn on the extra 10 gpus you had sitting around doing nothing. You have to buy, wait for for shipping, assemble, configure, etc. And if you are a new miner, that takes even longer (because you have to post threads asking why your shit doesn't work). Then you have the people that hear from their friends that they are making "money for nothing" and they join in as well. Until eventually mining isn't insanely profitable anymore, it's merely profitable for those who are efficient, those who don't know/care if they are losing money, or those who don't pay for their hardware/electricity.

I assume, if the price jumps again, there will be even more crazy difficulty jumps and the old miners will see these posts pop up again from all the new miners. And if the price does jump again, we won't see all the "mining, does it worth it?" threads for a few weeks because they lag behind the price as well!

[smooth]

When mining suddenly becomes insanely profitable, like it did then, it takes time for new hardware to hit the network (whether it be from newcomers seeing the amount of money to be made, or previous miners seeing the amount of money to be made). You don't just see the price go nuts, then turn on the extra 10 gpus you had sitting around doing nothing. You have to buy, wait for for shipping, assemble, configure, etc. And if you are a new miner, that takes even longer (because you have to post threads asking why your shit doesn't work). Then you have the people that hear from their friends that they are making "money for nothing" and they join in as well.

Even then, it still takes some time for difficulty to catch up because of how the difficulty-calculating algorithm works.

all the "mining, does it worth it?" threads

LOL

[rezin777]

Even then, it still takes some time for difficulty to catch up because of how the difficulty-calculating algorithm works.

Good point.

To show this in effect, notice that we just had a difficulty increase, yet we are still finding blocks faster than 6 per hour. (We are at around 10-11 per hour.)

The difficulty adjusted to the average of the last period, but by the end of the period, we were above the average.

[JJG]

Even then, it still takes some time for difficulty to catch up because of how the difficulty-calculating algorithm works.

Good point.

To show this in effect, notice that we just had a difficulty increase, yet we are still finding blocks faster than 6 per hour. (We are at around 10-11 per hour.)

The difficulty adjusted to the average of the last period, but by the end of the period, we were above the average.

A good indicator that the difficulty increases won't be slowing down much, if at all, for the next round at least.