Difficulty Lowering Question

[redhawk979]

Question: If the price of Bitcoin doesn't rise, and large miners begin to turn off their equipment, do we face a "Frisbee on the Roof" scenario where it takes an extraordinarily long time for blocks to be found and the difficulty to retarget lower?

[MicroGuy]

Question: If the price of Bitcoin doesn't rise, and large miners begin to turn off their equipment, do we face a "Frisbee on the Roof" scenario where it takes an extraordinarily long time for blocks to be found and the difficulty to retarget lower?

I think the retarget will be fast enough to make the adjustment without any problems.

[franky1]

large miners wont just give up... it will be the small hobbyists that turn off first.

large miners want bitcoin and use FIAT to buy rigs and pay electric and then hoard coins. yet its the small hobbyists that care about the bitcoin price because they have to sell coins to recoup losses. to be honest i enjoy seeing these stupid hobbyists turn their rigs off.. after all they are not investing in bitcoin. they are selling coins to invest their freshly received fiat into electric companies.

mining is not suppose to be quick mining to fuel a FIAT lifestyle. it suppose to be a way for people that want bitcoin to accumulate bitcoin. and those that want to accumulate bitcoin do not care about the price, as they know and are planning on the long term. and not caring about the daily/weekly costs

[redhawk979]

large miners wont just give up... it will be the small hobbyists that turn off first.

large miners want bitcoin and use FIAT to buy rigs and pay electric and then hoard coins. yet its the small hobbyists that care about the bitcoin price because they have to sell coins to recoup losses. to be honest i enjoy seeing these stupid hobbyists turn their rigs off.. after all they are not investing in bitcoin. they are selling coins to invest their freshly received fiat into electric companies.

mining is not suppose to be quick mining to fuel a FIAT lifestyle. it suppose to be a way for people that want bitcoin to accumulate bitcoin. and those that want to accumulate bitcoin do not care about the price, as they know and are planning on the long term. and not caring about the daily/weekly costs

Wouldn't the larger miners give up first if they are bleeding tons of money to electrical costs and not recouping them due to the low BTC price? I thought something just happened with a chinese farm offering thousands of Antminers for sale.

[coingamblingreviews]

Too many hobbyist miners for that!

[rz20]

No. Difficulty will addapt according to the mining power and miners won't stop mining because their investment.

[franky1]

Wouldn't the larger miners give up first if they are bleeding tons of money to electrical costs and not recouping them due to the low BTC price? I thought something just happened with a chinese farm offering thousands of Antminers for sale.

large miners mindset.

"i have $20million upfront beforehand.... and i want 28,000 coins, ill spend $10mill on rigs and $10mill on electric."
no matter what the price of bitcoin is. the cost of rigs/electric stays the same, the price of bitcoin is irrelevant because they never sell bitcoin

hobby miners
"i have $10k and i want $12k in 3 months"
they spend $10k on rigs. and then have to cash out the bitcoin to pay for electric bills each week/month, meaning they are not 100% hoarders and are going paste their 3 month deadlines due to changes in difficulty. thus they never reach ROI die to selling coins.

the smart miners are those that waste their fiat investments first off in electric and rigs. and then simply keep 100% of the bitcoin mined.

after all if your not keeping the bitcoin your mining.. then why the hell are you mining!..

[exoton]

Wouldn't the larger miners give up first if they are bleeding tons of money to electrical costs and not recouping them due to the low BTC price? I thought something just happened with a chinese farm offering thousands of Antminers for sale.

large miners mindset.

"i have $20million upfront beforehand.... and i want 28,000 coins, ill spend $10mill on rigs and $10mill on electric."
no matter what the price of bitcoin is. the cost of rigs/electric stays the same, the price of bitcoin is irrelevant because they never sell bitcoin

hobby miners
"i have $10k and i want $12k in 3 months"
they spend $10k on rigs. and then have to cash out the bitcoin to pay for electric bills each week/month, meaning they are not 100% hoarders and are going paste their 3 month deadlines due to changes in difficulty. thus they never reach ROI die to selling coins.

the smart miners are those that waste their fiat investments first off in electric and rigs. and then simply keep 100% of the bitcoin mined.

after all if your not keeping the bitcoin your mining.. then why the hell are you mining!..

You have this backwards. The "hobby" miners are less likely going to be monitoring electric costs and the price of bitcoin closely enough so that they know right away when costs of mining exceed the value of the bitcoin they are mining.

Large mining farms are going to be monitoring the price of bitcoin and the cost of mining (electricity) very closely. If their goal is to acquire a large amount of bitcoin then they will attempt to do so in the most efficient manner possible. This means they make an initial investment in miners in order to buy bitcoin at a discount (via their electric bill) in the future, however if they both want to acquire additional bitcoin and the cost to mine bitcoin exceeds the value of the bitcoin they are acquiring via mining they will simply buy additional bitcoin via an exchange at a similar rate they would be mining and turn off their miners. To continue to mine at a loss is not economically rational

[Oscilson]

Hobbyist does not care about electricity cost as it is hobby and hobby costs money any way.

[franky1]

hobbyists are those small household guys that are not investors..

basically they are more likely LIVING off of the proceeds of bitcoin and need to cash out to pay bills and live. and also cash out to upgrade rigs. thus they are ALWAYS worrying about the prices.

we see it every day, the small hobbyests posting on this very forum how they gave up mining because its too expensive. shouting out that POW has failed and has out priced average man from mining..
YET we still see the large mining farms expanding and gaining atleast 20-30% of the hash power share.

i agree that the large investors throwing in large amounts of fiat decide to either invest it in a mining farm company or buying directly on exchanges dependent on price. but the mining farms themselves do not care about the bitcoin price. as they are not cashing out bitcoin to pay electric. they are using the FIAT income from large investors for that and thus hoarding the bitcoin for themselves or handing percentages back to investors.

but if you want to ignore all the posts from people crying that they had to give up their hobby due to large farms.. go ahead
if you want to ignore the posts of people crying because bitcoin is becoming less decentralised because large farms are increasing hash power.. go ahead

the only time hobbyists dont care about electricity prices are when they are moving over to altcoins and playing the pump and dumbs to keep profitability high, but that has nothing to do with bitcoin difficulty. thats a discussion for the altcoin section

[exoton]

hobbyists are those small household guys that are not investors..

basically they are more likely LIVING off of the proceeds of bitcoin and need to cash out to pay bills and live. and also cash out to upgrade rigs. thus they are ALWAYS worrying about the prices.

we see it every day, the small hobbyests posting on this very forum how they gave up mining because its too expensive. shouting out that POW has failed and has out priced average man from mining..
YET we still see the large mining farms expanding and gaining atleast 20-30% of the hash power share.

i agree that the large investors throwing in large amounts of fiat decide to either invest it in a mining farm company or buying directly on exchanges dependent on price. but the mining farms themselves do not care about the bitcoin price. as they are not cashing out bitcoin to pay electric. they are using the FIAT income from large investors for that and thus hoarding the bitcoin for themselves or handing percentages back to investors.

but if you want to ignore all the posts from people crying that they had to give up their hobby due to large farms.. go ahead
if you want to ignore the posts of people crying because bitcoin is becoming less decentralised because large farms are increasing hash power.. go ahead

the only time hobbyists dont care about electricity prices are when they are moving over to altcoins and playing the pump and dumbs to keep profitability high, but that has nothing to do with bitcoin difficulty. thats a discussion for the altcoin section

Again you still have it backwards. hobbiests likely are not going to invest enough money in their miners for them to potentially be able to make a living off of mining. Once they realize that they are mining less then it costs in electricity they will stop mining, but it will generally take a month or two for them to realize this.

A mining farm will closely monitor the difficulty, price of electricity and price of bitcoin and will stop mining once it becomes uneconomical to continue to mine.

Once someone has been made aware of the fact that that it costs more to pay for electricity then the value of the bitcoin they are earning it will be irrational for them to continue to mine unless they are wanting to gamble that they will have more then 100% luck

[Meuh6879]

Link for the OP and others readers : https://bitcoinwisdom.com/bitcoin/difficulty

Code:

Dec 17 2014 	39,457,671,307 	-1.37% 	282,449,013 GH/s
Dec 02 2014 	40,007,470,271 	-0.73% 	286,384,627 GH/s
Nov 18 2014 	40,300,030,328 	1.76% 	288,478,854 GH/s
Nov 05 2014 	39,603,666,252 	10.05% 	283,494,086 GH/s

[exoton]

Link for the OP and others readers : https://bitcoinwisdom.com/bitcoin/difficulty

Code:

Dec 17 2014 	39,457,671,307 	-1.37% 	282,449,013 GH/s
Dec 02 2014 	40,007,470,271 	-0.73% 	286,384,627 GH/s
Nov 18 2014 	40,300,030,328 	1.76% 	288,478,854 GH/s
Nov 05 2014 	39,603,666,252 	10.05% 	283,494,086 GH/s

The difficulty is estimated to go down by ~4.5% as of the next difficulty period. It is my understanding that this will be the longest period (except when difficulty was at 1) that the difficulty has not increased

[Hawkix]

The difficulty is estimated to go down by ~4.5% as of the next difficulty period. It is my understanding that this will be the longest period (except when difficulty was at 1) that the difficulty has not increased

No. In 2011, from August to December, the difficulty was decreasing each period.

[exoton]

The difficulty is estimated to go down by ~4.5% as of the next difficulty period. It is my understanding that this will be the longest period (except when difficulty was at 1) that the difficulty has not increased

No. In 2011, from August to December, the difficulty was decreasing each period.

https://blockchain.info/charts/difficulty?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

You are right. That was before when I was monitoring the difficulty as closely as I am now (plus it is very difficult to see on any difficulty chart unless you know exactly where you are looking)

[kernel_panic]

Two interesting links:
http://www.coindesk.com/data/bitcoin-mining-difficulty-time/
http://bitcoincharts.com/charts/mtgoxUSD#rg60zczsg2011-01-01zeg2011-12-31ztgSzm1g10zm2g25
From August 2011 when diff start decreasing, that was the final blow on BTC price

[548845]

Wouldn't the larger miners give up first if they are bleeding tons of money to electrical costs and not recouping them due to the low BTC price? I thought something just happened with a chinese farm offering thousands of Antminers for sale.

large miners mindset.

"i have $20million upfront beforehand.... and i want 28,000 coins, ill spend $10mill on rigs and $10mill on electric."
no matter what the price of bitcoin is. the cost of rigs/electric stays the same, the price of bitcoin is irrelevant because they never sell bitcoin

hobby miners
"i have $10k and i want $12k in 3 months"
they spend $10k on rigs. and then have to cash out the bitcoin to pay for electric bills each week/month, meaning they are not 100% hoarders and are going paste their 3 month deadlines due to changes in difficulty. thus they never reach ROI die to selling coins.

the smart miners are those that waste their fiat investments first off in electric and rigs. and then simply keep 100% of the bitcoin mined.

after all if your not keeping the bitcoin your mining.. then why the hell are you mining!..

You just explained how Bitcoin has NO difference than FIAT.

The rich get richer, the poor get fucked.

Nice logic there Franky.

If I was you (and I know you are a true supporter of Bitcoin) I would get my shit straight.

You cannot in the life of you defend Bitcoin as different than FIAT yet come out with an explanation like that.

What gives?

[MicroGuy]

after all if your not keeping the bitcoin you're mining.. then why the hell are you mining!..

I think most crypto miners are like Gold miners... they mine, sell the gold, and collect the cash.

This is why we all need to focus on merchants integrating Bitcoin on the payroll side.

[Meuh6879]

rich print money for ... rich.


not bitcoin.


simple.




clear.







smart.

[exoton]

after all if your not keeping the bitcoin you're mining.. then why the hell are you mining!..

I think most crypto miners are like Gold miners... they mine, sell the gold, and collect the cash.

This is why we all need to focus on merchants integrating Bitcoin on the payroll side.

This is especially true today with the corporate miners out there. Before ASICs become as common as they are today we had more miners who simply wanted to acquire bitcoin but now miners are really only in it for the profit (although some may keep a portion of the bitcoin they mine above the cost of electricity)