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Author Topic: difficulty too high while bitcoin society too small  (Read 21812 times)
stic.man
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May 26, 2011, 10:23:59 PM
 #161

You think the trade volume not rising has more to do with the ten fold increase in BTC price maybe?
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LMGTFY
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May 26, 2011, 10:24:54 PM
 #162

This graph should give you a clearer idea as to what the current network hashrate really is. 19 blocks might be enough for you or me, but bitcoinwatch always loses the plot after a difficulty change. This is well documented here on this forum - every time the difficulty changes someone posts to ask why the network hashrate has apparently skyrocketed, and someone patiently explains that this is what always happens, and in a few blocks time the difficulty estimate will settle down.

I see you CAN hypnotize newbies, cunning fox. LOL))

Let us reject difficulty from the view completely. Watch the another graph from the same site:

http://bitcoin.sipa.be/speed.png

This graph has EXPONENTIAL axis 0Y, so exponetial growing function itself will be LINEAR on this graph.
We see the power of bitcoin network, in GHash/s is:
1. nearly linear slice @ time period Oct 2010 - Dec 2010
2. EXPONENTIAL slice @ period Dec 2010 - Mar 2011
3. second EXPONENTIAL slice @ period Mar 2011 - Jun 2011

I.e. what we see since roughly April, 20, 2011 - EXPONENTIAL GROW IN EXPONETIAL AXIS!
What is it?!
GHash/s (t) = EXP ( EXP (t))
?!

Hint: One person has Core i7 computer with integrated GPU and 7 MHash/s, then he observes, difficulty is skyrocketing, and he buys ATI 5870x2 or 5970 GPU, and his hash rate skyrockets from 7 up to 700MHash/s. His mining power increases in 100 times in ONE day, but he stay the same ONE mining person.

==================

Let's research another function - number of people (miners & traders) being attracted into bitcoin society - as function of time.
Current difficulty algorithm can not allow the number of people attracted to grow exponentially, but this is required for survival on earlier stages of society developing. 10000 members spread world-wide is not the society for the currency. and I proof, they frozen without growing.
I'm having great difficulty understanding you, but if I understand you correctly you're suggesting that the number of miners and traders is static, and that network hashrate is increasing only because miners are trading in their CPUs for GPUs, and then buying more and more GPUs. Is that correct?

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FreeMoney
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May 26, 2011, 10:36:56 PM
 #163

But you are wrong. The difficulty changes will make mining profitable for only the most efficient miners. If the exchange rate stays the same, the difficulty will increase until mining is only profitable to those who do it the best.

What you want is mining to be profitable to everyone for a very long time! That's insane and impossible to sustain.

Don't you understand, that if mining were allowed to be so easy, and the rate of new coin introduction was always going up, the price of Bitcoin would go down, defeating the whole point you are trying to achieve in the first place!

No one is going to buy something that is super easy to get. So no one is going to want to mine that junk. Damn dude...

BECAUSE NO ONE PERSON READS ME PEDANTICALLY, THIS IS MY LAST POST.

JUST WAIT FEW WEEKS TO OBSERVE THE START OF BITCOIN DECAY AND FEW MONTHS TILL 2012 TO OBSERVE THE END OF DECAY.

BYE.

At least honor your word man. How can we believe anything you say now? (No need to answer)

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
afterburner229
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May 26, 2011, 10:45:47 PM
 #164

I'm having great difficulty understanding you, but if I understand you correctly you're suggesting that the number of miners and traders is static, and that network hashrate is increasing only because miners are trading in their CPUs for GPUs, and then buying more and more GPUs. Is that correct?

Very very roughly, this is correct. Sure you can say 'I know many people who had started to mine or to trade in last few months'.

Focus on the exact things what I say:
1. THE EXPONENTIAL GROW in NUMBER OF MEMBERS (in time scale) IS REQUIRED FOR ANY SOCIETY TO SURVIVE IN THE EARLIER STAGES OF IT's DEVELOPING.
2. 10 000 MINERS & TRADERS SPREAD WORLD-WIDE IS NOT THE SOCIETY FOR THE CURRENCY.
3. CURRENT DIFFICULTY ALGORITHM DOES NOT ALLOW FOR NUMBER OF MEMBERS TO GROW EXPONENTIALLY.
4. WE OBSERVE substituted data (network power = exp ( exp (t)), average mtgox trade volume = const (t~1.6months)), that freezing process has been already started.
5. In this DANGER situation we MUST RESEARCH the function = number of real (living) people in bitcoin society (t) more accurately.
6. According that research results, We should be ready to change DIFFICULTY ALGORITHM.
rezin777
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May 26, 2011, 10:49:36 PM
 #165


mtgox trade volume (average) = const for 1.6 months (does NOT rise)


Look at the volume in dollars, not Bitcoins.
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May 26, 2011, 10:50:12 PM
 #166

I'm having great difficulty understanding you, but if I understand you correctly you're suggesting that the number of miners and traders is static, and that network hashrate is increasing only because miners are trading in their CPUs for GPUs, and then buying more and more GPUs. Is that correct?

Apparently they are buying Bitcoins from themselves as well.
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May 26, 2011, 11:00:02 PM
 #167

I havent mined for months since cpu mining was unprofitable. That's not the point of bitcoin...

Mining is the least interesting thing you can do with them.
afterburner229
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May 26, 2011, 11:00:40 PM
 #168

At least honor your word man. How can we believe anything you say now? (No need to answer)

I may be wrong.. and therefore I ask you not to believe me but TO VERIFY MY COMPUTATIONS.
Just to RESEARCH the number of bitcoin members as the function of time.

If you compromise the bitcoin currency by your inaction, you compromise ANY unanonymized distributed digital currency, in eyes of rest of the world.
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May 26, 2011, 11:04:36 PM
 #169

I'm having great difficulty understanding you, but if I understand you correctly you're suggesting that the number of miners and traders is static, and that network hashrate is increasing only because miners are trading in their CPUs for GPUs, and then buying more and more GPUs. Is that correct?

Very very roughly, this is correct. Sure you can say 'I know many people who had started to mine or to trade in last few months'.
No, I would say that I simply don't believe it's possible for the network growth to have come from "upgrades". When I started mining - in October 2010 - everyone used their CPU. GPU mining was just beginning to be discussed - it was semi-mythical. Check the forum posts from around that time, there was an idea GPU mining was do-able but if anyone was doing it they were in a tiny minority. Now consider everyone online at that time trading in their CPU miner for, lets say, 4 5970s. Let's take a conservative estimate for CPU mining, say 1 Mhash/s. 4 x 5970 would give us 2800 Mhash/s. So, if the number of miners stayed constant we'd see network hashrate increase 2800 times. Now look at the graph. Now consider that many miners simply haven't got 4 x 5970s. I haven't. I have 1 x 5870. You can see many posts here from people with 5850s etc. Some people may even still be using CPU miners.

Focus on the exact things what I say:
1. THE EXPONENTIAL GROW in NUMBER OF MEMBERS (in time scale) IS REQUIRED FOR ANY SOCIETY TO SURVIVE IN THE EARLIER STAGES OF IT's DEVELOPING.
OK...

2. 10 000 MINERS & TRADERS SPREAD WORLD-WIDE IS NOT THE SOCIETY FOR THE CURRENCY.
Possibly not, but I have no idea how you've arrived at this 10,000 figure. I could probably roughly determine the number of miners online, but I can't think of any way to count the number of traders.

3. CURRENT DIFFICULTY ALGORITHM DOES NOT ALLOW FOR NUMBER OF MEMBERS TO GROW EXPONENTIALLY.
Why not? Difficulty has been growing exponentially since I started mining, and I'm pretty certain that that hasn't been solely due to miners trading in CPUs for multi-GPU set-ups. Just from the number of posters on this forum I can see that new miners are starting constantly. Just a few weeks ago posters here were arguing that "now" (i.e. a few weeks ago) was the ideal time to invets in mining hardware, and profits were all but guaranteed (I was arguing that they should exercise caution).

4. WE OBSERVE substituted data (network power = exp ( exp (t)), average mtgox trade volume = const (t~1.6months)), that freezing process has been already started.
MtGox is not the only exchange. I used to use MtGox a lot; I haven't used it nearly as much recently because (a) I now have a local exchange which is far more convenient, and (b) even prior to that I'd started using bitcoin-otc because it was more convenient for me to work in my local currency. (Incidentally, can someone point me to the raw data that supports this constant trade volume claim? Thanks!)

5. In this DANGER situation we MUST RESEARCH the function = number of real (living) people in bitcoin society (t) more accurately.
Agreed. I think your 10,000 figure is a wild guess, and I dispute your theory that it is roughly static.

6. According that research results, We should be ready to change DIFFICULTY ALGORITHM.
Maybe. If the research backs up your theories then we could start thinking about solutions at that point.

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kjj
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May 26, 2011, 11:06:31 PM
 #170

Focus on the exact things what I say:
1. THE EXPONENTIAL GROW in NUMBER OF MEMBERS (in time scale) IS REQUIRED FOR ANY SOCIETY TO SURVIVE IN THE EARLIER STAGES OF IT's DEVELOPING.
2. 10 000 MINERS & TRADERS SPREAD WORLD-WIDE IS NOT THE SOCIETY FOR THE CURRENCY.
3. CURRENT DIFFICULTY ALGORITHM DOES NOT ALLOW FOR NUMBER OF MEMBERS TO GROW EXPONENTIALLY.
4. WE OBSERVE substituted data (network power = exp ( exp (t)), average mtgox trade volume = const (t~1.6months)), that freezing process has been already started.
5. In this DANGER situation we MUST RESEARCH the function = number of real (living) people in bitcoin society (t) more accurately.
6. According that research results, We should be ready to change DIFFICULTY ALGORITHM.

This is just as wrong now as it was when you said it the first 30 times.

The current difficulty system does indeed allow everyone to participate.  And I do mean everyone.

How many more times are you going to whine that you learned about bitcoin too late to get a ton of free coins?

p2pcoin: a USB/CD/PXE p2pool miner - 1N8ZXx2cuMzqBYSK72X4DAy1UdDbZQNPLf - todo
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afterburner229
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May 26, 2011, 11:10:12 PM
 #171

Look at the volume in dollars, not Bitcoins.

SEVERE MISTAKE! You introduce the NEW THING, LOOK at the volume of NEW THING.
The volume of NEW THING MUST be great, for NEW THING to be THE CURRENCY.

And remember, number of traders depending on time is MORE important even than volume of NEW THING itself.
What if 10 000 traders sell/buy BTC each other, and volume of this process is 99% of total BTC volume.
And 100 000 newbies sell/buy BTC, in 1% volume. This is TYPICAL DANGER situation.
dissipate
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May 26, 2011, 11:12:41 PM
 #172

Someone correct me if I am wrong (I have not read this entire thread), but the fallacy here is that AfterBurner is equating the size of the Bitcoin 'society' with the size of the Bitcoin mining 'society'. Bitcoin mining will from here on out always be a niche enterprise within the Bitcoin 'society', dominated by those with the time and expertise to compete for mined Bitcoins. Everyone else is a speculator, entrepreneur, or trader. The number of people using Bitcoin outside of mining will be a much larger and limitless number of people. Hence, the total size of the Bitcoin 'society' is potentially many times larger than the size of the Bitcoin mining 'society'. I don't see a problem here.
afterburner229
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May 26, 2011, 11:22:06 PM
 #173

LMGTFY,

I see you are on the right way. Just remember you must start the algorithm change BEFORE all BTC exchanges start to fall.
I recommed you to verify my computations on people-time dependence in FEW days.

Now, it is night in Moscow. I go to sleep.. bye for a while..

kjj
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May 26, 2011, 11:41:56 PM
 #174

Someone correct me if I am wrong (I have not read this entire thread), but the fallacy here is that AfterBurner is equating the size of the Bitcoin 'society' with the size of the Bitcoin mining 'society'. Bitcoin mining will from here on out always be a niche enterprise within the Bitcoin 'society', dominated by those with the time and expertise to compete for mined Bitcoins. Everyone else is a speculator, entrepreneur, or trader. The number of people using Bitcoin outside of mining will be a much larger and limitless number of people. Hence, the total size of the Bitcoin 'society' is potentially many times larger than the size of the Bitcoin mining 'society'. I don't see a problem here.

That is the charitable interpretation, yes.  See my other posts in this thread for less polite theories.

p2pcoin: a USB/CD/PXE p2pool miner - 1N8ZXx2cuMzqBYSK72X4DAy1UdDbZQNPLf - todo
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stic.man
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May 26, 2011, 11:54:56 PM
 #175

Still trying to understand this arbitrary 10,000 number's origins and how someone can ignore the media/forum spikes to assert that the userbase is static
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May 27, 2011, 12:31:57 AM
 #176

Look at the volume in dollars, not Bitcoins.

SEVERE MISTAKE! You introduce the NEW THING, LOOK at the volume of NEW THING.
The volume of NEW THING MUST be great, for NEW THING to be THE CURRENCY.

And remember, number of traders depending on time is MORE important even than volume of NEW THING itself.
What if 10 000 traders sell/buy BTC each other, and volume of this process is 99% of total BTC volume.
And 100 000 newbies sell/buy BTC, in 1% volume. This is TYPICAL DANGER situation.



Volume in dollars.

The growth occurs in volume of dollars, not volume of bitcoin.  The volume of bitcoin can only grow linearly.  So the volume of dollars is what grows exponentially.

College of Bucking Bulls Knowledge
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May 27, 2011, 08:34:43 AM
 #177

afterburner229 is a troll...

Gotta' troll the obvious troll.  Roll Eyes

One off NP-Hard.
gongcheng
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May 27, 2011, 08:58:19 AM
 #178

The most important thing for bitcoin to survive is to make more people believe in this system.

Right now, it is too difficult for new guys to get some bitcoins (either by trade or by mining).

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May 27, 2011, 09:50:18 AM
 #179

The most important thing for bitcoin to survive is to make more people believe in this system.

Right now, it is too difficult for new guys to get some bitcoins (either by trade or by mining).

That is kind of an amusing contrast when set against other claims that it is too easy to simply start another currency using Bitcoin code and co-operate with / compete with the original Bitcoins.

If original bitcoins keep going up in value like they have been, pretty soon it will cost you less than a bitcoin for a whole new 21 million coins of your very own, named whatever you want to name them up to trademark / servicemark type law limitations, or even more than 21 million if you prefer your currency to have more than 21 million available to circulate.

So don't moan about not being able to grab millions of coins dirt cheap, go ahead and grab some of any or all of the types that still are dirt cheap and if they too are not cheap enough for you simply start your own that you can sell as cheap as you think such things ought to be.

Play your cards - or your Freeciv Galactic Milieu nation - right and you might find you have at least as many buyers right off the bat as there are Freeciv Galactic Milieu nations that have already started their own currency, and at least as many buyers eventually as there are nations supported by the Freeciv software (hint: it supports quite a few already and the number keeps growing...)

-MarkM-

Browser-launched Crossfire client now online (select CrossCiv server for Galactic  Milieu)
Free website hosting with PHP, MySQL etc: http://hosting.knotwork.com/
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May 27, 2011, 11:44:24 AM
 #180

Right now, it is too difficult for new guys to get some bitcoins (either by trade or by mining).
I think this is more of an education issue than a practical issue. Mining is easy enough, and there are plenty of people right here who will help new miners get started. More importantly, perhaps, buying and selling bitcoins is easy - but people get hung up on MtGox. bitcoin-otc and Ubitex are both relatively straightforward (I've used bitcoin-otc, haven't used Ubitex so I may be wrong here...) and the exchange I use the most these days, britcoin, is very easy to use - no Liberty Reserve, Dwolla or anything else, I simply use my existing bank account. I appreciate not every country/currency has a britcoin, but everyone, anywhere, can use bitcoin-otc. If you live in a country with a lot of people you're bound to find someone wanting to trade sooner or later.

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