BIG difficulty jump coming | Bitcointalksearch.org

DeathAndTaxes

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Gerald Davis

Quote from: gdpone on July 25, 2013, 05:33:17 AM

Quote from: mgio on July 22, 2013, 06:53:46 PM

Quote from: gdpone on July 22, 2013, 05:45:00 PM

Quote from: DeathAndTaxes on July 22, 2013, 04:41:42 PM

Quote from: NR3000 on July 22, 2013, 04:40:49 PM

And if no one do not buy new hardware, nobody wants bitcoins and bitcoins price reduce. Now everyone usually buy bitcoins for new hardware. More hardware you have more difficulty you increase and you have buy more and more hardware. But if everyone stop buy new hardware where to put bitcoins? bitcoin price will 0 $ ;/

Um no. Bitcoin is more than mining.

Lets be honest here, no its not. Not really. Probably 95% of people who back bitcoin and scream viva la revolution do so as they mine, in hopes of getting rich. I mean dont get me wrong the whole concept is pretty neat and all, but its not likely to ever get too big, because if it does you can bet uncle sam will lay the smack down.

Not true at all.

The vast majority of people are simply buying bitcoins on exchanges, not mining them!

Bitcoin mining is only a tiny part of what bitcoin is all about. And it's becoming smaller and smaller.

While true, there wouldn't be any coins to buy/sell without mining. And yes I understand in the future mining will be almost irrelevant after a certain point.

We are close to that point already. Daily volume is significantly higher than total new coins mined even if we assume that 100% of newly mined coins instantly hit the exchange. You really think if mining output was zero tomorrow that there would be no coins to buy or sell? What about the 11M+ which already exist?

In last 180 days 20,591,491 BTC exchanged hands on the top 10 exchanges combined. That is 114,397 BTC per day. New minting is 3,6000 BTC per day or about 3.1% of total volume (assuming 100% of mined coins go directly to the exchanges for sale).
http://www.bitcoinity.org/markets/list?currency=ALL&span=6m

gdpone

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Quote from: mgio on July 22, 2013, 06:53:46 PM

Quote from: gdpone on July 22, 2013, 05:45:00 PM

Quote from: DeathAndTaxes on July 22, 2013, 04:41:42 PM

Quote from: NR3000 on July 22, 2013, 04:40:49 PM

And if no one do not buy new hardware, nobody wants bitcoins and bitcoins price reduce. Now everyone usually buy bitcoins for new hardware. More hardware you have more difficulty you increase and you have buy more and more hardware. But if everyone stop buy new hardware where to put bitcoins? bitcoin price will 0 $ ;/

Um no. Bitcoin is more than mining.

Lets be honest here, no its not. Not really. Probably 95% of people who back bitcoin and scream viva la revolution do so as they mine, in hopes of getting rich. I mean dont get me wrong the whole concept is pretty neat and all, but its not likely to ever get too big, because if it does you can bet uncle sam will lay the smack down.

Not true at all.

The vast majority of people are simply buying bitcoins on exchanges, not mining them!

Bitcoin mining is only a tiny part of what bitcoin is all about. And it's becoming smaller and smaller.

While true, there wouldn't be any coins to buy/sell without mining. And yes I understand in the future mining will be almost irrelevant after a certain point.

DeathAndTaxes

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Gerald Davis

Quote from: joae1975 on July 22, 2013, 07:19:32 PM

My Coinbits app says dif is dropping next to 27 mil. How is that?

Most tools for estimating difficulty looking only at blocks since last difficulty change. So right after difficulty change they are mostly useful and you really are looking at just the "luck" of the network. In 3 or 4 days if it says the same thing then it might mean something. Difficulty can go down. It means more hashing power was turned off then hashing power was turned on.

joae1975

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My Coinbits app says dif is dropping next to 27 mil. How is that?

mgio

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Quote from: gdpone on July 22, 2013, 05:45:00 PM

Quote from: DeathAndTaxes on July 22, 2013, 04:41:42 PM

Quote from: NR3000 on July 22, 2013, 04:40:49 PM

And if no one do not buy new hardware, nobody wants bitcoins and bitcoins price reduce. Now everyone usually buy bitcoins for new hardware. More hardware you have more difficulty you increase and you have buy more and more hardware. But if everyone stop buy new hardware where to put bitcoins? bitcoin price will 0 $ ;/

Um no. Bitcoin is more than mining.

Lets be honest here, no its not. Not really. Probably 95% of people who back bitcoin and scream viva la revolution do so as they mine, in hopes of getting rich. I mean dont get me wrong the whole concept is pretty neat and all, but its not likely to ever get too big, because if it does you can bet uncle sam will lay the smack down.

Not true at all.

The vast majority of people are simply buying bitcoins on exchanges, not mining them!

Bitcoin mining is only a tiny part of what bitcoin is all about. And it's becoming smaller and smaller.

DeathAndTaxes

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Gerald Davis

Quote from: gdpone on July 22, 2013, 05:45:00 PM

Quote from: DeathAndTaxes on July 22, 2013, 04:41:42 PM

Quote from: NR3000 on July 22, 2013, 04:40:49 PM

And if no one do not buy new hardware, nobody wants bitcoins and bitcoins price reduce. Now everyone usually buy bitcoins for new hardware. More hardware you have more difficulty you increase and you have buy more and more hardware. But if everyone stop buy new hardware where to put bitcoins? bitcoin price will 0 $ ;/

Um no. Bitcoin is more than mining.

Lets be honest here, no its not. Not really. Probably 95% of people who back bitcoin and scream viva la revolution do so as they mine, in hopes of getting rich. I mean dont get me wrong the whole concept is pretty neat and all, but its not likely to ever get too big, because if it does you can bet uncle sam will lay the smack down.

Well then why are you here? There is no barrier to entry on mining so on a long enough timeline the margin on mining is going to zero.

gdpone

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Quote from: DeathAndTaxes on July 22, 2013, 04:41:42 PM

Quote from: NR3000 on July 22, 2013, 04:40:49 PM

And if no one do not buy new hardware, nobody wants bitcoins and bitcoins price reduce. Now everyone usually buy bitcoins for new hardware. More hardware you have more difficulty you increase and you have buy more and more hardware. But if everyone stop buy new hardware where to put bitcoins? bitcoin price will 0 $ ;/

Um no. Bitcoin is more than mining.

Lets be honest here, no its not. Not really. Probably 95% of people who back bitcoin and scream viva la revolution do so as they mine, in hopes of getting rich. I mean dont get me wrong the whole concept is pretty neat and all, but its not likely to ever get too big, because if it does you can bet uncle sam will lay the smack down.

DeathAndTaxes

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Gerald Davis

Quote from: NR3000 on July 22, 2013, 04:40:49 PM

And if no one do not buy new hardware, nobody wants bitcoins and bitcoins price reduce. Now everyone usually buy bitcoins for new hardware. More hardware you have more difficulty you increase and you have buy more and more hardware. But if everyone stop buy new hardware where to put bitcoins? bitcoin price will 0 $ ;/

Um no. Bitcoin is more than mining.

NR3000

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And if no one do not buy new hardware, nobody wants bitcoins and bitcoins price reduce. Now everyone usually buy bitcoins for new hardware. More hardware you have more difficulty you increase and you have buy more and more hardware. But if everyone stop buy new hardware where to put bitcoins? bitcoin price will 0 $ ;/

DeathAndTaxes

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Gerald Davis

Quote from: bitcoinator on July 22, 2013, 11:13:26 AM

Update: would ASICMiner mine at a loss if mined bitcoins don't cover the electricity costs?

Unlikely they would mine at a loss. Once hardware is paid for it is a sunk cost. Turning off your rig doesn't get you the hardware price back. The ongoing cost is just electricity. ASICMiner chips are pretty efficient (MH/W). For ASICMiner to be operating at a loss difficulty would need to be 50x higher. Of course if difficulty is 50x higher then lots of other people are operating at an even larger loss. That would include anyone not using an ASIC and anyone with an ASIC and above average electrical costs. When those people shut down difficulty would decline.

Now massively higher difficulty hurts ASICMiner (and BFL and Avalon) in a different way. If difficulty makes deploying NEW HARDWARE uneconomical then people won't and that means no (or greatly reduced) new hardware sales.

Nemo1024

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Quote from: gdpone on July 22, 2013, 03:47:30 PM

Quote from: Nemo1024 on July 22, 2013, 01:42:30 PM

...aaaand it ended up being 31,256,961 for this round.

Well time to throw out my 2 usb asic miners lol.

Can you send them over to me, please.

gdpone

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Quote from: Nemo1024 on July 22, 2013, 01:42:30 PM

...aaaand it ended up being 31,256,961 for this round.

Well time to throw out my 2 usb asic miners lol.

Nemo1024

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...aaaand it ended up being 31,256,961 for this round.

jamesc760

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ASICMiner is located in China where electricity is cheaper than shit, due to all the hydro dams the Central Communist party regime has built.

bitcoinator

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Quote from: jspielberg on July 22, 2013, 08:19:05 AM

Improbable. Miners will switch off with as a continuous distribution rather than everybody all at once.

Newer tech that is profitable with the higher difficulty will come online to take up the slack. AM is good for 1 petahash by years end. I don't think you need to worry about a sudden lack of hash power/difficulty.

I thought it could happen at once because difficulty adjustment is a discreet event. Hashing power grows quickly not only because of ASICMiner, but also because of a bubble that happened couple months ago and attracted a lot of investors to buy mining hardware. That hardware is being developed and deployed. E. g. there is a lot of hardware pre-ordered from BFL.

E. g. if bitcoin price drops and at the same time BFL delivers all what it promised (as well as other manufacturers), then after difficulty adjustment it could be uneconomical to mine for most players.

Update: would ASICMiner mine at a loss if mined bitcoins don't cover the electricity costs?

jspielberg

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Improbable. Miners will switch off with as a continuous distribution rather than everybody all at once.

Newer tech that is profitable with the higher difficulty will come online to take up the slack. AM is good for 1 petahash by years end. I don't think you need to worry about a sudden lack of hash power/difficulty.

Otago

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Quote from: bitcoinator on July 22, 2013, 07:02:16 AM

So is it a good news or a bad news? It is harder to obtain bitcoins, thus probably new investors would buy them, the price should raise.

Bitcoin price IMO is mostly unaffected by mining. When people shut off miners the difficulty drops. Even a smaller number of miners prior to a difficulty drop would process the transactions allowing market to perform as normal.

How many coins miners sell & when does have an impact. The scale of the market determining the resulting impact. Large conversions of coin to USD to pay for hardware might explain any weakening of bitcoin value from time to time.

Quote

However many people ordered ASICs long ago. When they receive the hardware, they will run it. Difficulty adjustment has some lag too.

Due to lags in ASIC delivery, difficulty adjustments and price fluctuations, it is quite possible that at some point mining won't be profitable and most miners will switch off their mining hardware after difficulty adjustment. So we'll need to wait hours for block to be found and months for the next difficulty adjustments. Higher confirmation time will move the bitcoin price down and make the situation even worse.

Is this scenario probable?

ASICs rely on low enough difficulty to recover purchase cost.

With low running cost relative to return most ASICs will just be kept running or be sold to someone who will run them.

Hardware investment is the issue. Miners will be expecting good returns. Ultimately if poor returns (an overall loss) this may lead to reduced enthusiasm for bitcoin.

A miner is less likely to invest in the coin or recommend it if their first recollection is of losing (meaningful) money.

Another issue is people who mine can be enthusiastic promoters. Those without the money for specialist hardware may mine other types of coin taking to promoting & supporting other coins instead of Bitcoin. This is the real problem if the breadth of the market (real world uses other than speculation) doesn't continue to grow.

bitcoinator

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So is it a good news or a bad news? It is harder to obtain bitcoins, thus probably new investors would buy them, the price should raise.

However many people ordered ASICs long ago. When they receive the hardware, they will run it. Difficulty adjustment has some lag too.

Due to lags in ASIC delivery, difficulty adjustments and price fluctuations, it is quite possible that at some point mining won't be profitable and most miners will switch off their mining hardware after difficulty adjustment. So we'll need to wait hours for block to be found and months for the next difficulty adjustments. Higher confirmation time will move the bitcoin price down and make the situation even worse.

Is this scenario probable?

Otago

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Quote from: Nemo1024 on July 22, 2013, 03:23:08 AM

Um, the app I am using says: 31307692 in 0.4 days (that is today).
So, not as high as you predict, but still a jump of over 5000000.

Hash rate (https://blockchain.info/stats) is now 275,719 vs 297,621 GH/s @ 7:30 am.

The difficulty is adjusted every 2016 blocks based on the time it took to find the previous 2016 blocks. Original estimate had blocks completed 25^th not today. Peek I saw will vary. If maintained, difficulty rise will catch up to my estimate very quickly.

Nemo1024

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Um, the app I am using says: 31307692 in 0.4 days (that is today).
So, not as high as you predict, but still a jump of over 5000000.

Topic: BIG difficulty jump coming (Read 2267 times)