Topic: Bitcoin Difficulty Increase what's going on ? (Read 1619 times)

China is corrupt, throw a few reminbri around, everyone looks the other way.

It's interesting that the news reports that China is cutting miners off of subsidized electricity, but bitmain is racking in hundreds of units a day.. Where?  Are their bribes just so thick that their power usage is immune to these new regulations?  Or the reports are just BS, maybe - I was expecting to see s9's flooding out of China as displaced miners scrambled to roi.  Again, nothing.

I wonder if the guy ever bought from bitmain...

Seeing a lot of S7s and Avalon 6s hit the market recently.  This could be good for us that decide to stay in.

Really?! Bitmain exists  to make $$$. All they care for is their customers' money... as long as it's being transferred to Bitmain's pocket.

U make a good point here....but i dont think bitmain will not care for its customers like that

I can't give you a hard number bud!  Those with the lowest capital cost of equipment and the lowest electrical rate in the simplest of terms. 

It is entirely plausible that in the future bitcoin mining will only be done by manufacture's as they will have access to the lowest possible priced units.  It's also plausible that at some point manufacturing costs begin to approach the unprofitable mark.  That is assuming tech flat lines as well as coin price.

Think about Bitmain and their cost to manufacture a unit.  That cost is A LOT lower than current retail pricing.  Combined with sub $.05 usd/kwh and you can see how easily they could outlast any retail purchasing miner for a LONG time in the event of declining coin price and a prolonged low coin price.  What happens if coin price falls to 4K and sits there for 5 years.  Most miners are betting against that as are most folks in this forum in general but it's not an impossibility!

It's also entirely plausible because BTC has the possibility IMO to go a lot higher in price that we see a much larger profit window for a long time to come! 

Until we can predict the impossible we can only speculate and ENJOY the fuckin ride!

Well the price Bitmain sells them for is the lowest you will get one, and the most you should pay.

What amount would you consider to be a low overhead per S9?

I noticed there are several S9's for sale in the marketplace with nobody really moving on them. I too hope the price we are at now stays for a few months just to bring the miner price down some.

What will happen soon though, is miner costs will go down as those that can't compete get out of the game, or newbies coming in never ROI and have to take a loss.

I semi hope price stagnates for another month or so, so I can collect a few more miners from those whos dreams were thrashed.

People have been saying this since 2013!! 

Seriously though difficulty will follow price in the long run.  The reason diff has increased exponentially is quite obviously because coin price has as well.  If coin price was still $100 do you think we would have this much hash rate LOL?  It's not hard to see that the more profitable mining is the more people want to do it!  As it becomes less profitable less people are inclined to mine.  If coin price ever stabilized for a long period of time we would hit a soft equilibrium where only those with the lowest of overhead prices would be able to mine profitably.  Believe it or not the system was designed as a near zero sum game and is working exactly as intended.

The problem is that this motion of diff following price is really really slow compared to how fast coin price fluctuates.  Diff is always trying to play catch up.  With such massive volatility in coin price the old slow train diff just can't keep up.

You can't predict what will happen to diff because you can't predict what will happen to coin price.  What we do know is that if coin price explodes or trends up for a "long" time that difficulty will move with it... eventually.  2017 saw both, it makes a lot of sense to predict diff is going up.  If newer machines are made available it will only go up faster!

I am afraid with the level that difficulty is increasing it will be hard for the little guys to really benefit from mining in the future. I have debated on buying S9's now or just wait for the next generation of miners to come out and save my money in the meantime. Id hate to buy 20k worth of S9's and then something new comes out. Looks like the E10 is 18Th/s . Certainly other companies will have to step up to compete with that.

Well it already went up 0.4 Trillion from my January 20th posting. Believe it or not, it's happening lol.

I think btc has gone up alot recently and may not move for abit though. Same for eth. I wont say it becomes not profitable but it will be very low and roi will be too long for new miners especially. It is sad that gpu makes more considering they are far easier to do....

Well it's currently 2.6T with about 19Eh/s in gear. For the diff to get to 11.2T, there would have to be another 70-75Eh/s in miners manufactured. Which would be a shit ton more than has been produced since the inception of the s9. I don't think the chip foundries could even keep up with that demand.

Maybe we are in for a BTC price adjustment at some point soon?  Couldn’t come any sooner, beforr all the S9s are not profitable anymore.

Hmmm currently 6 gpu eth mining rig is now more profitable than an S9 or L3. I never seen this before....
Gpu mining is alot easier to do and by should give less returns by right.

Keep in mind the name of this sub-forum: Miner Speculation

Are you saying that there will be a new Antminer model this year with at least 30 TH/s and cost in the $3k range?

This has been gut wrenching to monitor.  Not only are the biggest pools growing in hashrate astronomically, but they are finding blocks well over 100% luck on a large scale for this difficulty adjustment coming up.  Antpool is at 121% luck for the last 3 days!  That is literally insane.  The difficulty projection jumped from 14% to almost 20% just in the last couple hours for the ENTIRE 2016 block period due to how many blocks the network is finding right now.  And ofcourse Bitcoin is tanking as well..........

Not when more and more miners are coming online no.

Next difficulty is going to be around 17% (in 3 days) is it going to ever stop :/

Economics 101: thinking at the margin.  Spend $150, make $300 sounds like a good deal to me.  If I could do this ten times simultaneously, I would.  But my only concern is the sustainability of these profits.  Remember that difficulty is increasing exponentially but so is computing power.  So the next generation equipment will be exponentially stronger than the current generation's.

What bitcoin/usd exchange rate will do is anybodies guess, could be $30k, could be $3k. Impossible to predict.
It's best to just think in BTC only.

Difficulty appears to be growing faster than your estimates above though, and it's better to just look at the total network hashrate, not difficulty if you want to forecast BTC earnings. Difficulty is there to ensure 1 block gets mined on average every 10 minutes, that's it.

How much hashing power you have vs. the total network hashing power is what determines the size of your slice of the pie.
Anyway, it doesn't matter too much as difficulty follows hashrate.

But, regarding your estimate, network hashing power growth is accelerating. It's truly exponential.
the network hashrate is now doubling every 2 months.

We can all agree on one thing, everybody and their mother is talking about mining, and it will only be EXPONENTIALLY increasing from here. Current mining difficulty is 2.2 Trillion, and it went up 1 trillion from exactly 3 months ago. So If I was to predict the difficulty rate by end of 2018, considering the exponential factor. I would do it like this:

Apr 20th - 2.2+1.5=3.7 Trillion
Jul 20th -  3.7+2=5.7 Trillion
Oct 20th - 5.7+2.5=8.2 Trillion
Jan 20th - 8.2+3=11.2 Trillion

This makes the average difficulty for the 12 months at 6.7 Trillion.
Being optimistic about bitcoins price, we can say that it's 12 month average will be $30k. After $150 in electricity costs, that will leave us with with an average monthly profit of $300 per month per S9 from now until January 20th, 2019. That is my prediction. Any thoughts?

Diff schmiff
mine on

Exactly! The old saying goes:
In a gold rush, sell picks and shovels.

And that's why I have just sold my S9 on Ebay, for $2600 more than I bought it :-) !!!
Imagine that, a used antminer selling for double the price of a new one, just because it's available now!
And that $2600 is profit on top of the $2000 it made me while I had it running...

This opportunity is not going to last though, according to the graphs above an S9 will not make $2600 ever again based on the current network hashrate growth.
But no matter how I try to explain this in the S9 thread, people keep coming up with dubious ways to defy the maths as an excuse to jump on the latest Bitmain S9 Batch, that will be delivered months from now.
Talk about a gold rush...


The difficulty automatically adjusts based on the total network hash rate so that on average we keep mining about 1 block every 10 minutes, that's it's sole purpose.
Now the bigger the total hashrate gets, the smaller every miner's individual piece of the pie gets...

Thanks, I did a bit more work on it while discussing this in the S9 thread, here's the latest version.

Image:


Link to the actual spreadsheet (click download, you won't be able to see it properly in the dropbox viewer):
https://www.dropbox.com/s/v1m3xac87ptylj0/hash%20forecast.xlsx?dl=0

Nice chart. Well, the newspapers wont write this as they need to sensationalize stuff.

Yes they compete with each other.  And with $BTC intending to be solved every 10 minutes...more miners = more chances to be solved under 10 minutes = difficulty raising to make it back to 10 minutes.

That's the short answer.

Kind of reminiscent of the gold mining days in California in the 19th century. The people who made the most money were the ones selling mining equipment, mules and horses and wagons, clothing, food, liquor, housing and sex.

On a different note, a newb question: I don't understand why more miners means more difficulty. Do they compete with each other somehow? I thought the difficulty would be just how hard it is to find a block and verify it.

And here's the spreadsheet for those interested, currently the numbers to play with (BTC/Month Jan 18, Power/Month, BTC-USD and Initial Investment) are set for the latest S9 13.5TH, but can be adjusted to specs of any miner(s).

https://www.dropbox.com/s/v1m3xac87ptylj0/hash%20forecast.xlsx?dl=0

I posted this in the S9 thread as a reaction to the craziness surrounding the sales of Bitmain's latest S9 batches,
but someone suggested it belongs in this subtopic so here goes:


I know I’ve said it yesterday but I’ll repeat it again today: Unless I am missing something, this is just crazy!

I really can’t see why you would buy an S9 now, the total bitcoin network hashrate is growing faster than ever, so unless BTC value surges again (massively) this year you just won’t get your money back on your investment.
The only money to be made now is in selling miners, not in mining!
After a few months of mining I just sold my used 13TH S9 on Ebay for $2600 more than I bought it, I will be putting that profit into Bitcoin. There is no way that an S9 will make another $2600 as of this point in time, unless BTC surges as said before

But don’t just take my word for it, please have a look at the numbers below.



What I’ve done is forecast the total network hashrate for 2018 based on 2017 numbers. I’ve used basic Excel forecasting to do this.
As you can see, I’ve created a forecast, an upper bound forecast (pessimistic in this case) and lower bound forecast (optimistic in this case).
Then I’ve created 3 tables predicting how much Bitcoin one S9 will make every month based on this forecast, how much revenue that is un USD based on the current BTC/USD exchange rate and how much profit you would make based on a $150/month power cost for 1 S9.

Now, based on these numbers the only way an S9 that starts mining today will pay back your investment, is if the network hashrate follows the lower bound (optimistic) forecast which ends up flattening out again, looking at the graph alone that just seems very unlikely!

Both the standard and upper bound forecast predict profit to go negative by the end of the year.

I’m happy to share this spreadsheet with anybody who wants to play with the numbers.
Bottom line,
My bet is: sell your S9’s while you can make a good profit on them, hold BTC and wait for the next opportunity when this madness dies down a bit (or perhaps the next generation of miners?)
Of course, to each their own. Who knows what the bitcoin value will be by the end of the year and that said, you might just enjoy mining, I know I did :-).

Giving yourself a wedgie?

<----Pulled that trigger last month.

As I sit here this morning waiting on a shipped email and watching the ticker my butt cheeks have never been clinched so tight....

The profitability is going back to more normal rates. It was abnormal back then.

IF ONLY there was a chart on past profitability, that would make people open their eyes more. Currently, people can only see current spot profitability and so they grab gear and believe that the rate will be at this level or close to it for a long time. Well, not the case.
This is why we see the high ebay prices and mad rush for gear imo.

 There will be another ramp up in difficulty as well since Bitmain, Avalon, Halong, and Ebang all have new miners coming out in the next few months.

That being said, considering the s7 is still profitable even at high power costs, saying that the s9 will not be profitable in a few months seems pretty silly.

And again, you CANNOT forecast profits in this industry so making assumptions about future profitability is a fools game.

Should you buy 1 dozen s-9's  .

Well  you can not project difficulty  beyond  4-6 weeks.

and the diff  can rip 20%  2 in a row  or do a  -1% and then a 2%

It all boils down to  how much risk will you take.  Myself I moved into gpus  much stronger then asics.

I am down to
2 full s-9's 
1 two board s-9 
1 one board s-9

grand total of 3 s-9's

but I have  about 70 gpus  mostly all nvidia 1080tis.  I felt gpus are less risk  then asics.

More miners turning on (we had a period of tiny difficulty increase a bit ago), and miners switching from BCH to BTC as BTC has become more profitable than Cash again. Most people buying miners now are hoping that price will go up and make their purchase of a miner worthwhile. Dangerous game as price stays stable but difficulty continues to skyrocket.

Hello,

I just checked the difficulty and it seems to increase a lot lately.

What is the reason behind this?

At this rate and if the price doesn't increase an s9 will not be much profitable by the summer....

I'm struggling whether I should invest in a dozen of S9 but things are not so motivating now compare to sept/oct when i first look into it.

Thanks for your insights.