Difficulty and BTC value - page 2. | Bitcointalksearch.org

Stephen Gornick

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Quote from: derr777 on June 08, 2013, 12:21:07 PM

So I go back to the statement that difficulty and price are nowhere near related. If they are related, show me the equation.. I've looked at this and tried, there is no statistical correlation.

There certainly is correlation:

- https://docs.google.com/a/digicoast.com/spreadsheet/oimg?key=0AmcTCtjBoRWUdHVRMHpqWUJValI1RlZiaEtCT1RrQmc&oid=10&zx=cdrtjfh4wgfg
- https://docs.google.com/a/digicoast.com/spreadsheet/ccc?key=0AmcTCtjBoRWUdHVRMHpqWUJValI1RlZiaEtCT1RrQmc (underlying data)

Clearly, difficulty does tend to rise when the exchange rate rises, difficulty drops are correlated as well though less so.

But the relationship is that difficulty follows price, and not the other way around.
- http://blog.brocktice.com/2011/05/25/the-relationship-between-bitcoin-price-and-difficulty/

drwho88888

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Understood and if you've looked at the stats then that's fine. I didn't know if they were related or not. If they're not, then they're not. Thanks.

derr777

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but thats not true... difficulty does not change the rate at which coins are mined. Difficulty is adjusted based on hashrate (computational power of the network) so that the exact same number of coins are mined per hour.

So, only in between a difficulty adjustment is there any potential difference in the rate of mined coins, and it will have a direct effect on the next difficulty increase, so its only very temporary, if at all.

Difficulty is adjusted *SO THAT* the rate of coins entering the economy over time doesn't change.

So I go back to the statement that difficulty and price are nowhere near related. If they are related, show me the equation.. I've looked at this and tried, there is no statistical correlation.

I think people want to believe there is, but the fact is there isn't. And yes, that basically means that difficulty will continue to exponentially increase, and that also means that mining profits approach zero over any decently long time frame, if price doesn't rise. Price *could* rise because of economic variables, but its not going to rise because of difficulty increases. There is no causal relationship there.

drwho88888

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"its crazy to think there is"

Beg to differ. Its a reasonable question to ask, particularly if you're a mathematician, as I tend to be.

Difficulty changes the rate at which coins are mined and therefor has a distinct effect on their supply. Supply and demand each affect the value. That's maths. QED

os2sam

legendary

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Think for yourself

I'll go with the yes as well.

So,
Yes,
Sam

derr777

member

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absolutely not.. its crazy to think there is.. no statistical regression shows it, and the rumor that was circulating here about its truth was based on something spiritual, because it certainly wasn't mathematical.

In other words, if you want to base a theory on faith, feel free.. I'll stick with mathematics.

crashoveride54902

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Dream become broken often

i think that first reply was pulling your chain...but hey i could be wrong...I don't think the diff. rate and btc value have anything to do with each other...market is based off of supply n demand i think...i'm no expert and don't claim to know alot but that is just my opinion so take it for what its worth

drwho88888

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LOL

And ? What is it, or aren't you telling and expect me to find out for myself ? (Or do you consider it a top secret notion which will give the keeper of the secret a big advantage ?)

MagicBit15

sr. member

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Let's Start a Cryptolution!!

Yes.

drwho88888

member

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Merit: 10

Does anyone know if there is a relationship between the two statistically ?

Topic: Difficulty and BTC value - page 2. (Read 3967 times)