Topic: Difficulty are going down - No question about it - New price target 3-4 dollars (Read 5244 times)

Sorry, this is wrong.  Actually, thinking of this sort doesn't even relate enough to reality to be merely wrong.

The exchange rate does not drive difficulty.  However, the difficulty also does not drive price.

Price, difficulty and a bunch of other factors form a complicated system of non-linear differential equations.  In short, they all drive each other in a chaotic way.  And I'm using chaotic in the technical sense here, meaning deterministic but unpredictable, like the weather.

A quick glance at a difficulty chart and an exchange price chart should make it perfectly obvious that there is no simple relationship between the two, so I can't imagine why people keep insisting that one causes the other.

References that you should probably read before replying:

Chaos theory
Newton's Method for finding roots of equations.  A ridiculously simple system that is often totally unpredictable.
Lotka Volterra a very simple model with only two equations.  Pay attention when you get to the part about the atto-fox.

I'm going to respectfully disagree with that, to an extent.  There was a time when difficulty increased when Bitcoins had absotively no USD price at all (pre-MtGox). Price alone doesn't drive difficulty, otherwise we would have seen a significant drop in difficulty by now from the time when the BTC was $32.  Yet all we've seen are marginal drops in difficulty that could have been affected by almost anything.  People become disillusioned and pull out, and to a degree it's balanced out by people who are just finding out about Bitcoin and by people who are adding to their hashing power.  I think it would be more accurate to say that what drives difficulty is awareness and speculation.

fastandfurious, I've read your posts, and it's obvious you don't know what you are talking about.  For you to stick out in my mind, you must have said some pretty stupid things.  There's only 4 or 5 people on this forum that automatically trigger a "don't listen to him" reaction in me, and you are one of them. 

Price drives difficulty.  Not the other way around.  That's the way it is.

Has the difficulty dropped yet?  It lags the block creation rate by weeks, but it ought to have dropped a bit by now.

Wake me up when it hits 3-4 dollars.

Anyone have a graph that compares difficulty with price over time (on a logarithmic scale)?

HAHA. And you think you know what you are talking about?

First indicator that someone has no idea what they are talking about: they think difficulty drives price.

Thanks Kermee.  Good points.

DB was over +10% lucky over the past 24-hours.
BTC Guild is holding +24% lucky over the past 24-hours.

That's why the 'Instant Difficulty' indicator shows 2.35 million...

Cheers,
Kermee

P.S. I'm still not worried about a Diff. Increase.
P.P.S. http://dot-bit.org/tools/nextDifficulty.php -- I've found it to be too 'aggressive' in its estimating in regards to Bitcoins. http://blockexplorer.com/q/estimate is a lot more accurate.

Holy crap.  1.30x instant difficulty now for 2.35 million! 

Instant difficulty currently at a multiple of 1.07 or 1.928 million.  Looks like the next increase might actually be an increase.

Difficulty is lower but I don't agree with OP that it is plummeting or anything along these lines.

Difficulty dropped from 1.89 down to 1.80 or 5%. I will agree with the fact that difficulty will most likely drop some more, based on the fact that network is still losing its mining power daily. I see outflow of 50 to 100Gh per day. Network top was 14.1Th when price cracked down to sub $9 miners started leaving and are still doing so. I don't think difficulty will drop more than 3 to 5% unless something major would happen to the price in either direction. By major I mean 50%+ move.

I don't agree with OP on his new price target. At least not anytime soon, 4 to 12 weeks. Bitcoin being that volatile its hard to predict basically anything, but my personal opinion right now is, that price simply can not plummet like OP is suggesting. We could see price drop to $9.50 but that's about it for immediate future.

Last time price dropped to sub $6  it was a mix of very unfortunate things coming together at exactly the right time. It was 1 block sell of 26k at the market that dropped the price from $7.xx down to $5.75. This was the biggest 1 block market sell when price itself was already struggling. Whoever was unloading those big blocks could certainly come back and sell more, but at the moment price is very well supported on the bid side and it would take a lot of persistent selling to shake the markets like that again. Also every time we get this kind of shocks to the system, you have to realize that bitcoins are spreading from very few people to the much bigger audience, which is always a good thing. Eventually all the early adopters and maybe Satoshi himself will unload most of their holdings and bitcoins will be held by a greater number of people.

I'm currently waiting to see which way the market will decide to go. I still see the pressure at the moment is to the down side, which means $9.50 area is the key on the downside. If we get a rally and price starts to run, I'm interested in price above $14.00 to $15.00 area. All this are simple key areas from bitcoins trading history.

I find all these market predictions hilarious since if price drops (which we know can happen since its still a volatile market) then these speculator threads are seen as prophecies however then the price recovers within 5days and those prophecies arnt being called out at all?

Ive noticed the absolute opposite to what you propose here, lower difficulty ended in higher trading value since more people get involved in the market and not only those who allready have coins from months ago.

Every single difficulty increase we have had since going over 1million difficulty resulted in a new low when hitting the next difficulty.

Drop the difficulty by 50% and you will more likely see the price stay relatively the same ~$10 or move up rapidly as before.

This is just another one of those and have no substance except pure gullable speculation.

If all miners think like you, Bitcoin is doomed. Seriously, it's very obvious that you are not into Bitcoins for its success. Ultra low price = people loose interest = helping paypal in destroying bitcoin.

These people who say they its alright to sell low because they have free electricity, are you really sure its free? For example, young miners who still live with their parents think that they are mining for free. Even though the parents are the one paying the electricity, that will have an effect on the spendings of the entire family. Since Dad has to pay higher electric bills, some little luxuries and savings will be affected. In short, stealing money from the parents. And those who mine at work, thievery and corruption plain and simple and might cause the company to size down (if a lot of employees are mining at the office) and probably lay off some of the workers in the future (if unlucky, your butt is on the line).

... or ...
The previous difficulty was 1690895.80305
The current difficulty is 1888786.7053531

What price range happened at the previous difficulty?

Will it drop back to the previous difficulty at the end of this 2016 blocks?
No. It will be higher. Higher difficulty than the previous 1690895.80305 ... ... ...

Any association between price and difficulty would be extremely complex ... not a simple-minded "difficulty went down price will go down"

I think it's, on average, going up for the next 2 weeks due to the pre/post conference hype.  After that, I think a lot of it depends on the success on the conference (like, what will Forbes/CNN/Wall Street Journal/etc. make of new things like Bitcoin ATM and other developments?). 

Hows this ENTIRE POST working for ya?

i'll put this out there though. /I/ believe in bitcions, so i'm going to mine them whether i'm paying to mine them, or being paid to mine them. The reason is because I believe the long term bitcoin price will rise, maybe not this year, perhaps next, perhaps when its 12BTC per block... the halving will certainly drive price I think.

That is true what you are saying price should in most cases drive difficulty. But I like to analyse things, for me right now that tells me that miners are more desperate. Because they have invested heavily in mining rigs last months, they wanted to "hustle" the direct buyer and thought they could make easy money, but we should be smarter then that. I'm a direct buyer (I believe in Bitcoin long term), but not at levels I know I am getting hustled.