Topic: Difficulty are going down - No question about it - New price target 3-4 dollars - page 2. (Read 5244 times)
August 14, 2011, 03:38:38 AM
On a related note, at least no one is arguing it's "un-ethical" to mine BTC: https://bitcointalksearch.org/topic/bitcoin-simply-are-not-worth-10-or-9-or-8-36881
August 14, 2011, 03:35:25 AM
You don't get it? Why is it that so many here don't get easy math or easy economics. It should not be that hard. If difficulty goes down then I can mine more bitcoins with my "1,4 GHash/s rig" / day, when i do so, I will be able to sell MORE bitcoins / day, and because of that I don't need it to be at 5-6 dollars, I'm happy to get 3-4 dollars and I STILL make a good profit at the last line, that is in dollars / day. Get it now? If not please stop commenting.
YOU might get more BTC when the difficulty goes down, but the TOTAL amount of BTC paid to miners is THE SAME. That's the WHOLE POINT of difficulty.
I think it's you that "don't get easy math or easy economics."
And what happens if I get more Bitcoins, and everyone else that are STILL mining also does so? Do you think that our incentives to sell at a lower price would be higher? Do you think that everyone else that has bitcoins would see that and understand economics, see the opportunity to sell high (before the miners) and buy back cheaper?
I'm trader and a miner. I'm going to get the best price for my BTC no matter where I got them from, mining or trading.
I see what you are saying. If miners get more BTC this week because the difficulty was lower, they will be more likely to sell them cheaper to cover electricity and hardware costs.
This is the old "difficulty drives price" vs "price drives difficulty" argument. We've been around and around this argument this whole thread. It comes down to what you believe.
I believe price drives difficulty.
This is like "liberal vs conservative" - in the long run, there is no right answer.
August 14, 2011, 03:29:25 AM
/if/ everyone was getting more bitcoins than they should, the difficulty would adjust... and the faster people get bitcoins, the faster the difficulty adjusts to set it to 1 block every 6 minutes.
over time, the average will stay around 1 block every 6 minutes, though short term there will be fluctuations. This round you might earn more than average, then if thats true, next round you will earn less than average. That is how difficulty works.
over time, the average will stay around 1 block every 6 minutes, though short term there will be fluctuations. This round you might earn more than average, then if thats true, next round you will earn less than average. That is how difficulty works.
That is not my point, I understand that.
My point in simple English is this. Miners that have high electricity cost will leave, that will take down the difficulty, that will make miners as me with zero or low electricity cost able to sell more bitcoins at A LOWER PRICE because we have a MAJOR ADVANTAGE.
Still don't get it? If not maybe you will get it when we hit new lows. As long as difficulty don't get a fair amount higher from the last all time high, the price of 10 dollars are very high.
August 14, 2011, 03:25:15 AM
Right now Bitcoin economy is in high inflation environment, later in maybe in 2013 (bitcoins mined is halfed) the price of creating a bitcoin isn't that important, because that in correlation to total amounts of Bitcoins is far smaller. But today this is not the case, still the amount of bitcoins in comparison to what is created are relatively big enough that it is very important to understand the price of one bitcoin created.
Get to understand the price of creating one bitcoin and do your due dilligence. So you don't get hustled at the exchanges by the traders that put up fake buy orders and also by the miners that make money on your dollars when YOU as a direct buyer are taking the majority of the risk by putting in money in this economy.
The miners have always two options. Stop mining (no cost). Sell the rig. The direct buyer has pretty much no options if someone wants to sell 100 000 bitcoins within a short time frame. Then you have lost 50 %.
Get to understand the price of creating one bitcoin and do your due dilligence. So you don't get hustled at the exchanges by the traders that put up fake buy orders and also by the miners that make money on your dollars when YOU as a direct buyer are taking the majority of the risk by putting in money in this economy.
The miners have always two options. Stop mining (no cost). Sell the rig. The direct buyer has pretty much no options if someone wants to sell 100 000 bitcoins within a short time frame. Then you have lost 50 %.
August 14, 2011, 03:18:23 AM
/if/ everyone was getting more bitcoins than they should, the difficulty would adjust... and the faster people get bitcoins, the faster the difficulty adjusts to set it to 1 block every 6 minutes.
over time, the average will stay around 1 block every 6 minutes, though short term there will be fluctuations. This round you might earn more than average, then if thats true, next round you will earn less than average. That is how difficulty works.
over time, the average will stay around 1 block every 6 minutes, though short term there will be fluctuations. This round you might earn more than average, then if thats true, next round you will earn less than average. That is how difficulty works.
August 14, 2011, 03:07:08 AM
You don't get it? Why is it that so many here don't get easy math or easy economics. It should not be that hard. If difficulty goes down then I can mine more bitcoins with my "1,4 GHash/s rig" / day, when i do so, I will be able to sell MORE bitcoins / day, and because of that I don't need it to be at 5-6 dollars, I'm happy to get 3-4 dollars and I STILL make a good profit at the last line, that is in dollars / day. Get it now? If not please stop commenting.
YOU might get more BTC when the difficulty goes down, but the TOTAL amount of BTC paid to miners is THE SAME. That's the WHOLE POINT of difficulty.
I think it's you that "don't get easy math or easy economics."
And what happens if I get more Bitcoins, and everyone else that are STILL mining also does so? Do you think that our incentives to sell at a lower price would be higher? Do you think that everyone else that has bitcoins would see that and understand economics, see the opportunity to sell high (before the miners) and buy back cheaper?
August 14, 2011, 02:59:08 AM
Another thing, don't think that because miners are leaving that is a sign that the prices are to low, that is only a sign that miners that shouldn't be mining in the first place mined bitcoins, the ones with high electricity bills. The Bitcoin economy as whole is big enough that you should see what you see in the real world, that is major advantages, so who are we that have them and will mine at pretty much any cost and are happy to see miners leave the market? The group of us miners that mine for free or with low electricity cost, and I know that we are a pretty big group. Some people actually do their due diligence.
August 14, 2011, 02:58:33 AM
You don't get it? Why is it that so many here don't get easy math or easy economics. It should not be that hard. If difficulty goes down then I can mine more bitcoins with my "1,4 GHash/s rig" / day, when i do so, I will be able to sell MORE bitcoins / day, and because of that I don't need it to be at 5-6 dollars, I'm happy to get 3-4 dollars and I STILL make a good profit at the last line, that is in dollars / day. Get it now? If not please stop commenting.
YOU might get more BTC when the difficulty goes down, but the TOTAL amount of BTC paid to miners is THE SAME. That's the WHOLE POINT of difficulty.
I think it's you that "don't get easy math or easy economics."
August 14, 2011, 02:53:04 AM
If the 10 dollar price should be sustainable, we should start to see an increase in the difficulty soon. It is like the market of Bitcoins prices in a difficulty increase, at the same time miners are leaving (not in a hurry but you can see that it is going down) and are showing the market that they have for different reasons stopped mining. My bet is on that it will continue going down for a while. And once again the direct buyer is feeding the beast, that is the miners, without having done their due diligence.
August 14, 2011, 02:46:14 AM
Blocks per hour now down to 4.88
Next difficulty 1,841,634
Difficulty down -> More bitcoins for the miners that are left mining (and are profitable) -> more bitcoins to sell to the direct buyers -> more pressure on the exchangesNext difficulty 1,841,634
Same bitcoins per day to miners
Same bitcoins to sell to buyers
Same pressure on the exchanges
that's kinda what the difficulty does.
You don't get it? Why is it that so many here don't get easy math or easy economics. It should not be that hard. If difficulty goes down then I can mine more bitcoins with my "1,4 GHash/s rig" / day, when i do so, I will be able to sell MORE bitcoins / day, and because of that I don't need it to be at 5-6 dollars, I'm happy to get 3-4 dollars and I STILL make a good profit at the last line, that is in dollars / day. Get it now? If not please stop commenting.
August 14, 2011, 02:37:28 AM
Blocks per hour now down to 4.88
Next difficulty 1,841,634
Difficulty down -> More bitcoins for the miners that are left mining (and are profitable) -> more bitcoins to sell to the direct buyers -> more pressure on the exchangesNext difficulty 1,841,634
Same bitcoins per day to miners
Same bitcoins to sell to buyers
Same pressure on the exchanges
that's kinda what the difficulty does.
August 14, 2011, 02:14:52 AM
Blocks per hour now down to 4.88
Next difficulty 1,841,634
Difficulty down -> More bitcoins for the miners that are left mining (and are profitable) -> more bitcoins to sell to the direct buyers -> more pressure on the exchanges Next difficulty 1,841,634
August 13, 2011, 10:16:29 PM
Blocks per hour now down to 4.88
Next difficulty 1,841,634
Next difficulty 1,841,634
August 13, 2011, 05:33:30 PM
I disagree completely that difficulty causes price changes.
It's the other way around.
If the price goes up, more people mine, and then the difficulty goes up.
If the price goes down, less people mine, and the difficulty does down.
Price affects difficulty. Difficulty does not affect price.
Yes, i found a lag of 15 days on average beetween price and diff., if price goes up then miners need 15 days to buy new hardware, setup the rig and start mining with the final effect of rising the difficulty. It's the other way around.
If the price goes up, more people mine, and then the difficulty goes up.
If the price goes down, less people mine, and the difficulty does down.
Price affects difficulty. Difficulty does not affect price.
August 13, 2011, 04:27:18 PM
I disagree completely that difficulty causes price changes.
It's the other way around.
If the price goes up, more people mine, and then the difficulty goes up.
If the price goes down, less people mine, and the difficulty does down.
Price affects difficulty. Difficulty does not affect price.
It's the other way around.
If the price goes up, more people mine, and then the difficulty goes up.
If the price goes down, less people mine, and the difficulty does down.
Price affects difficulty. Difficulty does not affect price.
August 13, 2011, 03:29:52 PM
If you live in the American Midwest and are finding it unprofitable to mine, you can move your rig into my place and I will charge you only 40% of your current electric bill.
I get free electricity.
I get free electricity.
August 12, 2011, 11:56:38 PM
Actually, difficulty DOES have an effect on price. Think about it this way. You are new to bitcoins and you want to be long some, with your choices being mine or to buy. If you do the math on power costs and at current difficulty your cost to mine is $7/btc with a bitcoin appearing once every 3 days while cost to buy is $5.80/btc, where do you think BTC prices will go short term?
Conversely, if the BTC is selling for $32 but it costs you about $2.50 to mine it at currently difficulty with a coin appearing every day where do you think BTC prices will go for the next few months?
There are other secondary effects. If I look at difficulty and it looks like I'll have an easier time coughing up coins in the coming 2 weeks than today then it makes little sense to hoard. If it looks like difficulty is going to drop a *LOT* then yeah, fire sale time.
That said my barometer of difficulty is deepbit. Deepbit was going up about 100 Ghash/day, then that slowed down to 50 Ghash/day, and is now holding about even at around 5400 gigahash. I'll panic if I see that drop to 4000 (which could happen if we trade at below $7/btc for more than a few weeks). Until then it still looks like smooth sailing.
Conversely, if the BTC is selling for $32 but it costs you about $2.50 to mine it at currently difficulty with a coin appearing every day where do you think BTC prices will go for the next few months?
There are other secondary effects. If I look at difficulty and it looks like I'll have an easier time coughing up coins in the coming 2 weeks than today then it makes little sense to hoard. If it looks like difficulty is going to drop a *LOT* then yeah, fire sale time.
That said my barometer of difficulty is deepbit. Deepbit was going up about 100 Ghash/day, then that slowed down to 50 Ghash/day, and is now holding about even at around 5400 gigahash. I'll panic if I see that drop to 4000 (which could happen if we trade at below $7/btc for more than a few weeks). Until then it still looks like smooth sailing.
August 12, 2011, 02:10:49 PM
I already dropped off of bitcoin mining awhile ago. Needs to be above $13 for me to get back in. (about 2.7ghash/s sitting idle) Got a months worth of bitcoin mining from mining ixcoins for 1 day anyway.
So i'll wait and see, but for now I'm not mining.
So i'll wait and see, but for now I'm not mining.
August 12, 2011, 02:01:55 PM
It's pretty much definite that difficulty will going down if nothing changes, actually. Estimates over multiple non-overlapping periods of time have consistently indicated that the hash rate has dropped, and it looks like we should be in for at least a 3% drop in difficulty.
Yes, I agree, but he was refering to the big "drop" that the 8 hour stimate had this morning.
August 12, 2011, 12:48:32 PM
The "proof" you provided is no proof at all.
Sipa calculates the hashing power of the network by aproximation. It computes the difficulty and the blocks found during a certain period. If the miners happen to be very unlucky for some period, it can seem that the hashing power is going down. And the same is true in the opposite direction, if the miners happen to be very lucky for a while, it can seem that the hashing power is going up.
Big short term variations are usually due to the luck of the miners. We have seen movements in the "hashing rate" like this before, both up and down.
It's pretty much definite that difficulty will going down if nothing changes, actually. Estimates over multiple non-overlapping periods of time have consistently indicated that the hash rate has dropped, and it looks like we should be in for at least a 3% drop in difficulty. Sipa calculates the hashing power of the network by aproximation. It computes the difficulty and the blocks found during a certain period. If the miners happen to be very unlucky for some period, it can seem that the hashing power is going down. And the same is true in the opposite direction, if the miners happen to be very lucky for a while, it can seem that the hashing power is going up.
Big short term variations are usually due to the luck of the miners. We have seen movements in the "hashing rate" like this before, both up and down.
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