Difficulty estimated to increase by 20%

notme

legendary

Activity: 1904

Merit: 1002

Quote from: Stephen Gornick on February 27, 2013, 09:59:11 PM

Quote from: ArticMine on February 27, 2013, 07:12:18 PM

The difficulty has increased has increase over the last year by a factor of 4 while the price has increased by a factor of 8 or more. How is this hurting a struggling GPU miner?

Um ... "halving" (50 BTC per block to 25, occurred in November). Those who sell their mined proceeds shortly after they are earned didn't sell them at $31, then sold them at $11, and $15, and $18, etc as it rose. So they are just now doing better than the level of profitability they were at right before the halving. But this 20% difficulty increase will cut their REVENUE 20%, which decimates their profits if their margins (revenue minus expenses) wasn't that great.

And that's why you use mining to acquire bitcoin and not fiat.

Stephen Gornick

legendary

Activity: 2506

Merit: 1010

Quote from: ArticMine on February 27, 2013, 07:12:18 PM

The difficulty has increased has increase over the last year by a factor of 4 while the price has increased by a factor of 8 or more. How is this hurting a struggling GPU miner?

Um ... "halving" (50 BTC per block to 25, occurred in November). Those who sell their mined proceeds shortly after they are earned didn't sell them at $31, they sold coins at $11, and $15, and $18, etc as it rose. So they are just now doing better than the level of profitability they were at right before the halving. But this 20% difficulty increase will cut their REVENUE 20%, which decimates their profits if their margins (revenue minus expenses) wasn't that great.

ArticMine

legendary

Activity: 2282

Merit: 1050

Monero Core Team

Quote from: Stephen Gornick on February 27, 2013, 04:14:33 PM

Quote from: Rothgar on February 27, 2013, 09:16:30 AM

So the price is steady around 30/31. What happens on Monday when the difficulty should be much higher and the banks are open to fund dollar accounts? Thursday-Friday the difficulty goes up. The fact that this price is holding even with the blocks coming out at around 8/hour I would consider to be a bullish signal.

Incidentally, the difficulty increase will be the biggest ever in terms of size of the increase in the number from one level to another. With block 133,056 is increased from 877,227 to 1,379,223, or 501,997 in one adjustment. This one will be over 700,000.
- https://docs.google.com/spreadsheet/ccc?key=0AmcTCtjBoRWUdHVRMHpqWUJValI1RlZiaEtCT1RrQmc

The impact of what miners do with their they earn each day anymore (or do when no longer earning coins from mining) is becoming a smaller and smaller part of the bitcoin ecosystem. It's not a trivial amount, but at the same time it is not something that would impact the exchange rate a whole lot, at least not that I can see.

But a 25% rise in the difficulty just offsets a 25% gain in the exchange rate that already occurred. If it were temporary, that wouldn't be that significant. Because ASICs will only be coming faster and stronger, that's probably going to be the death-knell for those who stuck with GPU mining since the halving (and pay average rates or higher for electricity).

In other words, this is a significant jump in the difficulty for you as a struggling GPU miner. It is insignificant to everyone else.

The difficulty has increased has increase over the last year by a factor of 4 while the price has increased by a factor of 8 or more. How is this hurting a struggling GPU miner?

steamboat

hero member

Activity: 648

Merit: 500

Quote from: Stephen Gornick on February 27, 2013, 04:14:33 PM

Quote from: Rothgar on February 27, 2013, 09:16:30 AM

So the price is steady around 30/31. What happens on Monday when the difficulty should be much higher and the banks are open to fund dollar accounts? Thursday-Friday the difficulty goes up. The fact that this price is holding even with the blocks coming out at around 8/hour I would consider to be a bullish signal.

Incidentally, the difficulty increase will be the biggest ever in terms of size of the increase in the number from one level to another. With block 133,056 is increased from 877,227 to 1,379,223, or 501,997 in one adjustment. This one will be over 700,000.
- https://docs.google.com/spreadsheet/ccc?key=0AmcTCtjBoRWUdHVRMHpqWUJValI1RlZiaEtCT1RrQmc

The impact of what miners do with their they earn each day anymore (or do when no longer earning coins from mining) is becoming a smaller and smaller part of the bitcoin ecosystem. It's not a trivial amount, but at the same time it is not something that would impact the exchange rate a whole lot, at least not that I can see.

But a 25% rise in the difficulty just offsets a 25% gain in the exchange rate that already occurred. If it were temporary, that wouldn't be that significant. Because ASICs will only be coming faster and stronger, that's probably going to be the death-knell for those who stuck with GPU mining since the halving (and pay average rates or higher for electricity).

In other words, this is a significant jump in the difficulty for you as a struggling GPU miner. It is insignificant to everyone else.

It will be about an 18% "loss" for me, running CM1s. If things continue like they are (I'm sure the difficulty rise will only continue to rise faster) FPGA miners will be priced out shortly as well. Thankfully I'm mining black ink so while not great, it isn't going to cost me.

Stephen Gornick

legendary

Activity: 2506

Merit: 1010

Quote from: Rothgar on February 27, 2013, 09:16:30 AM

So the price is steady around 30/31. What happens on Monday when the difficulty should be much higher and the banks are open to fund dollar accounts? Thursday-Friday the difficulty goes up. The fact that this price is holding even with the blocks coming out at around 8/hour I would consider to be a bullish signal.

Incidentally, the difficulty increase will be the biggest ever in terms of size of the increase in the number from one level to another. With block 133,056 is increased from 877,227 to 1,379,223, or 501,997 in one adjustment. This one will be over 700,000.
- https://docs.google.com/spreadsheet/ccc?key=0AmcTCtjBoRWUdHVRMHpqWUJValI1RlZiaEtCT1RrQmc

The impact of what miners do with their they earn each day anymore (or do when no longer earning coins from mining) is becoming a smaller and smaller part of the bitcoin ecosystem. It's not a trivial amount, but at the same time it is not something that would impact the exchange rate a whole lot, at least not that I can see.

But a 25% rise in the difficulty just offsets a 25% gain in the exchange rate that already occurred. If it were temporary, that wouldn't be that significant. Because ASICs will only be coming faster and stronger, that's probably going to be the death-knell for those who stuck with GPU mining since the halving (and pay average rates or higher for electricity).

In other words, this is a significant jump in the difficulty for you as a struggling GPU miner. It is insignificant to everyone else.

Rothgar

sr. member

Activity: 374

Merit: 250

Tune in to Neocash Radio

Quote from: b!z on February 27, 2013, 09:31:52 AM

I don't think so. Miners will be cashing out when the difficulty goes up.

cashing out their GPUs for bitcoin. Grin

b!z

legendary

Activity: 1582

Merit: 1010

I don't think so. Miners will be cashing out when the difficulty goes up.

Rothgar

sr. member

Activity: 374

Merit: 250

Tune in to Neocash Radio

So the price is steady around 30/31. What happens on Monday when the difficulty should be much higher and the banks are open to fund dollar accounts? Thursday-Friday the difficulty goes up. The fact that this price is holding even with the blocks coming out at around 8/hour I would consider to be a bullish signal.

Topic: Difficulty estimated to increase by 20% (Read 1138 times)