Hi guys, I'm a newbie to these forums and I have only just figured out that I need to make a post here before I can add some comments to the rest of the forums.
I've only been aware of bitcoin for a little over two months but I have followed it with great interest and thanks to these forums I feel I have learned a lot. However knowledge never stands still.
The difficulty level interests me. We should all know now why it rises but what I find amazing is that at some point in the future it has to slow down its massive increases. Ie if everyone on earth was already mining there would be increases as more users bought more miners, which is different from now in that ATM more users are buying more miners just as previously stated, but also more users are constantly finding out about bitcoin and themselves buying miners. These increase are on top of increase miner machines performances too.
I guess what I'm saying is IMHO the difficultly is being mainly driven ATM by at increase in awareness, as well as an advance in mining machines. Does this makes sense or have I waffled to much?
Thanks for reading and a big thanks to the many users who have written some excellent posts on this forum.
Ps can I have my "gold star" please now Mr Board Admin.
It is realively easy to discern the two effects.
(1) Assuming a constant cost of mining power (in terms of $s/hash and J/hash), and constant ratio of miners/users, difficulty follows the general rate of adoption, which is in turn reflected in the exchange price.
Throughout most of Bitcoin history, this has been so - give or take. Ergo, most of the time difficulty follows the exchange rate with a few weeks of delay.
(2) Whenever mining technology is transitioning (CPU, GPU, better GPU, FPGA, ASIC), we have an additional and temporary upward drift in the difficulty curve on top of what is described in (1), and which can be attributed to the technological leap.
