Topic: Hash rate declining slightly in recent weeks. - page 2. (Read 4372 times)

Suddenly, in the last two days, the hash rate went way up. Somebody just brought substantial new mining capacity on line. Looks like the difficulty will not go down.

Any idea who has the new big mining farm?

The chart in your link is now showing +1% difficulty change. So much for the "difficulty is going down" crowd. And still 5 or 6 days to go. 

https://bitcoinwisdom.com/bitcoin/difficulty

Big farms? The "big farms" are the ASIC manufacturers. Their equipment costs are a fraction of what retail machines cost. And their equipment is hosted in areas of the world where they pay a fraction of what your average home miner pays for electricity.

IF the price continues to slide, I think you will see the big farms start to sell off their equipment as they need the price to be at a certain point to be profitable. When they purchased the equipment, the btc price was probably above 600, so a 300 dollar price is pretty scary for them..

A difficulty decrease would be awesome but I'll believe it when I see it. I turned off all My S1s a while back. They were costing more in electricity than they were making in Bitcoin. Would make me very happy if I could turn them on again.

Where did you get the chart?

We need to drop the BTC/USD to 250, so 30% of the 'cloud' miners stop. Then it will be nice.

hash rate going up again, so yeah, most probably will be a small increase.

I think we will see a small increase in difficulty this next time.

We're halfway to the next difficulty adjustment, and the green line (difficulty if it was adjusted right now) is still below the red line (current difficulty). (The grey line (recent hash rate) is climbing again, though.) So we're on track for a decline in difficulty, or at most a small increase.

I believe its due to BFL...

Punishing and greed is the wrong frame IMO. Home miners are no less greedy than industrial miners, and profit motive isn't a bad thing. Home miners are simply having their asses handed to them, and uncompetitive data centers will also go out of business. This is simply a case of market forces in action, and it's healthy. I really doubt home miners will be able to maintain a significant share of the total network hash rate and unfortunately this may lead to more centralisation. Mining has become a business, and the rational thing for miners to do is to sell off all their bitcoins. Companies can also speculate in BTC, but these are really two independent business processes. There will be no return to the golden age of accumulating coins cheaply through home mining, just as there will be no return to GPU or CPU mining, no matter how much angry people with financial decisions that didn't pan out complain about it. There's no such thing as an indefinite free lunch, if you want to earn money you have to do something for it: perform competitively priced labour, bear financial risk, or save some money.

Agree. I think home miners who are marginally profitable should hang on to their equipment. If you are paying $0.22 for power, then maybe not so much. If you believe in BTC long term, then lower prices are good short term.

The fact that hash rate is no longer increasing even though we know at least some brand new equipment is coming on line means we start to understand the economics of the older mining farms. Some of them can no longer pay the bills at BTC less than $400. By pay the bills I meet are cash poor or choose not to operate equipment at a loss. So some of the 2013 equipment is getting turned off. At a power plus marginal operating cost of $0.12 GHS, a 2W/GHS miner is no longer profitable. If you saw my post about Chinese power prices, they are all over the map. If anybody knows when the power cost of hashing dropped below 2W/GHS, please share it with the group.

IMHO, this means that at least some large mining operations have to regularly sell their BTC to keep the lights on. Mine and hold is not an option to them. As discussed in other posts - this becomes a death spiral until miners start shutting down-thus stabilizing the drop in BTC price. I see at least two possible dynamics:

1. A farm is still at break even on the fixed costs with newer equipment. It is just the older equipment operating at a loss on marginal operating costs. This means the marginal cost of operating the older equipment is just the power (and a bit of labor). That equipment can be turned back on if difficulty drops or BTC price increases.
2. A farm does not have enough of the right type of hashing power to cover fixed and marginal costs and are shutting down either voluntarily, by the power company or by their landlords. These farms are much less likely to come back up if operating profitability of BTC mining improves.

In either event, as I have mentioned many times, the current economics makes investment in a new generation of ASICS highly problematic for the mining companies. I do have an MBA to go with my Physics degree. The business case would not pass muster here in the US. If I am right, then we may see a fairly steep  drop in the rate of difficulty increase as long as BTC price stays low.

Further, there is nothing to put upward pressure on BTC prices because industrial miners now dominate production. They have to sell.

As the OP said bitcoin ecosystem is punishing greedy mining farm companies. Delicious.

God I hope so    Come on $100 BTC!!!!!!!!!!!!!!!!!!!!!! 

more mining--->more sell pressure on btc---->>more difficulty--->more electricity cost----->no Return of Invest----> and shut down with negative profit ----> sell miners HW under pruduction's (or buy) cost ---> underinvested miners win and worst ( assume this word widely ) HW producers and big farms lost

cicle will repeat when people will (and they will) buy equipement for double (or more) the production's cost, probably because the next price's bubble

the cicle won't repeat when speculators understand that high ROI in bitcoin world is allowed only for very shot timeframe and at a huge risk.

However I don't think the time for true difficulty drop is now 

that big mining farms,companies had just punished themselves..

more mining--->more sell pressure on btc---->>more difficulty--->more electricity cost----->no Return of Invest----> and shut down with negative profit

bitcoin ecosystem is punishing greedy mining farm companies..

I'm sure hashrate is declining, with the cost of electricity in most countries and current difficulty / btc price its no wonder.

Mining is not profitable in most countries anymore even with the latest hardware.

I say not profitable. Most miners are not breaking even or in other words, they're losing money.

Price drop plus bfl bust plus variance equals first diff decline is years. Let's hope

i'm sure its the bigger coporations giving in now that the price is low. but as soon as it goes up so will the hashrate

Ya something had to give.