Topic: Projecting Future Difficulty (Read 1602 times)

power cost is the most stable of variables but do not rule it out as a factor.

IMHO, the decision on ROI should be based on past difficulty increases (15.2% for 2014) rather than projections of lower future increases.  Then factor in your cost of power.
An S3 miner put into production today at 15% difficulty increases flatlines at about .74 BTC in late 2015. At $0.10 power, it consumes about $140 worth of power in that time. That miner cost .66 BTC on the latest batch.

The variables in ROI are difficulty increases and BTC value. My goal is to slightly break even on both using conservative assumptions. Anything better is just nice.

Well It is only part of what I am doing.  I sell on ebay so having tested running machines is big for me as part of my sales. I have a lot of hosted gear.  But in house looks to be a dead end very soon.
  At 15 cents a kwatt. .8 watt gear is pretty important for me.  This kind of puts me in the market for the new dragon miner at 1.5th 3 without psu's would cost 3720 usd  1240 each.  I have psu's that will run the gear.  I would have 4.5th using about 3300 watts.     this translates to  .08 btc a day with the new diff. Frankly I can't justify doing this. What happens at a diff % increase of 10 power at 15 cents a kwatt and btc at 500usd is I no can pay for power around feb 1st 2015 and I lose about 1200 usd. Now if power was 10 cents a kwatt and I had 3 good dragon miners I project to lose 400 usd. The numbers are forcing me out slow but sure.  Spot miner at best in a few discounted  power areas.

That seems like a lot of trouble for a few dollars a day.

Well in about 12 hours we will jump 14.5 to 15.5 %    about 27,500M      this means a 1th setup earns  .0182 btc a day    so if you have a 1 watt machine it is 24 kwatts in a day

That is

2.40usd  for power at 10 cents
3.60usd for power at 15 cents
4.80usd for power at 20 cents

earnings = 9.10 usd    before power.      most of the s-1's undervolt downclock will be gone soon since they go as low as 1.1 watts.

 The squeeze is on for me I have 15 cents a kwatt in house.   So my 1.2th in house uses 1170watts   I pay about 4 dollars a day in power to earn about  11 dollars in btc.

my daily profit is  about 8.10 usd before this jump 6.45 usd after.  At 15 cents a kwatt my in house is going to end soon this forces me to find spot locations with cheap power. I have two as of now. Around 4 cents a kwatt and I run 4 s-3's in those spots.

I am hoping for around 10 percent.  We will see if I'm anywhere close in a few months. 

Once summer is over cooling at least for me is easier.  So that mean I have a little bit less cost.  I'm hoping winter comes soon.

yeah it has really done well in the last 5 hours. still fits my july 2014 to Jan 2015 prediction model of  11-13 percent avg.   we had some very low numbers in the summer. so a 20% and a 15% jump do not fully kill the lower numbers prior

   3.08%
   8.08%
   5.30%
 20.86%    these are a about a 9.36 avg over the last 4 jumps    so a 15% now still keeps us  under my 11 to 13 % prediction.
  we would be close to 10% over 61 days june 30  to aug 31st.

On the contrary   many feel the network will build out in huge data centers and 20% growth will come back with us moving form 200ph to 700ph in the next four months. That would be something to see. I am not quite sure it will happen. Asic builders don't need miners and only have to mine by their selves while they want profit they have not much risk if they have paid off the gear. If they sell it they lose since the power to hash/profit number becomes tighter.  But even though my logic is sound people get greedy and maybe they will build out like nuts.

Despite the bad luck on 5 major pools over the past couple of days we're still looking at 15% increase.  The luck seems to be normal or positive today and it's going back to between 15-20% increase in 24 hours.

you are coming up well under 10%.  I tend to agree with you if you look at many threads in spec on bit coin diff  .

I use 200 day time periods. I run:

 June 2013 to Dec 2013 25% avg.
Dec 2013 to July 2014 18%
July 2014 to Jan 2015    I project 11-13%.


I rank:
 btc price 1st
Watt per hash 2nd
$$ per k-watt 3rd          as the factors that could greatly change the 11-13% number.  I like your diff predictions better then mine as they are even lower then my 11-13% prediction.


My conclusion is asic builders will slow production down a lot and just hash/mine on their own  unless my 3 factors are radically changed in favor of profitable mining.

When buying a bitcoin miner, your first concern is will you ROI on your purchase.
To know whether you will ROI, you need a good idea of how quickly the difficulty in the future will increase.
I've been working on making difficulty projections, and most of the time, no matter what forecast model I use, I project that I will not ROI.
I've tried plain old exponential, double and triple exponential smoothings along with neural networks, double moving averages, polynomial, etc.

Here is a plot of the Bitcoin Difficulty over the past few years:



Note the long period between 2011 and 2013 that Bitcoin difficulty wasn't increasing very much due to ASICs not being on the market.

Let's zoom in on the ASIC era:



And now let's use double/triple exponential smoothing to forecast out 1 year:



Exponential smoothing was one of the more generous of the models I chose, and what I'm forecasting is that the projected difficulty increases wouldn't allow, for example, a SP31 that starts mining 10/20 to come even close to ROI'ing even with sub 5 cent electricity.

Here's the projected absolute difficulty:



Table of projected increases per jump:

8/31/2014   8.5%
9/12/2014   10.8%
9/24/2014   10.6%
10/6/2014   10.4%
10/18/2014   10.1%
10/30/2014   9.9%
11/11/2014   9.7%
11/23/2014   9.5%
12/5/2014   9.3%
12/17/2014   9.1%
12/29/2014   8.9%
1/10/2015   8.7%
1/22/2015   8.5%
2/3/2015   8.3%
2/15/2015   8.1%
2/27/2015   7.9%
3/11/2015   7.7%
3/23/2015   7.4%
4/4/2015   7.2%
4/16/2015   7.0%
4/28/2015   6.8%
5/10/2015   6.6%
5/22/2015   6.4%
6/3/2015   6.2%
6/15/2015   6.0%
6/27/2015   5.8%
7/9/2015   5.6%
7/21/2015   5.4%
8/2/2015   5.2%
8/14/2015   5.0%
8/26/2015   4.8%

Any thoughts anyone?