If current difficulty growth CAGR stays the same those investing today will never breakeven

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  • workwork Member Posts: 2,084 ✭✭✭✭
    ilia7777 said:

    work said:

    Difficultt growth isn't a stable thing... stop trying to "math the future" based on extrapolation of bad data.

    It has been around 39-40% on average monthly for bitcoin and it will be for ethereum. How much ETH you'd like to bet that in a month we will see another 40% increase ? Its April 4th today.
    Lol. This has been explained before. You are clueless if you think you can compare BTC hashrate growth to Ethereum. Ethereum difficulty will not grow exponentially. If it does, I will eat my hat.
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    @work I knew there was a reason I don't like hats! Not that I'm implying your assertion is misplaced, but simply that *I* wouldn't enjoy eating my hat, for whatever reason. :)
  • workwork Member Posts: 2,084 ✭✭✭✭
    @dlehenky heh, ya, I might be balding but I don't wears hats either. If I'm wrong and ilia7777 is right tho, I'll grab a hat from my closet and film myself chewing on it in shame.
  • ethfanethfan Member Posts: 458 ✭✭✭
    work said:

    ...Lol. This has been explained before. You are clueless if you think you can compare BTC hashrate growth to Ethereum. Ethereum difficulty will not grow exponentially. If it does, I will eat my hat.

    I too have told him exponential growth cannot be sustained (near the end of page 2 of this thread) and have been brushed off. Just wait and see.

  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    G416G said:



    I'll make that bet

    1 block and your on if you got the balls

    Ahh, the crystal balls are back! :)
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    @bitcanuck Crystal balls, as in foretelling the future. It's a reference back to the other "difficulty" thread. Just having a little fun. :)
  • ethfanethfan Member Posts: 458 ✭✭✭
    Brings to mind this famous rhyme:
    There was a man from Madras,
    His balls were made of brass,
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    @bitcanuck Don't think you'd get much argument from *most* folks. If there's profit, they will come, even if it's going down a rat hole fast.
  • heandog69heandog69 Member Posts: 283 ✭✭
    what would happen if everyone had a break from mining, how long would the difficulty take to go back up once the machines went back online ?
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    @heandog69 It depends on how long, and deep, the break was. The difficulty can only adjust so fast, either up or down.
  • adasebadaseb Member Posts: 1,043 ✭✭✭
    I agree, the way that the difficulty projected was incorrect.

    The higher the difficulty is, the harder it is for the difficulty to grow.

    One month ago difficulty was 16 and now it is 25. So about 56% increase.
    Hashrate changed was about 800G about 40,000 GPUS.

    For the difficulty to increase another 56%, there would have to be a hashrate change of 1600G, about 80,000 GPUs.

    Month after that, for the difficulty to go up another 56%, there would have to be a hashrate change of 3200G, about 160,000 GPUs.

    The difficulty won't kill miners, but it might be the price or going POS.


  • oslakoslak Member Posts: 191
    @ilia7777 In Math a design is called "block-design" created from actions of a Projective Special linear group with a finite field. Usually the Finite field is the Galois Field plus another element at the point of infinity.

    Im very new to mining. Just after new year. Heard bitcoin before but did not really put any attention, busy with my job. I tried to look at the math behind bitcoin recently and its an advanced applied block-design. Security is applied in terms of encryption. I could be wrong but halving is just scalar multiplication. That means blocks are just rotating on its setwise stabilizer multiplied by the value of the scalar.
  • workwork Member Posts: 2,084 ✭✭✭✭
    @oslak can't tell if smart or trolling *sideways look*
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    @oslak I feel soooo much better now! :)
  • oslakoslak Member Posts: 191
    haha. just trolling.
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    @work ... smart trolling? Projective Special Linear Groups @oslak, man that's sh!t's wacked!
  • ilia7777ilia7777 Member Posts: 113
    work said:

    ilia7777 said:

    work said:

    Difficultt growth isn't a stable thing... stop trying to "math the future" based on extrapolation of bad data.

    It has been around 39-40% on average monthly for bitcoin and it will be for ethereum. How much ETH you'd like to bet that in a month we will see another 40% increase ? Its April 4th today.
    Lol. This has been explained before. You are clueless if you think you can compare BTC hashrate growth to Ethereum. Ethereum difficulty will not grow exponentially. If it does, I will eat my hat.
    40% monthly is not exponential ? You could start eating your hat now. In one of my setups the block discovery time had shifted by almost a day. Yesterday the block was discovered at 3pm (just a week ago at 3am) , today its showing approximate time 23pm ! 8 hour shift in one day, I bet the difficulty grew some 7-8% overnight, I will check it later
  • workwork Member Posts: 2,084 ✭✭✭✭
    edited April 2016
    ilia7777 said:

    40% monthly is not exponential ? You could start eating your hat now. In one of my setups the block discovery time had shifted by almost a day. Yesterday the block was discovered at 3pm (just a week ago at 3am) , today its showing approximate time 23pm ! 8 hour shift in one day, I bet the difficulty grew some 7-8% overnight, I will check it later

    If that % growth continues for the next few months it would be exponential. A single month isn't anything, it's just growth.

    http://www.coinwarz.com/difficulty-charts/ethereum-difficulty-chart

    Difficulty peaked about 6 hours ago and is declining at the moment. Also, a week view on that chart is pretty clearly linear growth, definitely not exponential. Difficulty was also relatively flat from the 31st to the 3rd.
  • ilia7777ilia7777 Member Posts: 113
    ethfan said:

    work said:

    ...Lol. This has been explained before. You are clueless if you think you can compare BTC hashrate growth to Ethereum. Ethereum difficulty will not grow exponentially. If it does, I will eat my hat.

    I too have told him exponential growth cannot be sustained (near the end of page 2 of this thread) and have been brushed off. Just wait and see.

    I wouldn't argue with you that it can't be sustained, I would rather agree, but just 3-4 months of 40%-50% (its moving towards 50 btw now) difficulty growth would make mining ETH futile exercise. I would like to be wrong guys I'm not here to destroy your good mood. Its just the forces in play are too obvious to ignore.
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭
    @work On a shorter term basis, it seems more like a step function: ramp up, steady state, repeat. Longer term that gets smoothed out, of course.
  • workwork Member Posts: 2,084 ✭✭✭✭
    edited April 2016
    @ilia7777 if we see 3 months of 40-50% growth, I'll eat my hat.

    Then again, in full disclosure, I'm also betting against Ethereum's current (I believe high) valuation...

    @dlehenky yup, I would definitely agree with that. Most of the difficulty charts available are pretty poor indicators of network difficulty, since they only show the daily high diff, and Ethereum difficulty fluctuates quite a lot.
  • thesmokingmanthesmokingman Member Posts: 152 ✭✭
    The block reward is 5 ether because it's 10% of 50. The block reward for Homestead was supposed to be 50. So for Frontier, they started with a block reward 10% of what it would be in Homestead. For some reason, maybe inflation concerns, the block reward was left at 5 for Homestead.
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    @thesmokingman, ahh no. 5 eth was always the full reward and there was an intention that Frontier would pay 10% of that. However, because Olympic testing went so well they decided not to reduce Frontier's rewards.
  • ilia7777ilia7777 Member Posts: 113
    G416G said:

    ilia7777 said:

    work said:

    Difficultt growth isn't a stable thing... stop trying to "math the future" based on extrapolation of bad data.

    It has been around 39-40% on average monthly for bitcoin and it will be for ethereum. How much ETH you'd like to bet that in a month we will see another 40% increase ? Its April 4th today.
    I'll make that bet

    1 block and your on if you got the balls
    You mean 4.95 ETH ? My prediction is that the current 30-50% monthly difficulty increase trend will continue for at least three more months. After three more months it may slow down, because the breakeven period is going to be 1.6 years then excluding the electricity cost. May be it will slow down faster when the breakeven is going to be 1 year and all the bitcoin miners jumping it right now will realize that its the same futile exercise with ASIC or without.
  • ilia7777ilia7777 Member Posts: 113
    work said:

    ilia7777 said:

    40% monthly is not exponential ? You could start eating your hat now. In one of my setups the block discovery time had shifted by almost a day. Yesterday the block was discovered at 3pm (just a week ago at 3am) , today its showing approximate time 23pm ! 8 hour shift in one day, I bet the difficulty grew some 7-8% overnight, I will check it later

    If that % growth continues for the next few months it would be exponential. A single month isn't anything, it's just growth.

    http://www.coinwarz.com/difficulty-charts/ethereum-difficulty-chart

    Difficulty peaked about 6 hours ago and is declining at the moment. Also, a week view on that chart is pretty clearly linear growth, definitely not exponential. Difficulty was also relatively flat from the 31st to the 3rd.
    The difficulty grew 30% in January, 40% in February, 60% in March. If you draw it with 2 months periods its already exponential. But let me ask you exponential or not what kind of growth you'd like to assume for your revenue model ? Three months moving average is 45%.

    If we will see a trend of 25% monthly growth (I'm sure everyone will agree that its too conservative) the break even occurs at 10 month (but my electricity is 5 cents which is probably half of yours). If I put 10 cents electricity cost the breakeven doesn't occur and after 10 months the mining won't even pay for electricity.

    https://docs.google.com/spreadsheets/d/15QQ3Qs1wKhlkRnwR2axq_ZeJ9y5-VOmjXoYqeJQwjXc/edit?usp=sharing

    Now if we assume 40% growth you 7th month will be the last when you'll be able to pay for electricity. So what do we put in our model ?

  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    Here's Ethereum's hashrate. I'm using hashrate as the graph is cleaner and so doesn't show the same anomolies as diff, especially at homestead.




    March was linear as were the earlier growth phases. It reflects mining build out of new hash following February's price impulse. I see no reason for that build out to continue on it's existing slope through April given the horizontal market price and fuzzy time left to POS.
  • ilia7777ilia7777 Member Posts: 113
    @o0ragman0o thats fine, so what is your projection for the next 3 months ? You are not saying that its going to be less than 30% a month aren't you ? Ethereum is in a focus of media, its in the focus of all bitcoin miners, in the focus of all venture capitalists. Somebody for sure is going to drop large investment in mining on top of what current miners already doing. The only thing that could save the situation is further price increase. I have no idea how to evaluate things that have close to zero fundamental value. By fundamental in this case I mean the real demand for ether for the purpose of paying for whatever is going to run on ethereum. We could keep guessing about darknet demand for ethereum as bitcoin alternative or about speculative demand from bitcoin holders, but I have no idea how to measure it. And if I can't measure it I can't invest in it.
  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    ilia7777 said:

    @o0ragman0o thats fine, so what is your projection for the next 3 months ? You are not saying that its going to be less than 30% a month aren't you ?

    My projection is that I'll wake up each day, look at the stats and decide if it's worth it mining. I've ROI'd so why would do I have to worry about 3 months from now? I imagine I could even mine at a loss for a period and still have made a profit but have the extra eth waiting for the next big price up turn.

    I really have no idea why you're so caught up this stupid argument of linear vs exponential growth projections when there are so many volitile and unpredictible factors at play.
    ilia7777 said:

    Ethereum is in a focus of media, its in the focus of all bitcoin miners, in the focus of all venture capitalists. Somebody for sure is going to drop large investment in mining on top of what current miners already doing. The only thing that could save the situation is further price increase.

    Didn't we already work out there's something like over $8m worth of GPU's out there. Don't you think they're already investing or invested? So what's with the 'Somebody for sure is going to...'?

    And, So what?! That's capitalism!

    Don't you see that such focus and investment builds the very base value of Ethereum?
    ilia7777 said:

    I have no idea how to evaluate things that have close to zero fundamental value. By fundamental in this case I mean the real demand for ether for the purpose of paying for whatever is going to run on ethereum.

    Well I don't know how metaphysical you want to get here, but I personally don't see any fundamental value in anything humans do. I see all it's power structures and economies as artificial and destructive impositions upon the natural world which I so adore.

    Ethereum has properties and utility that solves problems, most of which we haven't even realised or created yet. That is it's fundamental value.
    ilia7777 said:

    We could keep guessing about darknet demand for ethereum as bitcoin alternative or about speculative demand from bitcoin holders, but I have no idea how to measure it. And if I can't measure it I can't invest in it.

    Well at least you can stop guessing now about an ethereum darknet....It's due in August. And they're even having a 'crowd sale'! How nice.... :/
  • happytreefriendshappytreefriends Member Posts: 537 ✭✭✭
    I agree. Someone has their panties in a bunch over.... something we all KNOW about ...
  • dlehenkydlehenky Member Posts: 2,249 ✭✭✭✭

    @thesmokingman, ahh no. 5 eth was always the full reward and there was an intention that Frontier would pay 10% of that. However, because Olympic testing went so well they decided not to reduce Frontier's rewards.

    Yes, that's was the original intent. I was pleasantly surprised when Frontier launched with the full 5 ETH block award. 50 would be deadly, IMO.
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