Author Topic: Bitcoin difficulty finally went down.  (Read 2495 times)

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Offline Ander

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In mid 2016, the block reward will undergo its second halving, from 25 BTC per block, to 12.5.

This means that miners get half as much bitcoin as before.  The bitcoin inflation rate will be half as much as before.


When this occurs, some combination of these two things MUST occur:
* Some miners who are now unprofitable turn off their miners, reducing difficulty and helping other miners survive.
* Bitcoin price increases (due to lower inflation, etc), making miners more profitable again.


We already had one halving, in late 2012.  It helped to catalyze the 2013 bull market.  (It was just one factor, of course.  It would be silly to say it was the whole reason for the rise).
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Offline CLains

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2016 is Apocalyptic: End of Time or Return of Jesus?

Offline Riverhead

The big industrial miners are playing a big game of chicken. Waiting to see who will blink first and unload their hardware before the August 2016 halving. I guess some blink with a big fireball and insurance cheque.

Can you tell me more about the 2016 halving? I'm still very new to crypto.  :-\
Not much to tell. The miners bread and butter is finding blocks and selling the reward. In August 2016 that reward gets cut in half. An industry on already thin margins has its revenue chopped in half.

Sent from my Timex Sinclair.


Offline ocelot357

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The big industrial miners are playing a big game of chicken. Waiting to see who will blink first and unload their hardware before the August 2016 halving. I guess some blink with a big fireball and insurance cheque.

Can you tell me more about the 2016 halving? I'm still very new to crypto.  :-\
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Offline Riverhead

The big industrial miners are playing a big game of chicken. Waiting to see who will blink first and unload their hardware before the August 2016 halving. I guess some blink with a big fireball and insurance cheque.

Offline joele

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Probably a momentum for the next catapult.

Offline Chuckone

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I'm curious to know the logic linking lowering difficulty and end of the bear market?

If bitcoins are overvalued, it is better to sell bitcoins (or hold off on buying them), and instead buy mining equipment.  The result is that investment money flows into mining, not bitcoin.  This contributes to the end of the bull/start of the bear.

If bitcoins are undervalued, it is better to buy bitcoins directly, rather than buy mining equipment that will be unprofitable.  The result is that investment money flows into directly buying bitcoins, helping to end the bear/start the bull.

Got it!

thanks for the clear and concise answer, it really makes sense.

Offline Ander

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I'm curious to know the logic linking lowering difficulty and end of the bear market?

If bitcoins are overvalued, it is better to sell bitcoins (or hold off on buying them), and instead buy mining equipment.  The result is that investment money flows into mining, not bitcoin.  This contributes to the end of the bull/start of the bear.

If bitcoins are undervalued, it is better to buy bitcoins directly, rather than buy mining equipment that will be unprofitable.  The result is that investment money flows into directly buying bitcoins, helping to end the bear/start the bull.
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Offline Ander

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Think it has anything to do with that fire back in early November?

Probably not much.  It mostly has to do with the price being low and electricity costs being high at this level of difficulty.
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Offline Riverhead

Think it has anything to do with that fire back in early November?

Offline Chuckone

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It hasnt gone down since January 2013.  It just had a less than 1% decrease.

The only period in bitcoin's history where the difficulty had some decreases was during the 2011-2012 bear market phase, where it was very undervalued.

This might be a good sign for crypto's in general, as it could be a sign of the end of the crypto bear market.

I'm curious to know the logic linking lowering difficulty and end of the bear market?

Offline Ander

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It hasnt gone down since January 2013.  It just had a less than 1% decrease.

The only period in bitcoin's history where the difficulty had some decreases was during the 2011-2012 bear market phase, where it was very undervalued.

This might be a good sign for crypto's in general, as it could be a sign of the end of the crypto bear market.
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads