Re:Bitcoin Falls Below $400
by runeks on Friday April 11, 2014 @08:53AM
(#7572556)
> 1. In theory difficulty and hash rate should follow the bitcoin price, but they don't.
This ignores efficiency increases in mining hardware. We've basically seen an increase in efficiency of at least 10,000 times, over the past years, from CPU mining (~5000W/GH) to ASIC mining (~0.2W/GH). This completely disconnects the Bitcoin price from mining, and this will continue to happen, as developing more efficient mining chips won't stop, although the rate of efficiency increases will decrease.
So difficulty and price will never correlate, because mining keeps getting more and more efficient.
This ignores efficiency increases in mining hardware. We've basically seen an increase in efficiency of at least 10,000 times, over the past years, from CPU mining (~5000W/GH) to ASIC mining (~0.2W/GH). This completely disconnects the Bitcoin price from mining, and this will continue to happen, as developing more efficient mining chips won't stop, although the rate of efficiency increases will decrease.
So difficulty and price will never correlate, because mining keeps getting more and more efficient.