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Do u have an estimate about what will happen when more powerful machines make the simple gpu use unaffordable?

This would practically mean that significant part of the mining will halt. You think that the new machines' impact on difficulty will be reduced by this or this phenomenon will be not an important factor?

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It won't matter. The difficulty will rise until the most efficient miners can't make a significant profit. What inefficient miners do has no effect because their actions are balanced out by efficient miners.

Essentially, take the most efficient mining setup widely available and compute the difficulty at which it just breaks even. Market forces will, over time, push the difficulty to be a bit less than that. If the difficulty is more than that, efficient miners will leave, reducing the difficulty. If the difficulty is less than that, efficient miners will enter, raising it.

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The network balances itself. If the new chips make it so difficult that mining on a GPU or CPU looses you money on electricity (this is currently the state of things) then people will stop mining with those things. However if this change makes it easier to mine then it would once again be profitable to mine on GPU's and people would begin doing it again.

Therefore I would argue that it is impossible for better chips to decrease the amount of computing power in the network (for any sizable period of time), and if anything it would increase the computing power. Not because people will no longer be using CPUs or GPUs but because this change will necessarily be brought about by people using better chips.

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Unfortunately because difficulty corrections, AND miner responsiveness are laggy - miners are slow to re-enter the market especially if their previous generation kit is marginal for any length of time - the network can become overloaded with slow transactions, that then depresses the value of the currency, further exacerbating the problem of low profitability. It’s like a traffic jam, full of board car drivers fiddling with their radios and neglecting to keep the flow moving. Unfortunately the difficulty factor is not responsive enough to hashrate slowdowns and so it’s like a demented traffic cop in the middle lane trying to push the traffic speeds. Auto-switching pool miners help ease the traffic jam by diverting miner resources to other more profitable currencies (lanes), but unfortunately this is only in response to market price, not price vs difficulty. This is especially problematic on pools in which “luck” plays a part in the reward system.

  • This doesn't make sense because difficulty increased, not decreased, as the new technology came online. Did you read the whole question, or just the title? – Highly Irregular Jun 5 '18 at 2:07

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