Bitcoin mining difficulty has been through some interesting ups and downs lately. (I've supplied snapshots below to give context for future readers)
Considering its long history of pretty much only going up for years, I'm wondering what people involved with mining should think about this.
Some base questions:
- What is the primary cause? Are miners leaving as new ones come it, or are new ones no longer interested?
- Why are miners leaving/not starting?
- If it truly is leveling, or at least resuming a slight growth pattern, how does this affect Bitcoin price in general? What about during "events" such as halving of the block reward?
- In principal, should Bitcoin value be related to difficulty in a predictable way, and is this leveling something that facilitates that or not?
- Lastly, does a stable difficulty help encourage Bitcoin's use in anyway? In other words, if people aren't getting into mining but are getting into Bitcoin, do they generally consider difficulty as a factor in this decision?
I'm not necessarily asking that you answer all those questions. Instead, I'm trying to show that I am interested in how an extended period of leveled and stable difficulty, as we seem to be heading into (Spring 2015), affects the economics of Bitcoin mining and use.
Here's snapshots of that page (clickable):