Bitcoin Mining Difficulty - What is it And How Does it ...

Bitcoin's market *price* is trying to rally, but it is currently constrained by Core/Blockstream's artificial *blocksize* limit. Chinese miners can only win big by following the market - not by following Core/Blockstream. The market will always win - either with or without the Chinese miners.

TL;DR:
Chinese miners should think very, very carefully:
The market will always win - with or without you.
The choice is yours.
UPDATE:
The present post also inspired nullc Greg Maxwell (CTO of Blockstream) to later send me two private messages.
I posted my response to him, here:
https://np.reddit.com/btc/comments/4ir6xh/greg_maxwell_unullc_cto_of_blockstream_has_sent/
Details
If Chinese miners continue using artificially constrained code controlled by Core/Blockstream, then Bitcoin price / adoption / volume will also be artificially constrained, and billions (eventually trillions) of dollars will naturally flow into some other coin which is not artificially constrained.
The market always wins.
The market will inevitably determine the blocksize and the price.
Core/Blockstream is temporarily succeeding in suppressing the blocksize (and the price), and Chinese miners are temporarily cooperating - for short-term, relatively small profits.
But eventually, inevitably, billions (and later trillions) of dollars will naturally flow into the unconstrained, free-market coin.
That winning, free-market coin can be Bitcoin - but only if Chinese miners remove the artificial 1 MB limit and install Bitcoin Classic and/or Bitcoin Unlimited.
Previous posts:
There is not much new to say here - we've been making the same points for months.
Below is a summary of the main arguments and earlier posts:
Previous posts providing more details on these economic arguments are provided below:
This graph shows Bitcoin price and volume (ie, blocksize of transactions on the blockchain) rising hand-in-hand in 2011-2014. In 2015, Core/Blockstream tried to artificially freeze the blocksize - and artificially froze the price. Bitcoin Classic will allow volume - and price - to freely rise again.
https://np.reddit.com/btc/comments/44xrw4/this_graph_shows_bitcoin_price_and_volume_ie/
Bitcoin has its own E = mc2 law: Market capitalization is proportional to the square of the number of transactions. But, since the number of transactions is proportional to the (actual) blocksize, then Blockstream's artificial blocksize limit is creating an artificial market capitalization limit!
https://np.reddit.com/btc/comments/4dfb3bitcoin_has_its_own_e_mc2_law_market/
(By the way, before some sophomoric idiot comes in here and says "causation isn't corrrelation": Please note that nobody used the word "causation" here. But there does appear to be a rough correlation between Bitcoin volume and price, as would be expected.)
The Nine Miners of China: "Core is a red herring. Miners have alternative code they can run today that will solve the problem. Choosing not to run it is their fault, and could leave them with warehouses full of expensive heating units and income paid in worthless coins." – tsontar
https://np.reddit.com/btc/comments/3xhejm/the_nine_miners_of_china_core_is_a_red_herring/
Just click on these historical blocksize graphs - all trending dangerously close to the 1 MB (1000KB) artificial limit. And then ask yourself: Would you hire a CTO / team whose Capacity Planning Roadmap from December 2015 officially stated: "The current capacity situation is no emergency" ?
https://np.reddit.com/btc/comments/3ynswc/just_click_on_these_historical_blocksize_graphs/
Blockstream is now controlled by the Bilderberg Group - seriously! AXA Strategic Ventures, co-lead investor for Blockstream's $55 million financing round, is the investment arm of French insurance giant AXA Group - whose CEO Henri de Castries has been chairman of the Bilderberg Group since 2012.
https://np.reddit.com/btc/comments/47zfzt/blockstream_is_now_controlled_by_the_bilderberg/
Austin Hill [head of Blockstream] in meltdown mode, desperately sending out conflicting tweets: "Without Blockstream & devs, who will code?" -vs- "More than 80% contributors of bitcoin core are volunteers & not affiliated with us."
https://np.reddit.com/btc/comments/48din1/austin_hill_in_meltdown_mode_desperately_sending/
Be patient about Classic. It's already a "success" - in the sense that it has been tested, released, and deployed, with 1/6 nodes already accepting 2MB+ blocks. Now it can quietly wait in the wings, ready to be called into action on a moment's notice. And it probably will be - in 2016 (or 2017).
https://np.reddit.com/btc/comments/44y8ut/be_patient_about_classic_its_already_a_success_in/
Classic will definitely hard-fork to 2MB, as needed, at any time before January 2018, 28 days after 75% of the hashpower deploys it. Plus it's already released. Core will maybe hard-fork to 2MB in July 2017, if code gets released & deployed. Which one is safer / more responsive / more guaranteed?
https://np.reddit.com/btc/comments/46ywkk/classic_will_definitely_hardfork_to_2mb_as_needed/
"Bitcoin Unlimited ... makes it more convenient for miners and nodes to adjust the blocksize cap settings through a GUI menu, so users don't have to mod the Core code themselves (like some do now). There would be no reliance on Core (or XT) to determine 'from on high' what the options are." - ZB
https://np.reddit.com/btc/comments/3zki3h/bitcoin_unlimited_makes_it_more_convenient_fo
BitPay's Adaptive Block Size Limit is my favorite proposal. It's easy to explain, makes it easy for the miners to see that they have ultimate control over the size (as they always have), and takes control away from the developers. – Gavin Andresen
https://np.reddit.com/btc/comments/40kmny/bitpays_adaptive_block_size_limit_is_my_favorite/
More info on Adaptive Blocksize:
https://np.reddit.com/bitcoin+btc/search?q=adaptive&restrict_sr=on&sort=relevance&t=all
Core/Blockstream is not Bitcoin. In many ways, Core/Blockstream is actually similar to MtGox. Trusted & centralized... until they were totally exposed as incompetent & corrupt - and Bitcoin routed around the damage which they had caused.
https://np.reddit.com/btc/comments/47735j/coreblockstream_is_not_bitcoin_in_many_ways/
Satoshi Nakamoto, October 04, 2010, 07:48:40 PM "It can be phased in, like: if (blocknumber > 115000) maxblocksize = largerlimit / It can start being in versions way ahead, so by the time it reaches that block number and goes into effect, the older versions that don't have it are already obsolete."
https://np.reddit.com/btc/comments/3wo9pb/satoshi_nakamoto_october_04_2010_074840_pm_it_can/
Theymos: "Chain-forks [='hardforks'] are not inherently bad. If the network disagrees about a policy, a split is good. The better policy will win" ... "I disagree with the idea that changing the max block size is a violation of the 'Bitcoin currency guarantees'. Satoshi said it could be increased."
https://np.reddit.com/btc/comments/45zh9d/theymos_chainforks_hardforks_are_not_inherently/
"They [Core/Blockstream] fear a hard fork will remove them from their dominant position." ... "Hard forks are 'dangerous' because they put the market in charge, and the market might vote against '[the] experts' [at Core/Blockstream]" - ForkiusMaximus
https://np.reddit.com/btc/comments/43h4cq/they_coreblockstream_fear_a_hard_fork_will_remove/
Mike Hearn implemented a test version of thin blocks to make Bitcoin scale better. It appears that about three weeks later, Blockstream employees needlessly commit a change that breaks this feature
https://np.reddit.com/btc/comments/43iup7/mike_hearn_implemented_a_test_version_of_thin/
This ELI5 video (22 min.) shows XTreme Thinblocks saves 90% block propagation bandwidth, maintains decentralization (unlike the Fast Relay Network), avoids dropping transactions from the mempool, and can work with Weak Blocks. Classic, BU and XT nodes will support XTreme Thinblocks - Core will not.
https://np.reddit.com/btc/comments/4cvwru/this_eli5_video_22_min_shows_xtreme_thinblocks/
More info in Xtreme Thinblocks:
https://np.reddit.com/bitcoin+btc/search?q=xtreme+thinblocks&restrict_sr=on&sort=relevance&t=all
4 weird facts about Adam Back: (1) He never contributed any code to Bitcoin. (2) His Twitter profile contains 2 lies. (3) He wasn't an early adopter, because he never thought Bitcoin would work. (4) He can't figure out how to make Lightning Network decentralized. So... why do people listen to him??
https://np.reddit.com/btc/comments/47fr3p/4_weird_facts_about_adam_back_1_he_neve
I think that it will be easier to increase the volume of transactions 10x than it will be to increase the cost per transaction 10x. - jtoomim (miner, coder, founder of Classic)
https://np.reddit.com/btc/comments/48gcyj/i_think_that_it_will_be_easier_to_increase_the/
Spin-offs: bootstrap an altcoin with a btc-blockchain-based initial distribution
https://bitcointalk.org/index.php?topic=563972.480
More info on "spinoffs":
https://duckduckgo.com/?q=site%3Abitco.in%2Fforum+spinoff
submitted by ydtm to btc [link] [comments]

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What about Bitcoin mining? Is it free money?

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