Weekly network forecast 15th April 2013

Important: 
These posts are a test of the methods used to create the forecasts, and definitely do not forecast non-MTGOX US$ / BTC price related changes - for example the current massive decrease in the cost of a hash. Please do not use the forecasts here for financial forecasts - the "ASIC choices" posts are more useful in that respect.


Errata: Nil.


0.Introduction
A ~5 Thps increase this week. The volatile market affected results significantly - same as for those leading up to the bubble in June 2011. Interestingly, the back calculating from the canary model, the last two weeks MTGOX exchange rates should have been US$55 to US$65 per BTC. I wonder if that's the level to which the exchange rate will fall - if this valuation has any intrinsic worth. We'll see over the next few weeks, but I'm not buying until the Canary model tells me to.

The four week estimate is quite accurate, only 4% too low. This forecast was generated before the exchange rate started increasing more than exponentially. It may simply be that any exchange rates that increase faster than exponentially aren't well modelled.

1. Models and datasets:

The model datasets have been collected into one paste to save time. Model estimates have been likewise aggregated.

Forecast and canary model analysis

All datasets

All estimates

Canary model: An estimate of the current hashrate estimate based only on current price and previous network hashrates. Used to detect changes to the network caused by agents other than the direct action the MTGOX US$ / BTC price as determined by the model.

Models f1, f2, f3 and f4: These are the one, two, three and four week forecasts of the network hashrate, based on the modelled relationship between the MTGOX US$ / BTC and the network hashrate.

2. Results

• Canary model, Models f1, f2, f3 and f4: Network hashrate is within the confidence interval the three and four week estimates. Most models significantly overpredicted the weekly average hashrate. Only the four week forecast model was significantly accurate this week.

• Difficulty modelling: Method one calculates a difficulty estimation using the network hashrate estimation and is recalculated each week. Method 2 calculates difficulty estimation based only on previous difficulties and the MTGOX price, and is only recalculated after each difficulty retarget.

3. Charts

Chart 1: 

A graphical history of the one, two, three and four week forecasts of the weekly average network hashrate compared to the actual network weekly average hashrate.

Chart 2: 

A graphical history of the Canary model estimates of the weekly average network hashrate compared to the actual network weekly average hashrate.

Chart 3: 

A graphical history of the last twenty six weeks of retarget date and difficulty estimates, actual retarget dates and actual difficulties. It should be noted that each retarget will often be forecast by two consecutive weekly forecasts, hence the multiple points per retarget on the new chart.

Chart 4: 

A graphical history of the one, two, and three retarget forecasts of the Difficulty, modelled directly as a function of previous Difficulties and MTGOX US$ / BTC prices.

Donations help give me the time to analyse bitcoin mining related issues and post the results. If you enjoy or find them helpful, please consider a small bitcoin donation:

12QxPHEuxDrs7mCyGSx1iVSozTwtquDB3r

Thanks to the following for use of their data:

blockexplorer.com:  1Cvvr8AsCfbbVQ2xoWiFD1Gb2VRbGsEf28

blockchain.info

bitcoincharts.com: 1kqHKEYYC8CQPxyV53nCju4Lk2ufpQqA2

molecular: 1MoLECHau3nb9zV78uKraNdcZsJ2REwxuL