Neighbourhood Pool Watch: Weekly network forecast 22nd 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 - these posts might be useful in that respect.

Errata: Nil.

0.Introduction
An unexpected ~2 Thps decrease in the average hashrate over the last seven days. The network hashrate estimates are driven by previous network hashrates / difficulties and prices. Since no new significant sources of ASIC hashrate was added, and the price also hasn't recovered, the estimates for this week are the least accurate so far. I expect this to happen more often as the exchange rate settles to some new relationship with the hashrate.

Last week I back calculated from the canary model that if that week's exchange rate was US$65 per BTC the Canary model would have been accurate. I jokingly suggested that this would be a good estimate of the underlying worth of a BTC - and the next day the exchange rate dropped to around $US65 per BTC. I'm little scared of the Canary now and won't be doing that again.

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. All models significantly overpredicted the weekly average hashrate. Only the three and four week forecast model was within the expected error range 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.