Neighbourhood Pool Watch: Weekly network forecast 6th May 2013

6th May, 2013

Last post

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
Almost no change in the weekly average hashrate this week. The limitation on hashrate additions due to BFL and Avalon shipping times ASIC mining tool availability means the network hashrate is not responding the way it has when GPUs and FPGAs were the main devices used. I still hypothesise that since most miners appear to be waiting for ASICs (and ignoring GPU / FPGA profits that can still be made by purchasing new GPUs or FPGAs) the network hashrate is at least partially decoupled from the exchange rate, as discussed last week.

ASICMiner is delivering in record time. The amount delivered is not a significant addition to the network. Also, their updated expansion plans are a little less optimistic than the previous plans (although I had to rely on multiple posts and other sources for that estimate, so I may have been wrong).

Batch sales is another issue, creating bunches of added hashrate rather than a smooth transition - making the forecasts less accurate even once the ASIC hashes are eventually added.

If BFL starts shipping large quantities soon, and people can buy ASIC miners without having to either wait a long time for delivery or wait for a new batch or auction, then the models may eventually regain some accuracy. Until then, they're going to be similar to this week - the weekly network hashrate is outside of the confidence intervals for error for all forecast models, and the difficulty estimates are not much better.

One interesting point is that the models seem to be reacting to the reduced previous hashrates - you can see that for models f1 to f3 a reduction in hashrate is forecast at the limits of their forecasts, and the f4 model has had a negative delta for the second time.

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, as discussed above.

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.