Why is Ethereum's difficulty rising when Ethereum is down by 50%?

in ethereum •  7 years ago 

Think of yourself as a miner.

You invest $10,000 in a brand new rig.

The next month, the ETH value drops by 50%
What do you do?

You can re sell all your rig for say $7000. You lose $3000.

Or you can still mine and earn some ETH that might be worth much more in the future.

Trading has a short term horizon. Mining has a long term horizon. You cannot buy and sell a rig as fast as buying and selling a bitcoin.

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Nice post!

Many thanks

Difficulty increase because there is a bubble, everyone and their mother started to mine with their card. More miners = More hashrate = Difficulty increase. The same reason bitcoin difficulty increased because of asic chips. I know it's quite frustrating, I myself have the same issue with my zcash mining rig.