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Comment by george88b | Hacker News Reader

Am I correct in assuming that the introduction of ASIC systems will cause a drop in bitcoin price (at least temporarily) due to a sudden surge in mining ability and thus a surge in bitcoins introduced to the market?

If so, would this trigger a crash?

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Mining difficulty is adjusted by the network to keep things nice and smooth. If the ASICs all came online at once and managed to really, massively increase the hashing ability for a while then it might do something. But most likely whoever holds the ASICs wants to avoid this situation, and ramp up in such a way that nothing is disrupted. That way they can quietly corner a good percentage of the mining without screwing the price.

ASIC miners won't make it out into the world fast enough to drop the average time between blocks dramatically. At least, it seems very unlikely to me; the difficulty will just slowly go up to go along with the new mining power. (For those who don't know, there's a difficulty value across the network that keeps the average mining time between blocks (currently 25BTC, or $3325 at time of writing) at an average of 10 minutes, to ensure a continuous release of bitcoins.)

Every couple weeks the mining difficulty adjusts to keep the rate of bitcoin generation relatively constant.

I think people new to Bitcoin could be confused by this. Mining difficulty is not "adjusted" by anyone. Only 21 million Bitcoins can ever be found. It's like hunting for Easter eggs. The last egg is hardest to find.

Lots of math but looks like you can calculate the difficulty yourself with an algorithm here:

https://en.bitcoin.it/wiki/Difficulty

It is adjusted, but by an algorithm shared among all clients, rather then arbitrarily by a person. Every miner and relay client calculates the difficulty themselves, and refuses to accept any block that was not solved with the correct difficulty. The difficulty changes after a fixed number of blocks rather than a fixed amount of time.

A sudden influx of ASIC miners, carefully timed, could disrupt things a bit for a short time, but it isn't very practical, and I don't think it would disrupt the overall market much. If they successfully sped up the overall block rate, they'd just make the difficulty adjustment happen even sooner.

The only case that might be a potential concern is if >90% of the miners all shut down at once. Then, it could take quite a while to solve enough blocks to get to the next difficulty adjustment. I can't forsee a situation that would cause that many miners to all shut down within a few days of each other, though.

OK thanks for explaining it better. My initial impression was that everyone was just brute-force attacking the same mathematical problem and there was only 21 million solutions. Apparently it's way more complicated than that.

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