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It can all go to zero

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Re: It can all go to zero

#221

Post by paulmd »

adamnemecek wrote: post #206
paulmd wrote: post #77

Earlier quoted context omitted.

It has nothing to do with the issue rate of Bitcoin, frisbee-on-the-roof is potentially a real problem. Say Bitcoin crashes down to $1 tomorrow, such that it's no longer profitable to mine. A bunch of miners go dark. What happens to the block time? Now remember that difficulty readjusts every 2016 blocks. If there are now 1% as many miners, that means a 1000-minute blocktime and potentially up to 1400 days per adjust…

Are you saying this will happen to all crypto or just Bitcoin? Ok if Bitcoin goes away, it might over time, exponential decay and what not. Or might also go up. But crypto overall will most likely go up. Like you can't go back. And I feel like people for example aren't talking about the fact that technology doesn't really go away. Like any technology we've ever invented is still used somewhere. This will very much be…

Specifically Bitcoin, other coins have more robust difficulty readjustment mechanisms.

Re: It can all go to zero

#223

Post by adamnemecek »

twblalock wrote: post #214
adamnemecek wrote: post #59

Earlier quoted context omitted.

Are we talking about Bitcoin or all crypto?

It applies to any kind of asset that derives 100% of its price from network effects rather than intrinsic value.

Ok. Would you say the same thing about Google stock? If people stop using Google tomorrow, the stock will plunge right?

Re: It can all go to zero

#224

Post by sillysaurus3 »

mial wrote: post #215
sillysaurus3 wrote: post #199

Earlier quoted context omitted.

Yes, miners will receive transaction fees. But have you run the numbers on how much those transaction fees would have to be to match the current block reward? The endgame seems completely untenable. No one is going to pay a huge amount per BTC transfer. So what do you think will happen to all those miners, with all their mining equipment? We currently have a monstrous block reward every 10 minutes, and yet tx fees ar…

If I understood the system correctly, at that point mining would become much less profitable so a lot of miners would stop their operations. In that case, difficulty would automatically decrease at the same rate as miners quit, and at some point it would become somehow profitable for the remaining miners to subsist on transaction fees.

Note that difficulty adjustment happens every 2016 blocks. If the miners all decide to call it quits shortly after the previous difficulty change, the next 2016 blocks might take far longer than 10 minutes per block.

Which of course means the next difficulty adjustment would take far longer than two weeks to trigger.

Re: It can all go to zero

#225

Post by martin1975 »

adamnemecek wrote: post #51
JumpCrisscross wrote: post #34

Earlier quoted context omitted.

> these articles always pretend a 20% selloff is the beginning of the end There are individuals in this thread claiming "there will always be buyers" and that the probability of Bitcoin becoming worthless is zero. The point of the article isn't that Bitcoin is doomed. It's that there is a substantial non-zero probability it ends up worthless. That such an elementary claim about a volatile asset is controversial almos…

Ok can you talk more about your failure case then? What are the conditions like what exactly is the end result. There are 0 exchanges?

1) Bitcoin becomes too expensive to mine or even sustain due to energy prices

2) Bitcoin's blockchain grows to petabytes or exabytes in size thus becoming horrendously slow to both replicate or even host

3) Bitcoin is surpassed by a better technology, such as Cardano or IOTA. This won't kill it but it will stunt/cap its growth indefinitely.

4) Bitcoin fails to integrate into the legacy world fully by remaining pseudonymous, reluctant or refusing to comply with AML/KYC regulations everywhere in the world, developed or not. It then maxes out in growth. Again, not a failure case, as whatever value was there will probably still remain, but it will be dwindled down significantly.

I'm sure there's more but I can't think of all of them...

Re: It can all go to zero

#226

Post by georgeecollins »

VMG wrote: post #32

If Bitcoin goes to 0, I will buy all of it and display the Trezor that stores it in a museum

You could buy GM stock for months after they announced it was going bankrupt (making the stock = 0). As I recall, it was selling for more than 0.50 cents. If something really terrible did happen to a crypto-currency (and I don't know and I can't predict) there would be a lot of people that would still want them because they used to be worth so much. It is human nature.

That is just an observation about human nature. I have no idea what will happen with the price of anything.

Re: It can all go to zero

#227

Post by georgeecollins »

ejanus wrote: post #166
rsuelzer wrote: post #152

There are so many glaring issues with BitCoin that it's insane that there are people who are dumb enough to buy it at these prices. 1) 96% of it is controlled by 4% of people. That means if it were to become a currency 96% of the wealth in the world would have to be given to 4% of people either through goods or a fiat currency. 2) It's just a matter of time before enough people lose their private keys that the total…

But US wealth is controlled by less than 1%. So, what is the difference

Wealth currency

Re: It can all go to zero

#228

Post by stale2002 »

sputknick wrote: post #14
whiskyant wrote: post #2

Maybe if you're holding a shitcoin, but Bitcoin? Nope.

What value does Bitcoin add to society? IF you don't add value, what's the point of having you around? Bitcoin could absolutely go to zero. I say this as a holder of some.

The value of Bitcoin is to provide people with the ability to send quick transactions across the world that are difficult to censor.

What other ways do people have of sending censorship resistant transactions?

Re: It can all go to zero

#229

Post by saas_co_de »

NathanKP wrote: post #145
saas_co_de wrote: post #126

Earlier quoted context omitted.

The way I understand it bitcoin is guaranteed to go to zero by design because there is a fixed limit on issue and so eventually there will be no incentive to mine and the network will collapse.

Actually Bitcoin has transaction fees for exactly this purpose. The idea is that once all the coins are mined the primary way that miners make money is from the fees that people pay to miners to get their transactions recorded in the blockchain. For reference a lot of times you currently have to pay a fee of >$10 to get your transaction recorded in the blockchain, and estimates of around $10 million a day in transact…

> questionable whether fees can actually support the ecosystem

right now every block pays 12.5 coins, which even with current low prices is around $145K.

The average transactions per block looks like around 1,800 (https://blockchain.info/charts/n-transactions-per-block) which puts mining revenue per transaction at around $80, on top of which miners also get the transaction fee.

With no more mining where is the other $80 going to come from?

More to the point, who in their right mind would ever use a transaction processing system that charges $80+ per transaction?

What happens when you have a fixed currency stock and every transaction requires paying some of it to the transaction processors? Seems pretty unsustainable to me.

Re: It can all go to zero

#230

Post by [deleted] »

martin1975 wrote: post #225
adamnemecek wrote: post #51

Earlier quoted context omitted.

Ok can you talk more about your failure case then? What are the conditions like what exactly is the end result. There are 0 exchanges?

1) Bitcoin becomes too expensive to mine or even sustain due to energy prices 2) Bitcoin's blockchain grows to petabytes or exabytes in size thus becoming horrendously slow to both replicate or even host 3) Bitcoin is surpassed by a better technology, such as Cardano or IOTA. This won't kill it but it will stunt/cap its growth indefinitely. 4) Bitcoin fails to integrate into the legacy world fully by remaining pseudo…

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