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At what price will the Bitcoin death spiral occur? (i.e. when it costs more to produce/handle Bitcoin than the revenue generated, so best move is to just exit the crypto industry).
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If they’re dormant, by definition they’re already unprofitable to operate. If the price decreases further, only the most efficient miners will remain, not the least efficient of them.
Unprofitable to operate in friendly conditions* If you can flip a switch and 10x the hashrate of a network, all under your control, and you don’t care about killing the chain in your attack, it may be a perfect exit for you if you no longer want to play the mining game. There’s actually a mining pool doing something like this on smaller PoW bitcoins https://sharkpool.cash (not associated, just think it’s interesting)
The tech world has jumped the shark. It’s now producing fart pipes and spinner rims to justify investment, rather than truly useful invention.
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Of course if you are filthy stinking rich, it's because you participated in a distributed scam in order to defraud money from those "bandwagon shirt-losers."
What precisely was the scam? Who and how was I scamming by mining coins with my GPU and some open source software I saw on slashdot that are now worth several thousand dollars each?
At what price will the Bitcoin death spiral occur? (i.e. when it costs more to produce/handle Bitcoin than the revenue generated, so best move is to just exit the crypto industry).
As others have pointed out, the difficulty adjusts both up and down depending on the total work being done by the network, so no death cycle is possible. Additionally, even when there are rapid drops in value (and thus mining), people still want to transact Bitcoin, so transaction fees go up and become a significant percentage of the overall value of a new block, thus compensating miners for the reduced value of the…
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Don't bitcoin costs adjust to a shrinking miner population as well as it adjusts for a growing one? If so, the answer is never. As people give-up, the costs for the remaining ones reduce so that at some point it's lucrative again. The interesting question is at what price people will stop speculating on its price and run to an exit? I don't think anybody can answer this one.
The difference is that even if the difficulty adjusts, there will be dormant ASICs waiting to be used. If the price lowers enough and enough ASICs are out on the bench, it’ll at one point becoming economically beneficial to turn them all on and attack the network rather than having them collect dust and depreciate.
There are tons and tons of much smaller coins, that can be attacked for very cheap, and yet attacks are still very rare.
IMO, this is because double spends just aren't a very good idea. If you tried to steal money from an exchange, everyone would know it was you doing the attack, and then they wouldn't accept your money in the future, or maybe you'd just go to jail instead.
Also, the network is not static. If there is lots of hashpower sitting unused, maybe that hashpower would turn in to defend against an attack.
More people have something to lose from a successful attack, and thus could be motivated to defend when an attack happens.
Earlier quoted context omitted.
If they’re dormant, by definition they’re already unprofitable to operate. If the price decreases further, only the most efficient miners will remain, not the least efficient of them.
Unprofitable to operate in friendly conditions* If you can flip a switch and 10x the hashrate of a network, all under your control, and you don’t care about killing the chain in your attack, it may be a perfect exit for you if you no longer want to play the mining game. There’s actually a mining pool doing something like this on smaller PoW bitcoins https://sharkpool.cash (not associated, just think it’s interesting)
At what price will the Bitcoin death spiral occur? (i.e. when it costs more to produce/handle Bitcoin than the revenue generated, so best move is to just exit the crypto industry).
Bitcoin removes the need to trust a bookie/agent to move money offshore.
Whenever flow of money is possible between a safe haven and a corrupt/socialist big country with high tax rate/more population burden.
Money flows to the safe heaven.
Bitcoin is one such way to move money from african nations/india/china to safe haven like Switzerland, Singapore, UK etc...
I am talking about illict gains/unreported assets which can't be moved through official channels.
Moving your unreported assets to a different country might not be illegal in that country if a deal is structured correctly. That's where lawyers/accounts/consultants come into play.
Bitcoin will rise again once a need to move money to save heaven rises again.
It's an efficient medium to move large sums of money without trusting a bookie.
I can buy coffee loaded in container from an african country where inflation has killed the local currency and banks do not have infra for international settlement or take much bigger cut or simply aren't trusted by local people. For this i make simple bitcoin transfer from Hong Kong and get my coffee contain undocked in Hong Kong.
Edit: it's haven not heaven.
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It's not a scam just a bad investment. Those using bitcoin for payments saw a utility not provided by other solutions. Those investing are a different class of users. Most purchased after hearing get rich stories.
What investment scam can you not say this about? People in boiler room operations pumping up bogus pharmaceuticals --- for example --- aren't themselves drug researchers and can, of course, tell themselves that they worked not on a scam, but on a product that didn't in the end worked out and simply turned out to be a bad investment.
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> Nobody who knows anything about anything made any kinds of plans involving $20,000 Bitcoin. Except for Goldman, Morgan Stanley, Citigroup and Barclays (see https://www.bloomberg.com/news/articles/2018-12-23/wall-stre... )...
They are part of the getting in late group and the lower valuations are most probably signs they are leaving the market. I remember when the price started to increase I didn't think 4,000 would hold. 2500 seemed like the correct price. The fact that it hasn't fallen below that amount means there are more investors. Personally I was using it to purchase goods before the runup and the slowness and increased fees made m…
How did you arrive at the 2500 figure? Is there some sort of fundamental analysis that could be done, or was it all technical?
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The difference is that even if the difficulty adjusts, there will be dormant ASICs waiting to be used. If the price lowers enough and enough ASICs are out on the bench, it’ll at one point becoming economically beneficial to turn them all on and attack the network rather than having them collect dust and depreciate.
People vastly overestimate the profitability of attacking a crypto network. There are tons and tons of much smaller coins, that can be attacked for very cheap, and yet attacks are still very rare. IMO, this is because double spends just aren't a very good idea. If you tried to steal money from an exchange, everyone would know it was you doing the attack, and then they wouldn't accept your money in the future, or mayb…
So either PoW has a security hole related to dormant ASICs or it’s useless. Either way it’s not a good look.