Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin is close to becoming worthless?

marketwatch.com

Post reply on HN
Print view View original

21–30 of 83 posts

Re: Bitcoin is close to becoming worthless?

#21

Post by konschubert »

rhn_mk1 wrote: post #17
konschubert wrote: post #10

The article is misinformed: I am the first one to jump on Bitcoin's flaws, but this here just reeks of somebody not understanding the protocol: > As I argued, once Bitcoin’s price falls below its cost of mining, the incentive to mine will deteriorate, thrusting bitcoin into a death spiral. The cost of mining adjusts depending on the hash rate , so if nobody is mining the cost of mining goes down until people start mi…

This has been addressed in the article: > So, it appears bitcoin is now entering a death spiral: If the price continues to drop and the cost of mining does not fall correspondingly (the cost of mining will algorithmically decrease, but not necessarily to same extent as the decline in prices), bitcoin will quickly go to zero.

Aaah. So he's saying that the price might fall so quickly and the hash rate might drop so quickly that the difficulty cannot adjust because they blocks to adjust the difficulty won't get mined?

(The difficulty gets adjusted only every 2013 blocks)

Re: Bitcoin is close to becoming worthless?

#22

Post by ForHackernews »

konschubert wrote: post #10

The article is misinformed: I am the first one to jump on Bitcoin's flaws, but this here just reeks of somebody not understanding the protocol: > As I argued, once Bitcoin’s price falls below its cost of mining, the incentive to mine will deteriorate, thrusting bitcoin into a death spiral. The cost of mining adjusts depending on the hash rate , so if nobody is mining the cost of mining goes down until people start mi…

The cost of mining only adjusts after a set number of blocks. It's possible for there to be a sudden drop in price, meaning the majority of miners shut down unprofitable rigs, and then it takes essentially infinite time to mine the required N blocks to adjust the difficulty.

Re: Bitcoin is close to becoming worthless?

#24

Post by swalsh »

I haven't bought bitcoin since it was sitting at $8 a coin... but hey, Buy when there's blood on the streets. I don't think bitcoin is nearly as important as many of people who invest in it believe. But it does seem to be a thing that will be around for a while. I view it as digital gold, and not necessarily a currency. Unless you're buying during one of the large speculative bubbles (which come every few years) it's not a TERRIBLE store of value... though it wouldn't be my first choice, it is an option. I think it has some more life in it.

Re: Bitcoin is close to becoming worthless?

#25

Post by gammateam »

fabizeid wrote: post #20
wongarsu wrote: post #7

Bitcoin's price drop might look bad enought to warrant sensational articles, but if you take any bitcoin price chart over the last years (like [1]) and switch it to logarithmic price, it doesn't appear exceptional. The same thing happened in 2013. 1: https://coinmarketcap.com/currencies/bitcoin/#charts

In 2013 most people didn't know about bitcoin. A big part of the spike in 2017 was from people who never heard about it before. Today everyone knows about bitcoin.

People said the same thing in 2014

Re: Bitcoin is close to becoming worthless?

#26

Post by ForHackernews »

ekianjo wrote: post #19
rhn_mk1 wrote: post #17

Earlier quoted context omitted.

This has been addressed in the article: > So, it appears bitcoin is now entering a death spiral: If the price continues to drop and the cost of mining does not fall correspondingly (the cost of mining will algorithmically decrease, but not necessarily to same extent as the decline in prices), bitcoin will quickly go to zero.

Why would the cost of mining not fall correspondingly? It will adjust until it becomes profitable again, nobody is going to run mining farms if they are clearly losing money every single day.

The way the bitcoin protocol is designed, the mining difficulty and rewards only adjust after N blocks have been mined. It doesn't respond in real time to the hash rate on the network.

Re: Bitcoin is close to becoming worthless?

#28

Post by ykevinator »

wongarsu wrote: post #7

Bitcoin's price drop might look bad enought to warrant sensational articles, but if you take any bitcoin price chart over the last years (like [1]) and switch it to logarithmic price, it doesn't appear exceptional. The same thing happened in 2013. 1: https://coinmarketcap.com/currencies/bitcoin/#charts

True, but I think this time around, people are realizing that no one is actually using for purposes other than speculation.

Re: Bitcoin is close to becoming worthless?

#30

Post by mcv »

I may still have some bitcoin, but I certainly hope it becomes worthless. It's turned out to be ridiculously energy-consuming, and it seems to be used mostly for speculation rather than payment. Transactions have become too slow and expensive to be efficient for a payment system.

It's entirely possible that cryptocurrencies will be the future, but it won't be bitcoin. It needs to be more efficient and more scalable than that.

Post reply on HN