Bitcoin price crash forces miners off network(decrypt.co) |
Bitcoin price crash forces miners off network(decrypt.co) |
What are you going to do in the post apocalypse, get a team of people with an abacus to calculate hash functions?
I really doubt that anyone is buying bitcoin for the collapse of industrial civilization. The more prepper-case for bitcoin comes from either very high inflation, financial instability, and/or severe capital controls. It's not implausible that these conditions coexist with the continued existence of industrial civilization.
It's not implausible because it's happened many times before in history. For example, if you were a Jew in Germany circa 1936, Bitcoin would have been very very valuable to you. In much the same that diamonds were valuable to those in that time and place, because of the ease by which they could be hidden and smuggled against the authorities' wishes.
https://bitinfocharts.com/comparison/bitcoin-hashrate.html
Its easy to skew this if you don't understand the underlying tech, but Bitcoin continues to work despite a supposed exodus of miners (best example being the last fork with BCash), what secures the network are the nodes, not miners. They're just participants who are rewarded for appropriating the network with hashing power.
As for the price dip, well I welcome anyone to buy $100 of BTC and hold onto a $100 and see which is more valuable now that the Federal Reserve has dropped Interest rates to 0%, and is issuing a $700 Billion QE program:
https://www.cnbc.com/2020/03/15/federal-reserve-cuts-rates-t...
> They should never be there anyway, Bitcoin is a waste of time.
Personally, this couldn't have come at a worst time for me as I stepped down from my day job to undergo my SpaceX interview(s), I've turned down some gig/jobs in the last month too, but I'm glad that I have BTC as a cushion with some cash on hand.
When margins are squeezed only the largest vertically integrated players survive.
And yet, that's not what happened when it forked Bitmain (who may have had 70-80% of Bitcoin's hashing power at one point) was the one to take the hardest hit and essentially folded; its founder was exited and disgraced, and the company was pivoted to what seems to be primarily an AI business now [2] after that utter failure to 'prove' what you have said is accepted as 'Truth' when its not simply true when it played out in this space.
I think what many, especially those not actively working or participating in this space, seem to not understand is that Bitcoin, and to some extent cryptocurrency in general, is defying the supposed 'conventional wisdom' by just exisiting and then disproving them with these occurences.
Most of the criticisms are cherry-picked and mis-focused to react to it in a negative light--eg the ICO craze had nothing to do with Bitcoin.
After all this time I don't see any of those price drops as bad, its allowing newer participants to into this system if seen as investment, that they otherwise may have not been able to enter. And for those that were using to transact for goods/services during this volatility it may have hurt, but as someone pointed out merchant adoption is not so large that it could kill a business right now, not to mention there are ways to mitigate this with other instruments (tethered to USD and such).
Also, the thing most people don't seem to understand either is that Bitcoin mining has spurred on tons of renewable energy projects and has since migrated to that to capture said efficiencies [3] as documented by the International Energy Agency. The network is estimated to be operating on 70% renewable energy, and is growing with projects like Theil's backed bitcoin mining facility in Texas [4].
1: https://www.ccn.com/bitmain-jihan-wu-micree-zhan-stepping-do...
2: https://finance.yahoo.com/news/bitcoin-mining-giant-bitmain-...
3: https://www.iea.org/commentaries/bitcoin-energy-use-mined-th...
4: https://www.iea.org/commentaries/bitcoin-energy-use-mined-th...
That's nothing.
That's a rounding error compared to the compared to the 4.4 trillion dollars spent each year by the government.
The market cap of the S&P 500 is still well over $20 trillion. It fluctuates more than $700 billion in a single day.
If anyone wonders what this is, it's a demeaning name for the Bitcoin Cash fork, used to discredit it.
https://medium.com/@jonaldfyookball/why-some-people-call-bit...
You have the same issue with Bitcoin, because it is deflationary it is in the holder's interest to not spend it, because it's future buying power will be increased.
So if you look at how bitcoin was distributed you have early holders that have a tremendous amount and have been rewarded for it.
Add to that speculation and you have this whole cycle ramped up on steroids, with huge swings up, and then down, and all the while the value continues to increase because it is designed to do so.
The problem was that bitcoin tried to solve two problems, but should have only solved one.
The first problem was how to transfer value in an untrusted network which was a great success.
The second, was unneeded, which is to make it deflationary as some sort of perhaps response to the inflationary world we live in.
But the reality is that the inflationary world was designed by economists so that wealth continues to circulate. Yes, there are still issues. Yes we have imbalance. But inflation does case wealth to circulate, though not as quickly as some would hope for.
In bitcoin, you have the exact opposite, wealth gets accrued to early backers and just sits there.
Funny, I built a fintech startup on helping the cannabis Industry from their supposed 'cash' problem(s): predominately having too much of it and not having banking, or having thier cash taken indefinitely by the bank/paypal upon closure of their account(s). While also doing B2B transactions where banks/CC companies failed to lend them services, despite having Local/State laws permitting so. None of which Cash seemed to prove as useful as you think it is.
I think you're looking at this the wrong way: rather than looking at it as a paradigm shift in what programmable money can do, you are measuring Bitcoin by how it fails to function (or dysfunction) as your local Fiat currency does.
That's a very poor measure/metric, as for being able to use it day-to-day, provided you're willing to operate within a KYC/AML system, you can have Visa Credit Cards that draw from your source of BTC in real time/previously loaded, depending on what service you use.
Merchants who accept Bitcoin is a constraint, mainly a tech related one, but just like how many restaurants now take UberEats/Doordash/GrubHub that amount to a growing/large(r) percent of their revenue (moreso when States are limiting restaurant hours or outright operation to online orders only [1]) you will see new use cases appear which Bitcoin's layer 1/2 can utilize natively as a private p2p system.
I think its very telling that despite guy's like Jack Dorsey backing Bitcoin, who I think understands the fintech landscape, and has been orientating Square to be integrated and compatible with it many of you still refuse to see the shift has already happened.
Price drops happen in Bitcoin, I've been in this long enough that it doesn't phase me anymore; and is the only real antidote to the supposed 'what about the early adopter whales' issue people bring up, personally I'm using some of my discretionary budget to buy more.
I'm not here to convince you to use Bitcoin, or why it would work for you/your business: I'm just pointing out why what you said is skewed and not framed correctly. Otherwise you'll have to do what IBM did: offer a good salary for consultant fees to do so. :)
[1]: https://www.usatoday.com/story/news/nation/2020/03/15/corona...
Does the difficulty factor of new blocks get dropped in response to losing hash power? Is the fee / mining reward balance predictable? Does the network become non-functional for xfers below a certain value at some point?
The mining reward stays the same, though it drops by half every few years (one such drop is approaching in May).
The network actually becomes non-functional for low transfers the other way - when there's too much interest, and too many transactions, the fees to get a transaction through start to rocket. At the peak of the 2017 hype the y hit around $50-70, IIRC.
1 TSC = 1 day of solar panel power with a clear sky at sea level at the equator, or something
They're still the by far largest and most successful ASIC manufacturer.
That doesn't disprove the comment I was refuting, we're not talking about ASIC production we're talking about hashrate on a given network. That just shows how young this Industry really is.
The entire community needs to confirm an operation before it's complete. This can be only named P2P if you remove all the meaning from the expression.
Many, many, many times more. Bitcoin could barely cope with the transaction rate of a mid sized town.
Being a fast/cheap payments network
Being a decentralised cash equivalent
Being a store of value
And why would they? It's inflationary in theory and speculative in actuality, anyone that actually thinks BTC is the way of the future would be a fool to part with it.
Namely these mainly Silicon Valley based Billionaires: Jack Dorsey, Peter Theil, Ben Horowitz, Andreessen Horowitz, Tim Draper. Add Mark Cuban in there, too if you want, but he's not SV based.
Seriously, if you want to put your money where your mouth is I can essentially prove your 1st/2nd points right now. The 3rd will take longer as a store of value is relative to the period you bought, so by default needs time to accrue value.
I'm game if you are, here is my address if you want to make it happen:
3FeN7m31dksxmGhXTMRM9ggxbEcPnfUDHy
You have fun now with all that name dropping. The track record of cryptocurrencies so far has quite thoroughly shown me and most of the world AFAICT that those points are a bust. It's worse than the systems we already have, in pretty much every way.
I note you don't actually address the points made either.
All of this of course, makes Bitcoin even more socially marginal. But yes, this is an area where Bitcoin excels for purchases.
(and to clarify, this is not to say that I personally think that drug purchases should be illegal although I have no problem with extortion demands being illegal, just pointing out the place of such transactions in the social milieu as it exists)
Once Bitcoin inflation is too strong and people are not willing to sell, it becomes profitable to start another currency. That currency will absorb liquidity and the deflation of BC stops. Like information in the internet, value flows around obstacles.
But so is a constant emission, the major difference being that the latter goes toward 0 a lot slower, e.g. taking 50 instead of 12 years to get below 2%. More importantly, it accrues wealth to late adopters as much as to early backers, combining a fairer distribution with reduced spending aversion.
In this model of inevitable coin loss, the alternative constant emission will eventually, perhaps in 50 to 100 years, reach a rough equilibrium where yearly emission roughly balances yearly coin loss. Like a softcap instead of a hardcap.
Everyday thousands of illicit transactions are carried out on the blockchain. The US government has never shown a shortage of force when it comes to stopping drug dealers. Yet the number of people who've been arrested based on blockchain analysis can be counted on one hand.
Once you start getting into the tens of thousands of USD, you can afford to obtain bank accounts outside of the country tied to a business. These are widely available and there's an entire cottage industry of lawyers who can provide everything you need.
Thinking that there would be a network when even the slightest disruption to civilization happens is simply naïve. The internet would probably be the first thing to go. Even before electric cars.
Get the fuck out of here.
The reason why so much electricity is being used on BTC is a result of an arms race between miners, not a necessity of the technical specification. Bitcoin would still operate correctly with less mining capacity. What is sacrificed is that the threshold for mounting a 51% attack becomes lower with less miners. But again, the network itself does not need a nation-state's worth of electricity to operate.
A price crash that forces a bunch of miners off the network means that, not only is a 51% attack cheaper, but the spare capacity to launch one exists, and is just sitting there unused, losing money.
A volatile combination.
If the cost of the hashing power is less than the value, then the incentive is to just buy the hashing power and do the 51% attacks.
So to the extent that bitcoin has any value at all, it's going to either burn an amount of electricity greater than the value of a network compromise, or it's not going to be secure.
So, maybe you mean 3 independent parties.. but what's to stop those 3 people from colluding for their own benefit, etc..
Anyway you need a hell of a lot more than 3 to run it.
As happened in parts of California last year?
How are you imagining they would do it?
I wouldn't say "GTFO" quite yet. Not without some more explanation for why you think it's so improbable.
Not that I entirely disagree with your sentiment, but do you realize the biggest exchange in the US/World is actually a YC backed venture based in Silicon Valley?
You're the one that said they were 'fools to be parted with,' yet these are the very VC titans of the Silicon Valley most of you adore, I just took the time to name a few who you were referring to. I personally don't care, they're just like any other person to me.
> I note you don't actually address the points made either.
Not if I'm not paid to, no; I'm a professional, and I'm compensated for my labour/skill set, why would I bother to if I'm not compensated for my time/effort?
I wouldn't ask you to build me a iOS app that I think currently is not available because 'Apple sux, lol' and expect you to do so solely because of my views may contrast with your own. I know you are paid well for what you do, so why ask such an absurd request?
Moreover, I could just prove it to you in practice far more readily rather than just provide a written counter-argument. But you have declined.
Again, this comes down to not wanting to base any of your assumptions beyond anything than just simply stating them to be fact; there seems little to no foresight or effort in them and they seem mainly sensationalist and reactionary.
What's even worse is how broadly you guys generalize things, rather than say: right, I don't understand how this technology benefits me directly, but I can see how it would given the circumstances of someone else. That's my problem with most of these ill-informed criticisms, you cannot see beyond your own position and circumstances, often until it's too late.
Sidenote: Had you purchased BTC 8 hours ago when I made that post, the 'store of value' of your purchase would have yielded an increase in 8% in a matter of hours while everything else in the stock market and fiat currencies is tanking.
Wow, now you're using the massive volatility as if it's some sort of benefit for something you're selling as a 'store of value'
If I'd bought a month ago I'd be down 50%.
You really are off on one.
Also that's hilarious "I won't address your arguments on the internet because I get paid for that, so I'm just going to tell you I already won the discussion without actually taking part".
LOL. Amazing.
The foresight you claim has had over ten years to play out now, and we've just had failure after failure after failure. The world has not been changed by it. It's time that the players in this space demonstrated real benefits or stopped the grandiose claims. Preferably both.
both phenomena even ascribe these first principles to color coded documents purportedly authored by mythical, pseudonymous departed sages, the emerald tablet of Hermes trismegistus and the white paper of Satoshi nakamoto.
You also don't need electricity (or most other modern luxury) to modify, trade, or use gold -- plenty of gold changing hands throughout the ages.
Cryptographic currencies have their use, but if the economy is looking shaky I'd rather have cash, gold, silver, cans of beans, or ammunition; BTC wouldn't even rank top 25.