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Comment by JumpCrisscross | Hacker News Reader

> At this point there's waayy too many actors and people who want Bitcoin to succeed

This has no relation to whether something goes to zero (or practically zero). Political influence? Sure. But I don't think anyone expects D.C. to bail out Bitcoin.

> A company has a "single point of failure"

Companies trade after bankruptcy. There are stubs, practical and theoretical, for companies improperly wound up going back decades.

Even if a state says "XYZ failed to pay franchise taxes and is now inactive," a shareholder can sue the former directors, holders of proceeds from the company, et cetera. (Company "ownership" is de-centralised and ambiguous, a fact that becomes uncomfortably clear post mortem.)

Colloquially, we call "practically worthless," i.e. where the cost of valuing something is likely more than it's worth, zero.

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> But I don't think anyone expects D.C. to bail out Bitcoin.

What does it mean for Bitcoin to be bailed out? How can Bitcoin "fail"?

> But a penny price is as good as zero.

Why would it go to zero?

> Why would it go to zero?

Crisis of faith. There's nothing else behind it.

The thing tho is that people have seen the insane gains it can provide. There will always be buyers. If Bitcoin went to $50 tomorrow, you can bet I would buy a lot. I'm not the only one. It's done magic once, it might again.

The point is, there will always be buyers.

> The point is, there will always be buyers

Someone could have said the same for the Dutch East India Trading Company. "What, will the colonies sink into the ocean?"

Note: I'm not saying it will become worthless. But you're grossly underestimating this risk.

To buy Bitcoin, a miner somewhere has to produce a block with your transaction in it. If the value of Bitcoin falls that much, it will no longer be profitable to mine. With no miners, nobody could buy or sell anything.

That was planned for. Like there's only 20million Bitcoins tops.

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 adjustment period (average of 700).

In this situation, the only option would be a hardfork to bootstrap the network back to a live state, either by directly adjusting the difficulty or by readjusting more frequently and more aggressively.

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 like bitcoin.

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

Bitcoin can fork to change it's Difficulty Adjustment Algorithm.

And then the hashing algorithm self-corrects in difficulty downwards, and an individual could mine on their own PC again, like it did in the beginning when almost no one was using it, let alone dedicated mining equipment.

The difficulty will be adjusted accordingly and automatically (it's part of the protocol). Your scenario can't happen.

Sure it can happen. The difficulty is adjusted every 2016 blocks, which normally means every two weeks.

Let's say the most recent difficulty adjustment has just passed, and the total network hash power suddenly drops by a factor of two. That means each block takes twice as long to find, so now you have to wait four weeks for it to correct itself. And during those four weeks, if the hash rate continues to drop, the adjustment gets further and further away.

Basically, if hash power drops by 5% per day for a sustained period, the network can't recover fast enough.

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

> What does it mean for Bitcoin to be bailed out?

Around when Bitcoin was trading at $19,000, my Uber driver told me about the second line he'd taken on his home to buy some. That's not a systemic problem in America. But it might be in some other countries, e.g. South Korea.

Suppose Bitcoin crashed 90% and stayed down for a few months. It is conceivable that Seoul might pay out, to avoid social tension. Directly, e.g. you get a jeon for every won you lost, or indirectly, e.g. temporarily increasing welfare benefits [1].

Note that I said "conceivable." It is unlikely, hence why I think arguing that because lots of people are involved it cannot become worthless is silly.

> Why would it go to zero?

Why would it go to $50,000? Because people decide it's worthless (or worth more).

[1] https://www.theguardian.com/business/2014/sep/03/long-term-u...

Agree. Too big to fail is a terrible, copy-pasta argument that makes no sense.

The combined worth of all the crypto-currencies put together is a drop in the global-financial bucket. The only people who would be hurt by a collapse to zero are those trying to artificially pump the price to cash out rich.

I used to be anti-FUD, but whatever the term for the opposite is - it's way more infuriating.

The opposite of FUD is hype. Or maybe, a specific form of hype?

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