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