There are individuals in this thread claiming "there will always be buyers" and that the probability of Bitcoin becoming worthless is zero.
The point of the article isn't that Bitcoin is doomed. It's that there is a substantial non-zero probability it ends up worthless. That such an elementary claim about a volatile asset is controversial almost says more than the article.
The classic one. Nobody wants to pay more than a token amount for Bitcoin. Maybe central banks jacked up rates or we went into a recession or something newer and shinier came about.
Value crashes, miners find it more valuable to sell their equipment than keep mining or confirming transactions, the entire ecosystem compresses to where it was when it was more about tinkering. Maybe it remains somewhat relevant, as a curiosity. Our generation's Esperanto.
It takes no more imagination to imagine $0.0000000001 than it does to imagine $50,000.
Either. Spinning up a cryptocurrency may become as mundane as creating up a database, as silly (or illegal) as trying to market a Ponzi-based hedge fund, or simply a pedagogical tool for CS students.
There is nothing inherent to crypto that says it must hold value. Markets are moody.
Yet you will find claims, on this thread, that Bitcoin becoming worthless is not possible.
A company’s stock (or bond) is a right to get some compensation in case of dissolution, bankruptcy, or liquidation sale. A precious metal like gold still has a backstop value - it can be sold to electronics manufacturers to make those beautiful gold-plated audio cables. Diamonds have a backstop value of being used in boring and drilling. Vacated real estate can be converted to other uses.
All of those assets (when owned outright and not pledged) are unlikely to go to $0.
I'm not sure what difference this makes.
As you can see here, Google has billions of assets, of which $19.7 billion are buildings.
Edit: I thought I posted a link to Google's balance sheet in my parent comment, but apparently I left it out: https://www.marketwatch.com/investing/stock/goog/financials/...
That or governments outlaw it entirely.
Consider, what happens if the Internet dies? Well you could run a private coin on an old laptop, but that's not really meaningful.
By analogy: two decades ago, US consumers were buying almost a billion dollars' worth of photographic film a year [1]. Photography hasn't gone anywhere -- people are taking orders of magnitude more photos than they used to -- but if you had invested your entire net worth into Kodak in 2000, you'd be penniless now.
Is this a serious argument?
Also, the concept of "numbers yet to be found" is philosophically questionable.
I'm not sure I'd bet on them having a quicker response than an open-source project with millions of interested parties.
Additionally, anything sent over the Internet via ANY of the standardized public key encryption algorithms can be skimmed and stored right now and decrypted once quantum computers are available. Social security numbers, bank account numbers, credit card numbers, security question answers, tax returns, trade secrets, personal details, Signal messages between elected officials and/or dissidents, informants, etc... All in clear text to anyone with forethought to start storing it right now.
Changing to a quantum resistant algorithm doesn't change the past; it doesn't change data that has already been archived.
That's why Quantum Jubilee is going to be such a big deal. Not only do you have the usual slowness in deploying new encryption standards (thus likely exposing industrial equipment, etc), but everything being sent right now is already at risk.
And we don't know when it'll happen. Could be 5 years from now, could be 15. Could have already happened in secret (unlikely, but still possible).
However, if you wanted to break the hashed private key, you don't need to solve 256 bits. Grover's algorithm is a search, thus difficulty scales with the final hash key length, not the intermediate hashes. Still, it's only a quadratic speed-up and 160 bits is still pretty tough. But that's fine, as you can still intercept the public keys before they're hashed on the blockchain.
My parents, before I was born, worked as teachers in Africa. They were sent via an agreement of our (communist) state with the Belgian government and were paid "expat" money. Only problem is, they knew that when they came back the government would take all their money (coerce them to exchange it at shit exchange rate, for a currency that was basically worthless). So they invested - they bought stuff. What did they buy? Well, they figured that ivory can only increase in value. So they bought ivory carvings - african art. We're sitting on a bunch of it - except for the artistic/decorative value... the monetary value is zero. Nobody touches ivory. Unless I'm willing to deal with some very shady persons and risk jailtime - I can't turn it to cash.
You think it's unlikely that governments worldwide would ban any given crypto - including BTC? Just watch what happened recently in a few countries....
Bitcoin is unlike your situation as with ivory you have to have physical contact with the shady person. With BTC you don't. People online don't care as much about dealing with shady people. It's also kinda hard to tell who's a shady person online.
An argument that you then concede, saying that it doesn't matter whether BTC is legal or not because you can always sell it online.
If it's illegal, doesn't it's value go way down? If you literally risk jailtime to sell it (or more accurate, to convert it to fiat eventually)
Not really, I dislike the fact that he volunteers this information. Replace ivory with child pornography (ethically they aren't that different). Would you still defend op's parents? Also note, it was a side note, I didn't say it to win an argument.
> If it's illegal, doesn't it's value go way down? If you literally risk jailtime to sell it (or more accurate, to convert it to fiat eventually)
So like all governments at once will outlaw doing anything with crypto? Like not regulate it, even if heavily, they'll just basically make owning crypto as illegal as owning idk, child porn (pardon for the repeat analogy). Like you aren't realizing the impossibility of making something like crypto illegal.
> Not really, I dislike the fact that he volunteers this information. Replace ivory with child pornography (ethically they aren't that different).
Well, they're quite different. Morally, legally, whatever, the society at large assigns larger value to a human than to an animal - any animal. Plus, they didn't do anything illegally - at the time they bought it, it was legal to buy it and sell it anywhere in the world.
You're now eating meat. It's quite conceivable that there might be a future where eating meat obtained through killing animals is considered as barbaric as you are now considering ivory trade. Different time, different people.
I only told you about ivory because it was __relevant__. It's a thing you can relate to - that people did in the past, without giving it much thought. Ponzi schemes are outlawed and considered imoral - do you consider _impossible_ a future where a marketing campaign convinces people that crypto is just a form of ponzi scheme, and participating in one is not just stupid and illegal, but also imoral?
Not the best things to compare. Builtin and culturally acquired anthropocentrism shall not be denied:
"And God said, Let us make man in our image, after our likeness: and let them have dominion over the fish of the sea, and over the fowl of the air, and over the cattle, and over all the earth, and over every creeping thing that creepeth upon the earth."
https://news.ycombinator.com/newsguidelines.html
These cryptocurrency threads are reliably causing people to lose both their manners and their minds, and we're going to start moderating them down for a while until this madness blows over.
So going to zero in that particular way would presume that there's a vulnerability in the protocol that makes it possible to manufacture effectively unlimited bitcoin outside the normal channels, and that nobody is able to figure out a way to defend against it.
2) Bitcoin's blockchain grows to petabytes or exabytes in size thus becoming horrendously slow to both replicate or even host
3) Bitcoin is surpassed by a better technology, such as Cardano or IOTA. This won't kill it but it will stunt/cap its growth indefinitely.
4) Bitcoin fails to integrate into the legacy world fully by remaining pseudonymous, reluctant or refusing to comply with AML/KYC regulations everywhere in the world, developed or not. It then maxes out in growth. Again, not a failure case, as whatever value was there will probably still remain, but it will be dwindled down significantly.
I'm sure there's more but I can't think of all of them...
And it boggles my mind that their only conception of failure is some kind of catastrophe or monumental event, like nuclear war, or quantum computing breaking cryptography. LITERALLY ALL THAT NEEDS TO HAPPEN IS THAT PEOPLE SUDDENLY WANT IT LESS. Excuse my caps.
If people doubt the future of crypto, then the price goes down. If the price goes down, crypto looks less attractive, so the price goes down more. This can spiral arbitrarily close to zero. No nuclear war or quantum computers needed.
What is being traded is like MMORPG game money or game items. They're only valuable as long as people want them. Crypto makes them unfakeable, but that doesn't mean people will want them.
My jaw is on the floor that this is beyond so many peoples' imagination.
I'm guessing there's at least someone that'd pay a few million for all of Bitcoin, so maybe a $0.10-1.0 floor, easily? Would be illiquid and hard for small holders to sell though.
Also, quantum computers do not break Bitcoin entirely as in previously unused addresses are safe. You'd need a way to quickly generate keys matching a certain hash. Otherwise you need a ton of hashing power, too, to rewrite the part of the chain created in the time a spend-of-interest was created and you generated matching keys with your attacking machine. Seems like something that can be upgraded assuming a QC-resistant crypto scheme exists.
It's funny, in this thread you dont really see much crypto optimism despite this meme being around for some time now.
> What is being traded is like MMORPG game money or game items.
There's definitely that aspect to crypto but its naive to think it's a dominant one. It might be like 10% maybe even less.
No offense, but I think this proves my point about commenters not having any clue what a run is or how markets work.
Explain to me what you think causes a run?
Is it really that unbelievable that bitcoin breaks certain economic rules and that some economic theory might have to be rethought? Is that what you are implying? That economics is like "science"?
Yes. Particularly when the basis of this rethinking is “there are so many people involved, how could it possibly crash.”
Yes, yes it is. It's incredibly remarkable that bitcoin could rewrite our economic theories so completely. It offers nothing novel in any way economically.
> It offers nothing novel in any way economically.
Ok, can you explain bitcoin in economic terms?
Its current status is essentially a speculative commodity. But in that regard it has no utility. Most commodities are, well, something tangible or valued based on something else in the world. Bitcoin as a commodity has nothing backing it up other than its distributed ledger and the massive amount of computational power behind that. But the distributed ledger will see a drop in miners as the value of BTC drops, or an increase in fees to make it even less tenable as a currency than it already is. If BTC were a useful currency, then BTC the commodity would at least have that as a backing. In theory the commodity price and currency price would move towards each other (with one leading or lagging behind the other). But BTC the commodity has made BTC the currency essentially impossible to use due to the present overvaluation.
Regarding deflation and its inability to survive more than one or two generations, assuming some stability, if it maintains a modest 2% deflation rate the real value of a nominal amount of BTC would double every 32 years. So someone receiving 1 BTC as salary today would receive 0.5 BTC for the same work in approximately 32 years. Halved again 32 years later, the 3rd or 4th generation would receive 1/4 the salary of the first generation (in nominal terms) and have a fraction of the buying power.
I suppose a novel aspect of this is that it virtually eliminates the need for pensions as the mere presence of money in your wallet means you'll have more buying power in the future than now. Unfortunately this only makes financial inequality even worse than the situation we have today. Lending would be eliminated, or the terms would be so dreadful only the most desperate would seek it. Savings would go up, but in the "under the mattress" sense rather than the "in the bank" sense, where the money can at least continue to have some utility by being lended out to others by the bank. A massive economic drag.
None of this is novel stuff, from an economics standpoint.
> As a currency, assuming that its value stabilized
by pointing out that without a central bank, a stable value is literally impossible, because its price becomes entirely demand-driven.
That alone is enough to bring its hope of being a meaningful currency in stable society to zilch.
Correct, but you somehow missed how demand for bitcoin was actually created - it is somewhat untraceable currency therefore used in "black market" transactions.
As those markets develop they will demand such currency in one way or another and that's novelty from an economics standpoint.
But that was also something that held back bitcoins valuation. In 2011/2012 anyone who heard of it either understood its technical features, or thought it was "that thing for buying drugs online". Once it stopped being the latter (at least in common perception) the speculation really began in earnest as the exchanges were able to gain access to banks and other financial institutions.
A blackmarket crypto that retains that reputation, whether used for legitimate business or not, will likely find its global valuation impaired by that reputation like bitcoin and it will be difficult for average folks with no interest in the blackmarket economy from "investing" in it.
It certainly will be interesting.
> Sure. It's an overvalued, speculative commodity in a bubble.
Overvalued compared with what? Speculative is an opinion.
> Ostensibly a currency, but without any of the useful features of a currency
With a fundamentally different set of features. Like being able to exchange with literally anyone in the world is unprecedented. Again, Bitcoin has opened many new markets, e.g. I can trade with North Korea with it. It also lets the underbanked people fight back against their government. E.g. I can pay a worker in Zimbabwe much easier than before. This could drive up the adoption rate to unprecedented levels.
> Most commodities are, well, something tangible or valued based on something else in the world. Bitcoin as a commodity has nothing backing it up other than its distributed ledger and the massive amount of computational power behind that.
The backing part of commodities is greatly exaggerated. Who cares? Is that why you are using dollars? It's a protocol that lets me plugin to the world economy. That's unprecedented.
You talk about BTC but like BTC is not the end all. There's like 7000 crypto, some of which are shit but some have like ...serious research behind them.
As a trading instrument it's so much better than stock. With stock you have to wait three days. I guess the closest is Forex but forex is just so boring.
You asked me to explain bitcoin, I did.
> Overvalued compared with what? Speculative is an opinion.
Overvalued compared to its utility as a currency, which is what it ostensibly is. As a currency it presently has no value because the overall BTC valuation is so high and so unstable, paired with the transaction fees and delays.
Speculation is not an opinion here. Look at how many people are "investing" in it with no comprehension of what it is and what it does.
> Like being able to exchange with literally anyone in the world is unprecedented.
For all practical purposes I can exchange Euros and US dollars with anyone in the world, modulo a few countries that have stricter and enforced policies. I was in Uruguay last July and was able to use USD at shops because the other option was credit card (exchange rate set at the end of the day) or ARS (cash on hand) and the exchange rate was better with the posted USD->UYU was better than either of those (as long as I used at least a $20 bill). No questions asked, they just took it and I got the goods I wanted.
> I can trade with North Korea with it.
I will agree that it does eliminate or reduce the effectiveness of economic sanctions in some situations, like this one. However, if you're a US citizen conducting business with NK is still illegal or tightly controlled, and bitcoin is only pseudonymous. And with regard to opening up financial interactions with people across borders, that is a potentially very useful thing. But at the moment it is not a feasible thing with bitcoin.
> The backing part of commodities is greatly exaggerated. Who cares?
The people seeking profit off of them. If a commodity doesn't have something behind it, its value will fall. When it will fall can be a while in the future depending on the general hype and/or confidence. Bitcoin is all hope, no real confidence, and no real utility (at present).
> You talk about BTC but like BTC is not the end all.
You asked about bitcoin, I answered about bitcoin.
> As a trading instrument it's so much better than stock. With stock you have to wait three days. I guess the closest is Forex but forex is just so boring.
Three days? Three days for what? And better in what way? In the "I enjoy rollercoasters" sense? Then sure, it's better that way. At least with stocks (or the ones I invest in) I can examine the fundamentals of a company, the global and national economies they play in, and have some idea of whether they're overvalued or undervalued at any given time with ease. Most Forex is the same.
Bitcoin, the thing you asked about, is not useful as a currency. So it's only useful, right now, as a commodity and in trading on various exchanges as a commodity. It is pure speculation until the value on those exchanges and the value of things I can purchase with are closer together than they are today.
It's not just a currency. It's part stock, part currency, part forex, part world of warcraft money, part political movement, part programming platform, part distributed database etc etc. Like the number of categories it fits into is a lot.
Ok talk about ethereum. Does ethereum have intrinsic value?
> Look at how many people are "investing" in it with no comprehension of what it is and what it does.
Is everyone investing into bitcoin speculating? Is possible that some people know what it is and still want to invest?
> But at the moment it is not a feasible thing with bitcoin.
That was an extreme example.
> Bitcoin is all hope, no real confidence, and no real utility (at present).
Ok, lets talk about other crypto.
> You asked about bitcoin, I answered about bitcoin.
OK can you answer the same questions for other cryptos not just Bitcoin?
Nah. You'll just be dissatisfied and ask me to answer other questions.
"I don't understand what a run is, but somehow I'm pretty sure it's bullshit. I don't understand how economics works, but I'm pretty sure all the rules have been rewritten in some unspecified way that makes bitcoin invulnerable, and I'm in a better position to know this than people who actually have the understanding that I'm rejecting. My ignorance, which I have no burden to dispel, is better than your knowledge."
If that's not your viewpoint, then I'd love to hear what exactly you were getting at.
Also what exactly do you think is the required knowledge for this? Just economics? If so, you are off.
Yeah, we could start there. So what's a run and what causes it? Still waiting.
Things like that don't just suddenly happen for no reason.
That it's such an elementary claim is the reason for the pushback. What's the point in saying something obvious?
Saying something obvious (e.g. circles are round) isn't the same as refuting something obvious (e.g. circles are squares).
What will happen is that animal spirits will change, and liquidity will slowly recede. At some point many market players will say, "Yes crypto has value, but I prefer to hold more dollars for the time being."
Price levels drop and volatility increases, and the feeling compounds. More people prefer to hold more of their wealth in dollars.
Those who have bought with leverage are force to sell, driving the price further down.
At that point there is a full on panic and crypto exchanges which are unregulated at best and sketchy at worst, and under no legal obligation to clear trades, will first front run their customers and then fail.
Stocks and bonds at this point would hit a floor at the value of the liquidation dividend, often, but not always, zero for the stock, slightly higher for bonds.
Currencies have no floor, but typically have capital restrictions (you can't get out) or a central bank with reserves and an interest rate mechanism The central bank would buy with reserves or raise interest rates to support it.
Cryptos have no central bank and no capital restrictions.
But I don't know. If you play with the zoom levels on price tracking sites, the $20k peak onward has been a pretty steady downward trend. BTC is down 20% over three days, down nearly 23% over a week. Is that par even for Bitcoin flash-crashes lately? Zoom out further to a month and the price is now down almost 40% at the time of this post.
We zoom out to six months, or a year, or two years, and we see astounding gains then – we are all aware of the blistering rise in price over 2017. But once it dipped after 20k, there were a lot of people who swore it would climb back. And then it dipped further, and further, and the collective memory of Bitcoin's humble recent history was lost in the cacophony of media blitzes and new customers entering the market.
I think the underlying worry for most people isn't the fact that the price goes up and down a lot... I think the worry really is that when growth stops will people still be interested? Can Bitcoin last forever if the price is e.g. <$5000/BTC?
Exactly! This is why casinos never make money.
This is what any market would look like without being rigged by governments and government backed institutions.
Bitcoin may be the best proof yet of how deeply flawed the libertarian free market ideology really is.
The price of gold isn't stable because the visible hand of the govt has stabilized it, or if there is any law which protects it.
If you have convinced yourself that this is the reason why it is stable, then you're drinking your own kool aide.
The price of gold, or any currency is stable because its market has been discovered, and huge financial assets have been created which allow people to profit off it's price movements, which results in price stability.
Even with that, Gold market can move up and down quite drastically, for instance when in 2009 and 2010 by 25% and 30% respectively, then dropped by 27% in 2013.
The reason why price of Bitcoin moves so much up and down because it's true market hasn't realized yet, once it does, it's price will stabilize too. No govt can make it happen.
If someone ever manages to mine asteroids for gold or we discover a previously unknown reserve we'll see more price shocks.
I don't know where you got the idea that the supply of gold was stable; it is merely inflexible because it depends on physically digging it out of the dirt.
Protections in the form of contract law, fair and impartial judiciary, notions of property (ownership)...
We can't just blanket say that any government interaction with a market is negative. Sure many aspects are. But there are positives as well.
If you look at the housing crisis that occurred that was because the market was becoming unregulated over time and because fraud was allowed to flourish. That was then coupled with human greed and it wasn't entirely the government or the banks faults either, because if regular people weren't going out to buy houses to make money doing nothing, then there wouldn't be such a huge collapse.
At the end of the day it's all the same. People want to get rich doing nothing and any opportunity to do so brings out the greed in individuals. If there weren't some winners in this equation, especially winners that you can relate to, then people wouldn't join in. But when an everyday person makes money this way then everyone starts thinking, well that person isn't special, why can't I do the same?
More often than not the early investors are the ones that reap the profits and hope to exit on time, while those entering the game late are the ones most likely to incur losses.
Look at the fundamentals. What we have here is a bad currency (volatile and deflationary) whose utility is diminishing as its price increases.
There aren't a lot of value investors in cryptocurrency at this point. The vast majority of the people who hold it are holding it on the theory that it will continue to appreciate, but it can only do that if more money comes in. If these "HODL"ers start to believe that no more money will come in they will sell to lock in their gains. Once it starts this will easily become a self-reinforcing panic sell-off a.k.a. a bank run.
Let's say it goes higher. Let's say it goes up another 1000%. That doesn't change these fundamentals. If anything it makes the situation even more volatile. Most people look at price charts in linear not logarithmic mode, making moves look larger at higher prices. This makes panic selling more likely.
I agree that bitcoin et al are escrows vs currencies.
That their current valuation is a combination of money laundering and typical bubble hype (FOMO, castles in the sky, gambling).
Do you have any tools you recommend that make it easy to see these logarithmic charts?
The reality is that the nanosecond the zeitgeist changes and people start believing that there is going to be an extended period of decreased value in cryptocurrencies then there will be a massive selloff which will just cascade. This is how markets work, this is how speculative bubbles work. Bitcoin especially has almost no value other than speculative investment, it's just a matter of time until the bubble pops.
The market as a whole won't tank completely unless its revealed that blockchain or DAG tech can't ever scale and decentralized tech is just too slow and inconvenient to use for everyday purposes.
At some point during said panic sale-off people will think, hey have the fundamentals changed or is this just a panic sell-off? Then they won't sell or will sell with the intent of buying in lower.
Curious, none of the things you mention indicate how this speculative bubble is any different from houses, stocks, or tulips.
People were investing in houses, stocks and tulips to make money. Many people invest in Bitcoin for religious reasons.
Could you please explain what “overvalued” even means in this context, and how one might go about determining fair value for cryptocurrency? I’ve yet to receive a straight answer on this.
So now we have bascially infinite bitcoins so the value of them is zero, because why would I buy one, when I can just make one at any time.
The opposite of this is where Bitcoin derived it's value. First there is a fixed number of Bitcoin, so you can't simply make more past a point. Secondly, the effort required to mine Bitcoin increases over time.
This effort requires real world currency exchange. I need to buy a powerful computer and then pay a lot of electricity, cooling, space.
So effectively my mining operation costs $x. Now as time goes on to get the same number of Bitcoins I need to increase my spend because the computational needs increase as well.
Effectively, I'm exchanging my USD to equipment and energy, which are giving me Bitcoins.
A reasonable value for Bitcoin would be to calculate the total amount of hardware and energy invested in mining and there you have a decent floor value. You can then extrapolate this for the future, since the total amount of Bitcoin to be created is known, you could say that multiplying that out you get a total amount of value.
To say that they are overvalued would mean that the total current dollars invested in mining bitcoin is far less than the current total market cap of said coins. If you look at the price of Bitcoin 2014 to the start of 2017, you see a gradual increase in price, which would be explained by the amount of money going into mining and with some markup.
In 2017 you see a 20x increase, but that isn't matched with a 20x increase in spend for minting Bitcoins, so the increase is irrational.
If I spend 1000 hours making a really bad doesn't, it'll have a value of zero, even though it's unique and a lot of work was put into it.
I haven't created value, I've destroyed it, I.e. All that time and nothing to show for it.
So not everything that is limited is valuable, however everything that is valuable is limited.
Just imagine if someone figured out how to engineer gold out of thin air, the value of gold would drop instantly.
That's literally exactly what you asserted:
> The opposite of this is where Bitcoin derived it's value. First there is a fixed number of Bitcoin, so you can't simply make more past a point. Secondly, the effort required to mine Bitcoin increases over time.
Not necessarily. The effort required is based on trying to create blocks every 10 minutes. If the price increases, mining becomes more profitable, thus more effort will be put into mining, which means the blocks will start to be created quicker, leading to an increase in difficulty. The reverse is also true: if blocks take too long, the difficulty decreases.
If you take a look at a difficulty graph [0] you can see that it decreases at times. Compare with a price graph [1]. You can see that significant price decreases also cause minor difficulty decreases, but it's not a 1:1 correlation due to mining efficiency improvements.
[0] https://bitinfocharts.com/comparison/bitcoin-difficulty.html... [1] https://bitinfocharts.com/comparison/bitcoin-price.html#log
The fair value for cryptocurrency, just as with everything else, is determined by the market(s) (at least, when it is unadulterated by government obstruction and price-fixing and such). So to determine the fair value of a bitcoin, go to the exchange of your choice and look at the price. If you don't like that price, try a different exchange. You might not want to pay that price right now, and that's okay, but that's what the fair value is right now.
To quote Warren Buffett, “price is what you pay, value is what you get.”
I "overpay" for Apple laptops because I know I'll be able to quickly make my money back by doing productive things with them.
The transaction fees on the network are incentives for miners to pass transactions in addition to block rewards.
But you can gain some idea of probability that something is correct or incorrect. For example, if 99 of 100 doctors agree that vaccines do not cause autism, that does not necessarily mean that vaccines do not cause autism. But chances are really good that the 99% of doctors are correct.
Nice job giving the formal name of a logical fallacy, though. Adds a lot of credibility to your argument!
The whitepaper is short and very approachable ;)
For reference a lot of times you currently have to pay a fee of >$10 to get your transaction recorded in the blockchain, and estimates of around $10 million a day in transaction fees go to miners.
Of course its questionable whether fees can actually support the ecosystem, but it is designed into the system.
The endgame seems completely untenable. No one is going to pay a huge amount per BTC transfer. So what do you think will happen to all those miners, with all their mining equipment?
We currently have a monstrous block reward every 10 minutes, and yet tx fees are already $10 to $20. Imagine how much the fees will be when there's no reward.
Which of course means the next difficulty adjustment would take far longer than two weeks to trigger.
right now every block pays 12.5 coins, which even with current low prices is around $145K.
The average transactions per block looks like around 1,800 (https://blockchain.info/charts/n-transactions-per-block) which puts mining revenue per transaction at around $80, on top of which miners also get the transaction fee.
With no more mining where is the other $80 going to come from?
More to the point, who in their right mind would ever use a transaction processing system that charges $80+ per transaction?
What happens when you have a fixed currency stock and every transaction requires paying some of it to the transaction processors? Seems pretty unsustainable to me.
Are you asking where transaction fees come from?
Well, if PayPal earns $3 when I use it to send you $100, where did that $3 come from? The truth is that I sent PayPal $103, PayPal kept $3, and you got $100. (These numbers are probably not exactly correct; I don't know what PayPal's actual fees are off the top of my head.)
So the transaction fee comes from the person that made the payment.
If what you're saying is that this means that miners will be able to accumulate all the BTC… well, yes, but that's what happens now. When you buy BTC, you are buying something that, at one point or other, was initially owned by a miner. So yes, miners could bring the whole system down if they just accumulate all the BTC for themselves, but they could already do that now, and they don't - instead they trade that BTC for fiat or (nowadays, perhaps) other cryptocurrencies, so it begins to circulate to others.