What if Bitcoin went to zero?

https://www.economist.com/finance-and-economics/2021/08/02/what-if-bitcoin-went-to-zero

by prostoalex • 5 years ago

18 24 5 years ago

economist.com

rfd4sgmk8u• 5 years ago

cool, but it will never happen. There are people like me that will buy at any price, regularly.

If BTC goes to zero, I will buy the remaining 14 million floating coins for $0.00000001/BTC.

Of course, there are others like me, and this will bootstrap value >$0

What we need to brace ourselves for is it going to infinity. There are not that many coins left, and when people realize this, they will run for the exchanges.

The exchanges, of course, are all actually insolvent, as over the years fraud, loss, theft and just plain being a dumbass has made their liabilities impossible to satisfy. There is not enough coins.

Not your keys, not your coin. Stash em away asap!

gizmo6862• 5 years ago

Thinking about dropping to 0 is a useful thought experiment, but everything in the article applies to a sufficuently small positive value.

On a practical matter, a sudden drop in the value of bitcoin could make it literally impossible to by, as the resulting drop in hash power could mean that no new block is ever mined, so the bitcoin transaction giving you ownership is never proccessed.

BayAreaEscapee• 5 years ago

If there was a severe drop in hash power, the mining difficulty would also drop. If it dropped very low, a single computer using CPU mining would be enough to mine a block every ten minutes (as Satoshi himself did after he first created Bitcoin).

In the long run, as long as even a single person has an interesting in mining, a new block will be mined (on average) every ten minutes.

asdff• 5 years ago

I remember when beanie babies were supposed to go to infinity too

bequanna2• 5 years ago

This is such a tired and lazy comparison. Especially when there are so many more apt things to compare Bitcoin with: early 2000’s tech stocks, pre-crash housing prices, East India Company.

rat87• 5 years ago

What if? I'm assuming it's just a matter of time. 0 or as close to zero to make little difference

kybernetikos• 5 years ago

Unlike other cryptocurrencies, it'd be quite surprising if bitcoin ever went entirely to zero because at a minimum it has historical interest.

I do hope that people will gradually realize that other more modern cryptocurrencies meet any specific goal (including the original goal of bitcoin) better, and eventually the majority of the value will congregate elsewhere, but I doubt it'll ever go to zero.

someguydave• 5 years ago

Yeah but nocoiner fantasies are a big market so the Economist is there

herendin2• 5 years ago

Non-paywall : https://archive.is/z6Jrv

It seemed it was a surprisingly poor and unfocused analysis. The Economist is normally better than this

rvz• 5 years ago

Quite a surprising take from The Economist. Might as well say what if you can purchase your dream house with just monopoly money?

Oh dear. I'm going to act as if I never read this uninformed low quality article. I expect much better than this from them.

abstractbarista• 5 years ago

They list the types of buyers, but forgot a fourth one: Those who buy it to immediately spend on things they cannot otherwise easily acquire with fiat currency. (I leave these things to your imagination.)

The first three groups may shy away if the price crashes, but the fourth group will (mostly) not. Because what the fourth group is doing (mostly) does not care what the price is.

They can buy their goods whether it costs 0.00001 or 100 BTC, because those goods are indexed against fiat prices. As Bitcoin goes down, prices on the markets that sell these goods automatically rise to counter.

Perhaps the price gyrations would be more aggravating for the sellers of these things. They rely on converting cryptocurrency back to fiat to finance their business, (although perhaps some are able to buy their wholesale product with crypto directly). Volatility exposes them to a risk of losing value if Bitcoin falls between the point in time a buyer places an order, and the time the seller is able to withdraw and convert the payment to fiat.

Ultimately these buyers and sellers support some price floor for Bitcoin and other cryptocurrencies as they exchange real goods and services.

There's a lot of hype around cryptocurrencies, but ultimately this is the true killer use case. And there are millions of people who value that >$0.

desperate• 5 years ago

Don't you think these fourth buyers apply more to supporting a baseline price on Monero and not Bitcoin?

lmilcin• 5 years ago

(disclaimer, I don't know shit about bitcoin)

The one problem with this is trust.

Even shady enterprises need tools to do business they can trust, and if all funds they have suddenly devalue by orders of magnitude they will loose trust.

Another way a shady enterprise can loose trust is if everybody stops using bitcoin and everybody knows whatever is left is a shady business. It is like going around with a big bag of $100 banknotes marked "STOLEN".

There is only so much utility from bitcoin for shady enterprises if they are restricted to only exchange funds between themselves but being unable to convert to real money. They would also have to mine bitcoin on their own.

ganeshkrishnan• 5 years ago

Those who buy it to immediately spend on things they cannot otherwise easily acquire with fiat currency

You dont have to leave it to imagination. For me bitcoin was the easiest way to pay content writers from remote places like venezuela or middle east.

This was when bitcoin was around $500 or less and I bought some bitcoins to pay this contract workers. There was nothing shady or illegal. it just was the simplest way to pay anyone across the world.

jjeaff• 5 years ago

I used to use Bitcoin for paying some overseas contractors for that same reason, but it became too expensive. So now I use ALGO or a few others. I was surprised to find an actual use for BTC. But turns out, it is not really very useful for that purpose anymore.

vinsci2• 5 years ago

Compare the fall of the US dollar, 100 USD dollars from 1913 now have a purchasing power of less than 4 dollars. [1]

When talking about the USD, it isn't a question of if the USD went to zero, but when people stop using it entirely in international trade, and it actually becomes worthless. It is currently on artificial life support, but there isn't any sustainable way to continue that.

The cost of yet another war of U.S. aggression would send the dollar into a final value implosion. Yet if you peek at Gettr.com, war propaganda against China is everywhere. It's not just the Republicans, a few years ago "Madame President" held a public speech in a park, and declared war on both Russia and Iran for no particular reason. Iran is backed by China, perhaps because Iran hasn't started any wars. YouTube has "helpfully" one way or other deleted the video of that talk.

The history of Rome is repeating, unless the Federal Reserve is shut down and replaced with a non-criminal central bank, without private profit interest.

[1] Visualizing the Purchasing Power of the Dollar Over the Last Century https://howmuch.net/articles/rise-and-fall-dollar

vinsci2• 5 years ago

Here [1] is a 2016 video [12:22] summary of the attempts by Hillary Clinton trying to start a war with Russia and Iran, in her own words, on camera.

[1] Hillary Clinton Is A Threat To All Of Humanity https://www.corbettreport.com/hillary-clinton-is-a-threat-to...

cowvin• 5 years ago

that's not really a "fall." that's normal inflation. a small amount of inflation is desirable because it incentivizes people to use their money rather than sit on it and let it accumulate value.

coincidentally that's actually a big problem with bitcoin... it's a deflationary currency so all the wealth is accumulating in the hands of the early adopters who are just sitting on it. this hinders its adoption since people are incentivized to not spend it.

danlugo92• 5 years ago

https://endthefud.org/

altspace• 5 years ago

If Bitcoin goes to zero, I’ll buy all of it

What if Bitcoin went to zero?

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