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Comment by aphextron | Hacker News Reader

This is really clickbaity. The title implies Bitcoin just rapidly fell in value. It's been slowly declining all year, and is still nearly 10x where it was last year.

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It's serious for miners, if I remember correctly - bitcoin is only profitable at ~7000$. But it's quite a bit below that now.

As miners withdraw and go bust the effort declines and the fees adjust until it becomes profitable again.

It's a clever aggregate system. Bitcoin is always worth what it costs to get it, which at root is relative to the aggregate effort deployed in the bitcoin system in 10 minutes.

10 minutes is a 'turn' in Bitcoin. Everything is relative to what can be done in that amount of time. Perhaps the inventor was an old school D&D player.

The profitability for Bitcoin production largely depends on power pricing. Here's one country-average based breakdown (from Feb 2018) - you can look at the $6000 down level to see where it's still profitable: https://cointelegraph.com/news/mining-margins-and-where-to-m...

You can also use a mining calculator to do a real time spot-check of whether Bitcoin is profitable to mine or not as well (even if you have pretty average electricity prices, very much so): http://whattomine.com/asic?utf8=%E2%9C%93&sha256f=true

For those interested in the most accurate and in-depth analysis on the economics, power consumption, and other aspects of Bitcoin mining, I can highly recommend @mrb's writeups like http://blog.zorinaq.com/bitcoin-electricity-consumption/ and http://blog.zorinaq.com/morgan-stanley-bitcoin-research-repo...

Note that the original article/title is pretty flawed to begin with since there are no tokens that depend on Bitcoin mining to begin with! (90% of tokens by market-cap are based on Ethereum, mining which is even more profitable than Bitcoin, and the economics of which will be changing drastically w/ Casper V2 soon).

Wow, thanks for the information! With that in mind, it seems that it will be a looong time until the bitcoin craze is over.

Well, it'll probably be a long time before the "bitcoin craze" is over since cryptocurrencies as a technology and an asset class are still in their infancy, but it's hard to say how long proof-of-work mining will last. Personally, I'm most closely following what the Ethereum guys are doing with proof-of-work (see: https://ethresear.ch/) but I'm also quite keen to see Chia's proof-of-space-time (an iteration of proof-of-capacity) or if something like proof-of-useful-work is possible. I think everyone's in agreement that PoW is expensive and wasteful, it's just a matter of developing//proving something that works better/cheaper...

Bitcoin pow is intentionally useless. The reasoning is that if there were alternative uses, the value of those alternatives could fluctuate and negatively impact hash rate.

Going from 20k to 5k seems like a crash to me...

As did $30 to $2 back in the day. And again at $1k to $300.

It's sort of standard practice for Bitcoin at this point. Not saying it's a guaranteed recovery, but at the same time it's not exactly an unprecedented event.

Here is another way to look at the price:

  June 29 2017 BTC $2,480
  June 29 2018 BTC $6,414

If a stock dropped 60% you wouldn’t consider “it was very recently 10 times lower” a positive.

A crash implies you came down from somewhere. Bitcoin came from a price of zero. The 20k peak was just price discovery fueled by mindless speculation for a brand new asset. It will keep settling down, but I highly doubt it will ever be worth less than its value a few years ago again.

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