Good. Bitcoin is too wasteful when it’s at a high valuation. The amount of resources in both electricity and gpu hardware that gets locked into mining is too high.
It can still do it’s job as a currency with a lower valuation.
It can still do it’s job as a currency with a lower valuation.
Remember that those mining farms still exist, even if they've temporarily turned off their mining equipment. Someone can turn all that equipment on suddenly to attack the network and start double-spending their coins.
In effect: the hashrate MUST remain high if the BTC network is to remain secure. That's just how Bitcoin was designed. A big drop like this where "good" miners start to turn off and sell off their equipment puts BTC in a highly vulnerable spot.
The electricity usage will remain high, OR a 51% attack will happen. The electricity usage can never drop without severe risk to the entire system.
Reminds me of something else that places a continually increasing demand on resources to remain stable...
Building the Red Queen problem into currency is insane.
It looks like some countries where BTC is more popular may take a bigger hit under such a doomsday scenario.
In effect, a 51% attack would cause the attacker to scam a lot of money from people in a short period of time. Then everyone will notice it on the blockchain (remember: the Blockchain is public. 51% attacks would be relatively obvious to see). After that, BTC's confidence will be broken and the value will march towards zero: no point holding a coin when some unknown entity out there can double-spend their coins. That's how it happens for other Proof-of-Work coins.
But at the same time, BTC is the biggest coin, so its the least likely thing to happen. Its far more likely that BTC miners understand the importance of their mission, and remain wasting electricity perpetually.
Some would argue that the BTC community is too vested into Bitcoin. So even if a 51% attack were possible, the people who could do it would never torpedo the coins that the own.
I honestly believe that the electricity usage - and therefore climate-change impact - of cryptocurrencies to far outweigh the benefits they bring.
I think that the "value... march towards zero" is a good thing because "wasting electricity perpetually" is a bad thing. I don't think we should care about the losses of people who willingly bought into a wild-west scheme.
edited: formatting
I guess the latter as future techs could be made less wasteful.
So, BTC is popular in large part for offering the ability to evade state controls (both regulation of supply and transfer, and taxation) that fiat is effectively subject to (whether or not they theoretically also apply to BTC), and to avoid control of the banks, but it is unthinkable but that an incumbent nation state, or set of banks, or combination of one or more of the former with or without the latter, would sacrifice the resources to thoroughly discredit BTC?
Sounds like the best argument against bitcoin I've heard yet.
What does Person C use to send something to Person D? Whatever Person D deems as acceptable.
This is true, but it can't do it's job with high transaction volume.
Counterargument: There are ways to correct it and intermediate services between BC and users will fill the gap between verification and use....
Counter-counterargument: If you need intermediaries, Visa and MasterCard already exist and their payment system is cheaper.
If in one year it can go from $2000 to $20,000 to $4000... Isn’t it better to think of it as a crypto-commodity instead of a currency? It doesn’t seem to me to share many properties of a successful currency, number one being confidence in its value.
That to me is definitely a good sign. Less hoarding, more spending. I do wonder what happens if the network starts to get transaction-bottlenecked again. It's not like all the problems with block size suddenly went away.