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To buy Bitcoin, a miner somewhere has to produce a block with your transaction in it. If the value of Bitcoin falls that much, it will no longer be profitable t

To buy Bitcoin, a miner somewhere has to produce a block with your transaction in it. If the value of Bitcoin falls that much, it will no longer be profitable to mine. With no miners, nobody could buy or sell anything.

adamnemecek 9y ago
That was planned for. Like there's only 20million Bitcoins tops.
- paulmd 9y ago
  It has nothing to do with the issue rate of Bitcoin, frisbee-on-the-roof is potentially a real problem. 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.
  - adamnemecek 9y ago
    Are you saying this will happen to all crypto or just Bitcoin? Ok if Bitcoin goes away, it might over time, exponential decay and what not. Or might also go up. But crypto overall will most likely go up. Like you can't go back. 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.
    - paulmd 9y ago
      Specifically Bitcoin, other coins have more robust difficulty readjustment mechanisms.
      - qsucvatz 9y ago
        Bitcoin can fork to change it's Difficulty Adjustment Algorithm.
cableshaft 9y ago
And then the hashing algorithm self-corrects in difficulty downwards, and an individual could mine on their own PC again, like it did in the beginning when almost no one was using it, let alone dedicated mining equipment.
Kiro 9y ago
The difficulty will be adjusted accordingly and automatically (it's part of the protocol). Your scenario can't happen.
- deleted 9y ago
  [deleted]
- teraflop 9y ago
  Sure it can happen. The difficulty is adjusted every 2016 blocks, which normally means every two weeks. 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. https://en.bitcoin.it/wiki/Difficulty https://en.bitcoin.it/wiki/Difficulty

adamnemecek 9y ago

That was planned for. Like there's only 20million Bitcoins tops.

paulmd 9y ago
It has nothing to do with the issue rate of Bitcoin, frisbee-on-the-roof is potentially a real problem. 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.
- adamnemecek 9y ago
  Are you saying this will happen to all crypto or just Bitcoin? Ok if Bitcoin goes away, it might over time, exponential decay and what not. Or might also go up. But crypto overall will most likely go up. Like you can't go back. 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.
  - paulmd 9y ago
    Specifically Bitcoin, other coins have more robust difficulty readjustment mechanisms.
    - qsucvatz 9y ago
      Bitcoin can fork to change it's Difficulty Adjustment Algorithm.

cableshaft 9y ago

And then the hashing algorithm self-corrects in difficulty downwards, and an individual could mine on their own PC again, like it did in the beginning when almost no one was using it, let alone dedicated mining equipment.

Kiro 9y ago

The difficulty will be adjusted accordingly and automatically (it's part of the protocol). Your scenario can't happen.

deleted 9y ago
[deleted]
teraflop 9y ago
Sure it can happen. The difficulty is adjusted every 2016 blocks, which normally means every two weeks. 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. https://en.bitcoin.it/wiki/Difficulty https://en.bitcoin.it/wiki/Difficulty