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What would happen if suddenly (on news from some exploit or a scheduled banning by the vast majority of governments) everyone tried to pull their Bitcoin and pu
by Robotbeat 6y ago
What would happen if suddenly (on news from some exploit or a scheduled banning by the vast majority of governments) everyone tried to pull their Bitcoin and put it into anything else? The blockchain can only do 7 transactions per second regardless of demand.
- tobylane 6y agoThe mempool queue would increase, iiuc. https://bitcoinqueue.com/#1,24h https://bitcoinqueue.com/#1,24h
- quesera 6y agoThat's correct, if the "into anything else" transaction required a cross through (any) blockchain. And the clearing feerate, which correlates to mempool queue depth, incoming transaction velocity, and cohort feerates, would increase dramatically. But if there was a run to convert BTC to USD, the exchanges would not be able to cover the USD required. They'd limit or suspend withdrawals immediately. At some point someone would have to start buying with fresh USD for the exchanges to be able to pay out the sellers. With big enough news, there could be tens of thousands of dollars gap between bid and ask, which would take a long time to ease.
- Robotbeat 6y agoYup, and the transaction fee would be bid up by people desperate to make transactions. To say nothing of the bottom falling out of the value of Bitcoin ...
- krupan 6y agoThis is different that everyone withdrawing dollars from a bank. The equivalent would be exchanging dollars for something not dollars. FDIC doesn't help there.