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I am naively asking this with real interest because I have no idea: Can it continue to function at any price? Is there a price so low that new transactions woul

I am naively asking this with real interest because I have no idea: Can it continue to function at any price? Is there a price so low that new transactions would not processed?

miracle2k 5y ago
No. Transaction will always be processed as long as there is one person with a Raspberry Pie. The price of Bitcoin is essentially a reflection of it's security budget though. The higher the price, the more people are mining, the harder it is to gain control of 50% of the network hashrate.
maccam912 5y ago
The difficulty of mining is adjusted based on how many people are mining. I think it could have trouble if there was a very quick loss of mining power, but if it was a slower process and some miners gave up because it wasn't profitable it would start going back down in difficulty until someone somewhere could get some profit out of it.
dustintrex 5y ago
The difficulty of mining the next block is a function of the hash rate. Miners quit, hash rate goes down, it becomes easier to mine the next block. That said, the "price" (in USD) is a function of supply and demand and is completely disconnected from this. The price of a BTC could drop to $1, and mining would still work fine.
- vmception 5y ago
  > Miners quit, hash rate goes down, it becomes easier to mine the next block. only after the difficulty adjusts downward which could be as long as 2016 blocks
BenjiWiebe 5y ago
Not really, but sort of. As the price drops, miners start leaving the network, causing the difficulty to drop, which keeps the block generation at the same rate. Now please correct me if I'm wrong, but IIRC the difficulty adjustment requires some blocks to get mined, so if the hash rate would drop extremely quickly, the duration needed to adjust to the lower hash rate could take a long time. However that would mean the potential block fees would be steadily increasing so maybe it would quickly fix itself (make mining those blocks more profitable).
vmception 5y ago
It can function at any price. There is no price too low. The only extreme possibility would be a temporary denial of service if hashrate dropped too quickly, causing blocks to come extremely slowly until the network adjusted to match the current hashrate, resetting block time back to the target. In such an extreme scenario, this could effectively pause commerce for months if nobody helped bring the hashrate back up until the adjustment. There are many mitigations possible: 1. The remaining miners have newfound control of the network so could push in a difficulty adjustment algorithm change to something more modern and adaptive, restoring service immediately. This has been done on so many other smaller networks that it isnt experimental. 2. The remaining miners could do other things too like a one time sooner difficulty adjustment There are a few networks experiencing this right now and addressing it in different ways. There are always a few real money cryptocurrency networks going through these growing pains so we can see all theoretical experiments happen extremely fast.

I am naively asking this with real interest because I have no idea: Can it continue to function at any price? Is there a price so low that new transactions would not processed?

miracle2k 5y ago

No. Transaction will always be processed as long as there is one person with a Raspberry Pie. The price of Bitcoin is essentially a reflection of it's security budget though. The higher the price, the more people are mining, the harder it is to gain control of 50% of the network hashrate.

maccam912 5y ago

The difficulty of mining is adjusted based on how many people are mining. I think it could have trouble if there was a very quick loss of mining power, but if it was a slower process and some miners gave up because it wasn't profitable it would start going back down in difficulty until someone somewhere could get some profit out of it.

dustintrex 5y ago

The difficulty of mining the next block is a function of the hash rate. Miners quit, hash rate goes down, it becomes easier to mine the next block. That said, the "price" (in USD) is a function of supply and demand and is completely disconnected from this. The price of a BTC could drop to $1, and mining would still work fine.

vmception 5y ago
> Miners quit, hash rate goes down, it becomes easier to mine the next block. only after the difficulty adjusts downward which could be as long as 2016 blocks

BenjiWiebe 5y ago

Not really, but sort of. As the price drops, miners start leaving the network, causing the difficulty to drop, which keeps the block generation at the same rate. Now please correct me if I'm wrong, but IIRC the difficulty adjustment requires some blocks to get mined, so if the hash rate would drop extremely quickly, the duration needed to adjust to the lower hash rate could take a long time. However that would mean the potential block fees would be steadily increasing so maybe it would quickly fix itself (make mining those blocks more profitable).

vmception 5y ago

It can function at any price. There is no price too low. The only extreme possibility would be a temporary denial of service if hashrate dropped too quickly, causing blocks to come extremely slowly until the network adjusted to match the current hashrate, resetting block time back to the target. In such an extreme scenario, this could effectively pause commerce for months if nobody helped bring the hashrate back up until the adjustment. There are many mitigations possible: 1. The remaining miners have newfound control of the network so could push in a difficulty adjustment algorithm change to something more modern and adaptive, restoring service immediately. This has been done on so many other smaller networks that it isnt experimental. 2. The remaining miners could do other things too like a one time sooner difficulty adjustment There are a few networks experiencing this right now and addressing it in different ways. There are always a few real money cryptocurrency networks going through these growing pains so we can see all theoretical experiments happen extremely fast.