Topic: What could cause Bitcoin to fail? - page 2. (Read 5672 times)

That is part of why we need ASICs. If it happens while peopel are still wondering whether to invest in ASICs it could be nasty, but once everyone and their dog has ASICs maintaining the network will be dirt cheap as far as actual running costs.

-MarkM-

If the price drops too far too fast, the miners will stop and the network would become less stable...that might allow for an easy 51% attack...not sure if thy would really kill Bitcoin though.

That's what I mean, it would have to be hacked. Nobody would be crazy enough to sell all their Bitcoin that cheap. If that happened and the 2 million were redistributed, Bitcoin price would bounce back before too long. That event would be well publicized and show that it's not the Bitcoin network that fails, but fools and their money. I think I would sell my car and buy more Bitcoin that cheap knowing that I would buy a new 7 series in a couple months.

For future reference, here's the thread:
https://bitcointalksearch.org/topic/z-98641

Interesting thread today on the 2 million btc that have been generated but never moved. If all sold at once, the last one would sell for a buck.

I think that has already happened several times, though I don't think they were voluntary cash outs.

A massive cash out could mean it would take many years to recover ones investment.

I think the OP doesn't quite see the point that any individual government, even the USA, is unable to kill or even significantly suppress Bitcoin. Even if they call out Seal Team 6 to kill every known developer and bomb the known servers, they will only show their fear and weakness. There are probably more hackers in China than there are college grads in the USA. Bitcoin will become stronger than ever.

I don't think we disagree, but to clarify: if bitcoins become very cheap due to straightforward government action, it becomes less practical for use in actual commerce (small changes in price due to volume make it proportionately more volatile) and more susceptible to attack because investment in mining follows price.

I agree that it won't disappear, but the OP seems to be asking if it could drop precipitously in value, or if it could fail to make a significant mark on the world economy. The answer to both of these questions is emphatically yes. Will bitcoin persist as a hobby even after government action? You bet, but I don't think that's what OP is asking.

So there is no online poker anywhere in the world?  Oh wait there is.  It is just very difficult to get money in from the US.  Nobody is ignoring the possibility of govt going after exchanges however the scope of such action would be limited to one (or a few) govts.  Would it hurt Bitcoin?  Of course (up thread I indicated Bitcoin may not "fail" but it may become marginalized and thus value drop very significantly).

Unlike poker (which are centralized) the decentralized nature of bitcoin will make any ban less effective (although it will marginalize usage in that banned country).  For example someone in the US could use OTC and WU funds to someone in a country which doesn't ban bitcoin and get coins (much like they do today). 

It is very unlikely a "ban" could kill Bitcoin without some one-world govt and Police state with direct control over the internet backbone.

I suspect the hostility to altcoins might have been quite destructive.

For example when I cast asset values in terms of Canadian Digital Notes (CDN), or in GMC, GRF, MBC, NKL, UKB or UNS, they seem quite a lot less volatile than bitcoins:

http://galaxies.mygamesonline.org/incdn.html

-MarkM-

Bitcoin desperately needs a big business to adopt it  ,such as an ebay or amazon or maybe even dhgate to go mainstream
even the itunes store or something as crappy as that would pull in millions of users

but big businesses dont change a perfectly working system easily and the sites mentioned above NEED transcations to be reversible in case customers dont get their goods

could you imagine the customer service agent when she tells someone tough shit that your product never arrived ,thats what you get for paying by bitcoin

All these comments about 51% attacks are very weird to me. The most straightforward way that a government would go after bitcoin is simply ban the exchanges on the pretext of stopping illegal gambling and illegal drug dealing (which, one will notice, are pretty major parts of the bitcoin economy). I've posted on this before:

Consider what happened to the poker rooms. What's really wild about that action is poker is probably not illegal in many states that ban gambling; it's not a banking game, skill has a significant impact, etc. Moreover, poker is not even asserted to illegal in all the states. The reason they dropped the hammer on Poker Rooms is the passage of UIGEA, which made financing poker room illegal, even though the underlying activity was not necessarily illegal.

Can you imagine something similar happening to bitcoin? Yes, easily. Without the ability to get checks, wire transfers, ACH, Dwolla, etc., bitcoin becomes very difficult to use--not just for drug dealers, but for everyone.

Lots of people have said that bitcoin would survive the loss of Silk Road, but I think it depends. If Silk Road is infiltrated by law enforcement and coordinated high-profile arrests made, I think the site might become too scary for customers to use, and that is dries up in the US. In that case, I think Bitcoin survives. But if they go after it with something like and anti-bitcoin UIGEA (call it ABU), I think Bitcoin could honestly die out.

Maybe you think that an ABU would not pass because there are legitimate for it, I say bullocks. Judging by Silk Road and this forum, the top three uses of bitcoin seem to be illegal drugs, gambling, and Ponzi schemes. It's not as if they are commonly accepted on eBay, for example. Bitcoin desperately needs high-profile legitimate uses. Moreover, compared to Poker Rooms, Silk Road (and the Armory) are terrifying to ordinary citizens. Most people didn't see anything wrong with poker, and UIGEA itself probably would not have passed without land-based casinos lobbying for it. It is true a lot of people think pot should be legal, but just the splash screen of Silk Road shows a whole lot more. If a politician demagogues on Silk Road, I bet something even more draconian than UIGEA gets passed, no problem.

But would this destroy bitcoin?  I mean, it would still be tradeable overseas.  I think it does kill bitcoin as a real currency (as opposed to quirky hobby).  We'd see the mother of all bank runs as US bitcoiners cash out. When this happens, not only with the price drop precipitously, but some of the exchanges will not have enough cash on hand and won't be able to cover claims. This will terrify non-US bitcoiners as well, and at the end of the day I think bitcoin is trading in the range of pink sheets, and the exchanges may all be belly-up. It won't make sense to mine, rigs will be sold off, and bitcoin becomes a cute novelty susceptible to attacks--kinda like Litecoin. And unlike bitcoin circa 2010, there isn't much of a chance for it to rise from the ashes--not with an an anti-bitcoin UIGEA in place, stifling the US market.

I'm pro-bitcoin, so I hope (1) flashy legal uses come to fruition quickly, and (2) the Silk Road is seriously compromised by LEO so that it doesn't become an excuse for demagoguery.

I suppose it could become mostly irrelevant like UseNet and IRC, but only if it's replaced by something better. Even then, it will probably just be re-purposed for something. OTOH, I expect UseNet and IRC to make glorious comebacks in the coming Age of Decentralization.

It is also possible that Bitcoin never "fails" (i.e. blockchain halts or value goes to zero) but never really grows.  A large portion of Bitcoin prices is speculation on future utility.  If that utility/demand never materializes the price could fall massively (99.9%) without Bitcoin failing.    I mean look at the scamcoins (LTC, SC, etc).  No real use for them but they still hang on to sub cent prices and small volume.  I don't personally thinking this is Bitcoin future but just pointing out value can go down and by a lot without a "failure".

I don't see bitcoin failing either... still it's possible. Never underestimate stupid politicians.

Another reason not to put too much of your savings in bitcoin is because YOU could fail to protect them. To me this is a more realistic problem.

That would make the USA and UK miss out on the new economy and countries like China, Russia, Japan, etc would have no worries to flood the USA and UK with counterfeit currencies with no fear of retaliation.

the cheapest way would be for USA to declare the BTC an "instrument of terrorists and drug trafficers and pedofiles" to evade capture and make them illegal

all exchanges accepting USD for bitcoin would be closed and it would cost hardly anything

if USA did it first ,UK would follow and probably EU eventually


they could do all this without buying a single coin or spending a single dollar because the
lawmakers are already on the payroll

Everyone is also conveniently forgetting that the moment someone invests in Bitcoin - even to 'manipulate' the price (which is laughable, given the lag times of moving funds into exchanges) means they are INVESTED IN THE SYSTEM.

Sorry, there are easier methods that don't involve speculation - but I won't entertain them here.

Wut?

Many ISPs think Bitcoin is important enough to set up systems for its defense, but they aren't interested in actually turning them on now? They are going to wait until attack or high difficulty? Besides being made up from no evidence it doesn't even make sense.