What can you do with your fiat when the government calls a "bank holliday" and devalues your money to 0 ?
If you dont have a card and no checks that happens every Sunday in the Western World.
Topic: What you can do with a bitcoin if the USD exchange price dropped to 0 - page 3. (Read 4118 times)
February 23, 2013, 02:42:16 PM
If you dont have a card and no checks that happens every Sunday in the Western World.
February 23, 2013, 02:19:41 PM
Everytime, when I tried to advertise bitcoin to my friends, the typical question they asked is: What is this thing backed by? What's the use of it?
Although I can explain to them that it is backed by mathematics and P2P network, and you can use it to buy anything online, it still does not make them feel safe enough, since that is real money, they are afraid of it's just a scam or a bubble
Just like MBS, CDS, eventually they are backed by a house, which is needed by majority of people, so no matter how abstract in concept and construction they are, they still get accepted. Because a house is a house, even the price crashed to 0, it still can provide some utility and that is the reason the price will never drop too much
"If the USD exchange price of this thing drop to 0, what is the use of it?"
There is an answer for gold/silver/diamond/house, even WoW gold
But there is no answer for bond/stock/options/futures
So it seems bitcoin fall into the second category, e.g. a financial security, and unlike bond/stock/options/futures, it has no underlying base instrument, or to say it is based purely on some promises
If we could find some good use of bitcoin even when the exchange price is 0, then it will flourish for sure
Although I can explain to them that it is backed by mathematics and P2P network, and you can use it to buy anything online, it still does not make them feel safe enough, since that is real money, they are afraid of it's just a scam or a bubble
Just like MBS, CDS, eventually they are backed by a house, which is needed by majority of people, so no matter how abstract in concept and construction they are, they still get accepted. Because a house is a house, even the price crashed to 0, it still can provide some utility and that is the reason the price will never drop too much
"If the USD exchange price of this thing drop to 0, what is the use of it?"
There is an answer for gold/silver/diamond/house, even WoW gold
But there is no answer for bond/stock/options/futures
So it seems bitcoin fall into the second category, e.g. a financial security, and unlike bond/stock/options/futures, it has no underlying base instrument, or to say it is based purely on some promises
If we could find some good use of bitcoin even when the exchange price is 0, then it will flourish for sure
That is free good (http://en.wikipedia.org/wiki/Free_good). Since bitcoin is scarce, it could not be a free good.
February 23, 2013, 02:10:42 PM
OP:
Bitcoin is a money system with some very desirable features that allows for some points called bitcoins to be transferred to anyone, anywhere in the world anytime with practically no chance of fraud via chargebacks, currency debasement or having your bitcoins get blocked or frozen and this doesn't stop being true if these points have no value, so to answer your OP question: The same thing as you can do with it now.
Bitcoin is a money system with some very desirable features that allows for some points called bitcoins to be transferred to anyone, anywhere in the world anytime with practically no chance of fraud via chargebacks, currency debasement or having your bitcoins get blocked or frozen and this doesn't stop being true if these points have no value, so to answer your OP question: The same thing as you can do with it now.
February 23, 2013, 12:37:09 PM
There already is fundamental support for bitcoin. Many of us believe in bitcoin for the advantages it offers over all fiat currencies, not because of any exchange rate. As long as those ideologically motivated individuals find strength in the bitcoin protocol, bitcoin will have value.
February 23, 2013, 12:28:51 PM
Quote
What you can do with a bitcoin if the USD exchange price dropped to 0
The question suffers from circular logic. In reality, the only way exchange rate would drop to 0 is if you suddenly couldn't do anything with Bitcoin.I'm thinking about a possible scenario where bitcoin were hit by either a severe internal split or an external regulation, where the trust crisis hit it hard and everyone is trying to dump their coin, like what happened with mtgox hack
If bitcoin get mainstream adoption and such an event happened, if there are no fundamental support or exchange rate support, people's faith about cryptocurrency in general will diminish and bitcoin will remain as a computer geek's game in cyberspace
February 23, 2013, 10:05:40 AM
So basically as more and more miners, or stake holders, or interested parties, or Bitcoin Reserve Funds, or Bitcoin Foundations, or whatever, keep more and more quantity of more and more variety of other currencies in stock, poised to buy bitcoins with any time bitcoin's exchange rate with respect to that currency drops, well, then you are playing the Minister of Finance game, or the Royal Exchequer game, or whoever it is in each nation that tries to keep that nation's currency's exchange rates from dropping to zero.
(At what price would YOU snap up any bitcoins you saw going cheap? Would the amount of USD you'd find yourself willing and able to dig up to snap them up with differ for different actual numerical values of the term "cheap"? If so In what way?)
To directly answer your question: what I could do would be "increase the USD exchange price".
It has already been done: bitcoins already had a 0 USD exchange price way back when.
-MarkM-
Very nice call, if we could connect 2 million people that is willing to buy 10 coin at $10 each, then each btc will worth at least $10, similar to the effect of a central bank intervention
So far it is volunteered and non-organized, if we could get support from enough people, make it a mutual agreement, then btc's downside risk will be firmly fixed
Most of the usages of bitcoin I can think of rely on its exchange price, so protect the exchange price should be part of the responsibility of btc community
February 23, 2013, 09:57:53 AM
February 23, 2013, 09:52:37 AM
What can you do with your fiat when the government calls a "bank holliday" and devalues your money to 0 ?
You can pay tax with that money at least
February 23, 2013, 09:42:09 AM
Quote
What you can do with a bitcoin if the USD exchange price dropped to 0
The question suffers from circular logic. In reality, the only way exchange rate would drop to 0 is if you suddenly couldn't do anything with Bitcoin.
February 23, 2013, 08:18:27 AM
I'll sell 2 pizzas for only 8000 bitcoins!
-MarkM-
-MarkM-
February 23, 2013, 08:17:45 AM
Call me when bitcoin price drop to 0.
February 23, 2013, 08:11:27 AM
3. Few or no transactions will means there will be no blocks to mine
This is not true. It is perfectly valid to mine a block where the only transaction is the coinbase transaction that pays the miner their subsidy. There are many blocks like this in the blockchain already
4. But also, the reward the miners receive for their work (BTC 25 currently) will be worth 0 and as there is no transactions and fees, the reward will be nullified
The reward will be greater than 0 as long as one person runs one miner for the next 136 years.
5. Many miners will stop their machines, only the ones that are mining for the sport of it and their electricity is free will keep mining empty blocks (is this possible?)
Yes it is possible.
9. All hoarders will wait for one of the two things to happen - someone suddenly decides he need Bitcoin and creates demand for Bitcoins or the end-goal of 21,000,000 million Bitcoins is reached and then the network suddenly stops to a halt, as there is no transactions, no fees, no reward, and no reason to waste electricity on.
Maybe someone will buy two pizzas for 10,000 BTC? It has happened before. The moment that happens, bitcoin instantly has a value again (price of 2 pizzas divided by 10,000). This creates a starting point for competition which can drive the price back up. (I'll sell 2 pizzas for 9,000 BTC!).
February 23, 2013, 06:00:57 AM
What can you do with your fiat when the government calls a "bank holliday" and devalues your money to 0 ?
February 23, 2013, 04:11:44 AM
here is one hypothetical scenario:
1. Bitcoin price (for whatever reason) drops down to 0, that means there is absolutely no demand for Bitcoins, no one wants to pay even $0.00000001 for BTC 1.
2. The number of transactions on the network will reduce, eventually drop to 0
3. Few or no transactions will means there will be no blocks to mine
4. But also, the reward the miners receive for their work (BTC 25 currently) will be worth 0 and as there is no transactions and fees, the reward will be nullified
5. Many miners will stop their machines, only the ones that are mining for the sport of it and their electricity is free will keep mining empty blocks (is this possible?)
6. The difficulty will collapse dramatically, proportional to the hard-core miners hashing power left on the network
7. These few miners will earn(?) Bitcoins at a rate they never dreamed about, but of course these Bitcoins will be worth 0 at that moment
8. Everyone by default will become a hoarder.
9. All hoarders will wait for one of the two things to happen - someone suddenly decides he need Bitcoin and creates demand for Bitcoins or the end-goal of 21,000,000 million Bitcoins is reached and then the network suddenly stops to a halt, as there is no transactions, no fees, no reward, and no reason to waste electricity on.
10. Years later, someone invents a great application for the well forgotten Bitcoin, resurrects the projects, Bitcoin jumps to $zilion level, then everyone frantically starts searching through their grand parent's computers and USB drives for wallet.dat's with the hopes of becoming Bitcoin zilionaires, again...
1. Bitcoin price (for whatever reason) drops down to 0, that means there is absolutely no demand for Bitcoins, no one wants to pay even $0.00000001 for BTC 1.
2. The number of transactions on the network will reduce, eventually drop to 0
3. Few or no transactions will means there will be no blocks to mine
4. But also, the reward the miners receive for their work (BTC 25 currently) will be worth 0 and as there is no transactions and fees, the reward will be nullified
5. Many miners will stop their machines, only the ones that are mining for the sport of it and their electricity is free will keep mining empty blocks (is this possible?)
6. The difficulty will collapse dramatically, proportional to the hard-core miners hashing power left on the network
7. These few miners will earn(?) Bitcoins at a rate they never dreamed about, but of course these Bitcoins will be worth 0 at that moment
8. Everyone by default will become a hoarder.
9. All hoarders will wait for one of the two things to happen - someone suddenly decides he need Bitcoin and creates demand for Bitcoins or the end-goal of 21,000,000 million Bitcoins is reached and then the network suddenly stops to a halt, as there is no transactions, no fees, no reward, and no reason to waste electricity on.
10. Years later, someone invents a great application for the well forgotten Bitcoin, resurrects the projects, Bitcoin jumps to $zilion level, then everyone frantically starts searching through their grand parent's computers and USB drives for wallet.dat's with the hopes of becoming Bitcoin zilionaires, again...
February 23, 2013, 04:02:47 AM
Its not a realistic scenario, so probably will not happen. The bitcoin is just entering its second growth phase. The dollar would have to start being backed by gold just to make it start having real value again. Its never happened in history ( somebody check me out ) that a fiat currency was reconnected to gold after being taken off it.
February 23, 2013, 04:00:49 AM
I doubt bitcoin will ever go to 0. While bitcoins isn't backed by any official authority, they are backed by hard work and a dedicated community. So as long as we have people that still believe in Bitcoin, work hard to promote it and have some great businesses, the price will never drop that much (even thou that is probably the jinx and next week it will be back at $10 LMAO).
Just to be clear, bitcoin is not backed by the work that went into it, it is backed by the work people are willing to do to get it. Bitcoin is not backed by the mining equipment people bought for bitcoin, it is backed by all the merchandise people are willing to sell to get bitcoin.
I was getting more at sweat equality in bitcoin how hard people are willing to work to keep it as a strong as it is. While your looking at it from a pure bitcoin being currency and what you get for it.
hero member
Activity: 756
Merit: 500
It's all fun and games until somebody loses an eye
February 23, 2013, 03:57:08 AM
I doubt bitcoin will ever go to 0. While bitcoins isn't backed by any official authority, they are backed by hard work and a dedicated community. So as long as we have people that still believe in Bitcoin, work hard to promote it and have some great businesses, the price will never drop that much (even thou that is probably the jinx and next week it will be back at $10 LMAO).
Just to be clear, bitcoin is not backed by the work that went into it, it is backed by the work people are willing to do to get it. Bitcoin is not backed by the mining equipment people bought for bitcoin, it is backed by all the merchandise people are willing to sell to get bitcoin.
February 23, 2013, 03:47:38 AM
I doubt bitcoin will ever go to 0. While bitcoins isn't backed by any official authority, they are backed by hard work and a dedicated community. So as long as we have people that still believe in Bitcoin, work hard to promote it and have some great businesses, the price will never drop that much (even thou that is probably the jinx and next week it will be back at $10 LMAO).
February 23, 2013, 03:40:42 AM
Do you really want a house that has a market price of 0 by the way? A 'house' is not always a house.
February 23, 2013, 03:25:01 AM
Buy it.
Take all and give the seller a bonus Jump to: