This has no relation to whether something goes to zero (or practically zero). Political influence? Sure. But I don't think anyone expects D.C. to bail out Bitcoin.

> A company has a "single point of failure"

Companies trade after bankruptcy. There are stubs, practical and theoretical, for companies improperly wound up going back decades.

Even if a state says "XYZ failed to pay franchise taxes and is now inactive," a shareholder can sue the former directors, holders of proceeds from the company, et cetera. (Company "ownership" is de-centralised and ambiguous, a fact that becomes uncomfortably clear post mortem.)

Colloquially, we call "practically worthless," i.e. where the cost of valuing something is likely more than it's worth, zero.

What does it mean for Bitcoin to be bailed out? How can Bitcoin "fail"?

> But a penny price is as good as zero.

Why would it go to zero?

Crisis of faith. There's nothing else behind it.

The point is, there will always be buyers.

Someone could have said the same for the Dutch East India Trading Company. "What, will the colonies sink into the ocean?"

Note: I'm not saying it will become worthless. But you're grossly underestimating this risk.

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

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.

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.

Around when Bitcoin was trading at $19,000, my Uber driver told me about the second line he'd taken on his home to buy some. That's not a systemic problem in America. But it might be in some other countries, e.g. South Korea.

Suppose Bitcoin crashed 90% and stayed down for a few months. It is conceivable that Seoul might pay out, to avoid social tension. Directly, e.g. you get a jeon for every won you lost, or indirectly, e.g. temporarily increasing welfare benefits [1].

Note that I said "conceivable." It is unlikely, hence why I think arguing that because lots of people are involved it cannot become worthless is silly.

> Why would it go to zero?

Why would it go to $50,000? Because people decide it's worthless (or worth more).

[1] https://www.theguardian.com/business/2014/sep/03/long-term-u...

The combined worth of all the crypto-currencies put together is a drop in the global-financial bucket. The only people who would be hurt by a collapse to zero are those trying to artificially pump the price to cash out rich.

I used to be anti-FUD, but whatever the term for the opposite is - it's way more infuriating.

You are comparing the market cap of cryptocurrencies to NASDAQ, a portfolio of the highest profit driving, real asset laden companies on earth. How is this even remotely realistic?

(In fairness, there's a lot of faith involved in your broker doing the trade in BP, the ADRs if applicable, the DTCC holding your actual shares, etc., but not a lot of faith required to believe that thousands of people are actually drilling useful shit out of the Earth for BP's owners.)

Something based on faith can drop all the way to zero and stay there because e.g. everyone bailed to something else and there was no reason to come back.

That's kind of my point, really. If crypto goes low enough, especially if the price is down for no good reason (i.e. it's based on a single country in the entire world cracking down on it, not because the tech stopped being useful or interesting), there will be investors who will think it's underpriced and will jump back in, which will bump the price and draw more people back in, etc etc etc. Bitcoin went through exactly this in 2013-2015. It kept dropping and dropping and dropping, all the news was terrible for it, but it never dropped to zero because there was enough people who thought it was underpriced and bought and held, waiting to see if it would go back up. And boy, if they held through last year, those people won big time.

"If everyone stopped using google tomorrow, their stock would go to zero. Investing in google is based entirely on faith."

Do you agree with this statement?

Yes, there's some faith involved in assuming that the advertising market won't change overnight or that Google won't suddenly stop being able to compete effectively but that's orders of magnitude less than the level of faith needed to justify the current valuations, especially when the argument is not just that despite being unproven cryptocurrencies are certain to become mainstream but going further to say that a specific unproven implementation is going to win.

Can I interest you in a Venezuelan bolivar fuerte. There are 30,000,000+ people vested in it. There are billions of USD worth of them out in the world. What could possibly go wrong?

Bitcoin will enable many more exchanges that weren't possible before.

Investing has nothing to do with faith, that’s called speculation. Investment is based on sound financial principals of expected future return based on debts and cash flow, where actual value is being created and added to the economy. This is mania.

This is where Credit Default Swaps came in. What is the cryptocurrency equivalent of a Credit Default Swap?

And, you probably wouldn't use a swap for hedging bitcoin currency exchange risk, unless you were doing an actual useful transaction where the sources and uses were in different currencies. People with bitcoins are either speculating or taking duration risk approximately equal to the delivery delay of a Priority Mail envelope full of heroin, as I understand it.

Crypto is nowhere near that, for one, very little of crypto's value comes from loaned money.

At any rate, the value of cryptocurrency market isn't a reflection of the amount of money that has been poured into it. The market cap is a product of the last price paid on any given exchange times the circulating supply of currency. So a $500B market cap might be the result of less than $50B worth of cash infusion, so long as the last person who bought in paid $13K for a Bitcoin.

The point api is making is that they were sure they were right.

One could make a good argument that the air is worth zero.

Yet one would be wrong: http://www.telegraph.co.uk/news/worldnews/asia/china/1205135...