This is actually a really critical observation of BTC. The system works just as well regardless of the price of BTC. Because this is the case, IMO it would be desirable to have the cryptocurrency not produce a distribution of coins that benefits early adopters and harms late entrants. But it would be nearly impossible to introduce such a change because BTC-as-investment is such a huge part of its ideology nowadays.

People have tried many distribution models under proof of work, so far they have all broken the economics of why the networks work:

if miners aren't desperately competing to pay off their capital expenditure, then they abuse their market position much more quickly, finding another way to assume control over the production on the network, which discourages anyone else from competing

so of all the major working consensus models it has either boiled down to either capital for miners or capital for coins that limit this abuse/control, spurring enough confidence in the network to bring on other participants (whether you or any one person personally agrees with it)

keep searching for improvements and alternatives though

The network won't fail but the price will fluctuate. BTC was always intended to be an alternate currency, not an investment asset so now it's suffering from competing agendas.

its been a decade for people to buy in, at this point not having done so was a concious choice not a missed oportunity.

besides, the people who benefit the most from crypro (central and south America, Africa, etc) dont care about your investments, they only care it works.

Compare to something like Dogecoin, which does not have a cap. Or imagine a linear mining curve rather than a logarithmic one.

"You had plenty of time to be an early adopter, enjoy being poor" isn't exactly the sort of governance of monetary policy that fills me with confidence.

Dogecoin still suffers some wealth concentration by having a 20x larger emission in the first year. Only one coin has tried a purely linear emission (one coin per second forever).

> "You had plenty of time to be an early adopter, enjoy being poor"

This is literally how every asset works. Early investors earn huge appreciation. Those speculative profits drive innovation. It's why we have a $500 billion venture capital industry that exists for the sole purpose of getting resources into the hands of innovators so they can grow new products and businesses.

It doesn't appear to be how dollars work.

People say that now because everyone already had a decade to find their own confidence, or at least not miss all of the alpha from either their own capital at risk or building a product to extract value

Still doing research™

Agreed. Currency was the worst thing to happen to blockchains. Maybe someone needs to purposely create a hyperinflationary cryptocurrency.

many people have tried that

turns out that speculation drives innovation, which really translates into any interest at all

without the competitive pressure, people put their time and resources on other things

with high supply creation experiments in the crypto space, the demand never catches up as nobody wants to earn the currency or buy the currency

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?

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.

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).

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.

> 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

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.

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.

> network will continue to function

What are transaction fees, still $20 USD average like they were in April?

Also, there is a backlog of transactions, so it can be days to get a transaction done.

Some currency.

>>What are transaction fees, still $20 USD average like they were in April?

Looks like txn fees are less than $1 USD [1] today; certainly a lot lower than they were back in April. High priority transactions likely can be pushed to $2+ if you are in a rush to get your txn processed.

>>Also, there is a backlog of transactions, so it can be days to get a transaction done.

Backlog seems to be low at the moment.[2]

[1] https://mempool.space/

[2] https://jochen-hoenicke.de/queue/#BTC,1y,count

No, they’re not.

https://ycharts.com/indicators/bitcoin_average_transaction_f...

About $2 if you are in a rush, and yes potentially days if you use a lower transaction fee if you are not in a rush. you can always try and then replace the tx if you become rushed.

About 1/100th of that if you have a lightning channel open already, I think

It's amazing that you can send $100m to anyone in the world with a phone, anytime day or night and it costs $2. And it's direct to the other person; no banks or payment processors.

I don't get all of the negativity HN has towards Bitcoin. This simple ability is so amazing and scifi to me.

> no banks or payment processors.

Until you want to get local currency, at which point you have to get involved with a processor. And taxes. And everything else associated with currency movement.

> It's amazing that you can send $100m to anyone in the world with a phone, anytime day or night and it costs $2.

That's really a problem I'm facing about once or twice a week, and BTC has solved that for me, you're right.

> I don't get all of the negativity HN has towards Bitcoin. This simple ability is so amazing and scifi to me.

Well, maybe there's the HUGE impact of BTC on global energy usage, mostly generated from fossil fuels (of one kind or another) and that there's actually little benefit for anyone not doing shady business or scamming people.

The energy usage is FUD. Bitcoin uses less energy than Christmas Lights, clothes dryers, or the gold industry. And it uses ~1/10th what video gaming does. And it's energy mix is cleaner than those uses because a lot of it comes from flared gas and stranded hydro.

BS.

If all that mining capacity is sitting in Kazakhstan they will most probably not import energy from renewables in Norway or sth. like that. Their energy mix is/was 99% fossils in 2019 [0], they can't change it that quick.

[0] https://www.iea.org/countries/Kazakhstan

Its an energy mix. One country isn’t the whole network.

Any country that subsidized electricity distorts the whole market there.

The best approach to this consternation about mining energy use is vigilance in ensuring miners use captured and renewable energy.

If there are subsidies or if governments get directly involved in trying to control the network that’s when it distorts the market forces. It’s sad that this discussion is currently limited to simply not being willing to accept that captured energy has always existed and is being utilized by miners as a significant energy source on the network. Energy that would only have been used to pollute the atmosphere but now is not.

This is correct, people don't want to hear it because the energy use argument was just a convenient trend for them to latch on their already existing “useless crypto” arguments that just lacked a hook. People want to say that there must be some Other use of the energy and aren't aware of how much energy has just been wasted and strewn directly into the atmosphere for decades, with crypto mining onsite being the only economic use so far.

The miners also did themselves a disservice by trying to keep their energy sources secret for several years, I know some of them in North America intentionally helped spread the energy misinformation just to slow others down from getting capital to build out their own sites.

But honestly all of this doesn't really matter as the oil and gas producers with the sites are the slowest ones to adopt. The ones already polluting for a century who are desperate for a solution are just slow to collaborate with the solution providers, the miners. They aren't stuck on carbon emissions as they have already made that their identity, they get that mining onsite reduces their carbon emissions even though other people ironically arent willing to understand that, the people running sites are just technophobes and computing luddites who dont get crypto, with a slight general concern about safety with adding more stuff to a dangerous site.

Most people don't see the benefit of being able to send $100,000,000 for $2 because most people will never need, or be able, to send $100,000,000 to anyone. Or $1,000,000, or even $10,000.

There are plenty other example https://streamable.com/i5r0yp

Technology isn't just about whether most people currently see the benefit of something.

15 years ago people were saying why would anyone need the ability to turn their stereo down by sending a signal over the internet, you should get one of those universal remotes from radioshack. Today we have smarthome turning on your lights and AC 10 minutes before you get back home.

What specifically is sci-fi about it? If there were no regulations, I would be able to do the same with my bank account or credit card in a much more efficient way.

Not really, because there would still be intermediaries that could halt your transfer or steal your money..especially if they weren't regulated!

Not to mention, $2 wouldn't be nearly enough to cover credit card fees. Not sure how a 1-3% fee could possibly be efficient.

How would you do it?

The only way I know of to send >$1m+ is wire transfers and they don’t work on weekends or to send to many countries, and they can take a day or more to clear.

Also, you the recipient needs to have a bank account and it needs to be in a jurisdiction that’s friendly with the US.

And also SEPA isnt the panacea people make it out to be, there is frequently some europeans that chime in acting like it is

I found it to be very similar to ACH within the US

Investigating further, turns out many Europeans dont use SEPA between borders. They just send to their friends within the same country using the same major banks, which increases the probability that “Instant SEPA” is used under the hood, which is a good user experience

Ive found crypto to have greater guarantees of unimpeded arrival in that monetary union as well.

If you're stating the $ amount and not BTC though, it might be worth $70m by the time you purchase the BTC and your receiver sells them...

or $200m, who knows

1 BTC = 1 BTC still true though

if I ever purchased bitcoin specifically to send it to someone else, it would happen so fast that extreme market volatility is so improbable that the user experience isn't different than any other form of payment

These are 24/7 markets, so even extreme market volatility happens over 3 trading sessions compared to something like equities, making any single 1-20 minute time period not volatile at all

Many people also already own bitcoin, which is a major contributing reason as to why the price is what it is, they dont have to go buy bitcoin when they get ready to send it. They dont have to wait for exchanges to accept their dollars, they dont have to wait for exchanges to process a withdrawal, and they can also move unlimited amounts.

Even as a facetious joke, there are better ones

Until you need to convert this theoretical $100m into real money, at which point intermediaries and payment processors will absolutely be involved.

1) There are enough goods, services, and investments in the crypto ecosystem that this distinction doesnt matter. Even an increasing number of non-crypto related hedge funds accept crypto as the capital investment for a new limited partner, as long as their fund admin accepts it. Any individual or business can skip local capital controls, or financial institution imposed scrutiny, or merely skip worse service hours.

2) there is enough liquidity to convert $100mm in bitcoin to $100mm in dollars. I would expect intermediaries to take about 50 basis points or less in a combination of fees and slippage. percentage based compensation adds up, but its not different enough. But yes, there are intermediaries if that truly was your only point.

And now the receiving computer has an unintentional $100M bug bounty on all its software and hardware. For digital money to be actually usable, you need some kind of authority that can revert transactions in case of mistakes or fraud.

people can build that, and some services offer that

its pretty clear there is a market and user story for a segment of the population that doesn't value reversibility

You are sending $100m in monopoly money thou.

Some would argue (not me) that the value basis of fiat money is the same basis as the value of bitcoin. People believe that others will believe it has value, so it has value to them. Then there are arguments that bitcoin being non-inflationary should even give people more faith in the value of bitcoin than they should have in fiat.

Personally I could see bitcoin maybe getting there in a loooong time. But whilst the actual value of bitcoin is fluctuating this hard, the argument doesn't hold up. I also kinda like the argument: "Because taxes need to be payed, and are payed in fiat money, there will always be some basic demand and price for fiat money".

$100mm that can be exchanged for $100mm worth of goods, services, and investments.

That's the average transaction-fee paid - and in practice, a fair amount overpay a lot. And making sure you use a reasonable wallet and bech32 addresses makes a big difference as well. So even with the same network fees and bitcoin price, a transaction costs a lot less today than in 2016.

Recently fees have been around 1~10 sats/vB. ~40 sats/vB would be $2. Network fees are quite volatile, so we don't have to go back far in time to find that, though.

Source: I look at bitcoin fee graphs way too much. Also mempool.space

Well you're right, $2 is better than $20

Still skeptical about Bitcoin myself

Yeah i figured it wasn’t really about the transaction fees but I didn’t want to prematurely risk writing a strawman argument that wasn’t presented

Lightning supposedly drops that to a fraction of a cent, so it’s useful for smaller transactions than could be made with a credit card, but I don’t know how functional it is in practice yet.

You must love loosing a generation of life savings due to hyperinflation.. its not if, when. Some places on earth every 10 years.

looking forward when they come to your house because of economical and societal collapse caused by this pyramid scheme

cute, since I rarely use bitcoin and avoid that particular cryptocurrency network due its worse, decade old, user experience

Yeah does Reddit create value? Ignoring their advertising. They also consume energy.

The energy comment is so naive. Move to renewable nuclear and who cares. Most people that complain can't even calc the marginal increase in net energy usage for their country.

1) Nuclear is not renewable.

2) Reddit arguably produces value by facilitating information exchange and dialog. (The quality of that value varies highly by community and it's fair to argue about whether Reddit as a whole is a net negative or net positive.)

3) Bitcoin produces nothing. It's a place for rich people to gamble, and for poorer people to get screwed trying to gamble. If people want to gamble, they can play poker and it costs zero energy.

We need to stop pretending energy is limitless. It's not. And we need to start factoring that in to our decisions about what technologies/businesses/activities are affordable/worthwhile and what aren't.

I mean nuclear isn’t renewable but neither is the sun and thus solar, wind, and hydroelectric power on a long enough time horizon. The reality is that there is enough nuclear fuel in the oceans alone to provide for thousands of years of clean energy. And after that plenty of nuclear fuel on the moon and other planets to keep us going.

Malthus lost this argument a long time ago. 'We need to stop pretending energy is limitless.'

Human ingenuity applied to the abundant energy available from both short and long term effects of the sun give me great hope. The barrier is basically politics.

Malthus didn't lose this argument - malthusian assessment of scarcity ultimately lives at the heart of capitalism and free markets. If it didn't, we'd all have access to whatever we wanted. Instead, we use markets as the best tool to distribute scarce resources. And in many countries we include the basic necessities of life (food, housing, clothing, etc) as those scarce resources.

Energy is limited and production of energy has costs and side effects. Sure, over time we can increase our production of energy, but again - with costs and side effects depending on how we choose to do it. And at any point in time our access to energy is limited and we need to make choices about how that access is distributed.

Right now we use markets to do that. But we've clearly seen that markets, with out intentional, ethical and moral guidance will often make insane choices.

And note, I say this as someone who believes post-scarcity (with in wise limits) for many of the basics is more or less with in our technological reach. IE. We can reach a point of post-scarcity for food, housing, clothing, energy where everyone has what they need and a good chunk of what they want as long as we don't let anyone hoard and insane amount of these resources or burn them away in frivilous uses.

Are you going to stop the billionaire's astronaut joy rides?

I'd love to.

Regarding #3, Bitcoin has enormous value: it facilitates black markets.

Beyond that, I'm not sure.

I mean, I think Reddit creates value. There are a lot of very positive communities on there that are helping a lot of people. It's a lot easier for me to see the positive value created by those communities than it is for me to see the positive value being actively created by cryptocurrencies.

You haven't heard of crypto communities?

> Yeah does Reddit create value?

Yes. Entertainment value aside, it's a place for some remarkably useful discussions on niche topics.

> Move to renewable nuclear and who cares.

Renewable Nuclear? I haven't heard of that. If you mean renewables and nuclear, aside from the fact that it requires real money and a lot of time to do - there's still an absurd amount of energy being wasted for a single transaction. Recording transactions is a well explored space, and requiring energy on the same magnitude as homes or countries to do so is absurd.

Someone was willing to pay for the transctions, so they paid the amount of value it provided to them. I am curious why you think you can out-guess voluntary economic transactions by other people. Their bodies, their choices.

The payment for transactions is using the same 'currency' as the transactions (and for a time "paid" for by the act of creating more BTC), so the actual cost of the electricity is not clearly linked to the transaction cost.

And the cost to our climate is absurdly higher than the individual $2-3 with all the previously closed coal plants being spun back up to facilitate all the transactions.

You have something there with '... not clearly linked to the transaction cost.'

Maybe you would be supportive of environmental parity tariffs to price the environmental problems created by manufacturing in locations which spew pollution. A few dollars extra on price of an iPhone or solar panels could even become a status symbol.

> Move to renewable nuclear and who cares.

Who cares? Any society which could use that energy to actually produce some value instead of cracking a hash. Wasted energy is just that, wasted.

That's a whole lot of straw man and not a lot of reality right there.

The "network" is still useless, it still creates no value and it still consumes energy that could be used to actually create something valuable instead.

Reddit provides entertainment? Are you claiming that bitcoin serves as an entertainment item?

>renewable nuclear

Was that a misprint or intentional? That's a real question. I've never heard nuclear be referred to as renewable. That's an interesting take.

When your concern is global warming most things in the world today can’t be justified outside of necessities including Reddit.

If your argument is “it’s a waste because we’re destroying the environment for no gain” all entertainment falls in that bucket as well.

Reddit profits don't rely on cheap subsidized electricity in a 3rd world country

Hey now bitcoin allows me to buy drugs

I know you're being satirical - but to anyone doing something similar, BTC is auditable forever (hence the 'chain') and anonymity is broken when transactions go to / from a financial account. Fuzzy memory, but I recall it being limited to CIA/FBI style investigations, but like everything that trickles to local municipality in 2-5 yrs.

I use BTC to buy gray market drugs these are non-fda approved research peptides. It's fine if I'm audited as it is currently legal. Just that payment processors are being used as an extrajudicial ban. My hope is that by the time the law catches up the medicine would have caught up as well.

>I know you're being satirical

I'm not, but yes theoretically they could track me down. Practically they're not going to expend the effort to prosecute some nobody buying personal quantities of recreational drugs.

this seems like an unfalisifiable standard, since it just takes a single actor to have a purpose for it, and it requires you to disagree with their use and any number of people’s variety of uses

that should tell you enough about that form of argument