Can Bitcoin Go to Zero?

in #bitcoin6 years ago

Bitcoin has plenty of opinions on where it's going, whether it be to the moon or to zero. There's an article that caught my eye on Cointelegraph that talked about why Bitcoin couldn't go to zero. In this video, we discuss the idea of Bitcoin's intrinsic value and some of the circular logic in terms of where it gets its value from.

Part of what makes this question interesting (at least to me) is that traditionally when we talk about Bitcoin, we focus exclusively on market psychology and sentiment. However, this question is more fundamental in nature: Does Bitcoin have any intrinsic value? Theoretically if Bitcoin had no intrinsic value, it should trend to $0 over a long period of time. For the record, when I say $0, I mean "effective zero" as opposed to literal zero.

There have been numerous attempts to find the intrinsic value of Bitcoin. Probably the most popular attempt was by Chris Burniske (and Ark Invest) by applying the equation of exchange. The issue I have with this method is I don't really view Bitcoin as a currency since it doesn't fit any of the traditional characteristics of a currency, so that makes it difficult to apply the equation of exchange.

There are also many that argue the floor value of Bitcoin is based on the cost to produce a Bitcoin, similar to how we might do commodity analysis. Yet Bitcoin isn't used industrially the same way most commodities are and unlike gold (which also is rarely used industrially), it doesn't have the same length of history and psychology. If Bitcoin becomes unprofitable to mine, people will simply stop mining it and difficulty will reduce - it's not like physical commodities where you literally cannot reduce the cost of producing said commodity (without coming up with another way to extract the resource at least).

However, Bitcoin isn't like a company that can go bankrupt either. This brings us to arguably one of the oddest aspects about Bitcoin: Its value comes from its ability to transfer value. That perception of value comes from the masses - So how stable can that be over the course of, say, half a century? It's tough to say and is part of what makes Bitcoin so difficult to evaluate.

Another common argument for why Bitcoin can go to zero is that other altcoins will supplant it. Part of the issue with this argument is the fact that most of these altcoins haven't had to deal with the issue of real scale. Often any flaws in governance and security are exacerbated as a cryptocurrency (or really anything) scales, so I find it difficult to believe Bitcoin will be usurped easily for a long-time.

In my opinion, there is a slim chance Bitcoin could go to zero in the long-term (it's not happening over the next 5 years - too much has been invested for it to fade quickly at this point). The highest chance of this happening is if the cryptocurrency space as whole trends towards zero, which goes into even bigger questions such as the value of public vs. private blockchains which is a bit beyond the scope of this video (although I briefly discuss my thoughts on that towards the end of this video).

This is a deeper type of video (as you can tell) and I'd love to hear your thoughts on what you think about this in the long, long-term. Thank you for watching!

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@cryptovestor, I got a bullish 12-26EMA crossover signal two days ago and went long Bitcoin again.

But while that is happening and there is an overall somewhat more bullish tone in cryptos, the satoshi value of ETH is falling like a rock. I'm interested in any insights you may have about that.

Thanks,
Rick

I also don't believe that it is so easy for altcoins to overtake Bitcoin. If any coin harnesses a technology that is truly superior and within Bitcoin's scope of purpose, Bitcoin can just fork their code to adopt it. There is already precedent for this.

Please review ALQO, thanks

All great information!! To keep a close eye on what direction the market is heading in, check out our predictions, updated daily: https://www.predictcrypto.net/predict/latest

I doubt very much that bitcoin will go to zero. I think that the only way that this would happen is if the FIAT system started working for ordinary people . IMHO the popularity of crypto is a reaction to a broken FIAT system

Interesting points @cryptovestor.

I see steem as having intrinsic value. Am I dreaming?

One of the other considerations for the value of Bitcoin is the fact that it is a medium of exchange and store of value that does not require a third party and also has trust embedded into the network given that it is peer to peer. Therefore, consider the demand if the inflationary spiral of most developed economy's and respective central banks and fiat currencies occur. Would you prefer having more value store in an instrument that relies on the management of a third party that has no limits as to the amount they can determine as supply or a decentralized network that has limited supply where value is mined through consensus and transactional confirmations?

The immediate answer is no, obviously there is nothing that can make BTC go to zero right now!

But as all business mans know, every single company eventually dies, and BTC is just another case, after it reaches the full potential it will start to decline and be surpassed by new things, new technologies.

I agree. What is there that says (other then people hatred towards bitcoin) it is at its end?

We will see BTC revolutionizing the world whether we want it or not.... It is already too late to kill this "baby".

Will it really going to zero, or is it what the people that want it to go away want you to think it’s going to do? What is really pointing for it to go to zero? Is there real hard facts that say it’s at its end?

Of course there's no hard facts that say it's going to have an end - There's no hard facts about anything when it comes to Bitcoin financially, only technically. None of this video has anything to do about "hatred" of Bitcoin - it's the fact that its value is actually determined by the opposite - People loving it (at least enough to assign it value). How reliable is that over the long-term? We don't know, but I have doubts after seeing a lot of things die that everyone thought would "last forever." Anyway, it's a long-term question (decades).

True as you said before maybe five years down the road but anything can happen in that amount of time. As an example the dollar could collapse in five years no one really knows what will happen in five years.

Hi,@cryptovestor you post title is much good,
if bit Bitcoin Go to Zero, million of people come on the road.

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