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Could Bitcoin Ever Go To Zero?

Though extremely unlikely (in the near term), it is technically possible for Bitcoin’s price to crash to zero.

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In brief

  • Despite reaching a peak of over $60,000, Bitcoin detractors argue that it’s just a matter of time until its price crashes to zero.
  • A 2018 report by two Yale economists places the odds of Bitcoin crashing to zero at around 0.4%.
  • Sending the price of Bitcoin to true zero would be a monumental task and could be near-impossible.

Bitcoin has mostly gone “up and to the right” for much of its existence, with its price climbing from essentially zero to as high as $60,000 in under a decade. The original cryptocurrency is now one of the largest currencies in the world, and in its short lifespan has become one of the most profitable assets of all time.

Despite this growth, Bitcoin’s detractors have long argued that it’s only a matter of time before it collapses back to zero.

Former Bitcoin Cash proponent Calvin Ayre stated in July 2020 that Bitcoin is worthless, while Berkshire Hathaway CEO Warren Buffett told CNBC that he views all cryptocurrencies (Bitcoin included) as worthless. (Buffett’s business partner Charlie Munger has called Bitcoin “rat poison” and “turds.”)

But in recent months, there’s been a flood of institutional investment in Bitcoin, with companies including MicroStrategy, Tesla, Square, and Aker ASA buying Bitcoin for their corporate treasuries. Meanwhile, Bitcoin exchange-traded products have boomed, with the launch of Canada’s Purpose Bitcoin ETF marking the first such product to be established in North America.

Such institutional investment is widely thought to have prompted Bitcoin’s current bull run, and it’s viewed as proof that the coin, which now has a market capitalization of over a trillion dollars, is here to stay.

But what would it actually take for Bitcoin to lose 100% of its value? As it turns out, a lot.

Could Bitcoin really crash to zero?

In 2018, two Yale University economists (Yukun Liu and Aleh Tsyvinski) published areport titled ‘Risks and Returns of Cryptocurrency,’ in which the authors examined the risk of Bitcoin collapsing to zero in the span of a day.

By using Bitcoin’s historic returns to calculate its risk-neutral disaster probability, the authors found that the likelihood of an unspecified disaster crashing Bitcoin to zero ranged from between 0% to 1.3%, and was around 0.4% at the time of publication. For comparison, Tsyvinski stated that the euro (EUR) has a 0.009% chance of the same, in aninterview with YaleNews.

Others argue that Bitcoin will eventually crash to zero because it lacks intrinsic value. But supporters retort that Bitcoin is backed by consumer confidence and mathematics. Even though Bitcoin is often framed in opposition to government currencies, both Bitcoin and “fiat” currencies like the US dollar (USD) and Pound sterling (GBP), which were once backed by gold (which has intrinsic value), are now backed by no physical commodity. Of course, some would argue that the US dollar, at least, is backed by debt.

Common arguments against Bitcoin

One of the most commonly-cited arguments for Bitcoin’s eventual demise is that it’s actually an elaborate scam, cooked up by some nefarious entity or group with the aim of parting users from their hard-earned money.

One of the most recent examples of this can be seen in a post by iOS developer Gaurav Sharma, which argues that Bitcoin is actually a modified Ponzi scheme.

He argues that far from being decentralized, the development of Bitcoin is actually controlled by a central committee of developers, which he claims only benefits the powerful. This overlooks the fact that anybody competent can submit a Bitcoin Improvement Proposal (BIP) for consideration, and the entire protocol can be forked with relative ease if undesirable changes are made.

With Bitcoin, all nodes and miners are free to choose which client they run—the client with the most combined work automatically becomes the canonical chain. As a result, the Bitcoin unit on these chains will almost certainly still have value, due to the computational work and resources involved in maintaining the integrity of the network.

Another common argument made by Sharma—and numerous other skeptics, including Warren Buffet and Mark Cuban—is that Bitcoin is simply overvalued because it has little or no utility. It can, however, be argued that Bitcoin’s utility is actually directly related to the number of users.

This has been seen with the advent of additional use cases for the cryptocurrency, with the cryptocurrency initially being used for peer-to-peer barter, before online trading became a thing, and now there’s an entire ecosystem of DeFi tools that expand its utility even further.

A similar phenomenon is described by Metcalfe’s law, which states that the value of a network is proportional to the square of the number of connected users. And with the number of Bitcoin wallets growing exponentially, Bitcoin’s utility is growing even faster.

Fringe case scenarios

If Bitcoin were to truly crash to zero, it would mean either that it became impossible to trade Bitcoin or exchange it for goods and services, or that buy-side liquidity fell to zero for some reason. One of the only plausible scenarios that could cause this is Bitcoin being banned by all world governments, potentially rendering it illegal to own or use—as is already the case in a handful of countries.

This would also require taking down the entire Bitcoin network, rendering all nodes offline—including the onesin space—and making it impossible to set up new ones. Theoretically, this would make it impossible to transfer Bitcoin and would prevent underground trading, likely rendering Bitcoin worthless—but this would be nearly impossible to accomplish. The decentralization and global spread of network nodes is the entire value proposition of the Bitcoin blockchain.

Another possibility is that Bitcoin could simply be superseded by a better cryptocurrency or a similar alternative payment system, rendering it obsolete (and therefore worthless as a payment method or store of value). But this scenario would likely take several years—perhaps even decades—to play out.

Whatever the case, it appears likely that Bitcoin will always retain some value, either as a collector’s item or as a historic artifact for future generations. 

A similar phenomenon was observed relatively recently when the Reserve Bank of India (RBI) demonetized Rs 500 and 1,000 notes in November 2016 due to a massive increase in counterfeit notes. Although authentic Rs 500 and 1,000 notes can no longer be used as legal tender in India, they still retain some value as works of art or as a curiosity.

Editor’s note: This article was first published in September 2020, and was updated in March 2021 to reflect Bitcoin’s rising price and the influx of institutional investors.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://decrypt.co/41863/can-bitcoin-ever-become-worthless

Blockchain

Wisebitcoin Opens Aggregate Trading For STORJ Against USDT

[PRESS RELEASE – Please Read Disclaimer] Wisebitcoin listed the STORJ/USDT aggregate trading pair on June 3, 2021. With aggregated trading, instead of supporting deposits and withdrawals, Wisebitcoin uses an aggregate trading system that automatically takes buy and sell orders from its own users and places those orders on other exchanges. In this way, users can […]

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[PRESS RELEASE – Please Read Disclaimer]

Wisebitcoin listed the STORJ/USDT aggregate trading pair on June 3, 2021.

With aggregated trading, instead of supporting deposits and withdrawals, Wisebitcoin uses an aggregate trading system that automatically takes buy and sell orders from its own users and places those orders on other exchanges. In this way, users can rest assured that the assets or tokens that are purchased via aggregated trading are all real assets that are in full reserves.

Aggregate trading makes it easy for growing platforms such as Wisebitcoin to quickly provide users with access to new and popular crypto tokens and assets.

The local and external order matching mechanisms used in Wisebitcoin’s aggregate trading system provide transaction speeds and user experiences that are similar to those seen when placing orders for other trading pairs on Wisebitcoin.

To meet the deposit and withdrawal requirements of users, Wisebitcoin will evaluate the volume of its aggregate trading tokens to determine whether to dock with project wallets that contain a large number of tokens or assets.

By providing liquidity, fast transactions, low fees, and a clean, intuitive UI to traders, Wisebitcoin makes it easy to invest in the crypto space and to trade popular, high market cap tokens and assets. By adding aggregate trading for STORJ to the platform, Wisebitcoin opens the doors to investment in one of the most popular decentralized file sharing and storage projects seen in the last few years.

About STORJ

Storj delivers secure, private, reliable, affordable, and decentralized cloud object storage for developers. Storj’s Decentralized Cloud Storage (DCS) files are encrypted, broken into pieces, and then distributed across a global cloud network instead of being stored on a single, centralized server. This makes data breaches impossible, and default encryption comes standard for all files. A decentralized network of Storage Nodes also makes data always available when it is needed, and open-source, full-stack compatibility makes it easy to build on the network.

You can learn more about the project here and you can read the project whitepaper here.

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to get 50% free bonus on any deposit up to 1 BTC.


Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/wisebitcoin-opens-aggregate-trading-for-storj-against-usdt/

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Blockchain

Wisebitcoin Opens Aggregate Trading For STORJ Against USDT

[PRESS RELEASE – Please Read Disclaimer] Wisebitcoin listed the STORJ/USDT aggregate trading pair on June 3, 2021. With aggregated trading, instead of supporting deposits and withdrawals, Wisebitcoin uses an aggregate trading system that automatically takes buy and sell orders from its own users and places those orders on other exchanges. In this way, users can […]

Published

on

[PRESS RELEASE – Please Read Disclaimer]

Wisebitcoin listed the STORJ/USDT aggregate trading pair on June 3, 2021.

With aggregated trading, instead of supporting deposits and withdrawals, Wisebitcoin uses an aggregate trading system that automatically takes buy and sell orders from its own users and places those orders on other exchanges. In this way, users can rest assured that the assets or tokens that are purchased via aggregated trading are all real assets that are in full reserves.

Aggregate trading makes it easy for growing platforms such as Wisebitcoin to quickly provide users with access to new and popular crypto tokens and assets.

The local and external order matching mechanisms used in Wisebitcoin’s aggregate trading system provide transaction speeds and user experiences that are similar to those seen when placing orders for other trading pairs on Wisebitcoin.

To meet the deposit and withdrawal requirements of users, Wisebitcoin will evaluate the volume of its aggregate trading tokens to determine whether to dock with project wallets that contain a large number of tokens or assets.

By providing liquidity, fast transactions, low fees, and a clean, intuitive UI to traders, Wisebitcoin makes it easy to invest in the crypto space and to trade popular, high market cap tokens and assets. By adding aggregate trading for STORJ to the platform, Wisebitcoin opens the doors to investment in one of the most popular decentralized file sharing and storage projects seen in the last few years.

About STORJ

Storj delivers secure, private, reliable, affordable, and decentralized cloud object storage for developers. Storj’s Decentralized Cloud Storage (DCS) files are encrypted, broken into pieces, and then distributed across a global cloud network instead of being stored on a single, centralized server. This makes data breaches impossible, and default encryption comes standard for all files. A decentralized network of Storage Nodes also makes data always available when it is needed, and open-source, full-stack compatibility makes it easy to build on the network.

You can learn more about the project here and you can read the project whitepaper here.

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to get 50% free bonus on any deposit up to 1 BTC.


Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/wisebitcoin-opens-aggregate-trading-for-storj-against-usdt/

Continue Reading

Blockchain

Wisebitcoin Opens Aggregate Trading For STORJ Against USDT

[PRESS RELEASE – Please Read Disclaimer] Wisebitcoin listed the STORJ/USDT aggregate trading pair on June 3, 2021. With aggregated trading, instead of supporting deposits and withdrawals, Wisebitcoin uses an aggregate trading system that automatically takes buy and sell orders from its own users and places those orders on other exchanges. In this way, users can […]

Published

on

[PRESS RELEASE – Please Read Disclaimer]

Wisebitcoin listed the STORJ/USDT aggregate trading pair on June 3, 2021.

With aggregated trading, instead of supporting deposits and withdrawals, Wisebitcoin uses an aggregate trading system that automatically takes buy and sell orders from its own users and places those orders on other exchanges. In this way, users can rest assured that the assets or tokens that are purchased via aggregated trading are all real assets that are in full reserves.

Aggregate trading makes it easy for growing platforms such as Wisebitcoin to quickly provide users with access to new and popular crypto tokens and assets.

The local and external order matching mechanisms used in Wisebitcoin’s aggregate trading system provide transaction speeds and user experiences that are similar to those seen when placing orders for other trading pairs on Wisebitcoin.

To meet the deposit and withdrawal requirements of users, Wisebitcoin will evaluate the volume of its aggregate trading tokens to determine whether to dock with project wallets that contain a large number of tokens or assets.

By providing liquidity, fast transactions, low fees, and a clean, intuitive UI to traders, Wisebitcoin makes it easy to invest in the crypto space and to trade popular, high market cap tokens and assets. By adding aggregate trading for STORJ to the platform, Wisebitcoin opens the doors to investment in one of the most popular decentralized file sharing and storage projects seen in the last few years.

About STORJ

Storj delivers secure, private, reliable, affordable, and decentralized cloud object storage for developers. Storj’s Decentralized Cloud Storage (DCS) files are encrypted, broken into pieces, and then distributed across a global cloud network instead of being stored on a single, centralized server. This makes data breaches impossible, and default encryption comes standard for all files. A decentralized network of Storage Nodes also makes data always available when it is needed, and open-source, full-stack compatibility makes it easy to build on the network.

You can learn more about the project here and you can read the project whitepaper here.

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to get 50% free bonus on any deposit up to 1 BTC.


Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/wisebitcoin-opens-aggregate-trading-for-storj-against-usdt/

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Blockchain

Dave Portnoy Disasgrees with Donald Trump That Bitcoin is a Scam

Barstool Sports founder Dave Portnoy said he disagrees with Donald Trump and that bitcoin’s not a scam.

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The CEO and founder of Barstool Sports – Dave Portnoy – admitted that at the beginning, he thought Bitcoin was a ”Ponzi scheme.” Eventually, he changed his stance and even opposed Donald Trump, who called the primary cryptocurrency a ”scam.”

Trump Is Wrong

In a recent interview for ”Varney & Co,” the founder of Barstool Sports – Dave Portnoy – shared his current view on bitcoin and the crypto market. He revealed that years ago, when the primary digital asset was introduced, it looked like a ”Ponzi scheme” to him, but later he started realizing its merit:

”I thought when Bitcoin was first introduced and for a long time that it was a Ponzi scheme. I’ve come around on it. It’s too widely accepted, there are too many people using it, too many big people believe in it, too many stores accepting it. There’s liquidity. You can get in and out of it easily.”

Recently, the ex-US president Donald Trump said Bitcoin looks like a scam and backed up the dollar as the ”world’s currency.” Portnoy opposed Trump even though he also had his doubts about the asset in its first years :

”I don’t know what it started as, but I certainly wouldn’t say it’s a scam now.”

Later on, the founder of Barstool Sports commented on the recent decline of the crypto market. He raised hopes that soon enough, digital assets will increase their fiat currency value. In his opinion, investors should be patient with them and hold on ”for the long game:.”

”Crypto isn’t going anywhere but it’s hard to brag about how great everything is going when you are down 50%.”

Portnoy’s Change of Heart

In September 2020, Portnoy pointed out that bitcoin lacks accountability due to the anonymity of Satoshi Nakamoto. As a result, if investors end up losing money or being scammed, they would prefer to know who’s the person behind the entire operation. He went even further, calling it ”one big Ponzi scheme.”


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It is worth mentioning that at some point, Dave Portnoy invested in the primary digital asset. He tweeted about a loss of $25,000 and stated that he currently owns zero bitcoins. Additionally, he vowed to interact with the stock market rather than the crypto one:

”I don’t need this. I know how the stock market works. I own the stock market. This Bitcoin – I don’t trust this market at all.”

In any case, it now seems that he has changed his stance on the primary cryptocurrency and he even flat-out said that he was wrong about it.

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to get 50% free bonus on any deposit up to 1 BTC.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/dave-portnoy-disasgrees-with-donald-trump-that-bitcoin-is-a-scam/

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