I think you're right but I'm pretty sure you missed GP's point...
> You really think there isn't a single person on this planet willing to put in 1-10 million to buy up all the bitcoin?
Of course there are people/companies willing to do this: they'd short squeeze the entire supply if they could but... It's not GP's point: GP's point is that there exist a scenario in which the "work" (the "proof of work") required to find one block would be so expensive compared to the value of BTC that it'd be impossible to ever mine a new block on the blockchain. That's be a "death spiral": a PoW forever too high and nobody willing to put in the $$$ in electricity required to mine one block and let alone the huge number of blocks required before the PoW difficulty is lowered. These blocks would be mined at a gigantic loss. The problem is made worse by the PoW only being able by -75% at most: so should some big miner mine at a loss for a very long time, the -75% difficulty "easing" may not be enough.
If anything, of all the dramatic scenario about Bitcoin since it came out, this death spiral has always been the most concerning one.
Compared to the rest of the whitepaper/code this part of Bitcoin always seemed very weak due to poorly choosen parameters (way too many blocks before the difficulty adjusts itself). This poor choice of parameters may be Bitcoin's eventual downfall.
Now... There's a group of devs who basically control the code and you can bet that should the death spiral happen, these devs would magically agree with miners and big players to "vote" on adopting new parameters / relaunching the chain/mining with a much easier difficulty.
That's why I think you're right: it's highly unlikely BTC would go to zero because there'd be an army of people coming to its rescue. But it's quite a range between $18 K (as I type this) and zero.
Your analysis is wrong. The actors in this system are rational actors incentivized to preserve the system. The algorithm assists difficulty. And even in pathological cases of continuous drop with unsustained price levels — you assume the miners are going to irrationally continue to raise rates because they are too stupid to realize the scenario you are describing?
Miners don't set the rates. They pick from existing transactions on the network to fit into limited space on the blockchain. For them picking the transactions with highest fees is rational in any case.
OP was saying the death spiral will happen because miners will decide That the combination of BTC price and block fees is insufficient motivation to mine at present difficulty levels. This is effectively miners setting rates. I am saying that miners will act in self-interest and avoid death by suicide by enabling this deadly spiral by continuously turning off hardware during times of down trend.
I expect that in the "hope dies last" spirit some of the miners will double down, to get higher share of the fees. Whether that's going to be enough to carry through till the network algorithm adapts.. I don't know but wouldn't underestimate the zeal.
I think you're right but I'm pretty sure you missed GP's point...
> You really think there isn't a single person on this planet willing to put in 1-10 million to buy up all the bitcoin?
Of course there are people/companies willing to do this: they'd short squeeze the entire supply if they could but... It's not GP's point: GP's point is that there exist a scenario in which the "work" (the "proof of work") required to find one block would be so expensive compared to the value of BTC that it'd be impossible to ever mine a new block on the blockchain. That's be a "death spiral": a PoW forever too high and nobody willing to put in the $$$ in electricity required to mine one block and let alone the huge number of blocks required before the PoW difficulty is lowered. These blocks would be mined at a gigantic loss. The problem is made worse by the PoW only being able by -75% at most: so should some big miner mine at a loss for a very long time, the -75% difficulty "easing" may not be enough.
If anything, of all the dramatic scenario about Bitcoin since it came out, this death spiral has always been the most concerning one.
Compared to the rest of the whitepaper/code this part of Bitcoin always seemed very weak due to poorly choosen parameters (way too many blocks before the difficulty adjusts itself). This poor choice of parameters may be Bitcoin's eventual downfall.
Now... There's a group of devs who basically control the code and you can bet that should the death spiral happen, these devs would magically agree with miners and big players to "vote" on adopting new parameters / relaunching the chain/mining with a much easier difficulty.
That's why I think you're right: it's highly unlikely BTC would go to zero because there'd be an army of people coming to its rescue. But it's quite a range between $18 K (as I type this) and zero.