Bitcoin Can’t Fall To $0 Nor Enter A “Death Spiral” — Mining Rules Deem It So

[LaltctalksL]

As BTC capitulated on Thursday evening, falling under a handful of purported key support levels, a number of bearish commentators, including Nouriel “Dr. Doom” Roubini and Bloomberg’s Mike McGlone, doubled down on their sentiment that cryptocurrencies would continue to disintegrate. A number of cynics, who are often berated for their improper insight, pointed to the expected collapse of Bitcoin mining as the primary stimulant for the impending exhaustion of cryptocurrencies.

However, as recently asserted by one of the crypto industry’s finest, this couldn’t be further from the truth.

By Design, Mining Will Keep BTC Alive

Since Bitcoin’s earliest years, Andreas Antonopoulos, a Greek-British blockchain fanatic, has been a zealous Bitcoin crusader, known for brutally debunking critics of a technology they don’t choose to understand. And in this recent market crash, which has led mainstream media to call for the arrival of a crypto “death spiral,” Antonopolus is back to his antics yet again, recently rushing to Bitcoin’s defense via Youtube.

For those who aren’t in the loop, in recent weeks, as BTC has found itself far under $6,000, the supposed break-even cost of mining, hashrate has begun to drop precipitously. Since November 14th, which was when selling pressure began to slam cryptocurrency markets, hashrate has fallen from 58 exahashes to a mere 37, down 36% in a matter of weeks. As reported by NewsBTC previously, Malachi Salcido, CEO of a crypto mining operation, told Bloomberg that miners are being actively “flushed” out, presumably due to dwindling profitability figures.

Salcido wasn’t alone in touting such sentiment, with blockchain research unit Autonomous Research claiming that upwards of 100,000 individuals have thrown in the Bitcoin mining towel.

Keeping the mining industry’s stormy conditions in mind, a number of pundits outside of crypto have claimed that BTC, along with its altcoin brethren, is poised to enter a “death spiral,” whereas miners would fold en-masse, sending BTC into the ether. But as always, these so-called “experts” have picked a bone with the wrong community.

In a recent video Q&A, which specifically addressed the “death spiral” predictions, which were baseless at best, and slanderous at worst, Antonopoulos spoke on why capitulation on the part of miners won’t massacre Bitcoin.

The diehard decentralist, who recently called the traditional financial realm the world’s largest “cartel,” first drew attention to the Bitcoin Network’s intrinsic feature of hashing difficulty, which readjusts every 2,016 blocks (~2 weeks) to reflect the state of mining. This feature, activated on the world’s first blockchain since day one, discredits the theory that a “death spiral” is inbound, while still maintaining that BTC can’t just fall to nil. Antonopoulos elaborated:

“If [miners] wait until the difficulty retargets and the difficulty becomes less, then each miner who waits makes more profit because in the new scheme they have a greater percentage of the mining power than they did before. Let’s say if the mining power drops by 50%, the miners who stick around and wait for the difficulty to retarget are now twice as profitable after the retargeting.”

When taking this simple element into account, which a majority of mainstream journalists skimmed right over, it becomes clear that participants will always keep some skin in the mining game, so to speak. As put by Antonopoulos, “that’s a pretty good incentive to stick around.” And as such, it is near-impossible for BTC to fall to $0, no matter how hard bears try to suppress the asset.

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Source: https://www.newsbtc.com/2018/12/07/bitcoin-cant-fall-to-0-nor-enter-a-death-spiral-mining-rules-deem-it-so/