Bitcoins - can't it only go down from here?

HotPants
Sat, 08 Jan 2022 02:52:44 +0000

Here is my understanding of Bitcoins, would love to hear from people more knowledgeable than me on what I am getting wrong

Only a certain number of bitcoins can be mined

if the price of bitcoin goes up, it makes mining seem more profitable which encourages more mining

If there is more mining, the difficultly of mining eventually increases, & so miners consume more electricity until mining becomes less profitable again

Bitcoin is already consuming so much energy that countries are starting to actively discourage mining

This implies that any substantial increase in bitcoin price will result in substantial regulation of the bitcoin industry as it impacts the supply and price of electricity to other industries

Bitcoin is highly volatile, and over time has increased in price substantially

A significant portion of bitcoin investors are speculating on an asset rise

If the asset stops rising, some speculators may start to sell

Increased selling activity will lower the price

A lower price will force more speculators to sell

This implies that if bitcoin does not keep rising, it will start to fall

Other crypto currencies are highly correlated with Bitcoin price movement.

Therefore if bitcoin falls, other crypto currencies fall.

Bitcoin is the current default for accepting cryptocurrency as payment

Bitcoin has a limited number of transactions it can process (3-7 a second)

If too many people want to process transactions, the fee will rise

Therefore one or more other cryptocurrencies that uses proof of stake, must become the default for accepting cryptocurrency as payment.

Comments URL: https://tildes.net/~talk/zxr/bitcoins_cant_it_only_go_down_from_here

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