Monday, August 26, 2019

The Death Of Bitcoin. Who and what can kill bitcoin!

The bitcoin offer is strictly limited to 21 million coins. More than 80% of the total emissions of the main cryptocurrencies already produced, and the last coin will be received in about the year 2140. Seemingly, for peaceful existence of the first digital coins there are at least 120 years. However, all is not so simple.

This spring, the company BitFlyer interviewed residents from different European countries, and more than half of respondents were confident that in the near future Bitcoin will disappear. 55% of them predicted the existence of the main digital coins only until 2029. The reasons for the disappearance of bitcoin is inevitable, were not named. But there are dozens of assumptions about what can kill the first cryptocurrency from absurd and unlikely to do possible.

Bans regulators and authorities

At the end of July, the working group of the government of India has proposed to introduce a complete ban on cryptocurrencies in the country. For mining, storing, sale, transmission and production of digital coins will face a fine in the amount of 250 million rupees (about us $3,63 million at the exchange rate at the time) and a prison term up to 10 years. Whether the bill approved by the authorities, is still unknown. If this happens, the value of cryptocurrencies may decline, but the collapse of the digital industry is unlikely to happen. After the recent ban on the purchase and sale of the first cryptocurrency in Iran was recorded minor fluctuations of bitcoin prices. This happened due to similar campaigns in Afghanistan, Morocco, Algeria, Bangladesh and Bolivia.

However, seriously undermine the position of bitcoin can inhibitions more influential on the stock market of countries such as America or China. Even more harm as the first cryptocurrency can unanimously unite all countries against BTC. But given the considerable number of loyal to the digital industry States today is difficult to imagine. In addition, the prohibitions often only reinforce the interest of users and compel to come up with increasingly ingenious ways to circumvent sanctions and laws.

Hacker attacks

Bitcoin is built on an algorithm Proof-of-Work (proof of work) which is necessary for confirming transactions and creating new blocks. The user with the greatest computing capacity may find more blocks and get more reward. But if in some "hands" will be more than half of the capacity of the network, her job might be at risk.

The possibility of attack 51% was noted in the White paper is the first cryptocurrency. Satoshi Nakamoto wrote that if the majority of the CPU node will be controlled by honest miners, the block chain will grow faster and will surpass any other blackany. To change the data in the last block and the change work from other nodes the attacker must make a huge amount of effort. But in theory, attack 51% is the most effective way to destroy bitcoin.

In January of this year, the developer of cryptocurrency projects Jimmy song in his Twitter explained why to attack 51% of the BTC network is extremely difficult. The user must not only have a sufficient number of Asimov to capture Hasrat, but also to find a powerful power source for all equipment. Moreover, with the passage of time and the growth of Hasrat the cost of attack will continue to grow.

The death of the mining industry

This summer, when the price of the first cryptocurrency reached $10,000, the activity of miners in the Bitcoin network has reached a historic high in 65,19 (Th/s). And in 2018, after a sharp decline in the rate of the main digital coins leading manufacturers of equipment for the production of tokens is said about the enormous loss and cessation of activity.

For example, the developer and supplier of graphics chips Nvidia has said that the period of maximum demand on the GPU for mining has ended. According to the estimates of the profit from the sale was reduced to $100 million, and in fact it fell to $18 million due to the fall of the cryptocurrency market, the manufacture of graphics cards for mining, not only did not bring expected profit, but became unprofitable.

The fact that the collapse of the bitcoin exchange rate can cause great harm to the mining industry, has been proved. Will this work in the opposite direction — the question is moot.

The seizure of bitcoin "whales" of the digital industry

The theme of manipulating the stock market major players discussed in the industry for a long time and actively. Theories about how they affect the exchange rate of bitcoin, pretty much. One of the most popular tactics by which the "whales" can control the market is called "rinsing and repetition": a big player sells a large amount of digital money at below market price. This causes panic, the price falls sharply, after which the initiator buys the assets at a most favorable rate and eventually remains in the black, then the cycle can be repeated. Will there be enough "whales" of power and influence to destroy bitcoin? This question has no exact answer.

But there is speculation that the largest "whale" is the Creator of Bitcoin Satoshi Nakamoto. According to unconfirmed information, he has not only 1 million coins, which is almost 6% of the current emission of cryptocurrencies, but also knows the way of eliminating BTC. However, the history of "I gave birth to you, I'll kill you" in the face of Satoshi Nakamoto seems to many just a myth.

A more real threat is the imminent launch of the global regulated platform for digital assets Bakkt. Some are waiting for this event with hope, others with great apprehension. Last year there was speculation that this service will not lead to a revolution in the digital industry, and to the seizure of bitcoin by institutional investors.

19 September 2018 on the background of news about the upcoming launch Bakkt concerned representatives of the cryptocurrency community has sent the SEC a letter with a warning about the dangers of inappropriate management of enterprise the introduction of bitcoins for the technology. The authors stated that, if Bakkt will begin to store all funds in a single account and use them for lending and investment, it is likely that there will be mixed money of the borrower and money lender. This phenomenon was observed during the financial crisis in 2007-2008. In addition, the Union of bitcoins in one account can significantly increase the risks of hacker attacks, break decentralization and lead to the collapse of the first cryptocurrencies.

Among the absurd assumptions that could destroy bitcoin, any ideas about how to disable the Internet worldwide, a global cyber war and the displacement of the BTC Althingi. What will the world, will disappear if the main cryptocurrency is a topic that becomes more relevant with each passing year. But perhaps even more important question is, what will the world look like if bitcoin will not disappear.

6 years ago a Reddit user Luka Magnotta has published a letter from the future. This message from the year 2025, where the first coin is already worth more than $1 million, a Large part of digital coins is concentrated in the hands of a small percentage of people who have built entire cities to protect themselves and the miners. States worldwide, no longer in control of tax collection, economic growth slowed, and terrorist groups prey on cryptocurrency millionaires. The world has turned into chaos, and the only way to save him is to destroy the first cryptocurrency.

Until 2025 six years — the period during which there could be a huge number of events. And now let's not think that bitcoin can rise to $1 million, such a scenario does not seem improbable.