10.27.2017

How bitcoin will die: Icarus

Bitcoin will die like icarus.  Or like an airplane that climbs too fast that it stalls out and crashes to earth.  This will be the death of bitcoin.

Like I said in my last post the reason for bitcoins recent spike has been scarcity; china is in a crackdown on bitcoin miners and is not letting them sell their mined coins.  This causes a reduction in supply, and with a constant demand will lead to an increase in price.

As these miners have been able to sneak some bitcoin past the guards and have been able to sell chunks the price has fallen and as the supply again dries up the price goes back up.  This is why we have been seeing temporary dips below 6000 to 5500 in recent days.

We don't know what bitcoins cap is.  What I mean by this is lets say all the supply from china drops out what is the most people are willing to pay for bitcoin?  It depends on the use that it is bieng used for.  With a price at 6000 obviously some people think that it has uses to warrant that price.  In other words they will pay that price.

Whatever the price cap ends up bieng the same fact remains, that once china effectively totally blocks its miners from selling their coins, or just makes it so they can't sell enough to maintain operations, they will stop mining (or greatly slow it down to the rate at which they can sell their coins).  This does not only perpetually keep the supply low and therefore bitcoins price high, but it will slow down transactions on the network.  The slowng down of the network will severely drop bitcoins usability and therefore the "price cap" - in other words what people are willing to pay - will drop significantly.  If it takes a month to process a bitcoin transaction people will dump their bitcoins and move to a bitcoin fork like bitcoin gold or another crypto like etherium (or monero if they are smart) where transactions happen in a reasonable time frame.

Bitcoin will never go away totally; but without the mining prowess it once had, it is just another run of the mill crypto.  And it will be priced accordingly.

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