Ask HN: What would kill Bitcoin? - et
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PeterisP
I'm not sure on how mining economics will work out after the bitcoin limit is
hit and miners will no longer get new bitcoins - has someone worked out the
math on how much transaction fees will increase to cover mining expenses after
that?

The implication is that bitcoin won't function without (lots of) miners, and
if miners would be getting more money in an alternative currency where they
can use their hardware, they'd leave bitcoin.

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littlecritter
I was at an event with Peter Thiel this weekend, and he seems to think that
the government will eventually do them in, if anything

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jboggan
The U.S. government made it illegal for individuals to hold or invest in gold
for quite awhile. It didn't "kill" gold as a storage of value or as a de facto
currency in many parts of the world. I think Bitcoin may be "killed" in a
subset of national jurisdictions, but I do not think it is going anywhere.

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littlecritter
IF you want an example, of how the US govt could completely kill a digital
currency, look up e-gold.

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oleganza
E-gold had a central provider. Bitcoin has anonymous miners all over the
world. Has anyone shut down Bittorrent or The Pirate Bay?

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Element_
Bittorrent/TPB ticked off a small number of industries (media,software,
etc...) their persecution was largely a function of how well those industries
could lobby the government.

If bitcoin ever got large enough to be perceived as a threat to USD (which is
a long ways off) the bitcoin community would not have the resources to take on
the US gov. Being geographically spread out is irrelevant. For a small
fraction of one of its many defense institutions annual budgets the US gov
could easily build an ASIC cluster larger than the entire bitcoin mining
network. They could even just start maliciously buying/selling large
quantities of btc to keep the btc market volatile. To put it into perspective:
btc current total market cap is ~4billion, and the NSAs annual budget is
~12billion.

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oleganza
Here's my version :)

Bittorrent is used to download fucking movies while a lot of serious people
invest millions in Bitcoin. Federal armies will have to deal with a lot of
vested interested. In addition, some bankers and regulators may look seriously
into Bitcoin and realize how good it is for storing their own bribes and
bonuses and thus buy it. Then "fight" against it only to confiscate for
themselves even more.

By the time anyone would seriously decide to throw billions to fight anonymous
miners and billion of smartphones, Bitcoin monetary base will be a trillion
USD and hashrate will be boosted by Chinese government protecting and taxing
their miners.

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Element_
The US government took down egold when it reached ~2 billion in annual
transactions. I suspect they will take action against bitcoin before it
reaches a trillion dollar monetary base, but only time will tell ;)

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oleganza
Like I said above, Egold was a single entity. In U.S. feds must shut down
multiple very different service providers related to Bitcoin and even then
there are other countries with their own companies and legislation.

Also, it's one thing to say that some company helped Osama bin Laden to
launder his money - there will be evidence and no one would make a big story
out of it. Another thing is to say that "we cannot do anything about this
protocol, so we will shut down every single company just because they might
use it". To shut down tens of companies you'd need to show evidence that they
all somehow launder tons of money. That would be an epic event and it will be
well-advertised, so prosecutors would have to be even more careful in what
they say, or they will look like simple bullies on every newspaper. It's just
entirely different scale of action to take on everyone connected with Bitcoin.

If they do things slowly and try to kill companies one by one, then each time
they would create more clarity on how to be compliant with the law which will
make every next case even more difficult.

I have no doubt there will be war (there's one already with all this
regulatory crap, seizure of funds etc.), but it sure won't be one single
decision and little attention, like in case of Egold.

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yen223
Bitcoin's value comes entirely from its utility as a currency, but its
deflationary nature would mean people won't be willing to use Bitcoin to buy
actual stuff. It'll be interesting to see how this plays out.

I suspect Bitcoin will occupy the same space that gold does now, as just
another place to store your money during economic downtimes.

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atom-morgan
"...but its deflationary nature would mean people won't be willing to use
Bitcoin to buy actual stuff."

It's all about time preference. For certain goods people have a very high time
preference. For other goods, it's low. Would I forgo dinner simply because I
think my Bitcoin will be worth more a week from now? Probably not since I have
a high time preference for food. I need it to survive.

Just think about goods in technology. They are extremely deflationary. Using
the deflationary logic people use to criticize Bitcoin, why would anyone buy
an iPhone 5S or Nexus 5 today when they know it's going to be cheaper 6 months
from now?

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bobfirestone
People loosing confidence in it. With no one & nothing backing it there is
nothing to prevent the value from going to 0. The only thing keeping the value
of bitcoin from being 0 is the willingness of people to trade them for other
things of value.

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notdrunkatall
Ultimately, that's the only thing keeping any currency from going to zero.

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wikwocket
Well, on one level, yes, but in practice there are many organizations and
governments that would step in if a national currency were headed towards a
value of zero. Bitcoin doesn't have the same level of institutional support
(yet?), and so if it's value starts crashing hard, it could turn into an
unrecoverable death spiral.

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ProblemFactory
Some potential scenarios are:

* A security or encryption issue discovered in the protocol that leads to compromise of most wallets. The bug could be fixed, but existing balances and trust may be wiped out.

* Government regulation that makes it illegal to exchange bitcoin for cash or goods at legal businesses. It may remain as a niche underground thing, but even drug dealers need a way to eventually buy _something else_ with their bitcoin.

* Insecure exchanges that make it impossible to exchange bitcoin for cash. Exchanges seem to get hacked and disappear even without government "help". The result is the same: people need a way to use bitcoin for it to have any value.

* Another digital currency becomes more popular.

* Someone with enough computing power takes over the network. This could be a government agency aiming to shut it down, or perhaps a back-door in ASIC miners.

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datz
Bitcoin will become a sentimental Gold while a more robust, efficient protocol
such as Ripple will become cash

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jack-r-abbit
It seems that Bitcoins keep getting stolen from the bitcoin "banks." I've not
followed closely in those cases but I imagine that people don't get those
bitcoins back like at a real bank with real money. I suspect THAT will kill
bitcoin.

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humbledrone
If you hold your own gold, and it gets stolen, nobody is going to pay you back
(unless you have some kind of insurance, which presumably could cover Bitcoins
as well). Similarly, if you hold a gold certificate and a trusted party
actually stores your gold, and it is stolen from them, you're in the same
boat. Maybe they have a refund policy and enough capital to cover the loss.
Maybe they don't. The point is, equal protections could be offered for
Bitcoin.

Personally, I think that hardware wallets have the potential to solve this
problem. Picture a device that contains your private key, and is capable of
signing transactions (after you press a physical button). This thing could be
designed such that it is physically incapable of leaking your private key via
its USB port (or whatever). And maybe it has a little LCD screen that shows
the transaction it's about to sign before you confirm. With something like
that, there's really not a whole lot a bad guy could do to steal your
Bitcoins.

Of course, if a bad guys does coax you into sending them Bitcoins via some
more social-engineery-type means, that could be a problem. E.g. if they
briefly took over a popular website and made it show their Bitcoin address
rather than the real one, there wouldn't be a whole lot of recourse.

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rajacombinator
1) potential flaws in the logic being discovered.

2) the iron fist of the Empire.

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mattm
The big one is obviously a critical flaw being found which makes it possible
to counterfeit bitcoins or steal at will from (genuinely) protected wallets.

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atom-morgan
Do you have a link to counterfeit bitcoins?

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27182818284
I think Bitcoin will be around for a while, but even when it dies out, for
whatever reason, one of several other cryptocurrencies will take over.

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fit2rule
Being able to email money to people. Somehow.

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stevejalim
Somehow ==> [https://square.com/cash](https://square.com/cash) (which isn't
the same at BitCoin, I fully appreciate, but it's good to see some thinking in
this direction)

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notdrunkatall
The government. It's obvious that people want to use it. Its popularity will
only increase from here. The government is the biggest threat to bitcoin by
far.

