Take a look at this all bad it’s from marketwatch his the headline bitcoin is close to becoming worthless the article was written by of sarin final professor at santa clara university food joints us now so make your case please.
Thanks to it so it is actually a fundamental reason for that and a technical reason for it fundamentally bitcoin has not lived up to its hype a primary me if you look at all the activity on around bitcoin it’s mostly around creating it doesn’t seem to have too many use cases of the ultimate prom is it helping me back the unbank i certainly has not lived up to it but from a motor from a technical perspective and that’s what i’m talking about in this article about the dead spinal do understand that we have to go back last year when the price was a around 19,000 or so at that point in time the future trading started and what he could do since she was you put mine bitcoin at around 5,000 why you could sell it in the futures market around 19,000 and that clearly attracted a lot of arbitrageurs.
Started a golden ball to the mining activities and then and when was guaranteed and arbitrage profit as more and more entered it into the market what happened was that the price of a bitcoin declined and it came around where it should have been which is the cost of mining plus a modest profit now the prices are falling on an actually all the miners are in a position where to buy the land of making negative profits so it can cost more to mine it than to actually buy it and own it.
Is that what that’s exactly right and that’s that to you you you nailed it on the head of something that’s exactly the crux of the argument and that’s not sustainable there is a self-correcting mechanism the algorithm beer by if the price goes down in my earners exit the the cost of a mining decreases so the miners can continue to make profit and but but it’s not instantaneous and there’s a lag and the rate at which the miners exit could be higher than the rate at which there is a decline in the price of a bitcoin bitcoin is worthless in the family near future is that it.
The idea that means i mean i guess my name is not italy congressional gold mining or anything of that sort the miners of the ones with effectively provide the computation of power to keep a record of who owns what is the cost of mining exceeds the car at the price of which they can buy they will stop mining and if the stop mining consequently there would be no computing power provider to effectively maintain a ledger of who owns bitcoin and no transaction would be possible and if there is no transaction happening and there’s no record of who owns what then all you have is a set of numbers and all those numbers i work at juliet you make a very good case and i think i understand it despite the technicalities of it which i understand where you’re coming from and will be checking that price thanks very much. we appreciate you being with us thank you sir.