WhiteSites Blog
WhiteSites Blog
Bitcoin has rised to $6000 a coin. This has encouraged many in the investment community to label it as a bubble that is backed by nothing. Yes I haven't heard a single person from the tech industry with the same view. Lets for a second pretend that one day Bitcoin Crashed. I don't mean a sudden short term drop in value, I am talking that the market for bitcoin was absolutely destroyed. where your bitcoins were worth absolutely nothing. What would happen to everyone who was benefiting from bitcoin.
Most of the companies that were producing the ASIC miners would go under.
AMD and Nvidia would suddenly realize how many of their GPUs were used just to mine coin. Sales would take an almost immediate hit
As miners suddenly find themselves with more GPUs than they need for gaming or desktop work, many would rush to ebay to sell them. the result is the price of something like a GTX 1080 would sell for under $200 used. While during the bitcoin boom they were selling for just below retail, which was about $500. Retail sales would take a huge hit, as why would anyone buy a new GPU if they can use a used one for 1/4 the price.
Mining Bitcoin was a very energy demanding task. Think of what happens when everyone who was mining stops, and their utility bill suddenly is racking up 500 - 1000 KWH less each month.
Its pretty well know that Bitcoin has started to become the preferred currency for illegal transactions. Go find a Bitcoin ATM and watch on the weekends as shady looking characters visit to do their business.
There have been a few people or families, that thought so highly of bitcoin they sold all their other investments, and even their home, and put everything into bitcoin. When Bitcoin fails, these people will find themselves suddenly broke and homeless.
Bitcoin's value is based on the fact it can be converted into US Dollars. The liquidity is made possible by merchants and ATMs that allow people to easily convert their bitcoins into US Dollars. But if the Federal Government decided to make Bitcoin Illegal, and ban ATMs that use the currency, this could cause the entire value of Bitcoin to crash. This is my biggest fear. Thats the reason I don't outright buy bitcoin, but I do still mine it. If it gets wiped out, my losses will be only a few hundred dollars in electricity. But if it grows I stand to make a nice profit.