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Bitcoin will not go to zero, according to Andreas Antonopoulos, a cryptocurrency lawyer, lecturer at the University of Nicosia and former head of security at Blockchain.info.
Instead, the Bitcoin self-preservation mechanism adapts to its environment to incentivize the mining community. If the extraction of a coin becomes too expensive and difficult, it fits. If it becomes too easy, it fits. According to Antonopoulos, it will eventually re-establish its difficult objective to make the mining sector profitable.
In a series of questions and answers about Bitcoin, Antonopoulos explains how the Bitcoin protocol has been configured to retarget the difficulty rate each time 2016 blocks are extracted.
"The way it works is for a period of two weeks, there should be 2016 blocks, and then, we can count the previous two weeks and say," How many blocks have been in the last two weeks? "If the answer is 2016, this means that the difficulty of the algorithm and the amount of calculation that people are engaging in the extraction of Bitcoin is exactly right.It's perfect.The blocks are coming out every 10 minutes, nothing to be regulated.
Now let's say that instead of 2016 blocks, we had 2,217 blocks. So, we actually had 10% more blocks. In this case, the network will increase the difficulty by 10%, exactly the same ratio of the number of blocks we have had compared to the number of blocks that we should have, ie 2,016. And if this difference is 10%, the difficulty algorithm will be adjusted by 10% and, as a result, we will approach the 10 minute blocks in the future.
If, instead of 2016 blocks, we had 1,800 blocks, and we were short of 200 blocks, then it's about 10% less. We would adapt about 10% in difficulty. This calculation takes place every 2,016 blocks, every two weeks, at exactly the same time, exactly on the same block and influences the difficulty of the next block on the entire network. Each computer on the network inserts the number of blocks it has seen in the last two weeks, measures the same number, adjusts the difficulty with the same amount and arrives at exactly the same answer. And so the whole network changes difficulties for the exact same quantity every two weeks. "
Assuming a judgment day scenario in which the extraction power drastically decreases, Bitcoin could suffer a sudden and prolonged interval between retargeting periods. For example, the network would need four weeks instead of two weeks to produce 2016 blocks if only 50% of miners were present. In this case, it would increase the likelihood that other miners would stop, as they would have difficulty resisting. The impact would be a domino effect of lost mining power, slower intervals up to adjustment, more falling miners, more lost mining power – a so-called "death spiral" that would kill the network.
Antonopoulos states that it is an unlikely scenario since miners have a long-term perspective, investments for long-term equipment and electricity plans that last for months, not days or two-week periods. Those miners who resisted during the current market crisis, driven by the dynamic monetary incentives of the Bitcoin network, will reap substantial rewards.
"In fact, if they wait until the difficulty does not retarget and the difficulty becomes smaller – it becomes easier to mine – then every waiting miner makes more profit because in the new scheme they have a greater percentage of mining power than before. if the mining power decreases by 50%, the miners who are waiting and waiting for the retargeting difficulty are now twice as profitable after retargeting, which is a good incentive to stay around. "
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