Unit 7 Lecture Notes

For a software program, Bitcoin is unusually morbid. Its death has been a constant topic of conversation since its birth. Satoshi's first emails were greeted with skeptics telling him how his project dies, and ten years later, skeptics have not relented in dreaming up gory fantasies for how this death is finally achieved. The Bitcoin Obituaries page has so far collected around 350 obituaries for Bitcoin, for an average of 35 deaths per year since inception, an impressive achievement for anyone, dead or alive. No other program or protocol seems to inspire such morbid fascination, and at the risk of triggering the people at Bitcoin Obituaries into adding me to their list of notoriously rabid nocoiners and anti-bitcoiners, I have decided to focus this paper on the economics of Bitcoin's death. We will look at the common threats to Bitcoin, the economic incentives involved, and their likelihood. I argue that the economic incentives around Bitcoin are key to its survival, which means that the threats people usually discuss are unlikely to be fatal to Bitcoin. Based on that, I argue that Bitcoin's death, if it were to occur, would have to come from developments that undermine the economic incentives to use Bitcoin, which I'll discuss in two such potential scenarios.

In Chapter 10 of The Bitcoin Standard, I presented several of the most popular ways in which people imagine bitcoin could die. These were hacking, a 51% Attack, hardware backdoors, internet and infrastructure attacks, a rise in the cost of running a node and a drop in their numbers, the breaking of the SHA-256 hashing algorithm, and a return to sound money. In this bulletin we delve deeper into these attacks as well as some others, and will show that many share a deeper cause and can be grouped into different meta-categories of death.

Source: Saylor Academy, How to really kill Bitcoin
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