You're asking entirely the wrong audience. We're computer programmers here, not economists.
Luckily I'm one of those irritating generalists.
So things I can tell you that might help:
Bitcoin is not a bank, so cannot be susceptible to a "bank run", where the end-game is a bank unable to satisfy a withdrawal request.
Bitcoin is a currency (by some definitions) or a stock (by others). A stock run terminates when a company's stock value goes below its operational assets, so becomes cheaper to buy the entire company and sell the remainder than to operate it. Bitcoin has no assets, so you'd think this wouldn't work - but recall that a bitcoin's mining costs are measurable in terms of electricity etc, so in some ways its closer to a stock than a currency, where a state can (more or less) just print more. Bitcoin only survives as long as miners are incentivized to continue validating transactions - if the price of a bitcoin drops below the mining cost, the only remaining miners will be those incentivized externally (ie, those making money due to the transactions being verified, like people selling things only available with Bitcoin).
Although you might think it's a currency, it's actually going up so sharply today that its almost impossible to usefully use as one. It's hard to see any transaction beyond investment that would make it worthwhile. But when a run on a currency happens, the currency typically plateaus, and the state either devalues it, creates an entirely new currency (with an initial exchange rate to the old, and usually - but not always - drops the old currency), or (in some particularly bizarre cases) simply starts using some other, more stable currency. But all the end games require some kind of state action.
A run on a stock is possible, but generally operates where people lose faith in an operating company. A run on a currency is much the same. But here's the key thing - for really effective runs, you'd need a futures market. And as I write this right now, there isn't one for Bitcoin.
Futures markets operate by making what suits call "investments", and we call "gambling", based on the future value. The most well-known of these is a "short", or "short sell". This is [simplified] a bet that the value of the asset (here, bitcoin) will drop below a certain value by a certain time.
If lots of these are seen on the market, there's a strong suggestion that lots of investors feel the price will drop, and this will cool other investors buying for investment - and sure enough, the price drops.
More interestingly, there ends up being a tipping point where investors switch from investing in Bitcoin to investing in Bitcoin short sells.
This is, clearly, much more likely to happen if the asset is hyper-inflated. You know, like if it were growing exponentially. Especially if it were growing exponentially with no futures market to allow an expression of confidence that the price would drop. This is simply because the short sells can be much - much - more lucrative. Every cent a bitcoin is worth can be harvested back, sometimes a few times over, in crashing the currency, and the hyper-inflation of Bitcoin triggers the loss of confidence much more easily.
If a futures market for Bitcoin were to open just when the price is rocketing, and a bunch of savvy investors shorted bitcoin like crazy, that'd crash the currency/stock below the mining cost, and Bitcoin would simply die. After all, everyone knows there's a bubble here - it's just a question of looking for what will burst it.
Tomorrow, as I write this, in Sunday 10th December. In Chicago, a Futures market for bitcoin will open for business.
Just sayin'.
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You're asking entirely the wrong audience. We're computer programmers here, not economists.
Luckily I'm one of those irritating generalists.
So things I can tell you that might help:
Bitcoin is not a bank, so cannot be susceptible to a "bank run", where the end-game is a bank unable to satisfy a withdrawal request.
Bitcoin is a currency (by some definitions) or a stock (by others). A stock run terminates when a company's stock value goes below its operational assets, so becomes cheaper to buy the entire company and sell the remainder than to operate it. Bitcoin has no assets, so you'd think this wouldn't work - but recall that a bitcoin's mining costs are measurable in terms of electricity etc, so in some ways its closer to a stock than a currency, where a state can (more or less) just print more. Bitcoin only survives as long as miners are incentivized to continue validating transactions - if the price of a bitcoin drops below the mining cost, the only remaining miners will be those incentivized externally (ie, those making money due to the transactions being verified, like people selling things only available with Bitcoin).
Although you might think it's a currency, it's actually going up so sharply today that its almost impossible to usefully use as one. It's hard to see any transaction beyond investment that would make it worthwhile. But when a run on a currency happens, the currency typically plateaus, and the state either devalues it, creates an entirely new currency (with an initial exchange rate to the old, and usually - but not always - drops the old currency), or (in some particularly bizarre cases) simply starts using some other, more stable currency. But all the end games require some kind of state action.
A run on a stock is possible, but generally operates where people lose faith in an operating company. A run on a currency is much the same. But here's the key thing - for really effective runs, you'd need a futures market. And as I write this right now, there isn't one for Bitcoin.
Futures markets operate by making what suits call "investments", and we call "gambling", based on the future value. The most well-known of these is a "short", or "short sell". This is [simplified] a bet that the value of the asset (here, bitcoin) will drop below a certain value by a certain time.
If lots of these are seen on the market, there's a strong suggestion that lots of investors feel the price will drop, and this will cool other investors buying for investment - and sure enough, the price drops.
More interestingly, there ends up being a tipping point where investors switch from investing in Bitcoin to investing in Bitcoin short sells.
This is, clearly, much more likely to happen if the asset is hyper-inflated. You know, like if it were growing exponentially. Especially if it were growing exponentially with no futures market to allow an expression of confidence that the price would drop. This is simply because the short sells can be much - much - more lucrative. Every cent a bitcoin is worth can be harvested back, sometimes a few times over, in crashing the currency, and the hyper-inflation of Bitcoin triggers the loss of confidence much more easily.
If a futures market for Bitcoin were to open just when the price is rocketing, and a bunch of savvy investors shorted bitcoin like crazy, that'd crash the currency/stock below the mining cost, and Bitcoin would simply die. After all, everyone knows there's a bubble here - it's just a question of looking for what will burst it.
Tomorrow, as I write this, in Sunday 10th December. In Chicago, a Futures market for bitcoin will open for business.
Just sayin'.