The fact that the ESF has not yet attempted to destroy bitcoin means one of two [three] things: 1) either bitcoin is a govt sanctioned scam, or 2) they just haven't gotten around to destroying it yet:
;or
3) Nobody will accept a naked short bitcoin, as it not only is a naked short, but it is no easier to obtain, hold, and secure than a real Bitcoin. Paper gold, OTOH, is much easier to obtain, hold, and secure than real gold - which is why (some foolish) people accept it.
Due to the technical nature of bitcoin and the fact that most people don't even know how to work a VCR, it's a given the vast majority of the population will be using "bitcoin banks" like Coinbase or other entities and not taking delivery of their coins. It will be even easier to short bitcoin into the ground than metals.
Vast majority? I disagree. It's not like you need a vault to store your bitcoins. You understand they have no volume or weight, do you?
Like I said, you don't even need naked shorts. All you need to do is short the price below cost of production
Without naked shorts and without buying a lot of btc? Could you ELI5 how for me please? A few details wouldn't hurt.
and force miners to turn off, which in turn further reduces the synthetic price floor through a feedback loop since cost of production is recursive based on it's own demand.
Right: cost of production depends on difficulty, which depends on mining power (cost of production), which ultimately can be traced back to demand. So some miners will shut down. We could be back to GPUs, and the network could become less secure. That is, assuming the price can be driven down without raising a massive spike before (again: ELI5 how, please).
Would this make the bitcoin network easier to take over? Sure. Would it make such an attempt
practical? I doubt it.
A takeover attempt would still require substantial hashpower (uneconomical with a significantly depreciated bitcoin). If a well-engineered change of PoW is enacted, such an attempt can be made even harder.