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I am new to crypto. I want to ask if in the future, bitcoin has a significant protocol update, will there be a recycle (or some kinds of buy-back or repurchase?) of old tokens or an automatic update of the old tokens (perhaps done alongside with wallet software update, just guessing)? What if I hold bitcoin long enough, will the market price of the bitcoin using old token standard drop to zero since the technology become outdated?
I know some crypto projects are built on bitcoin. So how exactly do these crypto project keep up with the updated protocol while maintaining the market price, and how do the bitcoin community and developers deal with these problems?
The general approach to Bitcoin protocol updates is to maintain forward and backward compatibility with the prior consensus rule set on the network.
In fact, Bitcoin's protocol stability is considered one of its most important properties, as it ensures that people can confidently store value and rest assured that their funds will remain accessible in the future. Changes to the system that would pull the rug under prior investors would meet extreme resistance.
Obviously, every user has to decide for themselves whether the perceived social contract is stable enough to inspire confidence.
1 bitcoin on the bitcoin blockchain will always be equal to 1 bitcoin on the bitcoin blockchain. There can be other new projects that move away from the bitcoin blockchain, but it will not change the original bitcoin blockchain. We call them "fork" like Bitcoin cash or Bitcoin SV.
Here is more information if you are new to bitcoin: I am new to Bitcoin, how can I get started?
There is already a planned update to the Bitcoin protocol, when mining stops in 2140. This could be analogous to the concept of a gold rush followed by cleanup investors who use expend ever more effort to find smaller and smaller nuggets, then flakes, until every last atom of gold on Earth is available for circulatory spending.
At that point, those who have stored value in bitcoin will continue to use it and circulate it. There are a number of ways it could become worthless, such as:
- The Internet ceases to exist or function
- Everyone with tokens loses their private keys and thus cannot use them
- Demand goes down due to a selloff, similar to a "bank run"
- Protocol improvement attempts result in one or more forks which cause confusion about where to spend one's tokens (applies mostly to existing forks which are in competition with each other)
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