Is there something in the design of the bitcoin system that prevents this scenario?
- The price of bitcoins drops by 80% (or some number) for some external reason.
- The profitability of bitcoin mining drops significantly.
- The number of bitcoin verifications drops significantly, causing
- Additional drop in the price of bitcoins because transactions are not verified promptly.
- Go to 2.
In other words, what happens if people stop bitcoin mining because it's too expensive? How will transactions be verified?