1/ My thoughts RE: “HODLing == free riding?” that @naval raised. Building on @real_vijay’s thoughts as well.https://twitter.com/real_vijay/status/1019804185334722560 …
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5/ As Vijay puts it: HODLing requires *ideological conviction* - without which the price will collapse, the network go BOOM & all that fancy dev work going to waste. In fact, in the early days, HODLing is as essential as writing code itself.
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6/ Based on this fact alone, “free riding” is probably not the correct term to describe HODLing in early-stage Bitcoin, when it plays such as crucial role.
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7/ Bitcoin would not survive with mere traders/speculators who lack ideological conviction. The price would likely go to zero in any of the major crashes, and unable to come back or become vulnerable to 51% attack.
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8/ While it’s true that someone who can (HODL + code) is doing more than someone who merely HODL. The reality is that the pool of qualified protocol devs is extremely tiny.
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9/ If you ever work in software, you’d understand that a developer is only as good as his ability to understand product requirements, no matter how strong his coding skills or understanding of the tech stack he works on.
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10/ The mythical 10x programmer is not a code monkey that can type 10x faster than average programmers, perform matrix operations in his head, or memorize a thousand design patterns that he can readily draw from.
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11/ The 10x programmer is someone who, first & foremost, deeply understands product requirements better than any of his peers, ruthlessly cut down waste in planning, design & implementation.
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12/ Once you understand this, you’d understand that becoming a qualified dev to work on the Bitcoin protocol is not an easy task. How could you make any changes to such a complex beast, without understanding all the philosophical underpinnings of the project?
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13/ Some trivial looking things such as block size parameters or max number of peer connections, can have huge ramifications for the network.
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14/ Another example: Vitalik trying to bring Turing-completeness to Bitcoin in the early days. That *sounds like* it’s something useful- how bad can it be right? Wrong. Not only “world decentralized computer” is a dubious vision, it’s a total distraction.
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15/ It then naturally follows that the most qualified devs we want to work on Bitcoin, are likely *already in it*. Their ideological conviction draws them to the project, not the promise of wealth.
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16/ TL;DR: Shortage of Bitcoin developers is not a problem you can simply throw money at or add in-protocol incentives for (I described how that’s impossible: https://twitter.com/hugohanoi/status/985073633419673600 …). It requires ideological conviction & only a tiny tiny number of people are qualified.
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17/ In late-stage Bitcoin, specifically post-hyperbitcoinization, the benefit of HODLing (to the network, not the individual) will decrease as Bitcoin becomes mainstream. The mere size of the mature market (say 10 trillion) will make any individual act of HODLing insignificant.
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18/ Conviction is most useful when you hold a contrarian view. Conviction is not a big deal when most people already believe in it.
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19/ HODLers in late-stage, post-hyperbitcoinization, are then merely hoarders of a scare & *non-productive* asset. Hoarders also tend to work less & produce less than others, since they believe that their hoarded assets always increase in value.
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20/ IMO the term “free riding”, then, might apply. Late-stage Bitcoin HODLers free ride not off protocol development, but society at large.
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21/ If everyone hoards & starts working less, we might end up with a situation where total production output & total number of things available to buy decrease. In which case, not only you will need to pay more for each product, the economy will stagnate as well.
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22/ Hoarding without working is free riding. You are free riding off efforts of others to push society forward. The interesting question then, is at the macro level, is there a level of free riding where it becomes unhealthy? But that is a topic for another day.
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23/ *Tweets 19-22 were unclear. Clarifications here:https://twitter.com/hugohanoi/status/1021866669281406976 …
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End of conversation
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I've always thought as more apps built on BTC go mainstream, that would create more utility demand for bitcoin other than investors/speculators. I also think it might unlock billions more in liquidity going thru BTC net. Unless im behind and this is already common knowledge
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