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1/ I doubt I'm the first to say this, but: #HODL is a cartel, one which (approriately) is simultaneously pedestrian and innovative in the same ways as #cryptocurrency itself.
2/ It's pedestrian because it's just a group of producers (hodlers) restricting supply to maintain price (Econ 101 - https://www.cliffsnotes.com/study-guides/economics/monopolistic-competition-and-oligopoly/cartel-theory-of-oligopoly …).
3/ A cartel works even better for a store of value than a good or commodity because there is no "use value" being compared to the price. The nominal (fiat) price almost doesn't matter, so demand is highly inelastic, hence price is highly sensitive to supply.
4/ But it's innovative because the cartel is massive and decentralized (much like the technology itself). Large cartels have been considered difficult to impossible due to coordination problems and the incentive to defect. But #BTC has, so far, proven that wrong.
5/ It has done so by brilliantly constructing a shared culture around supply restriction (HODLing), and (most importantly), a shared expectation that this is the route to greatest individual profit - removing the incentive to defect.
6/ Are they right? Will it work? The answer depends on how fast non-speculative uses are developed to support the demand, whether price drops attract or repel new investors, and on whether the HODL cartel can actually hold (err..."actually hodl").
7/ I can't help but be reminded of @ESYudkowsky and his Timeless Decision Theory (http://intelligence.org/files/TDT.pdf ). If HODLers can continue to act in unity, as TDT agents rather than traditionally rational ones, their prophecy will self-fulfill.
8/ If not, then there's no floor on the short-term price decrease, and today's prices will evaporate until enough non-speculative demand exists to justify them. (Which, if it happens, will be the ultimate vindication of the most dedicated hodlers).
9/ Final thought: BTC's governance issues stem, at least partially, from the disappearance of the founder. But in truly Zen fashion, this is one area where Satoshi's inaction is perfect leadership. His only contribution is to be hodler-in-chief. But it's an important one.
There's at least 4 other themes at play 1. Lost BTC (lost/deleted/forgotten/deseased). 2. Can't move dust due to high fees. 3. Tax burden of cashing out. 4. Bitcoin blacklisted / tainted.
Estimates of #1 are 20%, so that's a little perma-hodl. Taxes/dust are real, but not worse than losing it all. You still have to be a believer to hodl through a dip.
Hodling through a dip is easy compared to hodling through a mtgox like capitulation event and the bear market following. If you HODL'd crypto through that, u can HODL through anything.
To #5 Are we creating a prisoners dilema just on a global scale? Simplified to two people; If we both hodl, we win. If one becomes selfish and sells, one loses (and eventually all will lose)?
Sort of but not quite. Suppose only you defect, but the rest of the cartel hodls. The price keeps rising, and you've sold low. You ideally want to defect just before everyone else.
Cartels, by definition, are about restricting competition and agreement among market participants to keep sale prices high, not refusing to sell altogether. Doesn’t apply to #HODL.
Sorry, but that's totally wrong. OPEC works by agreement to limit the quantity of oil each state sells. AKA, agreeing to HODL the rest. It's exactly the same strategy as BTC owners agreeing to limit the quantity each sells (because what is HODLed is by definition not sold)
But HODL means sell nothing. And cartels rely on state protection. It’s best understood, not as an anti-competitive movement to keep up prices, but as a long-term bet on the utility of the technology.
I #HODL because it’s better to keep my money in an easily-secured, inflation-proof store of value. I want more Bitcoins, not dollars.
You've clearly never read the manifesto...hodlermanifesto.com/
Deep yo
In other words, "sell at a loss so I can buy up your coin cheap!"
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