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.
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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 …).
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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.
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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.Show this thread -
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.
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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").
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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.Show this thread -
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).
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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.
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