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Author Topic: HODL mentality destroys the currency aspect of Bitcoin  (Read 746 times)
Canis Majoris
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March 23, 2018, 12:06:34 PM
Merited by paxmao (1)
 #1

It seems like only a small fraction of bitcoins as well as other cryptocurrencies gets earned while the vast majority of the coins are bought. But when people buy coins, they obviously aim exclusively at selling them later at a higher price, which is what speculation basically consists in because it makes no economic sense to buy a cryptocurrency to spend it on goods when people can easily spend fiat instead. However, if the price goes down, people aren't going to spend their coins either. And whenever someone complains about prices going down, the only reply they receive is just to hold to their precious bitcoins, no matter what the price could or would be. I have yet to meet anyone telling these bag holders to spend their stashes on something useful.

Apparently, the HODL mentality kills the currency aspect of Bitcoin.
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March 23, 2018, 12:10:59 PM
 #2

Spot on and I don't think that will ever change, it's why I see bitcoin as becoming more in line with gold that is spendable. It won't be used as a daily currency but more for one off purchases etc. Unless the price was relatively stable this will always be the case.

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March 23, 2018, 12:34:39 PM
Merited by paxmao (1), Canis Majoris (1)
 #3

Im a hodler of spendable crypto, Bitcoin, Litecoin and Monero but I actually cannot easily spend them on goods I want.
I might be corrected now after this post but I am looking to buy a used camera and I actually dont mind spending some crypto for it.
My dilemma is where can I get my camera in exchange for crypto?

thats the problem there are not enough retailers accepting crypto and i do agree that hodling is not what Satoshi meant for bitcoin
it has become a speculative tool because of the volatility of the markets.
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March 23, 2018, 12:43:23 PM
 #4

It seems like only a small fraction of bitcoins as well as other cryptocurrencies gets earned while the vast majority of the coins are bought. But when people buy coins, they obviously aim exclusively at selling them later at a higher price, which is what speculation basically consists in because it makes no economic sense to buy a cryptocurrency to spend it on goods when people can easily spend fiat instead. However, if the price goes down, people aren't going to spend their coins either. And whenever someone complains about prices going down, the only reply they receive is just to hold to their precious bitcoins, no matter what the price could or would be. I have yet to meet anyone telling these bag holders to spend their stashes on something useful.

Apparently, the HODL mentality kills the currency aspect of Bitcoin.
You are right holding is the reason for the bitcoin can't be used as a currency but it is the thing which increases the demand for it so more and more people want to buy bitcoin,but still we can't spend bitcoin directly we need to convert them into fiat if we need to buy anything with that so it takes time to use crypto as direct form until that holding the bitcoin can help the holders to earn some money.

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March 23, 2018, 12:56:40 PM
 #5

Spot on and I don't think that will ever change, it's why I see bitcoin as becoming more in line with gold that is spendable. It won't be used as a daily currency but more for one off purchases etc. Unless the price was relatively stable this will always be the case.
yes mate,though i think this is not what satoshis plan,than this great coin will stay longer in wallets or storages than in market circulation,but we can't change the fact that this is what happening,and even OP if he will only be real and not hypocrite he will choose to hold bitcon than to sell it,and besides i see no wrong about this and i find this as reason why market goes high and low,

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March 23, 2018, 01:10:14 PM
 #6

The point is ideally if everyone holds his bitcoins that means there will be stability of a price after all,no one will be buying and be selling at that point and price drops wont occur.Unfortunately,this can't always be the case as everyone us a free individual with his own mindset and thoughts and also has a target price to sell at.So yes,we cant all always hodl at any one point.

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March 23, 2018, 01:11:07 PM
 #7

It seems like only a small fraction of bitcoins as well as other cryptocurrencies gets earned while the vast majority of the coins are bought. But when people buy coins, they obviously aim exclusively at selling them later at a higher price, which is what speculation basically consists in because it makes no economic sense to buy a cryptocurrency to spend it on goods when people can easily spend fiat instead. However, if the price goes down, people aren't going to spend their coins either. And whenever someone complains about prices going down, the only reply they receive is just to hold to their precious bitcoins, no matter what the price could or would be. I have yet to meet anyone telling these bag holders to spend their stashes on something useful.

Apparently, the HODL mentality kills the currency aspect of Bitcoin.
Yes, many people invested in bitcoin for various reasons, someone to save value, someone to make a profit. But the fact that people are holding bitcoin in the situation that is happening at the moment is nothing wrong. How do you act?

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March 23, 2018, 01:33:12 PM
 #8

Agreed, HODL mentality might destroy the currency aspect of bitcoin and yes people nowadays look bitcoin as a mode of gambling or investment but their point of view towards it is also not completely wrong. Maybe a solution for making bitcoin be used as a currency would be that huge companies be it a smartphone, gaming company, online shopping sites or other product seller start accepting bitcoin as a mode of payment for a limited amount of their stocks, for example, say 10% of their stock will be sold only accepting bitcoin or another crypto as a mode of payment. This will encourage people to use their cryptocurrencies as a mode of payment i.e currency and also increase the community by introducing known huge companies in the crypto world!
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March 23, 2018, 03:12:00 PM
 #9

Im a hodler of spendable crypto, Bitcoin, Litecoin and Monero but I actually cannot easily spend them on goods I want.
I might be corrected now after this post but I am looking to buy a used camera and I actually dont mind spending some crypto for it.
My dilemma is where can I get my camera in exchange for crypto?

thats the problem there are not enough retailers accepting crypto and i do agree that hodling is not what Satoshi meant for bitcoin
it has become a speculative tool because of the volatility of the markets.

It may look a bit counterintuitive and likely it is but retailers and merchants are not accepting crypto because there is not sufficient demand for such payments. Yes, you and a few other people would love to pay with their coins, but this is nowhere near enough. We need mass demand for crytpopayments to push cryptocurrencies toward mass adoption in the real sector. Merchants are not fools, and if they see crowds of people wanting to pay with crypto, they will start to accept it. If they don't, someone else will.
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March 23, 2018, 03:33:38 PM
 #10

Im a hodler of spendable crypto, Bitcoin, Litecoin and Monero but I actually cannot easily spend them on goods I want.
I might be corrected now after this post but I am looking to buy a used camera and I actually dont mind spending some crypto for it.
My dilemma is where can I get my camera in exchange for crypto?

thats the problem there are not enough retailers accepting crypto and i do agree that hodling is not what Satoshi meant for bitcoin
it has become a speculative tool because of the volatility of the markets.

It may look a bit counterintuitive and likely it is but retailers and merchants are not accepting crypto because there is not sufficient demand for such payments. Yes, you and a few other people would love to pay with their coins, but this is nowhere near enough. We need mass demand for crytpopayments to push cryptocurrencies toward mass adoption in the real sector. Merchants are not fools, and if they see crowds of people wanting to pay with crypto, they will start to accept it. If they don't, someone else will.

A lot of people seem mistaken on this and think the retailers are doing it because they're anti-cryptocurrency, these companies aren't anti anything as long as it's profitable for them, everything is a business decision. It's going to take years of stability until people begin to spend bitcoin in place of FIAT, right now given the historical uptrend everything you buy becomes much more expensive a year down the road.

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March 23, 2018, 03:43:44 PM
 #11

It seems like only a small fraction of bitcoins as well as other cryptocurrencies gets earned while the vast majority of the coins are bought. But when people buy coins, they obviously aim exclusively at selling them later at a higher price, which is what speculation basically consists in because it makes no economic sense to buy a cryptocurrency to spend it on goods when people can easily spend fiat instead. However, if the price goes down, people aren't going to spend their coins either. And whenever someone complains about prices going down, the only reply they receive is just to hold to their precious bitcoins, no matter what the price could or would be. I have yet to meet anyone telling these bag holders to spend their stashes on something useful.

Apparently, the HODL mentality kills the currency aspect of Bitcoin.

Well you are not wrong at all I believe.  Cheesy

Holding got introduced few years later when the bitcoin was pumping hard and people thought about it as opportunity to lots of money via it. They started acting upon it as if the bitcoin is commodity in which they are investing their money and it can grow later on. This continues today also and it is on far greater scale than the previous one. This has led to locked out fund in the market cap and thus money is not moving here and there at all. You are right about the currency thing, if it has to be currency then it has to be moving all the time and be liquid asset like the fiats that we have around us.

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March 23, 2018, 03:52:45 PM
 #12

It seems like only a small fraction of bitcoins as well as other cryptocurrencies gets earned while the vast majority of the coins are bought. But when people buy coins, they obviously aim exclusively at selling them later at a higher price, which is what speculation basically consists in because it makes no economic sense to buy a cryptocurrency to spend it on goods when people can easily spend fiat instead. However, if the price goes down, people aren't going to spend their coins either. And whenever someone complains about prices going down, the only reply they receive is just to hold to their precious bitcoins, no matter what the price could or would be. I have yet to meet anyone telling these bag holders to spend their stashes on something useful.

Apparently, the HODL mentality kills the currency aspect of Bitcoin.

I guess not. Holding your Bitcoin or other crypto currency is a best way for them to earn in their investment. It would be dumb if you invest on something and you will not gain from it. If fell like selling your bitcoins at a lower price then go ahead and lead the pack. Just don't regret it in the future.

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March 23, 2018, 04:13:01 PM
 #13

Absolutely agree with OP's statement, I believe that movement is growth and hence I try to spend my 50% of Bitcoins and I hold rest of the coins. However as we don't have that kind of market environment where we can use our Bitcoins directly to pay the bills of goods and services so I have to rely on online services in most of the cases. We must understand the fact that Bitcoin is valuable today just because early adopters didn't hold their coins and they spent it as a currency and that's what Bitcoin is all about the core principle states that Bitcoin is a payment system and we should treat it in that way.

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March 23, 2018, 04:23:05 PM
Merited by paxmao (1)
 #14

You might find this an interesting read.

https://www.zerohedge.com/news/2018-03-16/bitcoin-bubble-or-hyperdeflation

It's a report about a research paper by Incrementum, an independent investment and asset management company.

The key point is they highlight 3 outcomes:

1.) Bitcoin Becomes A Store of Value
2.) Bitcoin Becomes A Store of Value and a Medium of Exchange
3.) Bitcoin Becomes Neither and Collapses

What you are observing is that at the moment Bitcoin is mainly a store of value (digital gold) and used a little as a medium of exchange (currency). It is very early to say where it will end up but I'd back scenario 2 in the long run.



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March 23, 2018, 04:29:35 PM
 #15

That is right . This way the essence of bitcoin and the reason why it was inceptioned is fading everybody . Everyone aims too hold it until it gets a good price and then sell it for a good amount of money . The major reason behind it is that most of the people don't have the other option of holding it and using it in place of money . Then why would they hold it if it is of no use ? Fiat and other legal factors won't let bitcoin fulfill the reason of its establishment .

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MAJICOIN
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March 23, 2018, 04:35:28 PM
 #16

Bitcoin currency holding is beneficial and it is not causing any disadvantage to the holders if the user follow the holding strategy then this mentality is depend upon him and this is not the fault of the person this behavior change over time and the people are loving this currency because now those who have purchased bitcoin at $15000 they are not willing to sale these at the present time then the holding in this time is good and the users are happy with this instead of panic sale or cash out.

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Minnie1928
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March 23, 2018, 04:47:25 PM
 #17

Spot on and I don't think that will ever change, it's why I see bitcoin as becoming more in line with gold that is spendable. It won't be used as a daily currency but more for one off purchases etc. Unless the price was relatively stable this will always be the case.
The article is actually stating the truth. Bitcoin is not what it was meant to be by the original vision. The current fluctuations are currently only profit opportunity and the stable Bitcoin is far away.
I don't know if we will ever see the Bitcoin becoming the stable currency used by all. For that to happen value must jump even more but the current progress on the market isn't promising.
Holding is actually recommended but for the Bitcoin core, it is actually destroying it for a long term.

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dothebeats
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March 23, 2018, 04:59:43 PM
 #18

One reason I see is because merchants also don't want to receive payment in bitcoins, either, so this is some kind of a stalemate from the consumers and producers since neither doesn't want to make the first move. True that the currency aspect of bitcoin is trailing behind its speculative nature, but if there were more merchants willing to accept this currency--not just confined into online stores but brick and mortar stores included--then there is a possibility that this would be used widely by people who have them and looking for alternatives that are cheap and convenient at the same time.

Canis Majoris
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March 23, 2018, 05:00:18 PM
 #19

You might find this an interesting read.

https://www.zerohedge.com/news/2018-03-16/bitcoin-bubble-or-hyperdeflation

It's a report about a research paper by Incrementum, an independent investment and asset management company.

The key point is they highlight 3 outcomes:

1.) Bitcoin Becomes A Store of Value
2.) Bitcoin Becomes A Store of Value and a Medium of Exchange
3.) Bitcoin Becomes Neither and Collapses

What you are observing is that at the moment Bitcoin is mainly a store of value (digital gold) and used a little as a medium of exchange (currency). It is very early to say where it will end up but I'd back scenario 2 in the long run.

Myself, I can't possibly accept this view, to wit, that Bitcoin is a store of value. If you bought the coins at 19k and right now you keep them at half that price, it is anything but a store of value. You are a bag holder by any appropriate definition, and someone who tries to persuade you to the contrary is either delusional or a hypocrite of the highest caliber. Comparing Bitcoin to gold is actually a disgrace to gold.
xdrpx
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March 23, 2018, 05:02:48 PM
Merited by paxmao (1), Canis Majoris (1)
 #20

There was a time when there were advertisements on /r/bitcoin and people used to consider Bitcoin as "Magic Internet Money". There were discussions on Bitcoin transaction fees vs that of Western Unions, people performing micro transactions and tipping each other (Changetip) and discussions on how remittances and sending Bitcoins via SMS would be possible. All of these changed when the price of Bitcoin started rising sharply and countries Governing bodies started classifying Bitcoins as cryptoassets or some form of "stock" or "Derivative" to trade as. This switch in thinking and rise in price (sometime in 2016-2017) lead people to "HODL" through it and it's a common technique used for a "Get Rich Quick" cycle. I think the current dip is price is an excellent price correction and I feel when there's more stability in price, there's lower transaction fees and less panic transactions happen. This should allow people to transaction more and I believe as long as the price of Bitcoin comes into factor (with a possibility of a rise) there's always the possibility that people will save rather than spend.
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