There’s a missing piece most people don’t talk about, but I personally love: without transaction / block space demand long term, the network actually becomes unstable (as the block reward dwindles). So eventually there’s also this paradoxical incentive to want everyone to have some and transact with it as well or else it sort of collapses in on itself.
Admittedly this is probably a tough landing to stick, but it does hint at the next stage of the game where all the big hodlers are forced to coordinate / incentivize BTC based economic activity or else see their valuable reserve go haywire with volatility.
There’s nothing comparable to this in history… a sound money that rehypothecates itself thru proof of work. So we’re in for a weird ride IMO- and I’m skeptical of anyone who claims to know exactly how it plays out. If it works, we’ll all be forced to adapt in ways our species has never seen before. I hold naive hope it will be beautiful, but this long game transition is definitely not talked about enough and your questions are valid.
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yeah @mister_monster has been telling me about that.
essentially the design choices Bitcoin has made incentivizes hodling.
but hodlers don't pay for network security.
its kinda a big problem.
and since bad money chases out good money,
its easy to see a scenario where large, powerful players use violence to monopolize the network,
and issue a shitcoin (Backed By Bitcoin ™) for people to actually use for txs,
while they hoard the actual capital.
And nobody actually wants to SPEND their BTC anyway so there's not a lot of incentive to resist.
but like you say
its uncharted territory.
¯\_(ツ)_/¯
Hmmm, interesting take on how it plays out. My view has been the same problem you describe, but that there's no solution, that network security reduces as it becomes less profitable and with it, value of the network and therefore the price of coins. But, if a consensus can form as that happens to incentivize use of the network for transacting, you're right. I think though that that consensus will be difficult to accomplish, you'd need bigger blocks for that, you'd need an uncapped supply for that and you'd need all the stakeholders betting on second layer solutions to get screwed. Seems like a long shot to me, that's an understatement.
Yep. I have thought about this too.