This is a question all HODL'ers must really ask themselves. While many people are making money daily engaging in cryptocurrency arbitrage, the HODL'er clings to a future someday. The FOMO is great in those who HODL. They believe someday their one Bitcoin will be worth a million dollars. They need do nothing but Hold On for Dear Life as the volatile price rollercoaster tries to buck them out. Sometimes HODL'ers are seen as brave as they hold stoically through every downward dive. They are unmoved in the face of immense loss because they are in it for the long run. But are they really brave when FEAR is actually their main motivator? It is the Fear of Missing Out which keeps the HODL'er in the game. If they get out to take the profit, how will they get back in if the Bitcoin train leaves the station for good the next time the price shoots to an ATH. Recently, as Bitcoin's price blew through all-time high after all-time high like a juggernaut to break $40,000, it did appear to be an unstoppable freight train. HODL'ers think this is what I mean by Bitcoin is a locomotive. HODL'ers believe Bitcoin has reached a critical mass and it truly is the unstoppable locomotive which will deliver them to the promised land. This is not what I mean though. It is an analogy in the context of the railroads bringing in a new powerful age of commerce to the nineteenth century. Goods could be transported in large amounts over distances never before imagined. The railroad itself was the true money-making enterprise which ushered in a Gilded Age. Yes, you needed locomotives to pull these immense weights, but it was the rail lines which the locomotives ran upon. These were most lucrative, not having a locomotive. In the cryptocurrency world, the blockchain represents the rail lines in this analogy. If Bitcoin is a locomotive in this scenario, the HODL'er must worry if they are holding onto some version of the . The which was functional and had "some" utility. However, it hardly is what became the standard and what now comes to mind when someone says steam locomotive. DeWitt Clinton DeWitt Clinton was an early locomotive Quantum computing represents an existential threat to cryptocurrencies unable to adapt to the encryption breaking power of a quantum computer. Of course, there are quantum resistant algorithms. Perhaps the Bitcoin source code will be rebuilt and all the miners will agree to an update of the algorithm. This is surely a possibility; all HODL'ers agree Bitcoin can be hardened against quantum computing attacks. What you say? You did not realize the Bitcoin code could just be changed. You thought all this stuff Satoshi put together was immutable and unchangeable. That was why you were HODL'ing? The Bitcoin cap makes  the scarcity of the asset worth more in the future. The are proof of this every HODL'er assures us. halvenings Cryptocurrency ecosystems are kept alive by mining activities. Bitcoin's supply is capped at 21 million coins, so unlike a fiat currency Bitcoin has a capped supply. HODL'er confidence and faith in this cap is unwavering. Unfortunately, no one actually knows what will happen when the cap is hit and no more Bitcoin will be rewarded for mining. The idea is that the network will be self-sustaining by this point. Transaction fees are expected to compensate node operators since mining will no longer yield coins. However, it is possible miners may flee the Bitcoin network for more lucrative currencies. This could make the dreaded 51% attack more possible. It is also possible the Bitcoin source code could be changed to allow for more than 21 million coins. I do not feel like miners would object to removing the cap unless there is a very lively ecosystem supporting large transaction fees. When the cap approaches, are transaction fees sufficient at this point to support a truly robust decentralized network? HODL'ers never talk about the fact the source code can be changed or that the miners wield enormous power over what changes make it into the system. This is why the recent double spend of $21.00 is really a minor annoyance at most. It appears this may not have even happened but if it did somehow occur, the bug will be found. Once identified, everyone will agree double spending is bad and the source code will be updated. We can bolt anything we want onto our DeWitt Clinton locomotive, but will it really pull more? I certainly believe . However, the actual use case for Bitcoin remains to be seen. It is possible it becomes the tool of banks and nations to transfer large value blocks, but where does that leave the price? cryptocurrencies have a value proposition If central banks or nations want to leverage cryptocurrencies in this way why would they also want to make the into the richest men on the planet in the process? Winklevii The future of Bitcoin seems very cloudy even though the future of blockchain seems clear and bright. The Bitcoin use case is damaged by the huge holdings still controlled by just a few players. As the price of a single Bitcoin approaches $100,000, the distribution of Bitcoin among just a few hands will become very problematic. At any point(s) on the path to this price, the can cause a price dump to simply reacquire the position at a lower price. BearWhale Banks and nations will not be played as fools when there are so many other competing cryptocurrencies to run on the blockchain. Ripple has run afoul of government regulators. China has a national cryptocurrency and could easily make Bitcoin illegal at any point. Janet Yellen has also talked about "curtailing" cryptocurrencies, so HODL'ers could wake up to a Janet tweet telling them the Treasury has nationalized the Bitcoin supply. The HODL'er may seem brave and courageous during casual cocktail party conversation in the face of savage downturns in price. The aforementioned things can make HODL'ers nervous. If you want to see a HODL'er start to get weak in the knees, point out to them the cap is not really as hard as they think it is. What the miners want, the miners will get. For the most part this has been good for Bitcoin, but it need not always be the case for the HODL'er. At the hypothetical cocktail conversation, follow up with the DeWitt Clinton analogy. Point out to them how Bitcoin is a bit long in the tooth, while Ethereum grows and supports a use case. is even more formidable. Ethereum looks like it could be the equivalent of a diesel electric locomotive to the Bitcoin steam engine. Ethereum 2.0 HODL'ers have no good answers to the above questions, because NOBODY does.  Cryptocurrencies are the WIld West, baby. Keep your head screwed on and wear a sidearm at all times! Somebody is always trying to rob the damn train. LOL The opinions in this article belong to the author alone. Nothing in this article constitutes investment advice. Please conduct your own thorough research before making any investment decisions. Disclaimer:

fees

Fomo

5 Reasons Why We Dont Need To Worry About the SolarWinds Hack

Questions For The Most Controversial Hacker Of This Generation: Sabu

You have to code, if you want to KNOW!

Book a call

2021 - HackerNoon Contributor of the Year - FUTURISM

Nominated for 2022 - HackerNoon Contributor of the Year - Proof Of Stake

Nominated for 2022 - HackerNoon Contributor of the Year - Politics

Nominated for 2022 - HackerNoon Contributor of the Year - Bitcoin

Nominated for 2022 - HackerNoon Contributor of the Year - Science Fiction

Nominated for 2022 - HackerNoon Contributor of the Year - Crypto Adoption

Nominated for 2022 - HackerNoon Contributor of the Year - Cryptocurrency

Too Long; Didn't Read

CTA: Download the FREE AI Productivity Shift report

Is Bitcoin a Locomotive?

Is Bitcoin a Locomotive?

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

Untitled Story

Why It's Important to Preserve Encyclopedias for the Future

06/02/2018: Biggest Stories in the Cryptosphere

06/09/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

0 to Pro Crypto Trader: Your Ultimate Guide to Bitcoin and Altcoin Investing

Why It's Important to Preserve Encyclopedias for the Future

06/02/2018: Biggest Stories in the Cryptosphere

06/09/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

0 to Pro Crypto Trader: Your Ultimate Guide to Bitcoin and Altcoin Investing

Light-Mode

Classic

Newspaper

Dark-Mode

Neon Noir

Minty

HN StartUps