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Dan Hedl @danheld
, 25 tweets, 7 min read Read on Twitter
1/ Hodlers are the revolutionaries. A reflection on the important role hodlers play in developing Bitcoin’s network (and other cryptocurrency networks).

For a deeper dive please read my Medium post: medium.com/@danhedl/hodle…

For the TL;DR, check out this thread 👇
2/ “In the beginning of a change the patriot is a scarce man, and brave, and hated and scorned. When his cause succeeds, the timid join him, for then it costs nothing to be a patriot.” - Mark Twain
3/ Satoshi published the Bitcoin white paper on 10/31/2008, one month after the collapse of Lehman Brothers sent a shockwave through the financial system. Bitcoin was incepted in a time of absolute necessity. Trust had been lost in a world that ran on trust.
4/ “The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” - Satoshi Nakamoto
5/ Bitcoin was created to build a new financial system, one that didn’t require trust, which adhered to principles of sound money.
6/ But Satoshi needed to bootstrap the network with an incentive mechanism - the block reward which (a) controlled currency supply of Bitcoin and (b) created an incentive for people to participate in the network
7/ “Over and over again, the financial system was, in some narrow way, discredited…. the rebellion by American youth against the money culture never happened” - Big Short
8/ Satoshi built Bitcoin for the believers in new financial system, the hodlers, the revolutionaries. “It [Bitcoin] has the potential for a positive feedback loop; as users increase, the value goes up, which could attract more users to take advantage of the increasing value” - SN
9/ “Hodling bootstrapped bitcoin into existence. Hodling increases value, which increases demand, hash rate, and network security, which, in turn, attracts new hodlers and devs. Self-reinforcing feedback loop drives bitcoin’s network effects, security, and value”- @TobiasAHuber
10/ Early hodlers believed in Bitcoin despite overwhelming negativity and false information (ex: labeled as a currency for money launderers and drug dealers, price fluctuations). Hodlers had stronger risk appetite to weather the volatility of being a first mover
11/ They’re practitioners of skin in the game

"Don't tell me what you think, show me your portfolio."- @nntaleb
12/ “Holding bitcoin is the exact opposite of speculation. A trade can be called speculative when the incentive for buying/selling is merely based on market sentiment. You hope to sell the product for profit despite the fact that it did not accrue any intrinsic value for society"
13/ "Holding of money does not have this downside, rather the opposite is true. By holding money you invest in the economy as a whole. Every time you choose to retain money you decrease the available amount in circulation. This leads to the increase of purchasing power per unit”
14/ “The result is that prices fall and all participants in that economy become wealthier. By holding Bitcoin the price per unit increases. The more people hold Bitcoin in the long run, the more volatility drops towards a gradual increase in price.”
15/ “This convergence towards a stable increase in price makes Bitcoin more attractive to new audiences” - @Willem_VdBergh
16/ The increase in Bitcoin’s price has corresponding virality. And as it expands, hodling becomes popular with people with a lower risk appetite, pulling in more and more network effect into the Bitcoin black hole - @robustus
17/ With each of those boom/bust cycles we’ve seen Bitcoin redistributed from old hodlers to new hodlers via selling, decreasing the Gini Coefficient. In 2017 alone, we saw 15% of all BTC move out of old hodler hands
18/ “Slowly, but surely, Bitcoin creeps further and further into the psyche of those in charge” - @real_vijay

Via the Lindy Effect, the longer Bitcoin remains in existence the greater society’s confidence that it will continue to exist long into the future.
19/ “Protocols die when they run out of believers” - @Naval

The faith in a new financial system is what binds everything together. Bitcoin is not just a software project. It is a method of coordination for a large group of people who face extremely hostile/powerful adversaries
20/ “A stable and sustainable ideology must be the foundation of all cryptocurrencies. No amount of cryptography, or consensus protocol development will help a cryptocurrency with an unstable and bankrupt ideology. Stable ideologies allow communities to thrive”. - @kaykurokawa
21/ “Bitcoin is digital gold in the eyes of [Hodlers]. To some extent this group already operates on a Bitcoin Standard: investments are evaluated on their ability to yield a return in Bitcoin.”- @TuurDemeester
22/ By owning Bitcoin, you become the central bank, the backbone of the financial system. Hodling isn’t about finding another buyer at a higher price someday in the future, if hyperbitcoinization occurs you’ll never have to sell
23/ The capital markets will be rebuilt by hodlers. The annual rate of return on your Bitcoin is the risk-free rate, with additional layers of return per unit of risk. (Ex, the Lightning Network provides a framework to measure the time-value of or "LNRR.")  - @timevalueofbtc
24/ Bitcoin promises an alternative for citizens across the world to keep their savings in a form of money that can neither be confiscated/diluted. If Bitcoin grows much larger, it may force governments to become a voluntary organization. Through hodling we may finally be free
25/ Those who opt-in to Bitcoin are trading something abundant for something scarce, trading the past for the future, trading financial dependence for financial sovereignty vimeo.com/271929972
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