HODLing is just stagnant wealth. Change my mind.
Discussion
I agree! We will sooner or later need to start moving that HODL mass thru the economy. Would just like to see it passing between the people (Bitcoiners), not thru Wall Street.
Lots of controversy in the community about privacy being the reason for HODLing. I think that reporting my bitcoin on my taxes and having the freedom to trade transparently is a more profitable strategy than holding on to bitcoin that I may have acquired illegally to pass on to someone else. I get it, People holding coins from the beginning were breaking laws left and right, But without increasing my stack over time I am just as stuck as someone on a fixed income. The dream of the original bitcoiners was to abolish central banking, And the reality is that bitcoin is another layer in central banking. I move bitcoin occasionally but I spend dollars every day. I am pretty sure I could find a business that would accept payments in Roman Aureus. Fiat will become less relevant, But it will never go away completely.
I’ve talked to couple local small businesses recently in my neighborhood. Mostly Pubs, and restaurants. Some won’t take a credit card any longer, and some are adding 3.5% on to the bill to take the credit card. There margins are too tight to take the hit the credit card companies are charging them. On top of that, some have to wait between 30 and 60 days to be paid by the credit card company. Creates cash flow problems. If you tip on the credit card, the staff has to take it on their paycheck. They wait for that too. They also suffer income tax on those tips. Credit cards are real convenient. That’s why we use them to buy stuff. Watch out however, if you do not pay them off right away. Get yourself in loads of bad debt if not handled responsibly.
OK then, back to cash. Dirty stuff. Half the folks out there handling it don’t know how to make change from a buck any longer. Easy to loose it. Woops, left a $20 on the bar instead of a ten, or something fell out of my wallet when I was pulling other stuff out. Can’t remember where I spent that stuff.
All out now. Got to go back to the bank and get some more.
How about if the merchant took Bitcoin on the Lightning network. They get it instantly. You could tip the staff separately. They would not have to report it, and they get it instantly. The merchant would not have to charge you more to use Lightning payment. You pay a couple SATs when you make the payment. Peanuts compared to the credit card company.
The merchant can convert to cash instantly to pay his bills with Strike or CashApp if needed. If he has more in his account than he needs to pay his bills, he can let the balance ride on the Bitcoin network, and earn more than he can in his fiat bank account.
I know, Venmo and PayPal are attempting to make it just as easy. However, their fees are higher, and you run into issues at the end of the year with reporting who and why you spent or received money. Then did you pay sales taxes on something you bought from somebody. Here we will deduct it and send it in for you. And for that you need to have these accounts tied back into your bank account. Sorry, too much bull shit for convenience for me.
I am however in agreement with you. Bitcoin does not need to abolish the Central banking or banks in general, or Fiat for that matter. They can live together. People will gravitate naturally to the system that suits them best. It’s good that these systems need to compete with each other. Makes them all better in the long run.
The trouble with the Lightning network is that it becomes an expense. Maintaining channels is laborious, And force closes are an issue when you have channels open for more than a few days. I really feel Bitcoin has a role as an asset more than a means of transaction. The consumer mentality around instant payments works only for people who are not doing formal business with each other, Just casually spending. If I care enough a 1 hour confirmation process between myself and someone I am involved with financially is not a big ask. It’s when I don’t care that I want instant payments, And I try not to use bitcoin for things I don’t care about. Maybe a few wallets maintaining these channels becomes the lightning network, Asinq is the largest and Phoenix wallet is their product. I have always used Muun and had good functionality. I would only want to run my own channel in an event, Concerned around privacy, And only for a short time.
Running an umbrella lightning channel with 4 or 5 connections for 3 or 4 years now. Never a problem.
How much volume and how many transactions?
Not a lot. Transaction incl. tipping, bitcoin games I play winning Sats, and moving Bitcoin around in wallets
I think there is a fair amount of channel pwning that goes on. In my opinion the Lightning network needs 10 years for adoption before it is reliable and accessible by most people. Restaurant owners usually don’t do their own backend work on POS systems. Probably a job opportunity in there somewhere.