The Habits Of Highly Effective HODLers

Magazine

As the title suggests, I’ll go over what I believe makes a good Bitcoiner with the hope of persuading you that being a HODLer is actually an important job that entails certain responsibilities.

The outline roughly will be:

The philosophical prerequisites of the HODLer’s mindset
Impediments to adopting a personal bitcoin standard
Practical takeaways

Let’s go.

We have an important role as Bitcoiners to always be orange-pilling, but to do so in a way that’s constructive, and that means being sensitive to the reality that not everyone is ready to hear what we have to say.

We recognize that becoming a Bitcoiner often results from a set of philosophical underpinnings or dependencies. Someone lacking in one or more of these prerequisites will likely face obstacles along their journey that make adoption difficult. The fact that not yet everyone is onboard with bitcoin is testament to this difficulty.

There are other impediments to adoption beyond a mere conceptual understanding that can usually be traced to conflicts of interest. We believe in time these too will give way to a more free and open financial system based on voluntary cooperation. It’s our job to bring bitcoin to the world with the least number of casualties along the way and to remind people that bitcoin is available to everyone equally.

Studying bitcoin, I asked myself why some people aren’t profoundly astounded by it, or worse, feel an aversion to it at first glance. There are the usual FUD talking points that could scare you away if you don’t know any better, but this fud doesn’t seem to have a real effect on the HODLers. It soon became apparent that it is nearly impossible to have an appreciation for bitcoin if you don’t already see the shortcomings of the existing financial system.

It is the distinguishing qualities of bitcoin HODLers that prompted them to break allegiance from the old system and led them to demand a new one. Interestingly, the gold bugs warned us that the loss of sound money would eventually end in catastrophe. In a sense we owe it to them for sounding the alarm. However, the sound money narrative had to evolve beyond precious metals to reflect a digitally connected world.

The gold bugs, the Austrian economists, and other sound money advocates grew accustomed to being quietly swept into the corner of public discourse because of their tendency to be critical of mainstream economics. To regular folks the path of least resistance is to embrace the fiat system, as we’ve been so assured that the system is in good hands. However, those who seek financial autonomy, who crave logical integrity, and who value saving may find the trade-offs made in the fiat world to be intolerable.

Let’s dig a little deeper to see what sets apart a true Bitcoiner from the rest of the pack. As I alluded to, Bitcoiners not always but generally tend to lean libertarian, even anarchist in some cases. There is a tension between the concepts of personal liberty and state-granted permission. Bitcoiners tend to be skeptical of propaganda and corporate media which points to a fundamental divide in where we personally derive our human rights. Are we endowed with unalienable human rights, or are we granted rights by the state so long as we’re in good standing with the various bureaus, branches, and departments?

Skepticism when wielded properly is not just aimed at the media out of spite or for the heck of it. Rather it is a tool for reasoning that applies to all areas of life. It is simply the default m.o. when encountering new information. A rational person applies a healthy degree of skepticism whether dealing with science, business, or politics. Along the same lines is a need for logical consistency. Bitcoiners demand intellectual honesty and accountability from both our peers and our critics.

Bitcoin tends to be popular among tinkerers, early adopters, and gamers. Bitcoiners are always trying to think two steps ahead, they’re good at reading between the lines, and analyzing the second and third order consequences.

Finally, to be a good HODLer one generally has to have a propensity to save money. That may go without saying, but it just can’t be over emphasized. In a world entirely founded on credit, bitcoin challenges the conventional advice around debt and borrowing.

There’s a common denominator that ties together many of these characteristics which is what bitcoiners call low time preference. Put simply, it means they place little value on short-term gratification, opting instead to work toward long-term goals. To be fair, everyone has to put food on the table, so we can’t pretend it’s realistic to delay gratification forever, but what we can do is make decisions about what will satisfy us today and what is worth waiting for. Bitcoin takes saving to a whole new level. We suddenly realize our everyday decisions to spend and consume carry a lot of weight when judged against the opportunity cost of owning bitcoin. It’s common for Bitcoiners to undergo profound behavioral changes in the interest of saving. It might seem an excess of savings would lead to issues when it comes to stimulating the economy and the velocity of money, however the inflation/deflation debate and the mandate of perpetual growth are subjects that remain to be fully hashed out.

For these reasons bitcoin tends to resonate strongly with people who are motivated by things like math, economics, and game theory. But not everyone is wired that way; in fact, many people are not. People are motivated by all sorts of things, not the least of which are food, shelter, and love. Bitcoiners wouldn’t have the luxury to opine on monetary sovereignty if their basic needs were not met, which sadly is not the reality of large groups of people in the world.

But assuming one has the bandwidth to begin to understand bitcoin, that’s still no guarantee they will see any value in it if it doesn’t quite scratch their itch. A mere lack of education is easily fixed, but they say it’s hard for a man to learn something if his job depends precisely on him not getting it.

It’s hard to see the benefits of bitcoin if you don’t already see the problems with centrally controlled currency. Not surprisingly people tend to feel safest knowing their dollars are in the bank and insured by the Federal Deposit Insurance Corporation (FDIC). What is interesting is that bitcoin HODLers feel the exact opposite — they view using custodians as more risky than not, and that’s what makes this topic so fascinating. Sure there will still be trusted third parties going forward, but the choice of whether to use custodians wasn’t a choice we had before bitcoin.

The harsh truth is that the people who are most privileged by the financial system are the hardest to convert because they arguably have the most to lose from jumping ship. The persistence of the fiat machine relies heavily on the “Cantillon” class who are incentivized to bring ever more minions under their purview. And what’s a more powerful tool of persuasion than the money printer itself?

This is why we see the most pushback from wealthy bankers and money managers, the likes of Jamie Dimon and Ray Dalio. Not surprisingly, the most fearful rhetoric comes from the upper echelons of central banking. Central banks are supranational entities that have subtly extracted themselves from nearly all oversight and so must express a distaste for anything they don’t have a hand in. They then defend their position as the self-appointed arbiters of financial stability. The sentiments of central bankers toward bitcoin is rather telling of where their interest truly lies. Fortunately, bitcoin doesn’t need the approval of the immovable incumbents; their competitors in rising economies will adopt a bitcoin standard, gradually then suddenly setting off a global fomo. One by one, they come to the light, or they go the way of the dinosaurs. In bitcoin we say everyone gets the price they deserve.

I can…