Consider a scenario where you plan a 100-year vacation and aim to preserve your wealth upon your return. You bury a safe containing:
– Gold bars
– $100 bills
– Bitcoin in cold storage
Upon your return, the gold bars will likely remain intact. However, the $100 bills will have decayed physically and lost their purchasing power, possibly becoming worthless.
The fate of Bitcoin hinges on the network’s activity during your absence. If transactions continued, miners secured the network, and your Bitcoin remains valuable. Conversely, if everyone stored their coins, transaction fees would drop, miners would struggle, and the network might weaken, rendering the coins worthless.
Bitcoin’s backbone relies on miners processing transactions and upholding blockchain integrity through substantial time and resource investments. Miners are compensated via transaction fees and declining block rewards, requiring ongoing transactions for network security.
From the outset, Bitcoin’s ethos dictates that network users actively contribute. Ownership does not confer privileges; instead, Proof of Work versus Proof of Stake is the guiding principle.
However, HODLers, who hold Bitcoin without transacting, do not contribute actively. They expect others to sustain miners’ compensation, diverging from Bitcoin’s ethos.
To address this, implementing a HODL_FEE could be pivotal. This fee would compensate miners from dormant addresses, aligning incentives and encouraging network integrity maintenance, even during transaction lulls.
The proposed HODL_FEE would:
– Charge addresses inactive for extended periods, adjusting based on median transaction fees.
– Clean up dust addresses with negligible amounts, directing substantial sums to miners.
– Potentially recover lost coins over time, albeit slowly, while prompting periodic key tests.
– Promote network usage by incentivizing stacking and spending, crucial for miner compensation and Bitcoin’s value preservation.
Critics argue the HODL_FEE introduces a tax-like mechanism, contradicting libertarian ideals. It could also impact anonymity and generate unnecessary transactions. Yet, proponents argue it aligns with existing financial custodial practices and reinforces Bitcoin’s Proof of Work ethos.
In conclusion, the HODL_FEE proposal aims to ensure fairness, simplicity, and network integrity, reinforcing Bitcoin’s value as a robust store of wealth.
