I AM HODLING.
At 10:03 a.m. UTC on Dec. 18, GameKyuubi posted “I AM HODLING,” a drunk, semi-coherent, typo-laden rant about his poor trading skills and determination to simply hold his bitcoin from that point on. “I type d that tyitle twice because I knew it was wrong the first time. Still wrong. w/e,” he wrote about the now-famous misspelling of “holding.” “WHY AM I HOLDING? I’LL TELL YOU WHY,” he continued. “It’s because I’m a bad trader and I KNOW I’M A BAD TRADER.” (Investopedia)
HODL soon became a byword for an approach to cryptocurrency investing that shuns trading based on short-term price moves. This approach mirrors GameKyuubi’s rationale: novice traders are likely to botch their attempts to time the market and lose money or make less than they would simply holding onto their coin. (Investopedia)
Bitcoin mining is done by specialized computers. Their job is to maintain the ledger of transactions and to secure the network. Transactions are processed in blocks. The average block size is about 1.3meg, with a rough average of about 2,200 transactions per block. The median time taken to process a block is about 10 minutes.
Back in 2009, when Bitcoin was introduced, Miners were paid 50 Bitcoins for every Block processed.
The concept is that after every 210,000 Blocks mined, the reward paid to miners is halved. So, after 10,500,000 (210,000 x 50) were mined, the reward paid to miners was halved to 25 Bitcoins per block. This reduction in rewards is known as halving. The first halving occurred in November 2012.
The last halving occurred in May 2020, where the reward per block is now 6.25 Bitcoins per block. The balance on issue, as of 8th February 2020, is 18,623,587 Bitcoin valued at USD 856 Billion.
The average daily mined Bitcoin is 977 BTC. At $46,000 per BTC, the daily revenue being paid to miners is about $45 million per day. Transaction fees are also being paid, currently in the region of $4 million per day. The total value of block rewards and transaction fees paid to miners is around $50 million per day.
Clearly, even though BTC rewards are halving, miners have been able to maintain their revenue due to the increase in the price of BTC.
Daily transactions are between 300,000 to 350,000 per day, making an approximate cost-per-transaction of $140.
The cost of transactions is not apparent to users since miners are predominantly paid in issuing of new BTC. With halving occurring every 3 to 4 years, mining revenue needs to be either supported by increasing BTC prices and/or bigger transaction fees. Still, $140 per transaction is not cheap.
With Tesla announcing their investment of $1.5 Billion into BTC and saying that they will accept BTC for the purchase of their vehicles, the cryptocurrency is certainly moving into mainstream acceptance.
With Global debt approaching $277 Trillion (https://www.reuters.com/article/us-global-debt-idUSKBN27Y239), and Bitcoin approaching $1 Trillion in value, the Bitcoin life raft will not save many souls. Which is probably why a seat on the raft is getting so expensive.