Confidence Crisis: HODL on to Your Horses

Intro

There seems to be no end to the current cryptocurrency bear market. Widespread capitulation with no real end in sight. The only mistake people have made is to assume that the bear market only started when crossed $6000. The bear market started right off the top of $20000. Obviously you could not accurately call the top and say this is where it begins back in January. But today we can look back in confidence and say “this is the top and this is where the bear market began”. 

Bitcoin moves in extremely fast and volatile cycles compared to traditional assets. It saw its peak and potentially will see it’s trough in 2018, from January to December. Right now, everything is speculation. Nobody will see the bottom until a few months after it has been made. This kind of movement is exactly what Bitcoin and the entire cryptocurrency market needed. While it is indeed sad to see people slipping into depressive bouts because of the loss of their investments, the real investors with long-term intent are seemingly unfazed by this. This is because when you understand the mechanics of cryptocurrency and promise it brings backed by a decentralized system (Blockchain), it is evident that systems of this sort are indeed our future. Since the introduction of Central Banks, confidence in them has probably been at an all-time low as of today and will be even lower tomorrow. The recognition of a single point of failure in our banking system has led to the incredible adoption of cryptocurrency at such an early stage. 

Is it time to HODL or FODL?

Adopting cryptocurrency is very different from adopting fiat during the early days of the dollar. There is no central system in which you can place your faith and blindly go about business. There is no central organization telling you that this is the only way to go about transacting and making a living. The success of centralized models can be attributed to basic human psychology; the unwillingness to accept accountability. Humans hate accountability and will go to great lengths to eliminate this, including putting their money and assets in the hands of unknown people and corporations. In 2008, none of the subprime borrowers would have thought “maybe I shouldn’t have borrowed money I couldn’t pay back”. They all thought “these damn banks ripping off people like me to make a quick buck”. So in their minds, the solution is to be sought by banks, not by themselves. Even people who weren’t directly attributable to the housing crisis just sat back and allowed corporations and governments to dig themselves out of the hole. They never thought about finding a solution to this messy system where your assets are given to banks to do as they please. One person or group of persons saw the flaws and thought that they must find a way to fix this. And that person or group is today referred to as 'Satoshi Nakamoto'. 

The failures of today will lead to the success of tomorrow, as Andreas Antonopolous said: “Every day we fail to scale for tomorrow but succeed in scaling for yesterday”. This embodies the continuous process of evolution and improvement every single process goes through. By taking the accountability into our own hands, we close the need to rely on certain entities to do everything for us, that includes creating problems and finding solutions. The subprime borrowers were in no way knowingly creating an economic crisis, they were simply taking advantage of the system, or so they thought. 

So this is my call to all cryptonauts; don’t let the confidence crisis of today deter you from opportunities that could embolden and secure you. I personally entered the market purely for speculative gain, but as any trader and investor, I decided to study the underlying tech and the real potential behind decentralized systems. I bought Ethereum at $1400 and I still held on to it because what I see isn’t just an asset falling 95%, it’s a mechanism for me to enter contracts without fussing over whether the other party will hold their end of the deal and a system to create digital securities and applications. So if you saw the promise of this market, but the price movement has made you question your decisions, take a step back and think about where you see the market in 5 years. If you see it being nothing, go ahead and liquidate your holdings, but if you see the potential and promise of a trustless economy, you know what to do.  

- AB

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ReverseAcid Monthly Recap

• ReverseAcid Monthly Recap - November 2018 (Vol 1)

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Crypto Analysis Series

• Part 1 - Basic Attention Token and How It's Revolutionizing the Internet
• Part 2 - Golem Network Token as a Potential Giant Killer
• Part 3 - Augur and the Future of Decentralized Predictions Markets
• Part 4 - Dogecoin - Such Meme, Much Value

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Previous posts:

• Bitcoin Technicals: In Depth Breakdown of the Current Move
• The Scalability Trilemma
• Online Retailer’s Incentives for using cryptocurrencies as a medium of exchange
• Bearish Sentiment is Almost Gone: Bitcoin Technical Breakdown - 21 November 2018

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