Mike Burr - log

[BT®] The Burr Effect

Suppose there is a sound technology that is in use, is growing in use, has zero to no history of serious flaws, and is maintained and enhanced by an ever-growing number of people around the world.

For convenience, let's call the technology "Ethereum".

There are two kinds of stake hodlers in Ethereum: those who see a speculation market for the hot new thing and those who understand the loooong time horizon value proposition.

Some of the people who say #diamondhands and all that are people in the latter category, some are people in the former category who know the chants, "hodler now, hodler always!! always hodler!!" and so forth.

Some sayers of this stuff are not stake holders at all but rather just like a good pep rally. Their derivative is "social belonging".

When Ethereum goes from $3500 to $2741 and then back up to some big dollar value again, and on and on with the steep hillsides, we have a shakeout.

Those who understand keep hodlering of course. Those who don't and instead think the ride is about to come to an end* sell eventually, for any given person, there's a shakeout pattern that exists. If tomorrow morning you awoke and saw that the price was $400/ETH and could confirm this in the news and were able to construct some narrative that explains what's going on and implies that this is the end...would you sell? Even if not, we could construct a price history that scares you into selling.

Everyone has a price, but there should be a correlation between at least faith in Ethereum and one's ability to hodl on during the tight turns and steep dives.

Further, those who are shaken out are probably more timid about getting back in. They will watch the price go up with great skeptisism until it's too late, you are no longer happy with the buy-in price and now think there's a plateau.

Ergo, the more movement there is and the more abrupt the movement is, greater number of True Believers left hodling, at least as a fraction of all hodlers. Note that we are not talking about the quantity of money. We are talking about profile of "the average ETH hodler". Or maybe more accurately, we claim to be able to say something about the demographics of the participants: the weak get shook out ever more. [wtf is 'we'?]


Of course I have no idea if any of this is accurate or whether it's actionable at all.

One could make the case that having provable history as a diamond hand has its own cash value. Mmaybe?

It may also be true that there will be fewer participants overall, possibly giving you more influence as an actor, to some degree independent of how much you have.


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