Bitcoin, gold, and cash are all store of value options that can be buried for long periods of time, but only Bitcoin requires active participation to maintain its value. Bitcoin’s network relies on miners to process transactions and secure the blockchain. With transaction fees and block rewards declining over time, the network needs constant activity to remain secure. HODLers who simply hold their coins without participating in transactions are not contributing to the network’s security.
To address this issue, a proposal for a HODL_FEE has been suggested. This fee would be charged to addresses that have not had any activity in a year and would be based on 50% of the median transaction fee from the previous two weeks. The HODL_FEE aligns incentives for miners to maintain the network integrity even when transaction volumes are low. It also helps clean up small sat balances in dormant addresses, unlocks lost coins, tests owners’ keys, and encourages network usage.
While the HODL_FEE has many benefits, there are also arguments against it. Some view it as a tax that goes against the libertarian ethos of Bitcoin. It may also reduce anonymity by encouraging more transactions and consolidating holdings into fewer addresses. Additionally, it could create unnecessary transactions that may require increasing blockspace to process efficiently. Despite these drawbacks, the HODL_FEE aligns with the Bitcoin ethos of Proof of Work, where ownership alone does not confer benefits.
In conclusion, the Bitcoin network requires active participation from all users to maintain its value. The HODL_FEE proposal offers a fair and intuitive way to compensate miners for securing the network. It encourages HODLers to engage with the network through stacking and spending, while also rewarding miners for their efforts. Overall, the HODL_FEE could help ensure Bitcoin remains a stable store of value for the long term. It is a practical solution that aligns with the fundamental principles of Bitcoin and may be worth considering for further development.
