Different people take different approaches to digital currencies. Some of them, known as traders or traders, believe that buying and selling digital currencies is the best way to make a profit from them. Others, however, see digital currency trading as a risky game, arguing that in order to make a real profit from digital currencies, it is better to be patient and keep them for a long time, or so-called hoodle.
Wherever you are in the world of digital currencies, you are probably in one of these two categories, or at least one of these approaches is preferred to the other. Based on that Note Compiled by Mohammed Ayar, a technology writer, we will explain the differences between these approaches and the results of each.
Before beginning the article, it should be noted that the word “hoodle” (which we have used extensively in this article) is a common term in the bitcoin community, derived from a simple typo when writing the word “hold”. It is now often used as a “hodl” or “hodl”.
According to the author of the article, hoodling digital currencies is a destructive behavior that does not benefit anyone. At the same time, he disagrees with the constant buying and selling of digital currencies, or “short-term trading.” He proposes another method called “medium-term trading”, which has a longer time period than short-term trading and to do so must be “in the market ambush”.
Note that this article only examines one of the investment approaches in the digital currency market and should not be considered as an investment recommendation. Read more from the language of the author of the note.
Also read: The rules of being a Hoodler; Are you a Hoodler?
Hoodle damages the Blockchain!
I can agree with Gold Hoodle; But never with a digital currency hoodle!
You know that digital currency transactions are done without the need for banks and financial institutions and only on the basis of the Blockchain. Blockchain is a distributed, decentralized, public, non-censorship, immutable, and add-on digital general ledger. Do not worry about not understanding the term “filler only” additive; Its concept is simple despite its appearance.
«Just being a blockchain means that the Blockchainchain network is only updated when a new block is added. Each of these blocks also contains transaction information. In add-on systems only, no one can delete or edit previous information.
Hoodle’s problem is that it works to the detriment of the Blockchain, not to its advantage.
Hoodel literally means keeping digital currencies in the Blockchain for a long time. According to what we see on social media, the average hoodle period is 5 years. Some even increase this time to 10 years or more; Just like a retirement plan!
Unfortunately, the reality is that when users hoodle, they are destroying network transactions. If all users play the role of Hoodler, the blocks will be empty of the transaction. Miners are also forced to extract empty blocks that only contain Coinbase transactions.
Coin-based transactions are the first transactions of any bitcoin block that transfer the block mining bonus to the miner’s address. Even if the block is empty of user transactions, there is a Quinbase transaction in it.
The digital currency hoodle transforms the Blockchain from a peer-to-peer (P2P) network into a foreign exchange reserve fund, causing multiple damages to it.
Hoodel is actually turning the Blockchain into a bank; But no one needs a new bank; We are looking for a new financial system!
Hoodle harms digital currencies!
Bill Gates, Hoodlers, and digital currency punks believe digital currency is the future of money; Or at least they hope so. In contrast, others, such as Warren Buffett and politicians, completely reject the monetary nature of digital currencies. But I have a completely different opinion.
I personally believe that digital currency is money; But the common currencies of countries are not money.
Let’s read Aristotle’s comment on this. Aristotle introduces four criteria for good money:
- Durability: Good money must be able to withstand the passage of time and stay healthy forever;
- Portability: Good money should be easy to transport and trade;
- Divisibility and uniformity: Good money should be fungible (that is, my $ 1 bill should be worth as much as your $ 1 bill). One must also be able to break down and reassemble money in smaller amounts ($ 10 = $ 5 + $ 5).
- Intrinsic value: Good money should be scarce and independent of other things.
Both paper money and digital currencies have the first three criteria; But the latter is more debatable. In my opinion, Fiat currencies fail the final test (ie intrinsic value). I feel that the value we have ascribed to these currencies is not very accurate. In fact, they should have a value equal to the value of the paper on which they are printed; But this is not the case and they are much more valuable.
Unlike paper money, digital currencies are produced based on an agreed consensus mechanism. The digital currency consensus mechanism actually provides a yardstick for determining their value; But in reality, the value of digital currencies is even greater than their actual performance.
The truth is that it is we who determine the value of the objects we deal with. For example, during wars and crises, the value of food outweighs jewelry.
Jim Harper, a senior fellow at Enterprise American, says:
People decide what to value based on their situations and plans. In sum, it is the people who determine what is valuable in society.
This is why some digital currencies are more valuable than others. There are some digital currencies that operate in a similar way to other currencies; But they are worth much less. A prime example of this difference is the astronomical market value of Bitcoin compared to other digital currencies.
However, people who hoodle digital currencies are actually devaluing them; Because hoodling is contrary to the original purpose of digital currencies.
Based on a definition from the Inostopedia website (Investopedia), A currency is nothing but a “tool for the exchange of goods and services.” Stops hoodling, trading and circulation of digital currencies in the Blockchain.
The constant exchange of digital currencies is the process by which value is generated for digital currencies. By hoodling, these constant exchanges stop and value creation no longer makes sense. Therefore, attributing “currency” to what we call “digital currencies” becomes meaningless and erasable.
In fact, Hoodel works for the benefit of digital currency communities. If Huddlers continue to operate, Fiat currencies will remain the norm, and digital currencies will be merely speculative assets and speculators’ toys.
The price chart of digital currencies is nothing but measuring the value of these currencies in units of Fiat currencies and displaying them in charts and tables. This means that by hoodling, we only reduce the value of digital currencies.
Hoodle hurts your portfolio too!
There are two important behavioral characteristics in investing: patience and greed.
In the tumultuous world of digital currencies, patient investors win and greedy investors fall to the lowest levels.
I personally think that Hoodel fosters greed among investors. Most people are in favor of Hoodle because they want the story of “getting from the carpet to the throne” with bitcoin to be repeated in their lives.
It is true that early Bitcoin investors have made huge profits from their capital; But there is no guarantee that the price of bitcoin will continue to rise.
The fact is that throughout history, many valuable assets have reached such a price ceiling that they have never been able to return to the same ceiling after their bubble burst. Others have fallen completely after this incident. Keep in mind that this can be the fate of some digital currencies as well.
Hoodle makes investing in digital currencies like gambling; A long-term gamble!
Hoodle makes users irrational and unplanned. It also causes investors to abandon their investment strategies. Hoodel actually encourages people not to have a specific exit strategy in their investment.
Ambushing the market: The best digital currency strategy
The most important thing in investing is time.
Of course, no one can schedule and predict the market. If such a thing were possible, we would surely see more Ferraris on the streets than bicycles! But with all that said, we can learn from previous market patterns.
The best thing about digital currencies is that although they are very volatile, unpredictable and even insane, they have repeated the same process over and over again.
Digital currencies are either going viral or entering a recession. The first case occurs when the noise of the digital currency market increases in the society and the second case occurs when no one talks about digital currencies.
Shopping when the digital currency market is in full swing and selling when people are busy with something else is what I call an “ambush” strategy. You can extend this strategy to different trends and currencies; That is, when you spot the whispers of a new trend (such as defa, proverbial tokens, or blockchain games) in the market, invest in the currencies associated with that trend and wait for the noise to peak; Then get out of the process.
But why ambush strategy? The reason for choosing such a name is that in fact, instead of waiting for the market to surprise you, you are surprising the market yourself.
In my opinion, it’s a good time to hit the “sell” button when your phone is constantly receiving notifications from the digital currency market. These announcements are in fact warnings to remind you of “sales”.
The ambush strategy is neither hoodle nor trade;
The hoodle is long-lasting;
The trade is short-lived;
But the ambush strategy is medium-term.
Medium term 2 to 3 trades in one year Is. For example, once for sale and twice for purchase. This is the best way to minimize losses and profit from the digital currency marathon.
Blockchain is the world’s largest technology of the future and the beginning of a new digital age. Vikram Pandit, former CEO of Citibank (CitibankIn this regard, he says:
The advent of technology has transformed paper-based processes into semi-automated and semi-electronic processes; But the principles and rules remained on paper.
Even now, if we do not support and cultivate the Blockchain, we will never be able to truly experience the presence of technology in our lives.
The Blockchain is still in its infancy, and the way to support this technology is to support and help the advancement of digital currencies. Promoting digital currencies also means slowly eliminating paper currencies. Over time, bill payments to your taxi driver and hairdresser must be made in digital currencies.
Unfortunately, none of this happens when we hoodle. What is really happening is that people keep money under their pillows out of selfishness and just for their own pleasure; But the truth is that in the end they hurt everyone and even themselves.