Lesson 2

The scarcity of scarcity

That's quite enough — I hope I sha'n't grow any more...
Read by Guy Swann.

In general, the advance of technology seems to make things more abundant. More and more people are able to enjoy what previously have been luxurious goods. Soon, we will all live like kings. Most of us already do. As Peter Diamandis wrote in Abundance: “Technology is a resource-liberating mechanism. It can make the once scarce the now abundant.”

Bitcoin, an advanced technology in itself, breaks this trend and creates a new commodity which is truly scarce. Some even argue that it is one of the scarcest things in the universe. The supply can’t be inflated, no matter how much effort one chooses to expend towards creating more.

“Only two things are genuinely scarce: time and bitcoin.” Saifedean Ammous

Paradoxically, it does so by a mechanism of copying. Transactions are broadcast, blocks are propagated, the distributed ledger is — well, you guessed it — distributed. All of these are just fancy words for copying. Heck, Bitcoin even copies itself onto as many computers as it can, by incentivizing individual people to run full nodes and mine new blocks.

All of this duplication wonderfully works together in a concerted effort to produce scarcity.

In a time of abundance, Bitcoin taught me what real scarcity is.

    Down the Rabbit Hole