Bitcoin's Paradox: Demand Drives Demand

Video: 1m37s
Posted on X: Jan 19, 2025
Notes Below

Why Gold Differs from Bitcoin: Key Value Drivers

‍Gold’s reliability as a store of value is rooted in its dual-purpose: its role as a critical industrial input in electronics, energy, and aerospace provides a tangible foundation of demand, while its status as a symbol of wealth and a hedge against economic uncertainty—proven over millennia and ingrained into global culture—makes it a stable, tradeable, and enduring asset.

Why Property Differs from Bitcoin: Key Value Drivers

‍Property’s reliability as a store of value lies in its dual-purpose: providing essential utility through shelter, economic activity, and income generation, while its finite nature and universal demand make it a stable, tradeable, and enduring asset.

The Bitcoin Paradox: Demand drives Demand

‍Bitcoin’s value lies in its dual-purpose: as a decentralized financial network enabling secure, borderless transactions, and as a 'financial religion' driven by collective belief in its scarcity and transformative potential.

This religious-like faith (Bitcoin maximalist) could be the key to its longevity—just as major religions have endured for centuries through shared belief, identity, and community, Bitcoin’s global network (including potential National Bitcoin Reserves) and ideology may provide the foundation for it to persist.  

However, its paradox lies in its lack of intrinsic value creation mechanisms, leaving questions about how it will compete with more adaptive and functional stores of value as demand matures, technology evolves, and security risks emerge.