THREAD:
Many things set #Bitcoin apart from any altcoin. But keep it simple, no technical metrics needed.
Three elements to consider:
- Digital scarcity is a one-time phenomenon
- Schelling points
- Money is the mother of all network effects & tends to one
The graphic above shows the proliferation of cryptocurrencies over time. In truth, they exist in two categories: Bitcoin and copycats.
By definition, a copy of a digitally scarce system is itself not scarce. The marginal cost of creating an additional new copy is zero.
In this sense, it is only the original instance of a digitally scarce system that is actually scarce: Bitcoin.
Digital scarcity is a one-time phenomenon.
To understand this more deeply:
-@Breedlove22 breedlove22.medium.com/the-number-zer…
-@parkeralewis unchained-capital.com/blog/bitcoin-c…
Next, consider what would happen if you showed the graphic above to 100 people and asked them to pick which circle was most valuable.
Better yet, which circle they thought the other 99 people would pick.
That's called a Schelling Point, a game theoretic focal point.
This is the same choice that the world faces with regard to selecting a system of digital scarcity to store their hard-earned value in.
Before even considering Bitcoin's pros/cons vs. upstart competitors, advantage Bitcoin.
@Willem_VdBergh medium.com/@willemvandenb…
Finally, consider network effects. Network effects apply whenever the value of a system increases as the number of users increases. Telephones, the internet, Facebook, etc.
Metcalfe's Law describes the value of a network as proportional to users^2.
en.wikipedia.org/wiki/Network_e…
Money is the mother of all network effects - we gain wealth by choosing to value the form of money that others value, and we lose wealth if we choose wrong. (Beanie babies, tulips, silver, NFTs.)
As such, money tends to one.
Now, let's return to our original graphic.
Each digital value network carries a network effect, the strength of which can be approximated by the $ value of each. (Shown here as size of circle, with accurate scale.)
With your hard-earned money at stake, pick which circle others will value most.
That simple. #Bitcoin
Share this Scrolly Tale with your friends.
A Scrolly Tale is a new way to read Twitter threads with a more visually immersive experience.
Discover more beautiful Scrolly Tales like this.