Newsletter 19.06.2023
Timechain Newsletter 06: The Bitcoin Singularity
Singularity; a point at which a function takes an infinite value, especially in space–time when matter is infinitely dense, such as at the centre of a black hole
TL;DR
A set-in-code fixed bitcoin supply and known issuance schedule is the core of why bitcoin has value
It is the only asset in the history of human civilisation where supply is completely unresponsive to increases in demand
Against all other assets, bitcoin is consuming value like a black hole (or singularity) consumes matter
In a digital world, where the marginal cost of production of everything is falling to 0, bitcoin is unique
It is a digital asset for which the marginal cost of production can never be 0, because energy must be expended and energy is never free
In other words, bitcoin is a non-physical and entirely digital asset that cannot be copied and pasted. It is the invention of digital scarcity
Bitcoin introduces the laws of physics to the digital world. As such, AI is perfectly complementary to bitcoin because even an AI must marshal physical resources