"There will NEVER be more than 21 million Bitcoin."

"There are 8 billion people on the planet, and only 21 million Bitcoin."

"Nothing else can compete with Bitcoin for the store-of-value function because it's the only asset in existence with verifiable scarcity."

Above are some of the arguments you will hear as to why you should own a piece of the Bitcoin pie. But does Bitcoin's limited supply actually make it valuable?

While digital scarcity was certainly a good selling-point for Bitcoin when it launched in 2009, these days it's the worst argument someone could make for it.

Digital Scarcity

Although Satoshi introduced the idea of digital scarcity, anyone with basic programming skills can modify Bitcoin's open-source code, attract some miners, and launch their own supply-capped cryptocurrency.

Yes, most of them end up being worthless and forgotten about.

That said, some have retained value over the years, thanks to their dedicated community or cutting-edge innovation. For example, we have other legitimate crypto projects that also have maximum supply caps:

Litecoin - 84 million
Cardano - 45 billion
Digibyte - 21 billion
etc, etc, etc...

Instead of focusing on digital scarcity, which all cryptocurrencies have, Bitcoiners should be highlighting the other aspects of Bitcoin that give it an advantage over its contenders.

Bitcoin's Strengths

Here are a few reasons why Bitcoin has a leg-up over other cryptocurrencies:

Fair token distribution - Bitcoin had no premine, no token sale, and no insider allocation. Instead, it was distributed fairly to the community, without any privileged insiders getting a head start.
Secure - Aside from an alarming hack in 2010 that resulted in the creation of 184 billion Bitcoins, the network has proven itself resistant to exploits since 2009.
Stable - Bitcoin shies away from innovation, and has become known for being a stable "store-of-value" (SoV). Investors don't have to worry about risky upgrades to the network, or the project being abandoned.
High node count - As a result of the block size limit, Bitcoin's distributed ledger only takes up about ~600GB of hard drive space, allowing almost anyone to run a full node, increasing one aspect of decentralization.
First mover advantage - Bitcoin has been receiving media attention off and on since 2011, giving it solid brand-name recognition.

National and Corporate Adoption

Many would step in here to argue here that the increasing pace of nation-state and corporate investment also gives Bitcoin the upper hand over other cryptocurrencies. And to some degree, it does, at least for now.

Institutional adoption may be a benefit in today's debt-based fiat currency world, but when the Everything Bubble finally pops, value will have to be redistributed to projects according to their fundamentals.

To predict which cryptocurrencies will have value in the future, we need to measure how much economic activity they can produce, how decentralized their token supplies are, and their level of community engagement, among other factors.

Until next time...

Sometimes we lose our ability to think critically when money gets involved. If you're not careful, seeing a cryptocurrency skyrocket in price can permanently cloud your judgement of it. The "only 21 million" argument is based on emotion, rather than logic.

Arguing that Bitcoin has value simply because it's scarce is preposterous, especially considering all the other supply-capped cryptocurrencies that exist today. Instead, Bitcoiners should be promoting the project's stability, brand-name recognition, and coin distribution, which actually give it an edge over the competition.

If you learned something new from this article, be sure to check out my other posts on crypto and finance here on the Hive blockchain. You can also follow me on InLeo for more frequent updates.

Why Digital Scarcity Is Bitcoin's Most Preposterous Argument

Digital Scarcity

Bitcoin's Strengths

National and Corporate Adoption

Until next time...

Further Reading