Hey all. Welcome back to TCB for another TCB Short. For the short today we're gonna be answering the question: Can Bitcoin become worthless? So, in this context, what does worthless mean? So let's start with a fundamental idea of economics. Something becomes worthless when no one subjectively sees value in it. So, uh, it's kind of an Austrian economic idea that value is not so if everyone woke up tomorrow and decided that something had no value, it immediately becomes worthless. So the real question is, could the world stop seeing value in Bitcoin. So Bitcoin is money. So how does money historically, become worthless? Most money in history, it doesn't or didn't lose its value because people suddenly just kind of arbitrarily rejected it. Instead, money loses value because its supply explodes. So there's many historical examples of this. There was the Weimar hyperinflation of World War II. Zimbabwe's currency has hyperinflated. Venezuela's currency has hyperinflated, and there's been countless others. This pattern is almost always the same. Governments overspend. Their debt grows. The money printing accelerates to service that debt. The money supply explodes. The purchasing power of that money is therefore destroyed. The trust in that money collapses as the purchasing power is destroyed, and then the money becomes worthless. So when people kind of realize that the currency will continue to be printed without limit, they stop holding it. That was the case in all those examples above. That's gonna be the case for countless other fiat currencies as we move forward. So, the point is here is like, you've kind of heard it. Everyone's heard it before. They've heard the idea of like, oh, Bitcoin is going to zero. but currencies don't die by going to zero. They die by inflating toward infinity. It is, it's the purchasing power of the currency that quote unquote, goes to zero. For instance, you even look at our current United States dollar. The US dollar has lost 97% of its purchasing power since the Fed was instituted in 1913. And this is because the US money supply over that same timeframe has expanded roughly a 1000 X. So it's, as the money is continually printed, the purchasing power is continually destroyed, and it approaches zero or being worthless. So, Bitcoin was designed to remove that risk specifically, to remove the risk of monetary inflation. This is where Bitcoin is different. Bitcoin has a fixed monetary policy, so there's a maximum supply of 21 million Bitcoin that will ever be created. The issuance schedule is known. It's written into the code. Anybody can see it, verify it themselves. No government can change this. No central bank can print more Bitcoin. So this means that the most common cause of monetary collapse, monetary inflation, is structurally impossible with Bitcoin. So if Bitcoin can't inflate to death, what would make it worthless? So since inflation isn't the failure mode, Bitcoin would need other pillars to collapse in order to become quote unquote worthless. So one of these could be that the network just stops working. Bitcoin is a distributed network. It relies on nodes, and miners, and the global internet infrastructure. The network today runs across thousands of independent computers worldwide. So, in this case, it's very difficult for this network to stop working. There's no central server to shut it down. As a distributed network, it's anti-fragile and it's designed to keep working under even the most dire of circumstances. So there's a very low probability that the network would just stop working. What else could, possibly maybe be a failure mode of Bitcoin? The security could potentially break. So you hear sometimes people talk about potential threats of quantum computing, and even though quantum computing is unproven, there's a worry that maybe quantum computing could break the cryptography of Bitcoin at some point. Or, kind of the classic, sustained 51% attack, where an actor takes control of over 51% of the nodes and tries to kind of double spend a single time, over the Bitcoin network. but this is already really economically prohibitive to take that much processing power on a network that's so globally distributed. And there's really no economic incentive to attack the Bitcoin network because Bitcoin cannot be used outside of the Bitcoin network. It's not like you could hack the Bitcoin network, take all the Bitcoin, and then spend it somewhere else. If the network is destroyed, the value of Bitcoin would be worthless. You cannot steal Bitcoin and use it kind of independently of the Bitcoin network. So it's not that these things aren't a threat, but when it comes to quantum computing, the Bitcoin network is one of the strongest computer networks in the world. It basically would threaten all other economic actors before Bitcoin. If quantum computing becomes a reality, it threatens banks and governments and global finance first. Those would be more vulnerable. They're not as strong as Bitcoin. And, the money that you could steal from, say, a bank or a government or global financial actor. That money can be used somewhere else. So there's many networks that, maybe dollars could be used in, but if you attack the Bitcoin network, you can't steal the Bitcoin network and use it anywhere else. So there's really no economic incentive to attack Bitcoin. And in fact, your economic incentive, if you have that kind of processing power, would be to join the network. Like actually economically benefit from the network. And then, lastly, Bitcoin is a protocol. So similar to the internet itself, it can evolve, the code can evolve, it can address new threats as they emerge. So, very unlikely that security breaks for Bitcoin. In fact, it will probably break last and it's probably the safest place to put your value, when it comes to moneys. And maybe another threat to Bitcoin as far as going to zero or becoming worthless. For Bitcoin to be worthless, the global demand could just disappear. The world would have to collectively decide Bitcoin has no value. But, the trend has been that the exact opposite has been happening. So demand continues to grow amongst individuals, and corporations, and institutional investors, and nation states. And the demand is growing because the value proposition for Bitcoin is strengthening. Bitcoin's perceived value comes from several properties. It's digital scarcity, the 21 million hard cap that we spoke about. Censorship resistance. Nobody can stop a transaction. Everyone can play. No government can cut any actor off of the network. It has borderless transfer. You can transfer value across borders. No one can stop it. It can finalize in a matter of minutes. And it has a predictable monetary policy that cannot be changed by governments or central bank actors. So, every year the network becomes more secure, more widely owned, more widely understood. So, in other words, the number of people who see value in Bitcoin has been increasing, not decreasing. And because the value is network driven, adoption itself strengthens the system. Similar to kind of Metcalfe's law where a network grows at the square of its users. the Bitcoin network gets stronger as more people participate. So it's kind of a positive feedback loop. There's a paradox here. Critics are often saying Bitcoin will go to zero, but historically, this isn't how money dies. Money doesn't die by going to zero. Money dies because its supply explodes and the trust in that money is destroyed. So Bitcoin eliminated that failure mode from the very start, by design. So, can Bitcoin become worthless? The short answer is yes, because anything could become worthless, if people stop believing it has value. but that would require the Bitcoin network to stop functioning, the security of Bitcoin to fail, the global demand for Bitcoin to disappear. But meanwhile, the exact opposite trend is occurring. the network is, has not stopped functioning, the network has a 99.9% uptime. The network keeps growing. the security of the system keeps strengthening. More and more hash rate is coming to the network all the time. More and more computers are offering security to the network at all times. And more people around the globe continue to see value in it and continue to join that network. So, unlikely if the current trend continues. Money becomes worthless when people stop believing in it. so far the story of Bitcoin is that more people are believing in it every day. so, again, money doesn't die by going to zero. It dies by being printed to infinity, and that's the one thing that Bitcoin will never do. Every currency in history could be printed to death, and they have all gone to zero on a long enough timeline. So Bitcoin doesn't eliminate all risk. It just eliminates the most common cause of monetary collapse, which is inflation. In Bitcoin, inflation is mathematically impossible. So Bitcoin is the money that cannot be printed, and therefore it is the least likely money to become quote unquote worthless. I hope that helps y'all. Take care until next time and we'll see ya.