Hey y'all, welcome back to TCB for another TCB short. For the short today, we're gonna be tackling the question: won't the finite amount of Bitcoin be a limitation? So this is one of the most common criticisms of Bitcoin. There are only twenty-one million Bitcoin. How could that ever support a global economy? At a first glance, that sounds pretty reasonable. There are billions of people on Earth. Global co- global commerce is massive. So intuitively, people assume that money supply must continuously expand or be much larger than twenty-one million coins to support that level of economic scale. But Bitcoin challenges that assumption entirely, and today I wanna explore the idea that Bitcoin's finite supply is not a weakness at all. In fact, it's the driving force of Bitcoin's value. So Bitcoin was designed after the two thousand and eight financial crisis by an anonymous creator known by the pseudonym Satoshi Nakamoto. And why does Bitcoin have a fixed supply? The core idea is simple: create money that governments and central banks cannot inflate. In fact, Satoshi embedded a message in the genesis block. It was a Times of London headline,"Chancellor on the brink of second bailout for banks." Satoshi knew that massive monetary debasement was on the horizon, and it was gonna continue without limit. So unlike traditional currencies, Bitcoin has a hard cap. Only twenty-one million Bitcoin will ever exist. So new Bitcoin are introduced at a predictable rate on a known issuance schedule determined by the Bitcoin protocol. And eventually, around the year twenty one forty, no new Bitcoin will be created. So this makes Bitcoin fundamentally different from fiat currencies like the US dollar, where supply can continually expand forever. So Bitcoin replaces the need for trust in a world where the institutions have squandered that trust. There's been a phenomenal amount of money printing since two thousand and eight, exacerbated during the pandemic, and continues to this day. And, that's not a new idea. It's been going on for decades. So, Bitcoin's system is completely different. It's a monetary policy that is transparent, it's fixed, it's verifiable. There's no trust required in that system. So what about the question, won't we run out? Wouldn't we run out of Bitcoin? Here's where people make an assumption. We assume that economic growth requires more units of money as it grows. But economies don't grow because we print more currency. Economies grow because of innovation and productivity and efficiency gains and technological advancements. Money is just the measuring tool, so it really just becomes a question of pricing. And most importantly for this discussion, Bitcoin is divisible. So one Bitcoin can be divided into a hundred million smaller units called satoshis or sats. So for context, this means if one Bitcoin was worth a million dollars, a satoshi would be the equivalent of a penny, if we still made pennies. That means there are two point one quadrillion sats available. So the world doesn't need everyone to own a full Bitcoin any more than the world needs everyone to own an entire bar of gold. We already divide dollars into cents and gold into grams. So divisibility solves the practical issue of requiring more units. And since Bitcoin is digital, it can inherently divide further as its value density increases better than any other monetary good. It's essentially just software, so in that sense, it can just continually be divided down to smaller and smaller units if necessary as its value density increases. And the important part about this is that just means that as we become more productive, Bitcoin becomes more valuable. So this really mirrors kind of what free markets do naturally. Free markets are naturally deflationary, and so this is where the conversation gets much deeper. In a truly free market, prices should naturally fall over time. And why is that? Because capitalism and technology constantly improve our productivity. It's kind of the story of humanity to constantly be improving our productivity and gaining efficiency. So think about it. TVs get better and cheaper over time. Computing power becomes dramatically less expensive Iteration of anything improves the efficiency of that, of that production. Automation lowers manufacturing costs. And now in an era of AI, that may dr- like drastically increase, the pace of these productivity improvements. So this is what progress looks like. A productive society creates abundance. So in theory, all goods and services should become cheaper over time. That's not economic failure. That's the natural economic order. That is success. That is abundance. So why do we see prices increasing when productivity is also increasing? That's because the inflation of the currency masks those productivity gains. So under modern fiat systems, it's just something interesting that is happening. So as productivity has increased, governments and central banks have also expanded the money supply. So instead of fully experiencing falling prices from our technological progress, we experience inflation instead. So in other words, the productivity gains that should accrue to the working people get absorbed by monetary expansion instead, and that's why people feel confused, because technology is clearly improving rapidly, but everyday life is getting more expensive. It's very counterintuitive, and it's because inflation of the currency masks the true abundance created by free markets and innovation. We do not feel that abundance because it is being stolen from us by means of monetary expansion. So Bitcoin is a currency that mirrors the deflationary properties of the free market, and it would allow the productivity gains to flow to whom they rightfully belong, which is the workers who do the producing in the first place. And this also changes the signals sent by our economics. So hard money creates better economic signals, and why is that? This is one of the most important arguments for sound money, in my opinion,'cause when money continuously loses purchasing power, it changes human behavior. People stop asking,"What's the best use of my capital?" And they start asking,"How do I avoid losing purchasing power?" And that difference matters enormously. So inflationary systems like the dollar system we have today, cash becomes a liability, saving gets punished, speculation increases because saving gets punished, and debt becomes attractive, if not necessary to keep up. So people feel pressured into stocks and real estate and leverage and risk assets because they can't save in money. They have to put that money somewhere so it doesn't lose its value, and they don't put the money in those things ne- necessarily because they're productive. It's just because they know if they stand still and do nothing, that all of their money will lose value and get debased away. So if we had sound money, there would be stronger economic signal and better decisions would be made because of those signals. So imagine if money actually held its value over time. Suddenly, every purchase competes against appreciating capital. So there's no absolute necessity to invest. You could just keep your money in money, and it would store value. The value could be stored in the money itself as originally intended, and that would change decision-making. People would start asking,"Is it really worth spending on this thing?" Or,"Is this investment genuinely productive?" Or,"Does this create long-term value?" And the economic signal by actors acting with that mindset becomes much stronger. Weak investments become less attractive in that world. The waste-wasteful spending dec-declines dramatically because there's an opportunity cost to that spending, and capital must compete harder to earn an allocation. So this leads to better long-term investment decisions, less speculative excess, a lower time preference, we think about the future more, and just more thoughtful allocation of resources in general. So people in this world would invest in things that they actually believe in rather than just anything they can get their hands on that would beat the pace of inflation. And so the idea fundamentally is that scarce money brings fidelity to investment decisions and increases economic honesty. It makes it a, a more truthful, honest financial world. And operating in this way, we can push out our time preference. We can think about the future more and the, the present less and make more long-term decisions. So this is a shift in the time preference of humanity. Inflationary money, like we have today, it encourages consumption now. It conser-- it c- encourages borrowing now, pulling the future forward and short-term thinking, and that's because in the future we know our money is going to be worth less. So we trade our children's future for consumption in the present, and that's reflected in the US by our thirty-nine trillion dollar and counting national debt. We've essentially already spent a generation or two's, uh, you know, productivity before they even get here, which is just very unfair. And if we had deflationary money, it would encourage the exact opposite. It would encourage patience and saving and delayed gratification and long-term planning for those kids' future because the value of money will increase into the future alongside the productivity gains of mankind. So This is a much deeper problem. It isn't just an economic debate. It's potentially a civilizational one. We wouldn't necessarily see the demographics fall off a cliff. We wouldn't see young people thinking it's, you know, too expensive to have a family. Can't buy a house, can't have a family. So we would start thinking more long term. But wouldn't this just cause everybody... If the value of money increases over time, there's also a criticism of, well, wouldn't everyone just hoard their Bitcoin? Wouldn't they just hold onto it and not spend it? So there's kind of a... It's just a common criticism. But by reverse logic, we know our dollars are depreciating. We know they're losing value. So why would anybody save anything at all? And the truth is, this just isn't how people make economic decisions in real life. It's not an all or nothing game. So people spend appreciating assets all the time. They sell stocks, they sell real estate, they sell collectibles. People spend money when they need things and when certain opportunities arrive, and just to enjoy life on this short time we have here on Earth. So this would be true with an appreciating currency too. Even though, a good example of this is, like, televisions, like big screen televisions. You know they're gonna be cheaper in the future, but that doesn't stop you from buying one in the present when you need it. So it's... We basically make decisions on economic need, not necessarily the trajectory of our money's value in kind of an all or nothing sense. So Bitcoin doesn't eliminate spending. It simply makes spending and investing more selective and more intentional. Another criticism as far as Bitcoin being a fixed supply asset is that it won't be able to scale. So there's kind of this misconception that a finite supply means limited transaction capacity and it won't be able to scale. But transaction volume and money supply are separate issues. So similar to the internet itself, the internet scales through layers where there's base protocol underneath, and then you build faster applications on top of that base protocol. And Bitcoin can work similarly to that, particularly since it's software. So the Bitcoin based layer prioritizes security and settlement, and then additional layers like the Lightning Network, for example, can be built on top and can enable faster and cheaper transactions at higher layers in the stack, in the tech stack. So a fixed monetary base can still evolve to support global scale economic activity. So In closing here, the real debate is not really won't the finite amount of Bitcoin be a limitation? It's not a technical limitation to how Bitcoin will function in the global economy. The deeper questions are more important. So the deeper questions are, would society function better with money that cannot be diluted? That's ultimately a philosophical and an economic question,'cause Bitcoin challenges one of the deepest assumptions of the modern world, and that is that money supply must continuously expand forever. Instead, as an alternative to that system that's clearly failing us, Bitcoin proposes fixed scarcity, transparent monetary policy, savings that retain their value, prices that reflect real-world productivity, and it asks whether stronger money creates stronger economic signals, signals that encourage better investments, less waste, longer-term thinking, and more intentional allocation of capital. So maybe the question isn't really will there be enough Bitcoin? There is enough Bitcoin. The real questions are, what happens when humanity uses money that becomes more valuable as we become more productive? What if we stop the monetary debasement that silently steals the efficiency gains from the people? And what if saving for the future becomes possible again? So maybe the goal of civilization isn't endlessly expanding money, but allowing human productivity to naturally increase the value of money itself. So Bitcoin is the monetary revolution that brings about that world, and it's an abundant, better world. So hope that helps y'all. Take care till next time, and we'll see ya.