← Crypto · lesson 3 of 12
By the end of this one you'll know what digital scarcity means, where Bitcoin's 21 million limit comes from, and what that limit does and does not mean.
Scarcity is a plain idea, it just means there's only so much of a thing. Land is the classic example, nobody's making more acres in this county, so every acre is spoken for and folks pay attention to who holds what. Most money isn't like that, when a government needs more dollars it can create more, the way you can always print more raffle tickets. Bitcoin was written so that only 21 million coins can ever exist, and that limit sits in code that thousands of computers around the world all enforce together. Changing it would be like convincing every farmer in the county to agree the county suddenly has double the acres, good luck. So Bitcoin is scarce the way land is scarce, the supply has a fence around it. What people will pay for it still bounces around every single day, because a fence around supply is not a fence around price.
Same lesson, told by a hundred dollar bill. Tap to walk it one step at a time.
In this example, one bitcoin costs $100,000, and someone spends $100 on an app that charges a 1% fee, so $1 goes to the fee.
The remaining $99 buys 0.
00099 of one bitcoin, a little slice, like buying a tenth of an acre instead of the whole field.
Nobody needs to buy a whole coin, each one splits into 100 million tiny pieces.
Sunday afternoon, folding laundry with videos autoplaying, when a guy says there will only ever be 21 million bitcoin, so the price has to go up, and his countdown clock says act now. The basket is half folded and your card is right there in your purse.
Pick your move. Then peek at the other roads if you're curious.
Bitcoin's 21 million cap is a fence around supply, and a fence around supply is not a fence around price.