Bitcoin is becoming more expensive by the day.

Many assume its price is ascending an S-curve and will eventually stabilize.

But if we are heading toward hyperbitcoinization we shouldn't expect a levelling off of the USD price.

This thread, inspired by @knutsvanholm, explains.

1/ When a new technology disrupts an old one its adoption usually follows an S-curve.

The telephone, radio, tv, refrigerator and computer all followed this pattern.

As bitcoin passes $30k many assume we are ascending an S-shaped price curve, which will eventually stabilize.

2/ But they are mistaken.

Bitcoin's adoption as a technology may follow the S-curve, but its USD price will not.

We are used to expressing the value of assets in terms of money.

But when we're valuing an entirely new monetary asset, we're forced to switch perspective.

3/ Bitcoin possesses the properties we desire in money - portability, fungibility, limited supply - in perhaps the purest form ever known.

Economic logic and historical experience teach us that when monies compete, the one with the best properties crowds out alternatives.

4/ If Bitcoin continues to function the way it does now, we could be on the road to hyperbicoinization: the replacement of other monies by bitcoin.

As this happens, the USD yardstick of measurement we use today will become less relevant as its market share as money is undermined

5/ Should the world transition to a sound money standard, we should expect vast efficiency gains and reduced waste.

As the new global money, new value created from increased productivity will translate into increased demand for bitcoin as the economy grows.

6/ As such, we should expect bitcoin's "price" - its exchange value for real goods and services - to keep rising at a roughly steady pace.

But as demand for legacy fiat currencies falls away, bitcoin's USD exchange price will likely look more like a J-curve than an S-curve.

RESOURCES

The video “Bitcoin's adoption curve will not be S-shaped” by @knutsvanholm, @TheCryptoconomy and @IoniAppelberg can be viewed here:

For more on price trends in bitcoin adoption I recommend this blog by @theblackmarble: https://bit.ly/38YqkEj 

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