Scarcity

Why good money must be hard to make

After understanding inflation, we can now identify the real problem with most forms of modern money:

They are easy to create.

When money can be produced effortlessly and by a selected group of few, it cannot reliably preserve value over time, no matter how strong the promises behind it may sound.

To understand why scarcity matters so much, we need to take a closer look at what gives money its strength in the first place.

Scarcity is one of the most important objective properties of money, because it defines how difficult it is to create new units of it.

If something is abundant or can be produced at will, it cannot function well as money, even if people temporarily agree to use it.

We see this pattern everywhere:

Air is essential for life, yet it has no monetary value because it is abundant.
Sand covers entire deserts, yet no one saves it to protect their wealth.
Digital files can be copied endlessly, which is why they are never used as money.

For money to work, new units must require real effort, real cost, and real sacrifice to produce: this is what protects everyone who already holds it.

Easy money versus hard money

We previously saw how, throughout history, societies have naturally gravitated toward forms of money that were hard to create.

Gold did not become money because it was shiny or pretty but because it was scarce, durable, divisible, and extremely expensive to extract from the ground.

Every new unit of gold required time, labor, tools, and energy, this made large and sudden increases in supply nearly impossible.

That is what made gold reliable across generations, in contrast easy money always fails.

Shells stop working as money when people find a new beach full of them.
Paper money collapses when printing presses run nonstop.
Digital balances lose meaning when numbers can be changed with a keystroke or when funds can be froozen by few.

When the cost of creating money approaches zero, its value eventually does the same.

Scarcity and fairness

Scarce money aligns incentives, it rewards long term thinking, planning, and cooperation, instead of encouraging debt, speculation, and constant consumption.
Scarcity is what allows money to act as an honest ledger of human effort.

The mainstream monetary system used across the world, commonly referred to as fiat, is completely disconnected from the thermodynamic foundation of real markets, and this disconnection is one of the root causes of the environmental devastation and many other problems we are experiencing today.

Bitcoiners understand very well that money is the fundamental substrate of society, and that when this substrate becomes corrupted, every layer built on top of it is affected and eventually distorted.

For this reason, they often repeat a simple but powerful motto:

Fix the money, fix the world

Artificial scarcity versus real scarcity

Some systems try to simulate scarcity using rules, laws, or promises:

Governments promise not to print too much.
Central banks target acceptable inflation levels.
Institutions assure stability through policy and oversight.

However, there is a problem:

Rules can be changed.
Promises can be broken.
Incentives eventually win.

Real scarcity does not rely on trust in people or institutions but is enforced by nature, physics, or unbreakable system rules.

Gold had this property because no decree could make gold easier to mine.

The digital world, until very recently, had no equivalent.

The key insight

At this point, a crucial realization should be taking shape.

If money is a technology, and if inflation is caused by uncontrolled expansion, and if scarcity is essential for preserving value, then the most important question becomes this:

Can we create a form of digital money that is genuinely scarce, not by promise or policy, but by design?

For the first time in history, the answer is yes.

And that answer is Bitcoin.

Now is finally time to face the nature of Bitcoin!