flix on Nostr: Bitcoin adoption scenarios. Imagine that we are back in 2008, reading Satoshi's ...
Bitcoin adoption scenarios.
Imagine that we are back in 2008, reading Satoshi's Bitcoin whitepaper. We attempt to predict what the future holds for Bitcoin and we imagine a number of possible scenarios. We assign probabilities to them and describe what each of them will look like in terms of adoption, users, etc.
They range from INTERNET scenario that predicts Bitcoin will follow a tech adoption S-curve to a FAIL scenario that expects Bitcoin, like most of new projects, to never take off.
With 2008 knowledge... you would probably have assigned a very large probability to FAIL, maybe up to 90%. But even if the INTERNET scenario only had a 1% probability... as Hal Finney quickly saw, the risk-reward for owning some Bitcoin was incredibly positive. The rational decision was to mine/buy some "in case it takes off" even with very little knowledge.
Now let's fast forward to the 2013 Bitcoin bubble. The price has risen to $1000+. There are maybe over 1 million Bitcoin users. We can look back at the original scenarios and adjust probabilities. The FAIL scenario, which had 90% probability now has to be completely discarded. The adoption and price action could now indicate a higher probability for the TULIP or BETAMAX scenarios... or maybe you still think that government will shut down Bitcoin like it did with E-GOLD and so assign a 60% probability to that scenario. However given the evidence at that point... you do have to raise the probability of INTERNET to at least 3%. With a 3% probability of multiplying value by millions... once more the rational decision is to have a greater than zero amount of Bitcoin.
Now imagine that you are in 2017. Bitcoin is at $20k. What probability would you assign to each scenario with the information that you had then?
How about in 2021? 2024?
Published at
2024-10-22 10:41:57Event JSON
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"content": "Bitcoin adoption scenarios.\n\nImagine that we are back in 2008, reading Satoshi's Bitcoin whitepaper. We attempt to predict what the future holds for Bitcoin and we imagine a number of possible scenarios. We assign probabilities to them and describe what each of them will look like in terms of adoption, users, etc.\n\nThey range from INTERNET scenario that predicts Bitcoin will follow a tech adoption S-curve to a FAIL scenario that expects Bitcoin, like most of new projects, to never take off.\n\nWith 2008 knowledge... you would probably have assigned a very large probability to FAIL, maybe up to 90%. But even if the INTERNET scenario only had a 1% probability... as Hal Finney quickly saw, the risk-reward for owning some Bitcoin was incredibly positive. The rational decision was to mine/buy some \"in case it takes off\" even with very little knowledge.\n\nNow let's fast forward to the 2013 Bitcoin bubble. The price has risen to $1000+. There are maybe over 1 million Bitcoin users. We can look back at the original scenarios and adjust probabilities. The FAIL scenario, which had 90% probability now has to be completely discarded. The adoption and price action could now indicate a higher probability for the TULIP or BETAMAX scenarios... or maybe you still think that government will shut down Bitcoin like it did with E-GOLD and so assign a 60% probability to that scenario. However given the evidence at that point... you do have to raise the probability of INTERNET to at least 3%. With a 3% probability of multiplying value by millions... once more the rational decision is to have a greater than zero amount of Bitcoin.\n\nNow imagine that you are in 2017. Bitcoin is at $20k. What probability would you assign to each scenario with the information that you had then?\n\nHow about in 2021? 2024?\n\n\nhttps://m.primal.net/LeOv.png ",
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