Lindy effect and network effects

Why each year Bitcoin survives makes the next more likely, and why money tends toward one winner.

Educational information, not financial advice.

Two ideas explain why age and size matter more for money than for most technology.

The Lindy effect

For non-perishable things like ideas and institutions, the longer something has survived, the longer it is expected to keep surviving. Bitcoin has run since January 2009 through exchange collapses, bans, forks and price crashes, and the rules still work.

Network effects

Money is more useful the more people accept it. Each new user, node, miner, wallet and merchant makes bitcoin more useful for everyone else. Liquidity attracts liquidity.

The problem these answer

"A better coin could replace bitcoin." Technology can be copied in a day; the network, the security from hashrate, and the track record cannot. A copy starts with zero history and almost no proof of work behind it.

Limits

Neither effect is a law of nature. Bitcoin must keep its core properties: no issuer, verifiable supply and censorship resistance. That is why the community is careful with changes (see ossification).