MARCH 26
Scarcity Goes Digital
Hard to Create. Easy to Move.
The Signal
Bitcoin brought something new into human history: digital money with a fixed supply and no central issuer.
The Reading
Imagine everyone wanting a gold coin. Miners would have a reason to dig for more. Gold is scarce, but its supply keeps growing. In 2025, miners added about 3,672 tonnes. Bitcoin’s rules allow no more than 21 million coins, regardless of demand.
Roughly every four years, the new bitcoin created with each block is halved. Your coins stay untouched; fewer new ones appear. In May 2020, the yearly pace of new supply fell below 2%. After April 2024, it was below 1%. The pile keeps growing, but more slowly.
Imagine sharing all 21 million coins equally among roughly 8.3 billion people. Each would receive about 0.0025 bitcoin: one four-hundredth of a coin. UBS’s 2026 report counted about 57.5 million US-dollar millionaires across the markets it studied. They could not all own one whole bitcoin at once. Smaller pieces let more people own some without creating more coins.
Bitcoin was the first successful decentralised digital money. It made a fixed supply work without a central issuer. This is absolute digital scarcity: a hard cap of 21 million bitcoin. Under the network’s rules, the total can never exceed that limit. Independent computers reject extra coins that break those rules. Yet bitcoin can travel overseas without shipping gold. If more buyers compete for a limited amount offered for sale, they can push prices higher. Scarcity matters when people want what is scarce.
First Principles
Bitcoin combines digital money with a fixed supply limit.
Dividing coins creates smaller pieces, not extra supply.
Limited supply and willing buyers together influence price.
Today’s Challenge
Put one biscuit on a plate and break it into four pieces. You have more pieces, but no more biscuit.
Imagine it is a baker’s final biscuit, made from a recipe nobody can recreate.
Four people want a taste. Then forty. Then four hundred.
If people offer money for the four pieces, what might happen to the price?
Would cutting each piece in half create more biscuit, or simply smaller portions?
Now imagine owning a piece while more people want a taste. What makes your small share worth competing for?
Tomorrow’s Signal
Why Bitcoin Was Inevitable