Bitcoiners respond to Mike Green's 'scarcity destroys value' critique
Mike Green , portfolio manager at Simplify Asset Management, has published a novel critique of Bitcoin ’s 21 million hard-capped supply. In his view, Bitcoin ’s absolute scarcity destroys , rather than creates, value. Some resources such as gold and silver are rare and hard to extract. Thus, they have natural scarcity with persistent demand for adornment and electronics. In contrast, markets for other resources like diamonds use cartels and artificial scarcity to charge premium prices. Mike Green places bitcoin into the latter category of artificial scarcity. Indeed, Satoshi Nakamoto decided to artificially reduce the coinbase reward in half on an arbitrary, four-year schedule. This disinflationary schedule hard-caps bitcoin’s total circulating supply at 20,999,817.31308491. Fundamental laws of economics dictate that increasing scarcity will drive up prices if demand remains steady. Hoarding bitcoin increases scarcity such that consistent buying forces new buyers to pay higher ...