The Bitcoin Game Theory Is Playing Out
Published:
Bitcoin is the creature that feeds on itself. It’s a self-reinforcing cycle of growth
Bitcoin is a self-sustaining entity, thriving on its own growth. It creates a self-reinforcing cycle where its inherent game theoretic features encourage participants to support and cooperate within the network. As Bitcoin’s price rises, mainstream investors are increasingly drawn to it. This growing value attracts high-profile investors, who then influence major hedge funds, ETFs, and family offices to invest in Bitcoin.
Recently, influential figures have begun supporting and donating to politicians who advocate for Bitcoin. Consequently, in addition to addressing traditional issues like healthcare, energy, and global affairs, politicians will soon need to express a positive stance on Bitcoin to win over voters.
As Bitcoin gains political favor, countries will also need to consider holding Bitcoin in their treasuries to enhance their wealth and compete globally. The nation that accumulates the most Bitcoin will have a competitive edge.
The country and nation state with the most bitcoin wins.
Quantitative easing is a given; countries cannot avoid printing more money. This fundamental flaw in our fiat-based monetary system, which relies on manipulating interest rates to control inflation, means that the country holding the most Bitcoin will benefit from its appreciation.
More energy, please?
Furthermore, the rise in Bitcoin’s value will likely drive countries to invest more in renewable energy sources to support Bitcoin mining. Nations with cheaper and more sustainable energy tend to have higher living standards, greater productivity, and more prosperity.
Conclusion
As users, institutions, and nations advance along the Bitcoin adoption curve, those who get in early will reap significant rewards. In theory, this transition from an inflationary environment to a more prosperous deflationary one should be advantageous for early adopters.