Digital scarcity is what crypto provides. For Bitcoin, digital scarcity means that as more people believe in it as a store of value, it becomes more valuable. It’s a self-fulfilling prophecy. For me, that was always clear.
Yet I didn’t quite get digital scarcity for other newer tools like non-fungible tokens (NFTs). The example that I always imagine is a 2D piece of art. Those are pixels, and therefore can be infinitely replicated at zero marginal cost. Isn’t that the whole point of the Internet? To bring abundance to all?
Recently I went to the beach. I was trying to find a rock to bring to my loved one. Bringing souvenirs is quite a primitive instinct that our species has had ever since we lived in caves. It is kind of stupid, because there are so many rocks… If anything, Earth has a bunch of gases and rocks.
But I was looking for the rock.
A rock that is unique, a rock that is rare. Most of the rocks in that beach were actually very beautiful, but I didn’t feel inclined to grab any of them. The point isn’t how pretty they were, but how unique.
And that’s when NFTs fully clicked for me. My generation may still think that bringing a rock to your loved one is cute. But the same way we find that cute, future generations that live more and more in the Internet will replace analog customs with digital ones.
At the end of the day, rocks have a virtually infinite supply too — just like pixels. But I wanted to find the rock. And, after a while, I found it.