That’s just the supply side. What about the demand side? If few to no people have any use for or interest in an asset, then it doesn’t have much value.
Conversely, the more people that use something, the greater its value has generally become. In economics, this is what’s known as Metcalfe’s Law. Consider oil in the 19th century. Humans have been aware of and indeed have used petroleum for centuries, but it wasn’t until the advent of the automobile that the scramble for “black gold” really began, making some early oil barons like John D. Rockefeller incredibly wealthy.
Again, bitcoin—and cryptocurrency as a whole—is no different. It’s a nascent industry, but we see that more and more users are finding their way into digital currencies, which raises the total value. According to Blockchain.com data, just under 50 million unique crypto wallets have been created as of May 2020, a change of 10 million from just a year earlier. “We’re right where oil was in 1890,” commented Alex Leigl, CEO of Layer1, during our panel discussion on Monday.
The analogy is a compelling one. It suggests not only that we’re at the forefront of something new and bold, but that there could be many years of maturation and innovation ahead of us.
A good analogy in deed. The early adopters of BTC, some are Bitcoin millionaires and billionaires today. It is good to act wisely.