(The fifth post in the meta-experiment series of the Broken Money book club, part 5. Check out the fourth.)
If someone asked me what was the most fundamental axiom of btc, I'd probably say it's there will only ever be 21m btc. This is not usually that hard to wrap your mind around, although some people still manage to be confused.
Still, I think there's a profound idea underneath the idiotic objections to btc's scarcity, and Lyn describes it here:
My primary hesitation from the very beginning was that it seemed to me like anyone could just copy the code and create a different blockchain money. With precious metals, each one is scarce, and there are only a handful of different types. With blockchain monies, anyone with a bit of coding experience can copy one of the existing ones, change a few variables, and release it. Therefore, although there will only ever be 21 million bitcoin, the concept can experience supply inflation and dilution by the introduction of countless new blockchain monies. If the market share becomes and remains highly fragmented between countless blockchains, then perhaps none of them will persistently maintain any significant purchasing power, liquidity, or security. (p. 412)
Basically, while the current realized system of bitcoin will only ever have 21m btc (setting aside tail emission issues for now), there's nothing in the way of someone firing up a fork, and boom: now there's 42m 'btc'. Lather, rinse, repeat, and you can get digital scarcity multipled to infinity.
To deal with this objection, which is technically accurate, you have to really screw down your definition of what exactly is the scarce thing here. My attempt would be something like: btc is a system which instantiates the shared commitment of a group of people to a distributed ledger with dynamics allowing only 21m coins to be created and transmitted under such-and-such circumstances.
In other words, the thing that's really scarce is that collective commitment, which is not principally a technical construct. It's the thing that the "network effect" is the surface-level measure of. There was a brief stretch when there was another credible commitment of comparable size (bch, right after the fork wars) but that quickly dwindled into obscurity; and for a while eth seemed to be quite similar, before it became a system committed to a wholly other kind of thing.
The commitment that is btc is cultivated using far more than just the node software or just the hashpower deployed by miners around the world. It's everything. It's us, here, now, doing this. The software, the miners, and the rest are just the roles by which this commitment is enacted. They are not, themselves, the thing that is scarce.
If that's true, or even kind of true, it seems useful to ask about how that commitment can be cared for and strengthened? And how do we think it will evolve in the future, as it has done in the past?