Scarcity

Mr. GoBrr
February 24, 2024 • Reading Time:4 minutes

This weekend I want to share with some ideas that will help you become better investor.

You are alone in the desert.

Imagine that you are in the center of a big desert.

All you can see is sand everywhere.

The sun is very hot. 🥵

You have a bottle in your hand, filled with the precious elixir of life, water.

You want to drink because you are very thirsty.

You could drink all the water now, but you need to think about what happens when it is all gone.

The alternative?

Carefully sip, rationing each precious drop, betting on the chance to find an oasis or some other source of life-giving water.

It's a gamble.

Pitching the agony of your immediate thirst against the looming specter of an unwelcoming future.

Your choice, whatever it might be, carries weight heavier than the shifting sands themselves.

Every decision echoes in the hollow expanse of the desert.

Survival hangs in the balance in this desolate wilderness, a stark testament to the delicate duality of life.

No matter what decision you make, it's quite significant.

In this context, for you, water is the most scarce resource your life depends on.

Man-made (or centralized) scarcity - This might include designer-made limited editions, artwork, footballer cards, Pokemon cards, etc. This type of scarcity can be easily forged.
Man-made scarcity
Natural (or decentralized) scarcity - This includes things like precious metals, shells, salt, oil, etc. These are hard to forge.
Natural Scarcity

The primary distinction between centralized and decentralized scarcity lies in control.

Centralized scarcity is governed by a single entity, such as a corporation or government.

Decentralized scarcity lacks any distinct control.

In the crypto world, altcoins can be likened to centralized scarcity, as their control resides with a select few.

Bitcoin is decentralized scarcity because there is not a team that control it.

Bitcoin is like gold.

Altcoins are like Louis Vuitton goods.

..to evaluate the advantages and disadvantages of utilizing resources and how we choose to compromise.

The choice rests between appeasing our immediate thirst or rationing the water to extend time.

In the desert, thirst seems boundless (infinite), yet our water bottle is finite.

Needs may be endless, but our time and resources aren't.

The pressing question then is how do we make decisions when needs are infinite but resources are not?

We'll discuss that in tomorrow's lesson.

Mr. Go Brrr

P.S. Bellow some links to learn more about the concept of Scarcity: