The Scarcest Resource on Earth

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What is the scarcest desirable resource on Earth?

Before you read on, I want you to commit to an answer.

Is human time the scarcest resource?

No. You can always produce more humans. Your human time might be limited but human time in general is a renewable resource.

Is energy the scarcest resource?

Well, no. Energy is infinite, and it is all around us. The sun is a giant fusion reactor in the sky, and only a tiny portion of its emitted energy arrives on Earth.

Think of the sun’s energy as Niagara Falls, but trillions of times larger, pouring out light instead of water. The tiny fraction that reaches Earth is over 10,000 times our total energy use.

If harnessed effectively, it could power our world many times over.

Is USD the scarcest resource?

You are on the right track, but no. They wouldn’t print it in the trillions if fiat money were scarce. Look at any chart of the money supply growth (M1, M2, M3) – they are all up to the right exponentially. 📈

Not how the supply of a scarce resource looks like.

What about gold or diamonds?

Gold is one of the scarcest resources on Earth. Yet it has an annual supply growth of 2% per year. We mine more and more gold without an upper limit.

If the price of gold were to go ballistic (e.g., 10x), gold miners would profitably mine much more gold. With increasing gold supply, the prices would start to go down again.

The world economy is a self-regulating organism.

As for diamonds, despite their reputation for rarity, they are actually more common than gold when you look deep within Earth. You can even synthetically produce diamonds, so if the price rises, you’d mass-produce them, and the price would drop again.

Neither gold nor diamonds are the scarcest resources on Earth.

What about scarce and desirable real estate?

Think of rare, prime real estate as the ‘Picassos’ of the property world. Like original works of art from a master painter, there’s a finite amount of this prime property, especially in desirable areas like beachfronts or city centers.

To illustrate, imagine the Manhattan skyline as a limited-edition collection of sculptures. Once they’re all taken, there’s no more space for new ones – the only way to get one is if someone decides to sell theirs. This is why Manhattan real estate is among the most expensive globally; there’s high demand, but the supply is fundamentally limited.

In this sense, rare real estate can be as scarce as a precious gem.

Yet – there’s always more land. Earth is big. There are 695,000 miles of coastline, 29 times the Earth’s circumference.

We could build more real estate in the desert, under the sea or floating on it, on Mars, or just into the sky.

If you think about it, we’ll even build more real estate in digital worlds as more and more of our lives move into cyberspace. That’s one of the reasons Apple and Meta, two of the most profitable companies, focus on building virtual reality devices.

Is it intelligence?

Not with the recent intelligence explosion we’ve been witnessing. During the last few months, I’ve written extensively about LLM technology, AI, and ChatGPT.

Our collective intelligence will go 1,000x over the next couple of decades.

So what is the most scarce resource on Earth?

The answer is … Bitcoin!

Plain and simple.

Bitcoin is a monetary good with a fixed supply schedule. There will always only be 21,000,000 BTC units. Each is infinitely divisible but there cannot be more BTC without changing the protocol.

Unlike gold, diamonds, real estate, human time, intelligence, and any other good on Earth, you cannot produce more of it when the price increases.

When more miners try to generate more BTC, the difficulty adjustment will make it harder to produce it. This protects the cap of 21 million monetary units from being hacked by higher energy expenditure and increasing human ingenuity.

It is desirable. You can use it as the official payment instrument in a handful of countries already (like El Salvador).

There are an estimated 56 million millionaires in the world as of 2023. This number is expected to grow to 87.5 million by 2026. Fiat inflation will continue to produce more and more millionaires forever.

So not every USD millionaire can have a single Bitcoin, even though every USD millionaire will want one to diversify and protect their net worth.

The only reason this scarce monetary protocol works is decentralization (otherwise, it would become a fiat currency controlled by a single party). That’s also why the 20k+ other cryptos are inferior: they are less decentralized.

Soon an infinite number of intelligent agents based on LLMs and other AI technologies will start to acquire the scarcest good on Earth, which makes it even more scarce for ordinary people like you and me.

US presidential candidates now propose to buy BTC to stabilize the US balance sheets.

The biggest asset managers in the world — Blackrock, Fidelity, BNY Mellon, Vanguard — have already started to accumulate BTC and will keep doing so.

The US will soon see a Bitcoin ETF, and a tsunami of new retail capital will compete for the scarcest resource on Earth.

Nothing is inevitable, but objectively, Bitcoin is and is likely to remain the scarcest resource on Earth.

🚀 Recommended: Bitcoin Whitepaper Cheat Sheet (PDF Download)