As data becomes more and more abundant, digital scarcity becomes more valuable. Let me explain.
Imagine a world where robots built houses for free. The abundance on one side (=houses) increases the scarcity on the other side (=land). Consequently, prices of land would skyrocket.
Similarly, digital bots and generative AI create floods of digital information, helpful research, and abundant knowledge multiplying the productivity of knowledge workers. As a result of this data abundance, scarce digital data infrastructure must become more valuable.
What is the most scarce digital infrastructure?
I’m not referring to the price of Bitcoin or the limited BTC supply, but rather the capacity to store data on a digital infrastructure that is so secure and robust that even the most formidable nation-states or corporations cannot erase it.
On average, Bitcoin generates a 1MB block every 10 minutes.
To store 1GB of data on the Bitcoin blockchain, you would need exclusive write access to over 1000 blocks. During the last bull market, miners earned around 1BTC per block transaction fees, meaning the cost of storing 1GB of data could reach 1000 BTC during high-demand periods.
This was before the rise in popularity of storing various types of data on Bitcoin. (Yeah, ordinals and inscriptions 🙄.)
With a price tag of $30k per BTC, embedding 1GB of data into the secure and durable Bitcoin database would cost upwards of $30 million – talk about prime digital real estate!
In a nutshell, humans and autonomous internet bots constantly compete to store data in each block, using their BTC as transaction fees.
Three Killer Apps for Scarce Bitcoin Blockspace
Here are three killer apps that would need this pricey distributed database:
App 1: Want to secure a place in the history books and ensure your name is remembered long after the likes of Hercules, Julius Caesar, and Achilles have faded? Embed your name in the Blockchain. You no longer need to be a great warrior to achieve immortality.
App 2: To immortalize your love, consider writing your love message in the Blockchain while it’s still affordable for ordinary people like us. (In fact, I had this idea while having coffee with my wife a year ago, and we created a simple service for it. 💍 Check out BitcoinVows.com.)
App 3: If you’re a nation-state looking to store encrypted GPS locations of strategic military assets in a database that could survive a nuclear war, Bitcoin blockspace is your top choice.
With all the uncertainty about the future, this is something you can bet your house on:
Data volumes and processing capabilities will continue to explode in the upcoming decade.
In this rapidly changing environment, you can either bet on change by learning about AI, staying informed on tech, and mastering topics we discuss daily at Finxter, or you can bet on what remains scarce and constant in an increasingly digital world, like blockspace.
This article first appeared in my tech newsletter:
Jean is a tech enthusiast with a love for AI and machine learning innovations, particularly LLMs. Beyond contributing insightful articles to our blog, Jean has worked as a Python, Rust, and Go coder for one of the leading tech firms in the world.