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The Bitcoin adoption paradox

There is a finite supply of Bitcoin, and mining speed of new Bitcoins is reducing all the time. As more people buy into Bitcoin, the value tends to increase, since there’s more money in the system and less Bitcoin to go around.

Let’s say Bitcoin takes off in the real world and various merchants start accepting it.

Since Bitcoin is useful now, more people buy in. But since more people are always buying in and the total pool is limited, the value continues to go up. The more merchants support Bitcoin, the more people adopt Bitcoin, and the more valuable it becomes.

The more the value continues to increase, the better it seems as an investment, and the more people lean towards holding instead of spending. The more useful it becomes, the better it is to not use it.

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