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The Lindy Effect: How Gold and Bitcoin Survive the Test of Time



The Lindy Effect Explained in One Minute: From Albert Goldman to Nassim Taleb, & Gold to… Bitcoin?

What is the Lindy effect and why should you care? The Lindy effect is a theory that says the longer something has existed, the longer it will continue to exist. It applies to things that do not have a natural expiration date, such as ideas, technologies, or investments. The Lindy effect was first coined by Albert Goldman, a writer and critic, who observed that the life expectancy of a comedian was proportional to the amount of time they had been performing. 1 Later, Nassim Taleb, a mathematician and author, popularized the concept in his books The Black Swan and Antifragile, where he argued that the Lindy effect can help us deal with uncertainty and randomness in the world2

How does the Lindy effect relate to gold and bitcoin? Gold and bitcoin are both considered as alternative forms of money that can hedge against inflation and economic crises. Gold has a long history of being a store of value and a medium of exchange, dating back thousands of years. Bitcoin, on the other hand, is a relatively new invention, created in 2009 by an anonymous person or group using the pseudonym Satoshi Nakamoto. 3 According to the Lindy effect, gold has a higher probability of surviving and retaining its value than bitcoin, because it has proven its resilience and usefulness over a longer period of time. Bitcoin, however, has some advantages over gold, such as being more divisible, portable, and transparent, thanks to its digital nature4

So, which one is a better investment: gold or bitcoin? There is no definitive answer to this question, as both assets have their pros and cons, and their performance depends on various factors, such as supply and demand, market sentiment, regulation, innovation, and competition. The Lindy effect suggests that gold has a lower risk of becoming obsolete or losing its appeal, but it also implies that bitcoin has a higher potential for growth and innovation, if it can survive and adapt to the changing environment. Ultimately, the choice between gold and bitcoin depends on your personal preferences, goals, and risk tolerance. You may also consider diversifying your portfolio by holding both assets, as they may complement each other and provide some protection against unforeseen events. 5


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