Is Bitcoin real, or the most elaborate shared belief in financial history? This is the question everybody is actually asking, usually around the second glass of wine, and it deserves a proper answer rather than a hedge dressed up as balance.
Can I tell you what it took me to learn this? For years, I wanted somebody, anybody, ideally somebody clever and expensive, to tell me whether this thing was real. I wanted the answer handed over so I could stop thinking and start doing. That craving for certainty was more dangerous than any market, because a person desperate for an answer will accept a bad one from whoever offers it most confidently. What I have since learned is that the ability to hold two contradictory ideas in your head without panicking isn’t a failure to decide. It is the entire skill.
So let us hold two ideas.
What it has already survived
The list is genuinely remarkable. Mt. Gox, once handling the overwhelming majority of the world’s Bitcoin trading, haemorrhaged around 850,000 coins and collapsed in 2014, bleeding slowly over years rather, which is somehow worse. China banned it repeatedly, eventually expelling the largest mining industry; the network’s computing power halved, shrugged, relocated, and returned to record highs. Then came the 2022 winter; lenders, funds and one very famous exchange were revealed to be, in technical terms, making it up. Billions evaporated.
Through it all, the protocol kept producing a block roughly every ten minutes, indifferent to the carnage around it.
Now, and here is where I must part company with the more enthusiastic literature, that does not mean Bitcoin has never broken. It has, twice. In August 2010, somebody exploited an overflow bug and conjured 184 billion bitcoin into existence, roughly 9,000 times the entire supply that will ever exist. Satoshi patched it within five hours, and the chain was rolled back. In March 2013, a software upgrade split the network in two; someone successfully spent the same coins twice, and the fix involved developers ringing up the big mining pools and politely asking them to downgrade, at considerable cost to themselves.
I find those two incidents more reassuring than the sanitised version, and I’d rather you knew them. Bitcoin’s resilience has never been that it cannot break. It is that when it broke, people who cared fixed it in hours, and the thing kept walking.
What could genuinely finish it?
Four candidates deserve a serious hearing, and I have no interest in waving any of them away.
Quantum computing could, in principle, unpick the cryptography holding the whole edifice together. The developers know, and upgrades are designed to resist quantum attacks. The honest timeline is measured in decades, and the machines required don’t currently exist. Not dismissible. Not imminent either.
The security budget problem is subtler and, to my mind, the most interesting. Miners are paid in two ways: freshly minted coins and transaction fees. The minting halves every four years and eventually stops altogether. At that point, the network security rests on fees alone, and whether those fees will suffice is a genuinely open question that will not be settled in our lifetimes. Anyone who tells you it’s obviously fine, or obviously fatal, is guessing.
Then competition. Ethereum runs programmable contracts; Solana handles thousands of transactions a second. Bitcoin’s answer, that it never wanted to be a computer, only a store of value, is coherent. It is also a thesis, not a fact, and it requires people to keep believing it.
And regulation. A coordinated effort by major governments to make holding Bitcoin legally untenable would hurt. Enormously. That has become markedly less likely since the American spot ETFs arrived and the custodians moved in; it remains possible, particularly where governments regard control of money as a matter of national survival.
The Lindy effect
Which brings me to the one advantage Bitcoin’s rivals cannot buy at any price: time.
A popularised idea by the writer and statistician Nassim Taleb, named after a New York delicatessen where Broadway actors argued about which shows would run and which would close. For things that do not perish (books, ideas, technologies, institutions), every additional year of survival increases their expected remaining lifespan. A play that has run for a decade will probably run another. A book still read after two centuries will likely see a third. Fragility is weeded out by time; what remains has been tested by it. This is the Lindy effect.
Bitcoin has survived seventeen years, two protocol failures, the loss of its founder, several obituaries a year, and concerted hostility from China. Every halving that passes without anyone tampering with the 21 million cap makes that cap more credible. Every year without a catastrophic failure makes the next year’s failure less likely. Every institution that adds it to a balance sheet makes the next institution’s decision fractionally easier.
Gold took centuries to accumulate its reputation, through nothing more magical than repeatedly failing to rust. Bitcoin is attempting the same trick at speed, in a world where information travels instantly, and institutions still move like continents.
I’d add one delicious wrinkle, in fairness. Taleb himself, who gave us Lindy, has become one of Bitcoin’s most withering critics. Ideas don’t belong to their authors, and the honest reader will notice that the framework’s own father would use it against the very conclusion I have just drawn. Sit with that. It is the whole point of this article.
Weighing the two cases
Bitcoin is a high-risk, highly volatile asset, and anybody who tells you what it will be worth in five years is telling you something they cannot possibly know. That applies perfect symmetry to the bulls and the bears; the person speaking confidently on Bitcoin tells you precisely nothing about the accuracy of what they say.
Supporters rest their case on three legs: a supply cap that nothing else replicates, an adoption curve that may be far earlier than the noise suggests, and optionality, the idea that if the digital gold thesis proves right, the outcome would be very large compared with what was risked. The case against is equally coherent: it produces nothing, earns nothing, and its value depends wholly on a shared belief that could, in principle, evaporate. The very properties that make it thrilling to its admirers are exactly what make it intolerable to a state.
Both cases are strong. Holding both in mind, rather than dismissing whichever is inconvenient, is what separates a thinker from a believer, and only one of them sleeps well.
What I can share is a principle rather than a position. Anything this speculative belongs in the speculative column, never the foundations. No single position should decide whether a family is fine. And some things are better given time than attention. Nothing I said here is advice, and I’d be suspicious of anyone who offered you some. It is simply the temperament of a woman who has learned, slowly, that patience is the strategy, not the just thing you do while waiting for one.
Bitcoin is either the most consequential monetary invention since the banknote or the most elaborate collective agreement in financial history. The genuinely remarkable thing is that both sentences describe the same object perfectly.
Understanding why is where judgement begins, and judgement, unlike certainty, is actually available to you.
If you’d like the quieter side of crypto, read XRP Explained: Crypto’s Quiet Payments Plumber. To go deeper, the crypto manuals in The Collection explain how digital assets work from the ground up.
This is me, thinking out loud in your company: educational commentary, not financial advice. Capital is always at risk, and what you do next is gloriously your own affair.
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The Jacqueline Brand: knowledge builds confidence, and confidence builds wealth. This is editorial commentary for information and education only. It is not financial, investment or professional advice, and nothing here is a recommendation to buy or sell any investment. The Jacqueline Brand is not authorised or regulated by the Financial Conduct Authority. The value of investments can fall as well as rise, and past performance is not a guide to future returns. Figures were correct at the time of publication. Always do your own research and consider speaking to a regulated adviser. Where cryptoassets are discussed, they are high risk and largely unregulated in the UK, and you could lose all the money you invest.
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