The Lindy Effect

Happy Friday Bitcoiners!

A wealth advisor colleague called me a few days ago. His father-in-law just went all-in on Ethereum after ‘doing his research’. Smart contracts, DeFi, the whole pitch.

Then came the inevitable question: "Why are you still Bitcoin-only? Aren't you worried about missing out?".

My response was simple: "If you had to bet on what survives the next 100 years - the Bible or “The Let Them Theory” by Mel Robbins (Amazon’s best selling self-help book of the week), which would you choose?

He paused. "The Bible, obviously”.

"Exactly" was my response.

That's the Lindy Effect in action. And it's the single most powerful filter for separating signal from noise in investing.

1) Time: The Ultimate Stress Test

Here's something most people miss: The longer something survives, the longer it's likely to continue surviving.

Nassim Taleb calls it the Lindy Effect i.e. for non-perishable things (things like ideas, technologies and/or institutions), every additional year of survival doubles the expected remaining lifespan.

The Bible has been around for ~2,000 years. That means it's likely to be around for another 2,000. Compare that to the latest bestselling self-help book, which will probably be forgotten about within 2 years.

Same with Stoicism. Marcus Aurelius wrote his meditations in the year 170 AD. People still read them today because the principles survived countless cultural shifts and technological revolutions.

Or consider sugar and alcohol. Our paleolithic brains evolved to seek sweet fruits and fermented beverages. The Romans drank wine. The Egyptians brewed beer. Today we're still chasing that exact same dopamine hit.

These things survived because they've been stress-tested across millennia. The market of human experience has voted.

Time reveals truth. Survival is signal.

2) Bitcoin's Lindy Advantage

So what does this have to do with Bitcoin you may ask?

Everything.

Bitcoin is now 16+ years old which, in technology terms, is ancient. But what matters is that, according to the Lindy Effect, every year Bitcoin survives makes the protocol’s next year of survival even more likely.

Think about what Bitcoin has already gone through to get to where it is today:

• China mining ban (multiple times);

• The Blocksize Wars (civil war that caused a huge riff within the community);

• Multiple exchange collapses (Mt. Gox, FTX, etc.);

• Government/regulatory crackdowns across dozens of countries;

• Thousands of competing "Bitcoin killers" trying to be ‘better’ than Bitcoin.

Bitcoin didn't just survive these challenges. It adapted. The Blocksize Wars taught us Bitcoin's conservative approach protects the network. China's mining ban proved decentralization works. Each challenge made Bitcoin stronger to the effect that today hash rate (aka network security) has never been higher (blue line below).

This is the most critical insight though because the Lindy effect isn't just about survival time. It's proof of adaptability. As we explored in a previous article The Adaptability Advantage, the systems that endure are those that respond to threats without abandoning core principles.

So what’s the key difference between Bitcoin and everything else in crypto?👇

Bitcoin Cash forked off in 2017, promising to be "better Bitcoin". Seven years later and it's worth 0.3% of Bitcoin's market cap.

Bitcoin Satoshi's Vision (BSV) followed in 2018, claiming to be the "real Bitcoin". Today, BSV trades at ~$500 million market cap (0.02% of Bitcoins total market capitalization). It’s hash rate is also 0.02% of Bitcoin's (roughly 200 Petahash versus Bitcoin's 900,000 Petahash).

That correlation isn't an accident.

Hash rate represents real-world commitment. Miners allocate actual electricity and hardware to chains they believe will survive. When BSV lost the market's faith, it couldn't adapt. It doubled down on rigid ideology instead of responding to feedback. No adaptability means no Lindy Effect.

The market simply prices what miners already know: You can fork the code, but you can't fork the battle-tested adaptability that creates the Lindy Effect.

3) Time as An Investment Filter

Most investors analyze quarterly earnings and growth projections. But there's a simpler question:

“How long has this been around, and has it survived real stress?”

Coca-Cola has been around since 1886. That's 139 years of surviving World Wars (see one of their OG advertisements below), the Great Depression, and every major financial crisis + Covid, all while adapting and maintaining its core product.

Contrast that with the latest tech IPO. Maybe it looks great on paper. But most tech companies haven’t survived a real downturn yet.

Bitcoin is 16 years old. It has survived 80%+ drawdowns, government bans, and thousands of competitors. Meanwhile, Ethereum has changed its monetary policy multiple times. Most altcoins don't make it past year two.

The question isn't "Which has better technology?" It's "Which has proven it can survive?"

As we covered in The Art of Doing Nothing, the best-performing investors find something proven and hold it. New things need extraordinary evidence to overcome their lack of track record.

Bitcoin is past that phase. Betting against it requires believing something will break that hasn't broken yet, despite 16 years of attacks.

Key Takeaway

Time doesn't just test things. Time itself is the test.

The Bible, Stoicism, Coca-Cola, and Bitcoin all share the same trait: they've survived long enough that betting against them requires extraordinary justification.

So, when evaluating any investment in your portfolio, ask yourself: "How long has this been around, and what has it survived?"

If the answer is "not long" or "nothing serious", then you're speculating it will achieve what most things never do: survive long enough to benefit from the Lindy Effect.

Bitcoin has passed that test. Every year it exists makes the next year more likely. Every challenge it adapts to makes it stronger.

The market understands this (which is why Bitcoin dominance keeps rising over the long run and why BSV trades at 0.02% of Bitcoin's value).

Time is speaking, but are you listening? I sure hope so!

Stay humble,

@Publius256

P.S. We’re doing our best to orange pill the world by helping educate and share timeless Bitcoin principles.

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