Bitcoin and the Lindy Effect

Last week Bitcoin celebrated its 10th anniversary. At least in terms of the  original White Paper which was released all the way back on October 31st 2008. Of course, there’s a strong argument that the date of the Genesis Block is the true birthday – but that doesn’t really matter for these purposes.

Recently I’ve been thinking about the Lindy Effect. Like many, I originally came across this idea in both of Nicholas Nassim Taleb’s books ‘Black Swan‘ and ‘AntiFragile: Things That Gain From Disorder‘ but last week the phrase popped up again whilst reading Ryan Holiday’s ‘Perennial Seller‘.

The Lindy Effect is a simple heuristic that states the longer something has survived, the more likely it is to survive for at least the same period of time again. So the rate of mortality actually decreases with each additional year of life passed. Taleb has a good post explaining the concept in some detail but this quote sums it up nicely:-

“If a book has been in print for forty years, I can expect it to be in print for another forty years. But, and that is the main difference, if it survives another decade, then it will be expected to be in print another fifty years.”

“This, simply, as a rule, tells you why things that have been around for a long time are not “ageing” like persons, but “ageing” in reverse. Every year that passes without extinction doubles the additional life expectancy. This is an indicator of some robustness. The robustness of an item is proportional to its life!”

It seems to me that Bitcoin as a non-perishable technology is a prime candidate for the Lindy Effect. And in surviving a decade without collapse or fatal security flaw, the signs are good that it very well still by the time October 2028 rolls around.

(As an aside, I’ve just realised I’ve been writing about Bitcoin since 2013. 5 years ago. Does that mean I’ll still be writing about it in 5 years’ time?! I suspect so. Not sure that can be said to qualify as the Lindy Effect though…)