Hi all,
A lot of people struggle to explain the scarcity element of Bitcoin and why this has value to your buddies or to the so called No (or Pre) Coiners. I think a very easy way for people to understand is by relating to an old version of the MMORPG Runescape r/2007scape, the classic and 2007 editions. As many people of my generation have played this game it can be an easy bridge for the ones that still remember it to Bitcoin. Anyone that played this game will remember so called “Holiday drops” as in the first few years the game existed Jagex (owner of the game) dropped random items such as Christmas crackers, Party hats, Easter eggs, Halloween masks and Santa hats. If you are struggling to explain to No (pre) coiners why Bitcoin has value, simply ask them if they (or perhaps their kids) have played Runescape and if the answer is "Yes" ask them about the value of one of those holiday drops. They will for sure recognize it and you could tell them the scarcity of Bitcoin is very similar in real life (with its hard cap supply at 21m BTC) to that of those drops within the game.
Some background:
In Runescape you had a really simple economic system. Players could collect in game money and items by killing creatures and collecting quests, within the game people could trade with each other basically exchanging goods for coins or for other goods (like in the real world). However, within the game there was high inflation because both coins (Runescape money) and (valuable) items where randomly dropped by dying creatures, so as a result there was a constant new supply of all of those items within the game making the items and money less scarce continuously diluting their value. The longer the game existed the more the monetary system within the game evolved and the more detailed the pricing between all the various in game products became. Most of the pricing was based on how useful the product was (according to the product stats) and the rarity of the product (determined by the drop rate and how difficult it was to kill the creatures that dropped the product). The only products in the game however that were not on a regular basis dropped by creatures were those Holiday drops. These items were randomly dropped once by Jagex and as a result over the years became rare items. Despite the fact that these items were completely useless, they became the most valuable items within the game as they were the only items with no new supply and therefore the most hard asset within the game.
Anyone that ever played the old version of Runescape back in time will know what happened to the value of those holiday drops and as a result, will understand the concept of scarcity and store of value.
For example look at “partyhats” (see explanation in the below pictures), In the 10 years that I played the game (2001-2011) the value of these useless things increased from nothing to over 2 billion Runescape money, just because its scarcity (it was dropped in 2001 and never newly created thereafter), similar for the other above mentioned one time holiday drops. Actually the most valuable item became the un-popped Christmas cracker what produced the party hats. A completely useless item except as store of value, all you could do with it was keep it in the bank or trade it to someone else, you could not even wear it or show off your wealth as you could with the other items. Another similarity between those items and Bitcoin was the impact of Decay; Both for Bitcoin and these holiday drops, the total number is/was decaying over time as for Bitcoin there are people that store there private keys which might get lost and for these holiday items in Runescape people who owned them either quit or had their accounts banned over time diluting the total remaining number in existence.
I think for anyone that every played this game this can convince them of Bitcoins scarcity and very easily explain why bitcoin has a decent chance to be worth much more in the future (millions and millions of people from my generation have played this game). Bitcoin r/Bitcoin, is the only form of commodity/money that has a hard cap supply and therefore will become the most scarce store of value in history of humanity. As a result, there is a significant probability that Bitcoin, especially once coming closer to the maximum number of coins mined (already at 18m/21m), will show similar price movements as to how the holiday drops prices within Runescape have moved over the years.
Party hats explained:
"Partyhats are obtained by opening Christmas crackers, dropped during the 2001 Christmas event. There are six different coloured partyhats, all with the same shape and size (red, yellow, green, blue, purple, and white). When worn by a player they resemble a crown. Because they are discontinued, they are very rare, much sought after and worth billions of coins, although they don't offer any stat bonuses. These are currently the most valuable objects in RuneScape. Partyhats are used to hold large sums of cash, because the gold coin limit is 2.147B and these hats are gaining wealth over time. Due to their rarity, these items hold a much higher Street value than their value on the Grand Exchange. In Runescape Classic, the price of partyhats was drastically changed after players abused a glitch by creating many partyhats (see Partyhat duplication glitch for more info.) Due to their high price, they have become recognised as a symbol of wealth in the game by players and non-player characters alike.
Over time, the volume of partyhats has been diminishing. The much smaller number of players when partyhats were released meant that not as many were acquired when available. Also, at the time of the release, partyhats were virtually worthless, meaning many players discarded them immediately. The majority of the few players who held onto them eventually quit RuneScape or were banned, leaving the number of active players with partyhats at a very, very low number.
Surprisingly, partyhats do play a pivotal role in the RuneScape economy. Players will use these items as investments, cash placements, staked items, and collectables. They are used as cash holders for players because of the stability of the item. Majority of partyhats are traded in world 2 around the grand exchange, but collectibles players wishing to buy or sell a partyhat may either have to advertise on the RuneScape forums, leave it in the Grand Exchange, or trade at much lower/higher prices to accommodate the few players that are willing to trade partyhats."
Hope This helped some of you guys explaining Bitcoins scarcity element to your buddies.
~Benjamin
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