A Game-Theoretic Approach to Bitcoin’s Valuation in Equilibrium

The discussion presents a significant insight into the future trajectory of Bitcoin within the global economy, touching upon its potential to equilibrate at 50% of all wealth. This perspective is drawn from the principle that savings equals investment (S=I), a concept attributed to Michael Saylor's analysis. The conversation further delves into the implications of Gresham's Law on Bitcoin's journey towards becoming a widely accepted currency. According to this law, Bitcoin is expected to be initially hoarded rather than circulated as a currency because of the tendency for "bad money" (less valuable or less trusted forms of currency) to circulate more freely than "good money" (more valuable or trusted forms). This hoarding phase, however, is not seen as indicative of failure but rather as a necessary precursor to a broader acceptance and utilization of Bitcoin.

As the dialogue progresses, it anticipates a shift influenced by Thiers' law, which suggests an eventual reversal where "good money drives out bad." This transition is expected to manifest dramatically through substantial or prolonged hyperinflation of world currencies, setting the stage for Bitcoin to emerge as a daily "unit of account" or currency. This analysis underscores the complex interplay of economic laws and principles that will influence Bitcoin's integration into the financial systems and its acceptance as a viable currency in the future. The insights provided offer a nuanced view of Bitcoin's potential evolution, reflecting on both the challenges and milestones anticipated along its path to becoming a cornerstone of global economic transactions.