Gold supply grows ~3,000 tonnes yearly from mining. But ~90% of gold's value is monetary/jewelry (not industrial "intrinsic use"). Bitcoin reaches 21M maximum at a fixed, declining rate. Both have highly constrained supply relative to existing stock. Why does Stock-to-Flow emphasize this scarcity principle?

Stock-to-Flow argues assets with high existing stock and low new supply (high S2F) tend to hold value. Both gold and Bitcoin share this property: constrained new supply vs. massive existing reserves.

Metcalfe’s Law links value to…

Network value scales with user connections.

Treat models as guides, not guarantees.

Economic Models

10 min readarticleIncludes quiz · 3 questions

Models help explain or estimate value, but none are perfect. Use them as lenses, not crystal balls.

Simple definitions:

•Stock-to-Flow (S2F): Values scarcity—higher S2F may imply higher value.
•Metcalfe’s Law: Network value grows with the square of users.
•Production Cost: Mining cost can act as a long-term floor.
•TAM (Total Addressable Market): How big Bitcoin could be if it captures parts of gold, money, or payments.

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