The life expectancy of a technology increases proportionally with its lifetime. This is what the Lindy effect, popular among Bitcoiners, says. What to think of the concept.
The concepts and ideas that shape Bitcoin Loophole acceptance curve are not always easy to understand. Bitcoin is a novel technology for which there are no analogues from the past. Accordingly incomprehensible the rise of the first decentralized, fully digital money in the history of mankind affects viewers at the side of the page.
What is the Lindy effect?
One of these concepts is the Lindy Effect. In essence, the idea is quite simple. According to it, the life expectancy of non-perishable things like technologies increases with the duration of their existence. Each additional period of time that a technology masters implies a longer life expectancy.
The idea originally came from US author Albert Goldman, who in the 1960s linked the probability of comedy performances at New York’s Lindy’s restaurant (hence the name) to the frequency of previous gigs. The more frequent the gigs, the more likely a comedian’s career is to continue in the future.
But the concept only really took off when mathematician Benoit Mandelbrot described the „Lindy effect“ in his 1982 book The Fractal Geometry of Nature. According to this, future life expectancy is proportional to its past. So if a particular book is printed for 40 years, it can be assumed that it will be around for another 40 years. However, if it survives an additional ten years, it can be expected to be distributed in 50 years. The ultimate example of the stock of literature that can be explained by the Lindy effect is the Bible. It cannot be assumed that the Holy Scripture will be replaced by an update in the next few years.
So, as Nassim Taleb states in his book Antifragil, certain things age „backwards“. The automobile has existed for about 120 years. It can therefore be assumed that the invention will have relevance for another 120 years. Of course, according to Taleb, the Lindy effect is only a statistical probability distribution. For many technologies, however, there is a sudden end. The fax machine or landline telephone connections are largely a thing of the past, as more efficient technologies such as e-mail or cell phones have replaced them.
If a book has been in print for forty years, I can assume that it will be in print for another forty years. But if it survives another decade, it will probably be in print for another fifty years. This usually tells you simply why things age the other way round. Every year that passes without extinction doubles the additional life expectancy.
And what about Bitcoin?
Fair enough. But what does all this have to do with Bitcoin? Well, one transfers the concept to the crypto currency No. 1 might rise with each day, on which BTC functions smoothly, the general confidence that „orange Coin“ remains for the duration of its past existence further. In other words: The longer Bitcoin already exists, the longer the crypto currency might outlast.
Besides the Lindy effect permits a further conclusion. If it concerns the persistence of competing crypto currencies, the nose might have in accordance with the effect Bitcoin in front. After all, it is the first really functioning crypto currency.
Of course, the Lindy effect is a highly simplified view of technological advances. Even Taleb admits that the phenomenon is actually not suitable for predicting the life expectancy of individual technologies. In the end, however, it is a very useful tool for testing the robustness of technological achievements. And Bitcoin is actually becoming more popular every day.