When you strip away the blockchains and the tickers, what remains is an old idea in new clothes: value comes from limitation.
The crypto world has elevated scarcity into a kind of moral code, arguing that Bitcoin’s 21mn cap is gospel and inflation would be heresy. It is a worldview built in the wreckage of 2008, shaped by distrust of governments and the printing press. Yet, in a digital economy defined by infinite replication, that faith in scarcity looks increasingly out of step with the times.
The myth of scarcity
For much of the past decade, crypto’s founding myth has been that scarcity guarantees integrity. Central banks, so the story goes, dilute value by issuing more currency. Crypto, by contrast, enshrines discipline in code. The logic is simple: the fewer units there are, the more valuable each becomes. Bitcoin’s fixed supply, Ethereum’s burn schedule, and Solana’s limited emission all promise protection against the inflationary sins of fiat money.
A 2025 paper by Agisilaos Papadogiannis on Economic Scarcity as Value argues that crypto’s scarcity mechanisms function less as pure monetary policy than as signalling devices for perceived discipline and network trust. He describes scarcity as "a coordination narrative" that shapes investor psychology rather than a fundamental determinant of long-term value.
As Vice noted in its analysis of Bitcoin’s inflation rhetoric, this belief runs deeper than macroeconomics. It is cultural. It transforms monetary policy into morality, equating supply expansion with decay and scarcity with virtue. “Bitcoiners are obsessed with inflation,” wrote Edward Ongweso Jr. in Vice. “Are they right?”
Ongweso, a Brooklyn-based writer and editor who covers the intersections of technology, finance, and labour, is finance editor at Logic(s) magazine, co-host of the podcast This Machine Kills, and a senior researcher at Security in Context.
He argued that the answer depends on which inflation you mean:
Monetary supply: crypto’s critique has some basis.
Consumer prices: the correlation is far weaker.
That distinction matters. In 2021, researchers at the Internet Policy Review described “digital scarcity" in Bitcoin as a deliberate design choice that runs counter to the ethos of the internet itself. It introduces friction where networks tend towards openness.
They argued that scarcity in crypto:
Is less about economic necessity and more about identity.
Functions as a signal of belonging to a movement defined by resistance to abundance.
This cultural reflex is visible everywhere: in halving rituals celebrated like religious holidays, in NFT mints advertised as “one of one," and in the endless marketing of "sound money" as the cure for all social decay. To believe in scarcity is to see the world having gone soft, and to imagine salvation lies in code that refuses to bend.
When abundance rewrites the rules
The irony is that the digital age was supposed to abolish scarcity. Software copies infinitely at zero cost. Data multiplies by the second. Images, text and audio can now be generated in limitless supply by AI. Value has migrated from the rarity of things to the richness of connections. What drives growth today is not possession but participation.
That tension exposes crypto’s philosophical blind spot. A system built on limitation sits uneasily inside a networked economy built on proliferation. Nowhere is that clearer than in the NFT boom and bust. The first phase was pure scarcity theatre: finite collections, exclusive drops, proof of ownership as status. Yet the projects that endured were those that embraced community and expansion rather than rigid limitation. Access, not austerity, created staying power.
It also plays out in markets. The "digital gold" narrative rests on the idea that Bitcoin hedges against inflation by virtue of its capped supply. But the data have been inconsistent. During high-inflation periods, Bitcoin often traded as a risk asset, not a store of value. Empirical data reinforce that contradiction. An analysis by Victor Damberg at the University of Gothenburg found that Bitcoin’s performance during inflationary cycles diverged sharply from gold and oil, providing "limited hedging potential" and a high correlation with equity risk.
The numbers confirm what philosophy only hinted at. That disconnect suggests the scarcity thesis functions more as an ideology than a mechanism. Investors may invoke inflation to justify faith, but price action tells a different story. CME Group research shows Bitcoin’s running correlation with major equity indexes rose to around 0.5 and has stayed in that range, undermining the idea of a stable inflation-hedged asset.
AI introduces a further twist. Generative systems produce infinite content, undermining the notion that scarcity is a prerequisite for value. In an economy where everything can be copied, the premium shifts from owning to curating, from exclusion to context. Crypto’s ethos of digital restraint faces a cultural environment that rewards expansion and remixing. The abundance model is winning.
Reconciling the two worlds
None of this means scarcity will disappear. It remains a powerful signalling device, proof of trust, discipline and design integrity. The question is whether it can evolve from fetish to function. Future token models may combine the assurance of limited supply with mechanisms that embrace openness: networks where scarcity underpins credibility, but abundance drives participation.
The challenge is philosophical as much as technical. Crypto’s most profound anxiety has always been inflation, but the threat now may be irrelevance. If the industry continues to define itself only in opposition to fiat debasement, it risks becoming a nostalgia project for a monetary system it was meant to replace. Scarcity alone cannot explain value in a world that increasingly measures worth by utility, reach and adaptability.
As one essay on Singular Grit argued, crypto’s “hard-money mindset" has drifted into faith, where conviction replaces data and halving replaces analysis. That critique captures the unease of a system still fighting the last war, against inflation, while the world moves on to new forms of value creation.
The next phase may belong to projects that redefine scarcity as coordination, not restriction. Blockchains that scale participation, decentralized AI systems that price compute rather than coins, and token economies that measure contribution instead of possession. In those models, value emerges from abundance harnessed responsibly, not enforced deprivation.
As Ongweso wrote, the fixation on inflation reveals more about psychology than policy. It is the comfort of constraint in a world without limits. The irony is that crypto’s true innovation, the ability to program value into code, was an act of abundance. It created something from nothing, not less of something from too much.
In the end, scarcity may remain crypto’s most seductive myth. But myths evolve, and the next generation of builders may find that permanence lies not in how little we can create, but in how much meaning we can attach to the infinite.
