Bitcoin Power Law: Theory

The mathematics and the causal arguments behind the model

The Bitcoin Power Law chart is easy to read at a glance, but it rests on a specific piece of mathematics and a specific claim about why Bitcoin might follow it. These explainers unpack both - what the model is, and what could cause it.

The Mathematics of Log-Log Regression

Why a curve on a normal chart becomes a straight line in log-log space, and how the a and b coefficients are fit.

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Metcalfe's Law & Network Effects

The demand-side argument for why Bitcoin's value may scale as a power of its adoption and usage.

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Power Law vs Stock-to-Flow

How the demand-driven power law differs from the supply-scarcity Stock-to-Flow model, and why their predictions diverge.

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