In an interview with Dr. Adam Back, the hashcash inventor answered why Bitcoin is unlikely to go to zero, how earlier electronic cash systems failed, why Bitcoin is often compared to gold, and what “digital scarcity” actually means in practice.
Why “Bitcoin will never go to zero” and what that really means
Here Adam Back is explaining the game‑theoretic intuition that there will always be a buyer at some positive price, even if Bitcoin dropped extremely low. In his view, the combination of collectors, true believers, and people who understand its monetary properties creates a permanent floor above zero. He also points out that even if some governments ban Bitcoin, a global, coordinated ban is very unlikely, and history shows that bans often push usage into informal, gray‑market channels rather than eliminating it.
- “I think never definitionally because you know if it became 1 cent I would buy them all personally and then the next guy would pay two cents and the next guy would pay two cents and it would be back, you know, even just as a collectible to start with, a historic collectible.”
- “So it can’t happen I think now. I mean there could be adverse regulatory decisions in some countries, but there’s lots of things in life that exist in a gray zone or are illegal in some countries but legal in other countries…”
Earlier electronic cash experiments and why Digicash failed despite strong privacy
Here he provides historical context: Bitcoin did not appear out of nowhere. Before Bitcoin, there were digital cash systems like Digicash that offered very strong privacy but relied on a central company. That company became a single point of failure. When it went bankrupt, users effectively lost their money because no one could reliably tell which coins were already spent. This contrast sets up why decentralization is so crucial in Bitcoin’s design.
- “There were previous electronic cash systems with extremely strong privacy, one by Digicash which was a bit centralized but had much stronger privacy than Bitcoin and people were very excited about it for those privacy reasons.”
- “Digicash went bankrupt… that was the end of that… So anybody who had coins kind of lost them because the database that kept track of which coins are spent… is very centralized. So when that company shut down and its servers switched off… that was the end of it.”
Bitcoin as “digital gold”: mining, stock‑to‑flow, and monetary properties
In this part he explains why Bitcoin is often compared to gold rather than to traditional digital payment systems. Both gold and Bitcoin are mined, both have a constrained rate of new supply, and both derive monetary value from being hard to produce. He also brings in the “stock‑to‑flow” idea: how much existing stock there is relative to the new annual flow. When Bitcoin’s issuance halves, its stock‑to‑flow can surpass that of gold, reinforcing the “hard money” narrative.
- “I do think that Bitcoin has the most similarities with, let’s say, physical gold or something because you’ve got the mining aspect, which is a bit gold‑like in having a limited amount that can be mined each year due to the capacity of the mining process.”
- “Gold scarcity has that effect and Bitcoin has that same kind of effect and after the halving next year will arguably have a slightly higher stock‑to‑flow ratio than gold itself. So that’s an interesting metric to consider.”
Digital scarcity vs infinitely copyable bits: why Bitcoin feels counterintuitive
Most people intuitively understand that files, songs, and videos on the internet can be copied endlessly at almost zero cost. That is why calling file sharing “theft” often feels off: the original holder still has their copy. Against that background, Bitcoin’s claim to be “scarce” is counterintuitive. Here he highlights that one of Bitcoin’s major breakthroughs is to create a kind of digital object that cannot be duplicated at will, functioning more like a scarce physical asset than like a regular file.
- “It’s a strange concept, right, that something digital can be scarce. So in a way that’s one of the main new inventions of Bitcoin, that you can actually have digital scarcity which is an analog for physical gold scarcity.”
- “Historically digital things are not really scarce… a digital copy is costless and doesn’t detract from the existing holder’s possession. So to call that theft I think is an attempt at indoctrination and misleading people.”
How Bitcoin enforces hard limits on supply through mining and proof‑of‑work
Here he goes deeper into the mechanics that make Bitcoin scarce in practice. Mining machines compete for a fixed amount of new coins per block. No matter how many machines join, the protocol adjusts difficulty so only a set number of coins are created per unit of time. This is what gives Bitcoin predictable issuance and verifiable scarcity. Anyone can check the cryptographic proof of work attached to blocks to confirm that real computational effort was spent to create those coins.
- “The way that Bitcoin fixes the scarcity is that it’s defined mathematically that only a certain number of coins will be mined per day and these machines, however many machines are running, have to share them. So the rate per day will be fixed and that defines scarcity.”
- “To check that the right amount of work went into creating digital gold, Bitcoin, to show that it’s scarce, you can just check a hash function… and to verify it for a computer takes a tiny fraction of a second.”
Assaying Bitcoin vs testing physical gold for purity and authenticity
Finally, he compares the ease of verifying Bitcoin to the challenges of testing physical gold. With gold, you need tools and expertise to make sure a bar is real and not hollow or plated. That verification process costs time and money. Bitcoin, on the other hand, lets anyone with a regular computer or smartphone verify the entire supply and the validity of individual coins using simple cryptographic checks. This “built‑in assay” function makes Bitcoin superior as a verifiable monetary good, even compared to gold.
- “Bitcoin provides you with almost free, immediate assay on a laptop or a smartphone… there are techniques for checking if you have 100% pure gold, but that has a cost… Bitcoin lets you verify it yourself very cheaply.”
