The life expectancy of a technology increases proportionally with its life. This is what the Lindy effect, popular among Bitcoiners, says. What to think of the concept.
The concepts and ideas that shape Bitcoin’s acceptance curve are not always easy to understand. Bitcoin is a novel technology for which there are no analogues from the past. Accordingly, the rise of the first decentralized, fully digital money in human history seems incomprehensible to viewers at the side.
What is the Lindy Effect?
One of these concepts is the Lindy effect. At its core, the idea is pretty simple. According to this, the life expectancy of non-perishable things like technologies increases with the length 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 likelihood of comedy appearances in New York’s Lindy’s restaurant (hence the name) to the frequency of previous gigs. The more frequent the appearances, the more likely the comic career will continue in the future.
The concept only really got going when mathematician Benoit Mandelbrot described the “Lindy Effect” in his 1982 book The Fractal Geometry of Nature
Accordingly, future life expectancy is proportional to its past. So if a particular book is printed for 40 years, it can be expected that it will be in circulation for another 40 years. However, if it survives an additional ten years, it can be expected that it will still be sold in 50 years. The ultimate example of the body of literature that can be explained by the Lindy Effect is the Bible. It cannot be assumed that the Holy Scriptures will be replaced by an update in the next few years.
As Nassim Taleb explains in his book Antifragil , certain things age “backwards”. The automobile has been around for about 120 years. One can therefore assume that the invention will be relevant for another 120 years. Of course, according to Taleb, the Lindy effect is only a statistical probability distribution. So there is still an abrupt end to many technologies. The fax machine or landline telephone connections are largely a thing of the past, as they have been replaced by more efficient technologies such as e-mails and mobile phones.
If a book has been in print forty years, I can assume it will be in print for another forty years. But if it survives another decade, it will likely be in print for another fifty years. That usually just tells you why things age the other way around. Each year that goes by without extinction doubles the additional life expectancy.