202.7 Lesson - scarce

Screen: scarce

Headline: A monetary good must scarce

Reward: 3

Text: A good store of value should have a limited supply, or be scarce.

This is because scarcity can create value, as people often desire rare or hard-to-obtain items. Bitcoin, for instance, is designed to have a maximum of 21 million units, which gives each owner a known percentage of the total possible supply.

In contrast, the supply of gold can potentially increase through new mining methods, and fiat currencies are often prone to inflation, leading to a decline in value over time.

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QUIZ

Question: What is the most important attribute of a store of value?

Answer: Scarcity

Feedback: Congratulations! You are correct. Did you know that there will only ever be a maximum of 21 million bitcoins in circulation, making it a scarce and valuable asset

Correct: true

Answer: Abundance

Feedback: Sorry, but abundance is not the most important attribute for a store of value. Better luck next time

Correct: false

Answer: Ease of production

Feedback: Sorry, but ease of production is not the most important attribute for a store of value. Better luck next time!

Correct: false