In addition to overcoming the profitability problem, the second problem cryptocurrencies face in their quest to disrupt traditional finance is the power problem. For disruption to occur, cryptocurrencies must usurp power from institutions that have been around for hundreds of years. The Lindy Effect theorizes that many things “age in reverse,” which provides some intuition as to why a radical power shift, such as a crypto disruption, is difficult to pull off. Other major roadblocks in displacing long-held financial power include blockchain’s public nature and a suboptimal strategy undertaken by crypto advocates; I will elaborate on the these points further after exploring the implications of the Lindy Effect.

The Lindy Effect, first theorized by Albert Goldman in his 1964 article "Lindy's Law" in The New Republic, states that the future life expectancy of some nonperishables, such as an idea, business, or technology, is proportional to its current age. Many authors have since written about the phenomenon, including Nassim Taleb in his 2012 book Antifragile: Things That Gain from Disorder. The concept can be viewed as building on Newton’s first law of motion, which states that “an object in motion tends to stay in motion, unless acted upon by an outside force.” The Lindy Effect offers an estimate of how much time will pass before an “outside force” acts upon an existing nonperishable to change its trajectory (or “kill” it).

In January 2009, the genesis block on the bitcoin blockchain was mined into existence by Satoshi Nakamoto, officially kicking off the bitcoin project. The Lindy Effect suggests that because BTC has been around for 13 years, it should survive for another 13. With every year that passes without extinction, an additional year is added to BTC’s life expectancy. Taleb thinks of this as “aging in reverse.”

Now, consider such nonperishables as the Federal Reserve, established in 1913, and the Bank of New York Mellon (the oldest bank in America), established in 1784. These entities, 109 and 238 years old, respectively, are often viewed as institutions ripe for cryptocurrencies to disrupt. As the meme goes, with cryptocurrency “You can be your own bank.” But from the Lindy perspective, these long-established organizations have an upper hand over Bitcoin and shorter-lived cryptocurrencies in the game of existence. Their life expectancies are 8.4 and 18.3 times longer, respectively, than bitcoin’s.

Assume that BTC, the Federal Reserve, and the Bank of New York Mellon all survive another 100 years. Will the balance of power shift in crypto’s favor? One hundred year hence, the traditional institutions’ life expectancies would be only 1.8 and 3.0 times longer, respectively, than bitcoin’s. On the surface, this could appear to increase BTC’s chance for disruption, but it also could support coexistence. If we apply the Lindy Effect to the current coexistent relationship between cryptocurrency and traditional finance, we have good reason to assume this relationship will continue. At what point does the relationship become disruptive? Quite possibly, never.

Next, the question must be asked: What is stopping TradFi (Traditional Finance) incumbents from upgrading their systems to utilize blockchain? Surely they have been working on such projects. If crypto disruption is truly a threat to the power and profitability of traditional finance, these institutions would not ignore the threat and willingly allow it to occur. The meme “Blockchain is permissionless” has some truth because blockchain is a public database (please see the appendix). But for hodlers dreaming of disruption, the public, permissionless nature of blockchain means that the well-capitalized financial institutions of today have access to these systems too.

As I alluded to earlier, crypto advocates have adopted a suboptimal strategy in their quest for disruption: they are telling their enemy precisely what they intend to do. Sun Tzu, the ancient military strategist and author of The Art of War, advised “let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.” A modern-day meme originating from The Wire similarly advises that if “you come at the king, you best not miss.” From this perspective, the crypto-revolution appears decidedly unserious, lending support to my belief that the window for cryptocurrency disruption has likely passed.

“Crypto will disrupt traditional finance” and “Bitcoin is the future” are powerful memes that have successfully encouraged people to buy bitcoin and other cryptocurrencies over the past 10+ years, yet the power of memes has hardly made a dent in the power of traditional finance. With this reality and the Lindy Effect in mind, there is no reason to assume cryptocurrency will “enter the future”— that is, become widely accepted and utilized as money, usurp power from powerful financial institutions and governments, and cease acting as speculative investments—anytime soon.