Lindy Effect: Why Gold is the Ultimate Store of Value
Contents
- Lindy’s Law as a Survival Heuristic
- Buffett’s Moat and Lindy’s Filter
- Monetary Assets as Coordination Technologies
- Gold and the Lindy Curve
- Fiat’s Shorter Lindy Tail—
- Crypto and Engineered Durability
- Tether’s Portfolio Signal
Lindy’s Law as a Survival Heuristic
Authored by GoldFix
The Lindy effect (also known as Lindy’s law[ is a theorized phenomenon by which the future life expectancy of some non-perishable thing, like a technology or an idea, is proportional to its current age. Thus, the Lindy effect proposes the longer a period something has survived to exist or be used in the present, the longer its remaining life expectancy.(wiki)
Lindy’s Law1 is not an investment framework in the conventional sense. It does not forecast returns, optimize portfolios, or estimate forward earnings. It is a survival heuristic. It is empirical rather than philosophical or theoretical. In its simplest form, Lindy’s Law observes that for certain non-perishable things such as technologies, institutions, and monetary goods, their expected remaining lifespan increases with the time they have already survived.
Put differently, if something has existed for X years, it may reasonably be expected to exist for another X years. The future life expectancy of the asset or system scales with its current age.
Buffett’s Moat and Lindy’s Filter
When placed next to Warren Buffett’s concept of a protective moat, the overlap becomes obvious.
Buffett looked for businesses that can defend themselves against time, competition, and changing conditions. Lindy’s Law looked at things that have already done exactly that. They approach the same problem from different directions:
• Buffett asks: What will still be here decades from now?
• Lindy observes: What has already proven it can be?
Buffett’s moat is prospective. It is forward looking. It evaluates whether a firm’s cost structure, brand equity, network effects, or switching costs can resist erosion over time. Lindy’s Law is retrospective. It does not speculate about whether something can endure. It measures whether something already has.
Monetary Assets as Coordination Technologies
This distinction becomes particularly useful when discussing stores of value.
Money, at its core, is a coordination technology across time. A store of value only works if economic actors believe it will preserve purchasing power into an uncertain future. That belief is not granted once and permanently. It is earned repeatedly through performance under stress. War, inflation, fiscal expansion, technological disruption, political turnover. Each of these events constitutes a challenge to monetary trust.
An asset that survives multiple such regime shifts accumulates institutional memory. Legal scaffolding builds around it. Cultural reflexes develop in its favor. Settlement infrastructure evolves to accommodate it. Over time, the system becomes path dependent. The longer it survives, the harder it becomes to replace.
Gold and the Lindy Curve
This is where Lindy intersects with gold.
Gold has functioned as a monetary asset across empires, continents, and technological epochs for thousands of years. It persisted through bimetallic standards, colonial paper regimes, the Bretton Woods system, and the post-1971 transition to fiat currencies. Each transition introduced new monetary technologies that were more efficient in transactional terms. Yet when confidence in those newer systems degraded, gold repeatedly re-emerged as the reserve layer beneath them.
Under Lindy’s Law, this longevity carries probabilistic weight. If gold has served as a store of value for millennia, then its expected remaining lifespan extends accordingly. If it has lived for 5,000 years, one may reasonably assume that it could live for another 5,000. That is not a guarantee of performance. It is an inference about survivability.
Gold: 5,000 Years of Value pic.twitter.com/FkDsVwcgW9
— VBL’s Ghost (@Sorenthek) February 25, 2026
Fiat’s Shorter Lindy Tail
Fiat currencies present a different profile.
As much as policymakers might prefer a national currency to endure indefinitely, historical evidence suggests that fiat regimes rarely survive the full arc of fiscal expansion, demographic stress, and political turnover. Their adaptive flexibility allows for monetary expansion, redenomination, or replacement in response to economic crises. That flexibility enhances their usefulness as mediums of exchange and policy tools. However, it shortens their Lindy tail as stores of value.
If a given fiat currency has existed for 75 years, Lindy suggests that its expected remaining lifespan as a trusted store of value may also be on the order of decades rather than centuries. This is not to say that it will fail. It is to acknowledge that only time will tell if you can stand the test of time.
Crypto and Engineered Durability
Crypto assets face a similar challenge from a different direction.
Protocols such as Bitcoin attempt to engineer monetary durability through fixed issuance schedules and decentralized consensus mechanisms. These features are designed to resist dilution and political interference. In Buffett’s language, they constitute an attempt to build a moat through code.
Lindy’s Law, however, does not evaluate design intent. It evaluates demonstrated endurance. Crypto’s monetary history is measured in years rather than centuries. Its long-term survivability as a store of value remains contingent upon future stress tests that have yet to occur at scale. Again, this does not imply failure. It implies uncertainty that only time can resolve.
Tether’s Portfolio Signal
Which brings us to Tether.
Tether has historically positioned itself as a staunch advocate of Bitcoin and the broader digital asset ecosystem. Its reserves and investment strategies have reflected a belief in the long-term viability of decentralized monetary technologies. Yet over the past two years, the company has also begun allocating capital toward physical gold.
This shift invites a question.
Continues here
