William Jevons' paradox suggests that increased efficiency can lead to greater consumption rather than conservation. Historical examples include more fuel-efficient cars and HVAC systems, which have resulted in higher usage. The digital revolution has deepened this phenomenon, with computing costs plummeting, resulting in higher demand rather than efficiency-driven savings. The current trend in AI investment reflects this, as more efficient GPUs are expected to drive even greater usage. However, past examples from airlines and telecoms show that increased efficiency can still result in poor investment returns despite higher demand. In the crypto space, the assumption that lower-cost blockspace will create exponential demand has yielded mixed results, evident in Ethereum, where transaction costs have dropped significantly without a substantial increase in usage. Thus, even businesses exhibiting Jevons paradox can fail to deliver investor profits, showcasing the complexity of predicting investment success in the wake of efficiency gains.

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