The positive feedback and negative feedback mechanism

Everything is interconnected rather than linear causality.

For example:

Increasing the money supply would cause a lower value of the currency. This is a cause and effect relationship. In fact, there are many factors that contribute to currency depreciation. i.e. The currency is relatively weaker than other currencies; The national productivity declines; High debt; Poor economic system...etc.

How to think in systems

In the view of system, there is a definite cause for every effect, likewise for every cause there is a definite effect.

To think in systems, there are 3 parts: positive feedback, negative feedback and delay.

Positive feedback
Positive feedback means a reinforcing effect.

Negative feedback

Negative feedback means a balancing effect.


As a concept, systems thinking is a way of understanding the complex world around us. Events in the world do not occur instantaneously. Instead, there is often a significant lag between cause and effect.

For example: 

Printing more money by a central bank will not immediately lead to inflation. There is a time delay.

More thoughts

While a positive feedback loop amplifies an effect, there are limiting factors. From the above graph, examples of the limiting factors are government intervention, bitcoin security exposure and its acceptability, etc.

Moreover, because everything is interrelated, finding the root cause is the key for analysis.