Opportunity Cost

Opportunity cost is what you ‘lose’ when you choose one thing over another. It’s the value of the next best thing you could have chosen instead.

For example, say Bob has $100 and he has to choose between buying chocolate or bitcoin. If Bob decides to buy bitcoin, the opportunity cost is the enjoyment and satisfaction he would have received from buying and consuming the chocolate. This cost reflects the value of the next best alternative that Bob did not choose.