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BITCOIN 1, BITCOIN 2, ....: AN EXPERIMENT IN PRIVATELY ISSUED OUTSIDE MONIES
Author(s) -
Garratt Rodney,
Wallace Neil
Publication year - 2018
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12569
Subject(s) - fiat money , cryptocurrency , economics , currency , monetary economics , indeterminacy (philosophy) , value (mathematics) , object (grammar) , store of value , medium of exchange , digital currency , time value of money , microeconomics , commerce , keynesian economics , finance , monetary policy , computer science , computer security , physics , quantum mechanics , machine learning , artificial intelligence
The value of bitcoin depends upon self‐fulfilling beliefs that are hard to pin down. We demonstrate this for the case where bitcoin is the only form of money in the economy and then generalize the message to the case of multiple bitcoin clones and/or a competing fiat currency. Some aspects of the indeterminacy we describe would no longer hold if bitcoin were an interest‐bearing object. ( JEL D50, E42)