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172 sats \ 2 replies \ @Undisciplined 16 Oct \ on: Bitcoin Economics And Finance Survey bitcoin
Here's a passage from the introduction of the Ciaian and Rajcaniova (2016) paper.
Among the BitCoin features, which may facilitate its use as a currency, we have identified low transaction costs, high anonymity and privacy, learning spillover effects, infinite divisibility and no inflationary pressures.
Among the BitCoin features, which may impede its use as a currency include the absence of a legal tender attribute, difficulty to procure BitCoins, relatively high fixed costs of adoption, dependence on network externalities, absence of an institution enforcing dispute resolution, absence of BitCoin denominated credits, deflationary pressure, extremely high price volatility, and issues with cyber security.
I think that's a very fair set of factors, for 2016. Some of the impediments have improved tremendously in the past 8 years and they are all things that can improve (except for deflationary pressure, which is a fake impediment).
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0 sats \ 0 replies \ @Undisciplined 16 Oct
being a virtual currency, BitCoin is more vulnerable to cyber-attacks than traditional currencies
ROFL!
That clearly came from someone with no clue about how either bitcoin or modern banking/finance work.
It's not a particularly important part of the paper, but it's really damn funny.
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0 sats \ 0 replies \ @Undisciplined 16 Oct
This paper discusses the lack of bitcoin credit markets as one of the major obstacles to becoming a medium of exchange. In one sense, I agree with this, but the authors don't seem to understand that you can have functioning credit markets without fractional reserve banking.
Bitcoin credit markets would function exactly like credit markets were supposed to work on the gold standard (bitcoin just prevents the rampant cheating that occurred). A lender (mortgage provider or credit card company, for instance) would have to hold the bitcoin first and would then allow customers to spend it on condition of repaying them with interest. It's not that hard to understand, as it's how most normal people think the current finance system works.
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