pull down to refresh

64 sats \ 1 reply \ @SimpleStacker 4 Nov \ on: Bitcoin Economics And Finance Survey bitcoin
I've been reading this one: https://www.sciencedirect.com/science/article/pii/S0304393212001110
It's a good one. It's not even about Bitcoin, but here are some excerpts:
Can currency be efficiently provided by competitive markets?
If suppliers of currency cannot commit to their future actions, then competition loses its bite. Once agents hold a particular currency, there may be an incentive for the issuer to inflate the price of goods in terms of this currency, thereby reducing its outstanding liabilities.
Cough cough government fiat printing cough
Trust may solve the time inconsistency problem in the supply of money.
With commitment, currency competition achieves the efficient (Friedman rule) monetary equilibrium, as Hayek (1976) envisioned.
With full commitment, Hayek's conjecture that efficient monetary equilibria can be achieved through currency competition is verified.
And, although the paper doesn't mention Bitcoin... we know that one of Bitcoin's key features is its commitment to the future monetary policy. It explains why ossification is important for Bitcoin. It also explains why shitcoins are shit, because there is no trust in the issuer's ability to commit to a future path.
Looks more and more like economic theory is supportive of Bitcoin... I'm looking forward to reviewing this :)
write
preview
21 sats \ 0 replies \ @siggy47 OP 5 Nov
Excellent. I hope to finish it tomorrow. As always I look forward to your review.
reply