As an economist, I am much more comfortable with that statement
It is somewhat a worse situation than you describe, as though bitcoin is legal tender nowhere, it is assuming many of the features of a component of broad money supply (somewhere in the neighbourhood of M3 or thereabouts, so it can self-perpetuate for a long time indeed).
Also, as a consequence of its construction and finite supply of bitcoins, it does not allow elastic creation of money (no lending, only coining) when the need arises, so it has all the components of a catastrophic liquidity crisis: no underlying value, shallow capitalisation, no ability to adjust supply in the short term, fixed long term amount, and speculation run riot. This could be terrible.
I’m fairly sure blockchain technology will eventually be appropriated by central banks and governments and integrated into the financial system (”biteuro”?) but until the , I’m staying away from it.
Just a few days ago the thought came to me that a government mandated crypto-currency in Canada might be well-named as the Loonie.
Also, I am wondering how hard it would be to create a model - interactive online - that has different models of comparing a Ponzi scheme scale operation vs. a Bitcoin-like operation.. Is there software or online platforms for economists to run these kinds of analysis?
I'm not aware of an index of “ponziness”, but I'm equally pretty sure somebody must've defined a bunch of them and that they can probably be calculated. I just can't think of set of keywords that would allow to search for them in the literature.
I’m fascinated by the topics of economics and currency controls here and would would love to discuss some of these issues with you (relevant to a current project).
I wish to remark however that mine is a purely doctrinarian point of view, argued from first principles, and that bitcoin is by no means my field of expertise. I'm just looking at is as any neoliberal/monetarist financial economist (with a passion for market failures and the study of disequilibria) would.
To coin an analogy (pardon the pun): I'm like a chemist telling people about how dangerous plutonium is, purely on the basis of its chemical reactivity and toxicity, blissfully ignorant of its transcendent physical reactivity and fissile potential.
Within the window of that proviso, and assuming I have more to say on the topic (it might surprise you, but I'm not terribly interested in bitcoin, and don't bother to stay up to date on it beyond the occasional sensationalistic news that filters through Bloomberg and international media), I'm always eager to have a rational, measured conversation even between people that disagree. I'm not a bitcoin guru, I'm not an active equities, commodities, or derivatives analyst or investor, and I concern myself with the comparatively mundane task of running a family business that has blossomed into a multinational corporation. Despite what my written English may belay I'm not even an Anglo-Saxon, so I couldn’t declare myself to be entirely up-to-date on the nuances of political debates occurring in America in particular either, and I will of course exhibit an unknown Continental, centrist, statist bias.
It is somewhat a worse situation than you describe, as though bitcoin is legal tender nowhere, it is assuming many of the features of a component of broad money supply (somewhere in the neighbourhood of M3 or thereabouts, so it can self-perpetuate for a long time indeed).
Also, as a consequence of its construction and finite supply of bitcoins, it does not allow elastic creation of money (no lending, only coining) when the need arises, so it has all the components of a catastrophic liquidity crisis: no underlying value, shallow capitalisation, no ability to adjust supply in the short term, fixed long term amount, and speculation run riot. This could be terrible.
I’m fairly sure blockchain technology will eventually be appropriated by central banks and governments and integrated into the financial system (”biteuro”?) but until the , I’m staying away from it.