Some simple bitcoin economics

【Author】 Schilling, Linda; Uhlig, Harald

【Source】JOURNAL OF MONETARY ECONOMICS

【影响因子】4.630

【Abstract】We provide a model of an endowment economy with two competing, but intrinsically worthless currencies (Dollar, Bitcoin). Dollars are supplied by a central bank to achieve its inflation target, while the Bitcoin supply grows deterministically. Our fundamental pricing equation implies in its simplest form that Bitcoin prices form a martingale. "Mutual impatience" implies absence of speculation. Price volatility therefore does not invalidate the medium-of-exchange function. Bitcoin block rewards are not a tax on Bitcoin holders: they are financed with a Dollar tax. We discuss monetary policy implications, Bitcoin production, taxation, welfare and entry, and characterize the range of equilibria. (C) 2019 The Author(s). Published by Elsevier B.V.

【Keywords】Cryptocurrency; Bitcoin; Exchange rates; Currency competition

【发表时间】2019 OCT

【收录时间】2022-01-02

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