Why Economists Don’t Like Bitcoin (Part II)
<p><a href="https://medium.com/p/c0f0bcba17d9" rel="noopener">Last week</a> I documented and looked at the reasons why economists don’t like Bitcoin. After this week, it is safe to say that more and more people are with them. That said, as I argued, the reasons economists give for not liking Bitcoin don’t really stack up with their own usual ways of looking at things. Namely, it is not clear that it is driving illegal payments, its missing foundation makes it more like money, and in terms of wasting resources, economists usually look for market failures to evaluate that and, in the case of Bitcoin, it is unclear the market failures are there.</p>
<h2><a href="https://joshgans.medium.com/why-economists-dont-like-bitcoin-c0f0bcba17d9?source=post_page-----8f0b0808916e--------------------------------" rel="noopener follow" target="_blank">Why Economists Don’t Like Bitcoin</a></h2>
<h3><a href="https://joshgans.medium.com/why-economists-dont-like-bitcoin-c0f0bcba17d9?source=post_page-----8f0b0808916e--------------------------------" rel="noopener follow" target="_blank">Do their reasons stack up?</a></h3>
<p><a href="https://joshgans.medium.com/why-economists-dont-like-bitcoin-c0f0bcba17d9?source=post_page-----8f0b0808916e--------------------------------" rel="noopener follow" target="_blank">joshgans.medium.com</a></p>
<p>Nonetheless, I left that discussion hanging in that I actually think there are some legitimate economic concerns about Bitcoin. But this requires us to look beyond the usual competitive markets framework and, instead, focus on one thing economists usually don’t focus on (irrational behaviour) and another thing they definitely do worry about (market power).</p>
<p>In doing this, I am going to divide my analysis into two in order to answer the question of what economic service Bitcoin is providing. On the one hand, I will consider it as a store of value — digital gold if you will. On the other hand, I am going to characterise it as purely a game — a gambling game. Crypto enthusiasts aren’t going to like that. The reality is a mix of the two. It just serves my purpose to separate them out analytically as you will see. With that warning, let’s go to it and start by offending people as much as possible.</p>
<p><a href="https://joshgans.medium.com/why-economists-dont-like-bitcoin-part-ii-8f0b0808916e"><strong>Click Here</strong></a></p>