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Getting off the ground: the case of bitcoin

Published online by Cambridge University Press:  03 August 2018

WILLIAM J. LUTHER
WILLIAM J. LUTHER*
Affiliation:
Department of Economics, Florida Atlantic University, Boca Raton, FL 33431
*
*Email: [email protected]
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Abstract

By declaring an item legal tender or making it publicly receivable, governments might generate sufficient demand to determine the medium of exchange. How do private actors launch a new money? There are two views in the literature. The first requires offering an item with a use value to some agents that is distinct from its role as a medium of exchange. The second suggests that agents might coordinate on an intrinsically useless item. With these views in mind, I survey the logs from the original bitcoin forum, bitcoin-list. I find that early participants in the bitcoin community understood the importance of coordination and took steps to coordinate users.

Type
Research Article
Information
Journal of Institutional Economics , Volume 15 , Issue 2 , April 2019 , pp. 189 - 205
Copyright
Copyright © Millennium Economics Ltd 2018 

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