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Getting off the ground: the case of bitcoin

Published online by Cambridge University Press:  03 August 2018

WILLIAM J. LUTHER*
Affiliation:
Department of Economics, Florida Atlantic University, Boca Raton, FL 33431

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
Copyright
Copyright © Millennium Economics Ltd 2018 

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