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76 sats \ 2 replies \ @Undisciplined 16 Oct \ on: Bitcoin Pricing, Adoption, and Usage: Theory and Evidence | Article Review BooksAndArticles
Good paper to start with.
It's hard to know what to take away from most of these price dynamic papers, because so much has changed in such a short period of time. To whatever degree Bitcoin was a purely speculative asset in 2016 or earlier, it's very different now. Plus, I don't know what these standard classifications would make of hodlers. I'm guessing they show up as speculators, but that's not what someone like Darth is.
It's hard to know what to take away from most of these price dynamic papers, because so much has changed in such a short period of time
Agreed. I think one of the cool things about the paper is that it shows a non-zero steady state price of Bitcoin when the only use case is international payments.
As long as their is some transaction for which Bitcoin has less friction than fiat, Bitcoin will not "go to zero" as the critics claim.
I think another interesting implication of the paper is that the main force mitigating against Bitcoin is risk of failure. That risk can actually be used to explain why you can't simply clone Bitcoin---the clone has too high a risk of failure when the main network is still operational and useful.
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That risk can actually be used to explain why you can't simply clone Bitcoin
That is an interesting point.
As I was reading through the literature survey, I started thinking about how valuable bitcoin will be for international tourism. I'm sure plenty has been written about that already, but I had mostly thought about cross-border payments like trade or remittances. Being able to bypass currency exchanges by just spending bitcoin when you're travelling is going to be huge, eventually.
The thing that made me realize bitcoin will never go to zero was just seeing that there will always be at least some fringe weirdos who keep using it and mining it.
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