About Bitcoin as it might be discussed in economics class, e.g. supply, demand and price in theory.

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Bitcoin boom and bust - Inherent instability of Bitcoin

I'd like to put the a question to the community regarding the inherent stability/instability of Bitcoin. I hope it's not off-topic since it's more a economics-type question. So, here's the scenario in ...
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171 views

Why does bitcoin have a value? [duplicate]

I got this pretty good question the other day - why does bitcoin have a value at all? After all it's nothing - who is willing to pay for nothing?
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37 views

What would happen to the world if Bitcoin were the only allowed currency? [closed]

Could a world economy be based solely on Bitcoin? I mean the only mean to pay would be bitcoin. From the point of view of economy would this be possible or would all the economy collapse? Could we ...
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2answers
361 views

Halving reward, price effects? [duplicate]

What is the case after halving reward takes place: Would bitcoin price gets double, since its harder to mine? Would Blockchain introduces more blocks (e.g: 1/5mins)?
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72 views

Will people not spending their Bitcoin cause Bitcoin to fail? [duplicate]

Everyone I know that owns Bitcoin (including myself) seems to plan to sit on it until it becomes widely accepted/used and the price sky rockets to a ridiculously high value (100000 dollars each). It's ...
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28 views

Are any group currencies working at a big scale right now?

I am from Spain and here the national elections are being held next week. There are some political parties which have proposed a system to give a basic income to all the citizens without any job. I ...
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Selection of dependent variables - Time series regression on Bitcoin Price in USD

We are doing a time series regression project to identify the variables that impacts the bitcoin price in USD. We came up with the following explanatory variables: 1) GDPs of US, Canada, Europe, ...
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What are the prevailing metrics that are used to measure the size of the Bitcoin economy?

For example, one measurement is bitcoin days destroyed. However, I don't have a sense for whether or bitcoin days destroyed is one of the major ways people report the size of the Bitcoin economy. ...
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130 views

Economic effect of Bitcoin

I am an accounting student and I recently read about bitcoins, I was wondering if anybody could clear up my questions from my basic understanding of the bitcoin system. Since Bitcoins on a whole, ...
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How do transaction volume and block reward relate?

As an example, assume a block has 10 transactions with a total value of 1BTC. Does a miner get 25 BTC for validating and committing that 1BTC? What's the economics of this model?
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Inheritance and Bitcoins

A basic economic property of any currency is the ability to hold its value in the long term. While Bitcoin's ability to hold its value is evident, since there is no central authority to control the ...
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Can transactions scale sufficiently to compensate the diminishing block reward by fees?

Today, the bitcoin network is secured by massive computing power, which is expended in the process of mining. The miners are rewarded by newly mined bitcoins, plus transactions fees. The security of ...
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218 views

How to get paid providing full node services?

I run a full node. I would like to get paid for the services I provide. How can I go about getting that to happen?
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70 views

Can a cryptocurrency exist in a closed system?

I am developing a online game that requires a realistic economy and currency. I know I can create a new crypto coin currency with out much effort. What I am unclear on, is it possible for me to mine ...
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Details of Bitcoin mining rewards [duplicate]

I'm looking for some details about how Bitcoin mining rewards are doled out. It seems like the world of Bitcoin mining is composed of CPU miners, GPU miners, ASICs miners, and mining pools. And it ...
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297 views

Are loans with enforced repayment possible on the blockchain?

Are loans with interest possible in Bitcoin, such that repayment is enforceably encoded with Bitcoin Script on the blockchain from the establishment of the lending contract?
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859 views

Who issues bitcoins and how?

I can't find information on who actually issues the bitcoins. I understand that miners generate new bitcoins but what party is responsible for issuance?
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What will be happen if 21 million of bitcoins become the property of one?

Let's assume, that the day already came, when emission of bitcoins completed, and we have the 21 millions of bitcoins. Let's say it happen that all these Bitcoins at one moment became the property of ...
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127 views

Correlation between business cycle and BTC price

I would like to know if there is a correlation between business cycle and Bitcoin price, whether it is negative or positive. I am wondering because Bitcoin is deemed as commodity in my country's law, ...
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93 views

An “Almost” decentralised currency

I've been interested in Bitcoin for a while. I've been thinking I'd like to give it a go and see if I can make my own cryptocurrency, just to see if I can. I run my own small web hosting company, the ...
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What are some of the proposed ideas to why the Bitcoin dropped to sub $400 in the end of summer 2014?

Having seen that BTC was around $600 early summer of 2014 (May-July). It is currently almost 50% of that value. I read many varying reports of the cause of such a big drop. Can someone give a list of ...
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How does the Bitcoin forex work?

Does it work differently in relation to a regular forex because of its underlying technology? How can the market calculate its value?
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283 views

How efficient are bitcoin markets?

There are several bitcoin exchanges which trade bitcoins to $US and also several other markets which trade bitcoin for other currencies. Each exchange however quotes a different price in effective ...
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Are there any instruments that I can use to trade bitcoin volatility?

In the stock market, there are several financial products that allow an individual investor to trade/hedge daily volatility? As an example, there is the VIIX. Are there any such financial products ...
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109 views

How are new bitcoins created without monetary inflation?

As bitcoins are mined are older bitcoins retired? If not, how is monetary inflation prevented? Wouldn't the additional bitcoins cause the overall value of bitcoins to be deflated?
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How could a large owner of Bitcoin give back to the Bitcoin community in an equal way?

If there was one large owner of Bitcoin, for example somebody who owned 3% of all mined Bitcoins, would there be a way for that person to give back their Bitcoins in an equal way? I'm thinking more ...
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70 views

What are the economics of confirming a block of transactions?

From what I understand, CREATING a block to confirm or verify transactions is hard work, and is rewarded with 25 bitcoins, or something like $12,325 (depending on the daily exchange rate). But how do ...
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How do goods & services sellers manage price instability?

How do retail outlets manage the massive price instability? Are they really repricing every second with 25-50% spikes and drops over 24 hours? How much does it cost to maintain accurate prices? ...
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51 views

How can other currencies be “issued” via Bitcoin?

I've heard a few prominent bitcoiners (Andreeseen, ppl from BitPay) say that currencies such as US Dollars can be "issued" over the bitcoin network. I'm not exactly sure how this is possible, and I ...
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380 views

How to calculate velocity of Bitcoin?

So determining the value of bitcoin is not the question at stake here. Suppose there's a new bitcoin with a production algorithm that's tied to the feedback rule proposed by McCallum and adjusts ...
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Is there a way to make a crypto-currency stable by design? How? [duplicate]

I'm just wondering if there's any way of creating a crypto-currency that is stable by-design. How would one do so? Can there be something like a "central bank" built in into the currency client? I ...
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BTC for political donations?

When I am asked to make donations, I assure the requester that I will donate if they accept BTC. Initially, that gets a blank look, but I wonder how it might change if more of us took that approach. ...
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Why is mining difficulty increasing?

I have heard in many places that mining difficulty is increasing, meaning that the hardware used to mine new coins will need to be more and more powerful as time goes on. What is pushing mining ...
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Bitcoin from an economic standpoint?

Anybody have any good resources to learn about bitcoin from an economic standpoint? Specifically discussing the debate around its deflationary nature?
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How do people know that less than 1000 people own 50% of all bitcoins?

I read this post on this site: Who are creating all the alternate cryptocurrencies? In it, there is a answer saying: An article about a month ago was written about the owners of Bitcoin and we ...
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Is price volatility necessarily a bad thing?

Discussions of BitCoin as the potential basis for a future global monetary system often point to the currency's price volatility as a shortcoming. Fiat currencies, by comparison, are (mostly) a lot ...
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How much Bitcoin volume is for purchasing stuff versus trading/speculation/investment?

What percentage of Bitcoin transaction volume is due to people actually buying stuff ("goods") versus between traders, investors and speculators? Of the "goods" volume, what percentage is for illicit ...
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212 views

Ripple network overhead

I like the way Ripple provides effectively instantaneous transaction verification. When building consensus how much traffic and their equivalent of orphan blocks are accumulated? Is communication ...
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Economics article on BitCoin [closed]

I was wondering if some economists started to create a research group around BitCoin, or published academic paper on it. In general, I was wondering how BitCoin was analyzed and studied in academic ...
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367 views

Is split possible in bitcoins (like in stocks)?

I see that bitcoin is reaching 1000USD. If bitcoin becomes widely accepted currency, then we'll have to deal with decimal numbers like 0.00023 for onions etc. This can be cumbersome and might become a ...
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Is Bitcoin deflationary and inflationary at the same time?

I was wondering as Bitcoin is represented in the public and media as a deflationary currency (for more adept media as payment protocol). Is it really deflationary? Deflation is described on Wikipedia ...
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How do we know that the algorithm of Bitcoin does not embed bugs since inception?

I'm new to Bitcoin. My understanding as a trained economist (and not a programmer or IT expert) is that the key selling point of Bitcoin is the assignment of monetary policy prerogatives to an ...
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What happens if Bitcoins are lost

Since there are a finite number of Bitcoins that can be created, I am wondering what happens if some of the coins are lost. My questions are three fold: How do you define a "lost" coin? For example ...
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Do exchange rates between countries' currencies have an influence on Bitcoin exchange rates?

Are the exchange rates of each country a factor in the worth of a Bitcoin? Is the use of Bitcoin similar to traveling to another country and having a exchange rate between paper monies? Basically, ...
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285 views

What pressure prevents alternate currencies from completely diluting bitcoin?

Looking into LiteCoin a bit makes me wonder: if LiteCoin were to gain transaction, what's stopping a 3rd, 4th, and 5th currency from gaining traction as well? Wouldn't this effectively eliminate ...
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933 views

How can Bitcoin change the world?

Let's think of a hypothetical scenario if Bitcoin becomes the world's major (most used + highest market cap) currency one day. How will it change the world? The obvious point is cheaper money ...
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173 views

How does the Chinese Bitcoin ecosystem differ from the European/North American ones?

What is the background of the whole Bitcoin ecosystem in China? Their market has been growing insanely in the last days... but I guess it can be very specific (different mentality of people, the Yuan, ...
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Is mining an antieconomical process?

I will (probably) oversimply things, but I see it like that: Gold linked currencies: someone stores in vaults the value of the circulating money (1) and that "real wealth" is safe to be eventually ...
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Why did Dan Kaminsky say that Bitcoin is dependent on the Federal Reserve?

Dan Kaminsky embed a custom message in a block, which reads "BitCoin's new dependency upon [...] BERNANKE". Why did he say that Bitcoin is dependent on the Federal Reserve?
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Inequality in a Bitcoin World

So let's assume at some point in the future bitcoin has replaced fiat currencies and we thus have a fixed money supply. Let's also assume we have increasing production and therefore deflation. It ...