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Getting off the ground: the case of bitcoin

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  • LUTHER, WILLIAM J.

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.

Suggested Citation

  • Luther, William J., 2019. "Getting off the ground: the case of bitcoin," Journal of Institutional Economics, Cambridge University Press, vol. 15(2), pages 189-205, April.
    • Handle: RePEc:cup:jinsec:v:15:y:2019:i:02:p:189-205_00
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    Citations

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    Cited by:

    1. Harwick, Cameron & Caton, James, 2022. "What’s holding back blockchain finance? On the possibility of decentralized autonomous finance," The Quarterly Review of Economics and Finance, Elsevier, vol. 84(C), pages 420-429.
    2. Michael Peneder, 2022. "Digitization and the evolution of money as a social technology of account," Journal of Evolutionary Economics, Springer, vol. 32(1), pages 175-203, January.
    3. Hogan Thomas L. & Luther William J., 2019. "Endogenous Matching and Money with Random Consumption Preferences," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 19(2), pages 1-9, June.
    4. Alastair Berg & Chris Berg & Mikayla Novak, 2020. "Blockchains and constitutional catallaxy," Constitutional Political Economy, Springer, vol. 31(2), pages 188-204, June.
    5. Alastair Berg & Brendan Markey-Towler & Mikayla Novak, 2020. "Blockchains: Less Government, More Market," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 2(Summer 20), pages 1-21.
    6. William J. Luther, 2022. "Regulatory ambiguity in the market for bitcoin," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(1), pages 1-14, March.
    7. Hendrickson, Joshua R. & Luther, William J., 2022. "Cash, crime, and cryptocurrencies," The Quarterly Review of Economics and Finance, Elsevier, vol. 85(C), pages 200-207.
    8. Hazlett, Peter K. & Luther, William J., 2020. "Is bitcoin money? And what that means," The Quarterly Review of Economics and Finance, Elsevier, vol. 77(C), pages 144-149.
    9. Levulytė, Laura & Šapkauskienė, Alfreda, 2021. "Cryptocurrency in context of fiat money functions," The Quarterly Review of Economics and Finance, Elsevier, vol. 82(C), pages 44-54.
    10. Luther, William J. & Stein Smith, Sean, 2020. "Is Bitcoin a decentralized payment mechanism?," Journal of Institutional Economics, Cambridge University Press, vol. 16(4), pages 433-444, August.

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