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Can cryptocurrencies become a commonly accepted means of exchange?

In: The Economics of Blockchain and Cryptocurrency

Author

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  • Nicolás Cachanosky

Abstract

This chapter studies the challenges a cryptocurrency faces to become a common means of exchange. In particular, the paper discusses the scalability constraint that limits the number of transactions a cryptocurrency may be able to verify per unit of time, the network effect in goods that function as money that increases the cost of new currencies to gain market share, and the implications of the fixed monetary rule present in most cryptocurrencies that departs from an elastic optimal monetary policy. Potential solutions for each case are also discussed.

Suggested Citation

  • Nicolás Cachanosky, 2022. "Can cryptocurrencies become a commonly accepted means of exchange?," Chapters, in: James L. Caton (ed.), The Economics of Blockchain and Cryptocurrency, chapter 2, pages 13-28, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:20524_2
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