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Valuing cryptocurrencies: Three easy pieces

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  • Burda, Michael C.

Abstract

This paper surveys the capacity of simple macroeconomic models - 'three easy pieces' - to account for persistent and positive valuations of privately issued assets based on the blockchain. Each of these three models - transactions demand for a means of payment, consumption-based capital asset pricing, and search and matching - highlights important aspects of digital payments. The mutual interference of these jointly produced features may impede widespread use of cryptocurrencies until technological innovations have been developed to separate them.

Suggested Citation

  • Burda, Michael C., 2021. "Valuing cryptocurrencies: Three easy pieces," IRTG 1792 Discussion Papers 2021-011, Humboldt University of Berlin, International Research Training Group 1792 "High Dimensional Nonstationary Time Series".
    • Handle: RePEc:zbw:irtgdp:2021011
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    File URL: https://www.econstor.eu/bitstream/10419/235590/1/1762592185.pdf
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    Cited by:

    1. Michael C. Burda, 2022. "Discussion on: “Programmable money: next generation blockchain-based conditional payments” by Ingo Weber and Mark Staples," Digital Finance, Springer, vol. 4(2), pages 127-131, September.
    2. Ingo Weber & Mark Staples, 2022. "Programmable money: next-generation blockchain-based conditional payments," Digital Finance, Springer, vol. 4(2), pages 109-125, September.

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    • C00 - Mathematical and Quantitative Methods - - General - - - General

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