- The Changing Role of Economics
Economics has historically focused on "goods" in the form of physical objects: production of food, manufacturing of widgets, buying and selling houses, and the like. Physical objects have some particular properties: they can be transferred, destroyed, bought and sold, but not copied. If one person is using a physical object, it's usually impractical for another person to use it simultaneously.... But on the internet, very different rules apply. Copying is cheap. I can write an article or a piece of code once, and it usually takes quite a bit of effort to write it once, but once that work is done, an unlimited number of people can download and enjoy it.
Bill Gates made the same point:
Larry White asks Has Bitcoin Succeeded?
- The answer depends on what you mean. Succeeded at what?
And from 2014, another entry for the hindsight cringe archives:
with some fair criticisms that remain relevant, but also an observation that BTC was crashing from $800 to $700 while commenters complain that it is deflationary.
No one mentioned that Bitcoin had just turned five. In 1790, when the dollar was five years old, and the Spanish peso was in common use in North America, was the dollar widely accepted by merchants? Was volatility acceptably low?
As cryptocurrency approaches a trillion dollars in total capitalization, I don't see the concern that volume is too small for it to be useful on the world stage so often.
Meanwhile, Bitcoin adoption is booming in Turkey, where the lira has long exceeded inflation targets. It probably didn't hurt that the Shariah Advisory Council announced that digital assets are mal: lawful money.
Is it time for another price prediction contest?