Why Isn't Bitcoin Interesting To Leading Economists?
I think that the entire concept of the Bitcoin is perplexing. Cyber currency wasn't even an idea just a few decades ago, and now here it is, valued as a 5 billion dollar piece of our economy. The author of the article steps back and looks at the Bitcoin and why it has not been researched much by our respected economists. The author states that the answer to that question is simple: 5 billion dollars isn't a lot of value. If you think about it, that is the same size as a single mid-cap stock. One company. Bitcoin is as valuable as one decently sized corporation. That's why economists don't focus on Bitcoin that heavily YET. Economists are more interested in all of the firms instead of just one, moderately large corporation.
Bitcoin is, however, a currency market. Currency markets are usually looked at by economists. Economically, Bitcoin is no different than any other currency. It will have inflation just like any other currency, in fact, the inflation is actually easier to predict than the value of the dollar because every transaction is so easily monitored. But, it is hard to study Bitcoin transactions from an economic standpoint because the transactions are anonymous in the sense that we don't know what demographic is buying the product. Economists study who buys and sells, with no method of determining that, how can they see what's going on? Bitcoin is still relatively small in terms of the entire economy, but who's to say it can't make an impact someday? That day just hasn't come yet.
- David Gerhart
- David Gerhart
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