2011-09-19

Bitcoin: creating a truly free coin

I recently finished writing this paper about bitcoin, the internet commodity/currency/thing. In it, I take the (somewhat odd, for me) position that we need a coin like this that (only sort of!) has a measure of inflation built in. Here is the abstract:

A commonly held belief is that bitcoin exchange values will either go down to nearly zero, as interest in the currency wanes, or will explode upwards by many orders of magnitude as the currency becomes a major player in the economy. This paper outlines a third endgame, whereby a bitcoin-like cryptocurrency becomes a major player in the economy, yet the exchange value remains relatively stable. I argue that bitcoin will not acheive widespread adoption without one key change, and that those who understand the potential of bitcoin as a force for good have a moral imperative to make this change. I further argue that competitive market forces will either promote a successor to bitcoin, or force bitcoin to evolve, driven by the key feature of value stability.

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