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9 posts on "bitcoin"
April 30, 2021

Hey, Economist! What’s the Case for Central Bank Digital Currencies?

Since the launch of Bitcoin and other first-generation cryptocurrencies, there has been extensive experimentation in the digital currency space. So far, however, digital currencies have yet to gain much ground as a means of payment. Is there a vacuum in the landscape of digital money and payments that central banks are naturally positioned to fill? In this post, Michael Lee and Antoine Martin, economists in the New York Fed’s Money and Payment Studies function, answer some questions regarding the concept of central bank digital currencies (CBDCs).

Posted at 7:00 am | Permalink
August 12, 2020
June 18, 2020

Bitcoin Is Not a New Type of Money

Bitcoin, and more generally, cryptocurrencies, are often described as a new type of money. In this post, we argue that this is a misconception. Bitcoin may be money, but it is not a new type of money. To see what is truly new about Bitcoin, it is useful to make a distinction between “money,” the asset that is being exchanged, and the “exchange mechanism,” that is, the method or process through which the asset is transferred. Doing so reveals that monies with properties similar to Bitcoin have existed for centuries. However, the ability to make electronic exchanges without a trusted party—a defining characteristic of Bitcoin—is radically new. Bitcoin is not a new class of money, it is a new type of exchange mechanism, and this type of exchange mechanism can support a variety of forms of money as well as other types of assets.

March 25, 2019

Deciphering Americans’ Views on Cryptocurrencies

Having witnessed the dramatic rise and fall in the value of cryptocurrencies over the past year, we wanted to learn more about what motivates people to participate in this market. To find out, we included a special set of questions in the May 2018 Survey of Consumer Expectations, a project of the New York Fed’s Center for Microeconomic Data. This blog post summarizes the results of that survey, shedding light on U.S. consumers’ depth of participation in cryptocurrencies and their motives for entering this new market.

February 9, 2018

Hey, Economist! What Do Cryptocurrencies Have to Do with Trust?

Bitcoin and other “cryptocurrencies” have been much in the news lately, in part because of their wild gyrations in value. Michael Lee and Antoine Martin, economists in the New York Fed’s Money and Payment Studies function, have been following cryptocurrencies and agreed to answer some questions about digital money.

March 23, 2016

Is Bitcoin Really Frictionless?

Bitcoin is the most popular virtual currency yet developed.

September 1, 2015

A Distributed Version of Repugnance as a Constraint on Markets

The 2012 Nobel Prize in economics was awarded to Alvin E. Roth and Lloyd S. Shapley for their work on matching problems.

Posted at 7:00 am in Financial Markets | Permalink | Comments (1)
August 28, 2015

Entry and Exit Leads to Zero Profit for Bitcoin Miners

In a previous post, we discussed bitcoin miners’ incentives to undertake a 51 percent attack given the current condition of the bitcoin market.

Posted at 7:00 am in Financial Markets | Permalink
November 24, 2014

Bitcoin: How Likely Is a 51 Percent Attack?

Rod Garratt and Rosa Hayes In June 2014, the mining pool Ghash.IO briefly controlled more than half of all mining power in the Bitcoin network, awakening fears that it might attempt to manipulate the blockchain, the public record of all Bitcoin transactions. Alarming headlines splattered the blogosphere. But should members of the Bitcoin community be […]

Posted at 7:00 am in Exchange Rates, Financial Markets | Permalink
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