Back in 1924, John Maynard Keynes postulated that a “master-economist must
possess a rare combination of gifts. He must be mathematician, historian,
statesman, philosopher – to some degree.” And this is certainly not sufficient to
really understand bitcoin.
A “master cryptocurrency economist” will need
specialist knowledge about both software and hardware as well as blockchain
technology. That is why traditional economists are finding it difficult to get a
grasp on the bitcoin phenomenon. However, bitcoin supporters tend to
oversimplify things, too. For example, some of them believe that bitcoin will
become a regular means of payment in the long run and simply close their eyes
to its disadvantages compared to traditional currencies and traditional banking.
After all, many people are wary of using a global, decentralised technology
which is outside traditional law.
As a result, the current discussions triggered largely by bitcoin’s spectacular
price increases are not very informed or nuanced. All too often, participants only
repeat dogmatic claims, for example that “bitcoin will soon be dead anyway” or
that “bitcoin will soon dominate the financial sector”. Explaining how improbable
either of these two scenarios is already seems to provide an information edge.
We hope to make things a bit clearer with this report.
However, the issue is so
complex that we do not dare to claim that we can conduct a comprehensive
analysis. Instead, we will focus on several standard claims, which we will put
into context and, if necessary, rectify. This will hopefully help our readers to
familiarise themselves with the topic.