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.”
Numerous economists feel that this
description is still valid today. And potentially disruptive technologies, from
digitalisation to biotechnology, will simply add to the list of requirements, as
economists will need to understand just what is innovative about the new
procedures. Keynes’s list of requirements is certainly not sufficient to really
An excellent cryptocurrency economist must have a
software background in order to read and understand the bitcoin code. This is
necessary, as the code contains the relevant rules, the so-called bitcoin
protocol. They must be hardware experts in order to understand the global,
decentralised network and the mining process. And they should have an
understanding of blockchain technology in order to understand the link between
bitcoin transactions and the mining process.
That is why traditional economists
are finding it difficult to get a grasp on the bitcoin phenomenon. Their forecasts
about the future development of bitcoin are often based on traditional, historical
patterns. The mantra “this time is different” has always turned out to be wrong in
financial market history – just remember the financial crisis of the past decade.
This knowledge about the circle of “Manias, Panics and Crashes” 1 is now
applied to cryptocurrencies. Consequently, bitcoin is regarded as a digital Ponzi
scheme, and traditional economists like to call bitcoin today’s tulip bulbs2.