Bitcoin and the Network Effects Problem

Source: American Institute for Economic Research
by William J Luther

“Bitcoin proponents differ in the extent to which they expect the upstart cryptocurrency to circulate in the future. Some see the potential for bitcoin to replace the dollar. Others think bitcoin might serve as the primary currency for cross-border commerce, while reasonably well-managed national currencies like the dollar continue to circulate domestically. Still others expect bitcoin use will be largely limited to countries like Venezuela, Zimbabwe, and Argentina, where national currencies have been mismanaged in the past. But most have some notion of widespread bitcoin adoption in mind. The market capitalization of bitcoin suggests there is some chance it will achieve widespread adoption in the future.” (09/06/21)