Tyler vs. Tyler on cryptocurrency network externalities
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Tyler Cowen thinks Bitcoin is going to “plummet in price.” While I agree with my colleagues Jerry Brito and Andrea Castillo that the price is not really what’s interesting about Bitcoin, it is always worth grappling with Tyler’s arguments. Tyler first argues that entry into the cryptocurrency market is limited primarily by the cost of marketing the new currency. Tyler notes that these marketing costs are isomorphic to the network externalities enjoyed by incumbent cryptocurrencies. “Alternatively you can think of that sum as representing the natural monopoly reserve currency advantage of Bitcoin.” OK, I prefer the latter terms, so let’s push marketing to one side.
Tyler vs. Tyler on cryptocurrency network externalities
Tyler vs. Tyler on cryptocurrency network…
Tyler vs. Tyler on cryptocurrency network externalities
Tyler Cowen thinks Bitcoin is going to “plummet in price.” While I agree with my colleagues Jerry Brito and Andrea Castillo that the price is not really what’s interesting about Bitcoin, it is always worth grappling with Tyler’s arguments. Tyler first argues that entry into the cryptocurrency market is limited primarily by the cost of marketing the new currency. Tyler notes that these marketing costs are isomorphic to the network externalities enjoyed by incumbent cryptocurrencies. “Alternatively you can think of that sum as representing the natural monopoly reserve currency advantage of Bitcoin.” OK, I prefer the latter terms, so let’s push marketing to one side.