The Bitcoin Model

stock flow bitcoin model

The prevailing view among some traditional economists is that bitcoin is a speculative bubble, an irrational mania, an inexplicable phenomena; but if we take a different view, that bitcoin is an objective rational actor subject to market forces, we can come up with what we are calling the bitcoin model which can potentially be used in macro-economic analysis. The bitcoin model is simple in concept. Unlike any other money we know or have ever known, bitcoin is a totally fixed measurer of value. Therefore the bitcoin value doesn’t change, the value of everything else changes. To be very precise, its supply is currently increasing but we know by exactly how much it is increasing – 1.7% a year – and therefore can discount it to make it amount to a fixed measurer even now. Because this is a fixed measurer with complete information about all of its qualities, we can…

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