Documents Associated with Bitcoin and Related Topics in Law: Part XVII

[ad_1]

This article first appeared on Dr. Craig Wrights blog, and we have republished with permission from the author.ReadPart 1,Part 2,Part 3,Part 4,Part 5,Part 6,Part 7,Part 8,Part 9,Part 10,Part 11,Part 12,Part 13, part 14, part 15 and part 16.

Burns (2022) says the primary motivation behind Bitcoin was to disrupt money by enabling faster and more secure forms of money. The same concept was taken up by Caton and Harwick (2022, p. 1), who argued that Bitcoin and related systems transformed money and the association of the canonical presentation of money and its emergence, [while] the adoption of means of exchange through an exchange network is supposed to reduce transaction costs: search costs, storage costs, transport costs, costs due to the absence of divisibility of the goods exchanged.

Marthinsen and Gordon (2022) present digital payment systems as an option for countries experiencing hyperinflation. In their analysis, the authors outline sixteen attributes that must be met when introducing such a system and show how to incentivize governments and financial institutions to become fiscally prudent. Yet the analysis once again fails to capture the alternative restructurings and incentives that apply to nations or policy decisions that lead to hyperinflation. Unfortunately, in such an analysis, the argument treats the leaders of African nations as those of liberal Western countries.

Annotated Bibliography

Burns, S. (2022). The Silicon Savannah: Exploring the Promise of Cryptocurrency in Africa. In The Economics of Blockchain and Cryptocurrency (pp. 6994). Edward Elgar Publishing. https://www.elgaronline.com/display/book/9781800882348/book-part-9781800882348-12.xml

While Burns (2022, p. 70) incorrectly refers to bitcoin as a cryptocurrency, the purpose of bitcoins as a privately issued medium of exchange is correctly described. The author studies the catalyst for digital cash adoption in Africa, labeling it as cryptocurrency adoption. In the analysis, the author notes how Hayeks’ reference to non-government currency can potentially be implemented in Africa, in light of the widely varying inflation rates and lack of monetary stability within countries across the continent. .

The paper analyzes inflation, consumer price indexing and the question of demand and supply, noting that Bitcoin has become so popular in Zimbabwe that demand has exceeded supply, causing it to caused it to trade at a significant premium to prices in other countries (2022, p 74). Unfortunately, the scenario also led to volatility limiting the effectiveness of the system. In response, the author demonstrated how stablecoins have provided opportunities in the region, despite the lack of certainty surrounding such systems. Yet, the lack of financial development and the increasingly high cost of remittances in African countries seem to offer additional opportunities in the region.

Additionally, political instability and continued economic uncertainty are introducing several technology trends that show that changing demographic trends will likely lead to the replacement of M-PESA and other digital payment systems. Yet hostile regulation and a lack of technological infrastructure leave an open competitive market, with mobile money open to disruption. Therefore, African nations could possibly provide a testing ground for Hayeks’ proposition that competing private issuers would provide better and more stable currencies than central banks (Burns, 2022, p. 90).

Caton, JL, & Harwick, C. (2022). Cryptocurrency, Decentralized Finance, and the Evolution of Money: An Approach to Transaction Costs.Journal of New Finance,2(4).https://doi.org/10.46671/2521-2486.1027

Caton and Harwick (2022, p. 12) argue that with Bitcoin, a fully decentralized and automatic solution has been developed and implemented to enable a new form of monetary exchange. Although such a statement is technically incorrect, the authors analyze transaction cost and the nature of the exchange and explain how the reduction of fees and the ability to minimize financial intermediation provide opportunities for the introduction of new currencies. disturbed. The analysis assumes that the Lightning Network (Poon & Dryja, 2016) will solve the problems of the BTC network, allowing batch transactions to exist with lower fees.

Continuing their analysis, the authors misrepresent the nature of financial privacy, confusing Zcash with anonymity, while continuing to analyze the concept of public blockchains and anonymity with decentralized finance. Finally, in this analysis, the authors continue to investigate mobile money, noting that M-PESA and its adoption can mean lower transaction costs for African sellers, while undermining the argument presented in the article. through the analysis of buyer and seller behavior in Kenya.

The article continues to analyze Coase (1995), while misrepresenting the nature of business and linking it to the use of digital payment systems for the wrong reasons. Additionally, the analysis does not cover the nature of fee reduction, focusing instead on decentralization. In doing so, the authors represent a bill introducing bitcoin in El Salvador, not understanding that it is not a way to introduce legal tender, but a way to integrate a payment system government based digital currency account.

Marthinsen, JE, & Gordon, SR (2022). Hyperinflation, Optimal Currency Scopes, and a Cryptocurrency Alternative to Dollarization.The Quarterly Review of Economics and Finance,85, 161173.https://doi.org/10.1016/j.qref.2020.12.007

Marthinsen and Gordon (2022, p. 161) analyzed the development of digital payment systems and presented an argument that technologies have enabled nations suffering from hyperinflation to adopt personalized cryptocurrency, with specifically designed attributes so that any nation wishing to make the transition from hyperinflation to a more stable monetary environment could do so. While such an approach is noble, the question of how it would eliminate or significantly reduce the means by which governments and central banks can earn seigniorage revenue (Marthinsen & Gordon, 2022, p. 161) remains.

Research studies traditional money and the introduction of new alternatives, including monetary bonds, central bank pegs, and fluctuating exchange rates. Through the analysis, the authors present a topic called Cryptozation based on the adoption of a stablecoin and argue for the advantages and disadvantages of a fixed exchange rate system. Yet, this presupposes that a technology such as Bitcoin would be implemented and the number of stablecoins would not change under adverse market conditions. Unfortunately, the concept is technologically flawed and distorts the underlying ability of individuals running a system to introduce new digital currency.

The authors analyze the nature of backed and unbacked assets, examining the concept of confidentiality but not anonymity. In this analysis, Marthinsen and Gordon (2022, p. 168) demonstrate that most companies, individuals and organizations have a reasonable expectation of privacy in their economic activities, while noting that governments need privacy. monitoring to prevent and avoid money laundering or other illegal uses, including tax evasion and human trafficking. Overall, the authors capture many existing structures that need to be considered for a digital payment system, but fail to understand the issues with the definitions that have been applied to these technologies.

The references

Burns, S. (2022). The Silicon Savannah: Exploring the Promise of Cryptocurrency in Africa. In The Economics of Blockchain and Cryptocurrency (pp. 6994). Editions Edward Elgar. https://www.elgaronline.com/display/book/9781800882348/book-part-9781800882348-12.xml

Caton, JL, & Harwick, C. (2022). Cryptocurrency, Decentralized Finance and the Evolution of Money: An Approach to Transaction Costs. Journal of New Finance, 2(4). https://doi.org/10.46671/2521-2486.1027

Coase, R. H. (1995). The nature of the business. Springer.

Marthinsen, JE, & Gordon, SR (2022). Hyperinflation, Optimal Currency Scopes, and a Cryptocurrency Alternative to Dollarization. The Quarterly Review of Economics and Finance,85, 161173. https://doi.org/10.1016/j.qref.2020.12.007

Poon, J., & Dryja, T. (2016). The Bitcoin Lightning Network: Scalable instant off-chain payments.

Watch: Bitcoin Masterclasses #1 Day 1 with Craig Wright: Confidentiality, Intimacy, Anonymity, Party to Party

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about the Bitcoinas originally envisioned by Satoshi Nakamoto and blockchain.

[ad_2]