From Crowdfund Insider
With a market capitalization of approximately $12 billion and with the price of Bitcoin reaching towards its 2016 high, Bitcoin is both the most established and the most secure cryptocurrency. Its ascendancy has triggered both a great deal of enthusiasm and a fair share of concern.
On the utopian side, optimistic proponents assert that cryptocurrencies will free consumers from the tyranny of their domestic currencies, will force out entrenched financial players and payment systems, will reduce transaction costs for businesses and fees for consumers.
On the dystopian side, pessimistic opponents argue that cryptocurrencies may undermine traditional monetary policy, support illicit activity, or simply cannot meet the speed, scale and privacy requirements of real-world financial applications and marketplaces.
And whatever side of the debate you come out on, cryptocurrencies are here to stay. Bitcoin, although the first, is unlikely to be the last.
In a new MIT working paper written with my colleague at the University of Toronto, Joshua Gans, we argue that cryptocurrencies will affect two key costs in the economy:
- the cost of verifying transactions
- the cost of running a network, platform or marketplace
Read the full post at Crowdfund Insider.
Christian Catalini is the Fred Kayne (1960) Career Development Professor of Entrepreneurship and Assistant Professor of Technological Innovation, Entrepreneurship, and Strategic Management at the MIT Sloan School of Management.