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Some Economics of Private Digital Currency

In: Economic Analysis of the Digital Economy

Author

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  • Joshua S. Gans
  • Hanna Halaburda

Abstract

This paper reviews some recent developments in digital currency, focusing on platform-sponsored currencies such as Facebook Credits. In a model of platform management, we find that it will not likely be profitable for such currencies to expand to become fully convertible competitors to state-sponsored currencies.
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Suggested Citation

  • Joshua S. Gans & Hanna Halaburda, 2015. "Some Economics of Private Digital Currency," NBER Chapters, in: Economic Analysis of the Digital Economy, pages 257-276, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:12992
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    References listed on IDEAS

    as
    1. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    2. Gans Joshua S & King Stephen P, 2003. "The Neutrality of Interchange Fees in Payment Systems," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-18, January.
    3. E. Glen Weyl, 2010. "A Price Theory of Multi-sided Platforms," American Economic Review, American Economic Association, vol. 100(4), pages 1642-1672, September.
    4. Jean-Charles Rochet & Jean Tirole, 2002. "Cooperation Among Competitors: Some Economics Of Payment Card Associations," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 549-570, Winter.
    5. Rockoff, Hugh, 1974. "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 6(2), pages 141-167, May.
    6. repec:rje:randje:v:37:y:2006:3:p:668-691 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Castronova, Edward & Knowles, Isaac & Ross, Travis L., 2015. "Policy questions raised by virtual economies," Telecommunications Policy, Elsevier, vol. 39(9), pages 787-795.
    2. Andreas Hanl, 2019. "Waehrungswettbewerber Facebook: Oekonomische Implikationen der Corporate Cryptocurrency Libra," MAGKS Papers on Economics 201930, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Neil Gandal & Hanna Halaburda, 2014. "Competition in the Cryptocurrency Market," Working Papers 14-17, NET Institute.
    4. Jonathan Chiu & Thorsten V. Koeppl, 2017. "The Economics Of Cryptocurrencies - Bitcoin And Beyond," Working Paper 1389, Economics Department, Queen's University.
    5. Yannis Bakos & Hanna Halaburda, 2019. "The Role of Cryptographic Tokens and ICOs in Fostering Platform Adoption," CESifo Working Paper Series 7752, CESifo.
    6. Huberman, Gur & Leshno, Jacob & Moalleni, Ciamac, 2017. "Monopoly Without a Monopolist: An Economic Analysis of the Bitcoin Payment System," CEPR Discussion Papers 12322, C.E.P.R. Discussion Papers.
    7. Easley, David & O'Hara, Maureen & Basu, Soumya, 2019. "From mining to markets: The evolution of bitcoin transaction fees," Journal of Financial Economics, Elsevier, vol. 134(1), pages 91-109.
    8. Benito Arruñada & Luis Garicano, 2018. "Blockchain: The birth of decentralized governance," Economics Working Papers 1608, Department of Economics and Business, Universitat Pompeu Fabra.
    9. Beata Szetela & Grzegorz Mentel & Stanislaw Gedek, 2016. "Dependency analysis between Bitcoin and selected global currencies," Dynamic Econometric Models, Uniwersytet Mikolaja Kopernika, vol. 16, pages 133-144.
    10. Stephanie Lo & J. Christina Wang, 2014. "Bitcoin as money?," Current Policy Perspectives 14-4, Federal Reserve Bank of Boston.
    11. Ben Fung & Miguel Molico & Gerald Stuber, 2014. "Electronic Money and Payments: Recent Developments and Issues," Discussion Papers 14-2, Bank of Canada.
    12. Neil Gandal & Hanna Halaburda, 2016. "Can We Predict the Winner in a Market with Network Effects? Competition in Cryptocurrency Market," Games, MDPI, Open Access Journal, vol. 7(3), pages 1-21, July.
    13. Winston Moore & Jeremy Stephen & Caroline Elliott, 2016. "Should cryptocurrencies be included in the portfolio of international reserves held by central banks?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 4(1), pages 1147119-114, December.
    14. Hosain, Md Sajjad, 2018. "Bitcoin: Future transaction currency?," MPRA Paper 87588, University Library of Munich, Germany.
    15. Canidio, Andrea, 2018. "Financial incentives for open source development: the case of Blockchain," MPRA Paper 85352, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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