I wasn’t planning on writing about Bitcoin/blockchain today, but it’s on everyone’s mind as we close the week. From the coverage I’ve got stacked up in my browser tabs after a morning of perusing the more interesting stories from the past few days, it’s clear we’re all obsessed. So instead of the regular mix of six or seven unrelated stories, I’m going to focus today’s Money Quote column on our favorite speculative bubble, and see what sense we can make out of it, including some background reading. Given that Bitcoin futures trading officially starts next week, it seems a bit of weekend study is in order. Onwards…
I can’t vouch for the integrity of all the information in this long and clearly detailed overview, but it’s been shared widely on Medium and helped me make sense of some of the finer and more technical points around Bitcoin’s architecture. The piece covers many of the technology’s limitations, affordances, and potentials, and is a good place to start if you’re familiar, but not deeply literate in the space.
Brexit, Britain’s exit from the European Community, was supposed to tank the British economy. But so far it hasn’t. In fact, Britain had a great 2016, economically speaking. The economists called that one wrong, just as, a decade ago, they failed to predict, or help us prevent, a massive financial crisis and recession.
Why do economists get so much wrong so often? John Lanchester (The New York Times) looks at the current crisis of confidence among economists, as represented in recent papers by the chief economists at the World Bank (Paul Romer) and the Bank of England (Andy Haldane). The problems cluster around macroeconomics, the discipline that studies the workings of the economy as a whole. As Lanchester puts it, macroeconomists would like us to view them as plumbers, behind-the-scenes tinkerers with reliable systems. But in practice they are more like a bomb disposal squad, summoned in emergencies to prevent catastrophes like the Great Depression.
In 2015, I wrote a blog post about how I thought that Bitcoin was similar in many ways to the Internet. The metaphor that I used was that Bitcoin was like email — the first killer app — and that the Bitcoin Blockchain was like The Internet — the infrastructure that was deployed to support it but that could be used for so many other things. I suggested that The Blockchain was to finance and law what the Internet was to media and advertising.