We make a distinction between centralized, decentralized, and distributed payment mechanisms. A centralized payment mechanism processes a transaction using a trusted third party. A decentralized payment mechanism processes a transaction between the parties to the transaction. A distributed...

In The Curse of Cash, Kenneth Rogoff lists reductions in criminal activity and tax evasion among the primary benefits of eliminating cash. We maintain that, to the extent that individuals are interested in purchasing illicit goods and services or evading taxes, eliminating cash will encourage...

Current money matching models employ either random matching or endogenous matching processes, both of which oversimplify the problem. We maintain that although most economic interactions are intentional, randomness still exists in consumption preferences. We offer an endogenous matching model of...

In a recent article, Yermack (2015) argues that bitcoin is not money because it functions poorly as a medium of exchange, unit of account, and store of value. We offer a more conventional view. We maintain that the standard approach classifies an item as money if and only if it functions as a...

We employ a monetary model with endogenous search and random consumption preferences to consider the extent to which governments can ban bitcoin. We define a ban as a policy whereby government agents refuse to accept bitcoin and mete out punishments to private agents caught using it. After...

By declaring an item legal tender or making it publicly receivable, governments might generate sufficient demand to determine the medium of exchange. How do private actors launch a new currency? There are two views in the literature. The first requires offering an item with use value to some...

Monies are typically categorized as commodity or fiat, depending on whether the item in question is intrinsically worthless. In the case of bitcoin, it is not so clear. I consider the superficial subjective value argument often put forward by non-monetary economists and a more sophisticated...

Over the course of U.S. history there have been a small number of occasions in which aggregate nominal spending has declined, the most recent of which occurred during the recession that began in December 2007. Coincident with these observed declines in nominal spending are declines in the...

In December 2020, Visa, Mastercard, and Discover stopped processing payments for Pornhub, a website based in Canada that allows users around the world to upload and view pornographic videos. Cut off from traditional payment processors, Pornhub had to rely on cryptocurrencies. I consider the...

In a recent article, George Pickering (2019) has taken issue with my work regarding the two potential ways one might deal with the regression theorem in light of bitcoin. Specifically, he argues that I misinterpret 'the purpose and requirements of the regression theorem' (p. 608). His critical...