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...

The emergence of bitcoin poses an important question for monetary theorists: can bitcoin compete with or even replace existing fiat monies? To answer this question, one must be able to determine what gives intrinsically useless monies their value, what determines the coexistence of alternative...