The creation of bitcoin paved the way for the storage, replenishment and automatic use of any information of value. However, the value of bitcoin is not determined by the labor of miners, but by the number of its users (according to Metcalfe’s law, the usefulness of any network is proportional to half the square of the number of its users). That is, it is a value that cannot be freely produced. However, all attempts to express the essence of bitcoin using entities that existed before it are lame. So in order to make the co-op into an analogy, Krugman would either have to argue that American recessions are caused by central planning, or that the Sweenys are incorrect in their economic analysis of the co-op, or that despite having different causes, American recessions have the same effects and cures as that of the co-op. In order to stay competitive, the members of the co-op must agree to some obligations to one another, and I would argue that agreeing to honor the scrip upon certain terms is a necessary part of that obligation.
As long as the price is fixed, then the central board must meet to adjust the price as needed. This central control solves the problem of double spending: since all the data related to electronic payments is stored in one place, it becomes impossible to spend the same money twice. It is on this principle that electronic money and modern computer banking systems are built. Any file on the computer can be copied – theoretically any number of times. One can go out several times at one’s leisure without worrying about replenishing the supply immediately if one does not have time to provide care for other children. People can be expected to follow Bitcoin’s conventions (like accepting the greatest-difficulty chain) without making promises to one another, because Bitcoin has its incentives in the right place. So virtual currency is just one example of the application of the new technology. This is a new saving technology. It is difficult to attribute this program to any class, because with the help of bitcoin, the author has said a completely new word in the field of modern technologies. Before Bitcoin, there were no cryptocurrencies, and all existing cryptocurrencies in one way or another evolved from Bitcoin.
Bitcoin is programmed in such a way that its emission is limited. It is to the extent that electricity is like light and water that bitcoin is like money and gold. Financial transactions are carried out digitally under the control of the bank or the owner of electronic money. Block creators (miners) are rewarded with bitcoins. There would not be enough bitcoins to go around and bitcoins would be so inconvenient that no one would want to improve the bitcoin infrastructure. For example, he says that one unit of scrip was worth an hour of babysitting time, when it was really worth one half-hour. There at least two possible ways of dealing with a suboptimal supply of scrip: the supply of scrip per capita could be adjusted or the price of the scrip could be adjusted. Yet although the Sweenys clearly and repeatedly identify price controls as being fundamental to the co-op’s problems, Krugman does not mention that his interpretation of the events is very different from the Sweenys and does not present price changes as a possible cause of the co-op’s problems.1 He assumes that a change to the supply of scrip is the only possible solution, and in fact, the word price does not appear in his article even once!
Krugman has done nothing to show in his article that deregulation, rather than monetary policy, is a valid response to a recession. In 1998, Paul Krugman wrote a commentary on it called “Baby-Sitting the Economy.” He interpreted the events it describes as a microcosm for the economy as a whole, and he analyzed it according to his Keynesian framework. But Gobry is most certainly not off the hook, first of all, because there aren’t a lot of Keynesians into Bitcoin in the first place, and second, because the Bitcoin economy is not centrally planned and has never experienced a liquidity trap – exactly what an anti-Keynesian would expect! Why has no liquidity trap occurred? This is why bitcoin is called not only virtual currency, but also digital gold. Bitcoin is a phenomenon that cannot be prohibited, stopped and controlled. Bitcoin is the path to your personal financial independence and security. Bitcoin is a digital currency that has the potential to replace the US dollar as a global reserve currency and new wave in bitcoin casino USA payment system. Hence, this system of price controls means the inflationary pressure does not drive up the scrip-price of baby sitting, inflation is suppressed, and shortages are found.
