Door to Crypto
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Door to Crypto

Neither Vitalik, nor Bitcoin bugs: towards a sensible cryptoeconomics, P1: Against overempasizing mechanism design

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  1. If the Ethereum Foundation organizes a conference at the city where Alice lives, Alice will happily purchase the ticket and attend.
  2. If a new Lambo cost less than $10,000, Bob would buy one without hesitation.
  3. If people could be credibly excluded from consuming most police services, there would be no need for funding policing through taxation, as people would voluntarily paid as much as necessary for policing.
  1. Far from being a chaotic mess, a system of competing banks issuing inside money partially backed by the base money such as gold can maintain money supply without over-issuance and sudden massive deflation episodes.
  2. The US system prior to 1913 cannot properly be called an example of free banking because, although a central bank was absent, banking was severely restricted in all kinds of ways, first, by state governments and then by the national banking regulations aimed at funding the North’s Civil War effort.
  3. Other historical examples of competitive banking involving decentralized inside money issuance (especially Scorland and Canada) strongly suggest that free-banking system helped avoid money shortages while not resulting in runaway inflation episodes or even artificial investment booms à la the construction bubble of the 2000s. Most strikingly, in Canada, even during the Great Depression, not a single bank failed, despite the massive crisis emanating from its biggest export market’s collapse.
  4. The Fed that replaced the somewhat competitive banking system has actually probably performed worse on the key monetary policy metrics than even that highly stifled system.



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Daniil Gorbatenko

PhD, economics (2018) from Aix-Marseille University, independent blockchain adoption consultant based in Aix-en-Provence, France, Email: