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35 Cato J. 357 (2015)
Bitcoin Will Bite the Dust

handle is hein.journals/catoj35 and id is 382 raw text is: BITCOIN WILL BITE THE DUST Kevin Dowd and Martin Hutchinson Bitcoin is the most radical innovation in the monetary space for a very long time. It is an entirely private monetary system that runs itself and does not depend on trust in any central authority to honor its promises. Instead, it relies on trust in the Bitcoin community or network that verifies transactions and maintains the integrity of the system. This system of distributed trust creates bitcoins and produces an automatic, tamper-proof bitcoin money supply process. ' As such, it avoids the dangers of discretionary monetary policy-namely, quantitative easing, manipulated interest rates, and the need to rely on wise men or women to withstand political pressure or successfully forecast the future. Indeed, under Bitcoin there is no monetary pol- icy at all. There is just an automatic monetary rle dictated by the Bitcoin protocol designed in 2009 by an anonymous programmer using the alias Satoshi Nakamoto. Cato Joumal, Vol. 35, No. 2 (Spring/Summer 2015). Copyright © Cato Institute. All rights reserved. Kevin Dowd is Professor of Finance and Economics at Durham University in the United Kingdom and a partner at Cobden Partners. Martin Hutchinson is a journal- ist and author of the Bear's Lair column (www.tbwns.com/category/the-bears -lair). The authors thank Ferdinando Ametrano, Gavin Andresen, Raadhiyah Anees, Steve Baker MP, Roger Brown, Dave Campbell, Akin Fernandez, Dominic Frisby, Jim Harper, Doug Jackson, Gordon Kerr, Jim Rapp, Eric Sarnieski, Lawrence H. White and Basil Zafiriou for much helpful feedback. We note that several of our readers have expressed serious reservations about our analysis and conclusions. Any remain- ing mistakes are the authors' own. 'By convention, Bitcoin with an upper case B refers to the Bitcoin protocol that sends and receives payment information; and bitcoin with a lower case b refers to the corresponding unit of money.

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