Bitcoin is in the news again with the Winklevoss Twins testimonies and the indictment of some persons involved in a Bitcoin exchange.
There has been surprisingly little research on Bitcoin from academics. Partially this may reflect a disinterest, or a lack of knowledge of how it works, or a dismissive attitude towards it as ‘faddish’. That said, Bitcoin seems to be staying the course so far, and it would not be surprising to see more serious academic research emerging. It seems an ideal focus for monetary theorists. Here – Economics of Bitcoin – is one paper by Gerard Dwyer, a very well respected economist (who also worked as a senior central banker).
It concludes very favourably for Bitcoin – “The design of Bitcoin and similar currencies does not have any inherent flaw”