Studying BitCoin

July 07, 2011

Has anyone else heard of BitCoin, and the incredible inflation it has seen?

This dude has put allhis money into BitCoin - not smart, I would say.  Especially when news like a run on BitCoin hits. (If you have no clue on what BitCoin is, read.) So while I laugh at the guy who invested all his money that is now gone, I reflect back on a conversation I had with a friend a few years ago.  Can we use this virtual currency to study monetary economics?  BitCoin has the potential to provide us with an interesting avenue to understand another type of currency. But what I am imagining more is looking at virtual worlds and video games (disclaimer: I have no direct experience with video games) to build scenarios to “test” on live people interacting with the world/game.  Currently, there are trading simulators that follow the market where one can see how his/her virtual portfolio would fair in real life.  Add that aspect to a virtual economy and see how quantitative easing programs could affect it. Just an idea.

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