In a Federalist Society white paper, David Rivkin and Andrew Grossman explore new bitcoin innovations and discuss the ways in which regulatory policy can hinder that innovation or spur growth:
Bitcoin is dead. Long live Bitcoin. A counterintuitive feature of the groundbreaking cryptocurrency—and there are many—is that both statements may simultaneously be true. The Bitcoin economy is robust and growing, with access to Bitcoin-denominated services expanding and more and more startups and established businesses seeking to capitalize on its popularity. At the same time, the Bitcoin network—literally, the interconnected web of computers that records transactions in Bitcoin’s distributed ledger known as the “blockchain”—is showing the strain of the currency’s success, while disagreements threaten to stymie efforts to scale Bitcoin usage further. Bitcoin-the-network may soon become too overloaded to fulfill the Bitcoin-the-currency’s promise of fast, secure, and low-cost transactions.
Read the full paper.