Bitcoin through the Lenses of Complexity Theory: Some Non-Orthodox Implications for Economic Theorizing

Abstract

This paper investigates the foundations of Bitcoin, the controversial digital and stateless currency launched in 2009. After explaining why Bitcoin is a complex object of study, the latter electronic currency is analyzed through the lenses of complexity theory. In this sense, by breaking away from the holy trinity of the mainstream, namely rationality, equilibrium and self-interest, the Bitcoin phenomenon casts light on the emergence of non-intuitive macroeconomic results derived from numerous micro-interactions involving groundbreaking technology. Further, the paper discusses how established knowledge fields, such as monetary policy and banking regulation have been shaken by Bitcoin. The methodological implications for economic theory are then singled out. Finally, we conclude.

Keywords: Bitcoin, e-money, complexity theory

JEL Classification: B41