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Getting Off the Ground: The Case of Bitcoin

29 Pages Posted: 8 Aug 2017 Last revised: 5 Jan 2018

William J. Luther

Kenyon College; American Institute for Economic Research

Date Written: January 2, 2018


By declaring an item legal tender or making it publicly receivable, governments might generate sufficient demand to determine the medium of exchange. How do private actors launch a new currency? There are two views in the literature. The first requires offering an item with use value to some agents distinct from its role as a medium of exchange. The second suggests agents might coordinate on an intrinsically useless item. With these views in mind, I survey the logs from the original bitcoin forum, bitcoin-list. I find that early participants in the bitcoin community understood the importance of coordination and took steps to coordinate users.

Keywords: bitcoin, coordination, cryptocurrency, currency, demand for money, intrinsic worth, launch, money, use-value

JEL Classification: E40, E41, E42

Suggested Citation

Luther, William J., Getting Off the Ground: The Case of Bitcoin (January 2, 2018). AIER Sound Money Project Working Paper No. 2018-03. Available at SSRN: or

William J. Luther (Contact Author)

Kenyon College ( email )

Gambier, OH 43022
United States


American Institute for Economic Research

PO Box 1000
Great Barrington, MA 01230
United States

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