Original source: Techcrunch

Original compilation: old yuppie (WeChat public account id: laoyapi)

Tyler Cowan is an economist and author who co-founded the popular blog MarginalRevolution. A professor at George Mason University, Cowan has been named by The Economist as one of the 36 most influential economists of the past decade. In academia, he is a popular thinker and blogger, and his work has appeared in Bloomberg and The New York Times. All this said he was a smart guy.

Plus he supports cryptocurrencies.

To find out what economists think about this nascent industry, I reached out to Cowan to talk about the history of cryptocurrencies as it pertains to monetary policy, and to ask a simple question that the general public might find irrelevant: the greatest economists of the past What do you think of the current cryptocurrency craze?

TC: What do economists think about cryptocurrencies? Do they study it? worry about it?

Cowen：I don't think most of them paid much attention to it. There are also quite a few people who are wondering about cryptocurrencies. They are not the main minds behind the cryptocurrency movement. Especially like Paul Krugman, the attitude towards cryptocurrencies has been quite severe. There are quite a few cryptocurrency research papers in academia, and there are people trying to model cryptocurrencies, and everyone is interested in cryptocurrencies. So I don't think there is a human consensus on cryptocurrencies right now. However, unless you work in monetary theory, the incentives for professional papers to study cryptocurrencies are fairly small, and very few people do in-depth research. But the fact that they are economists doesn't qualify them for an opinion as much as you might think.

TC: Are you seeing any new economists emerging, or just looking at cryptocurrencies?

Cowen：You really need a lot of economics that we don't teach in graduate school, including the basics of cryptographic engineering. In fact, spending some time to experience and study cryptocurrencies will be helpful to recognize cryptocurrencies and understand the industry. As such, most of the best work on encryption is on Twitter. It's in the odd place, not in the research of professional economists. Not even monetary theorists. It all makes me feel down about my career, but that's the way it is.

TC: What is your take on the current industry?

Cowan:I started out as a cryptocurrency skeptic, but over time I have become what I call a cryptocurrency hopeful. I'm not sure if it will all be successful, but I can see legit facts with high payoffs. And I think there's a good chance they'll be successful, and I'm impressed by the amount of talent that's working in crypto or in the crypto movement.

TC: People compare this technology to currency cults. The hallmark of building an economic system is hoping that it will magically appear. Is this description accurate?

Cowen：I think crypto users are super smart. They are, on average, smarter than economists. And they also have their own benefits in the game, don't they?

TC: Does the profit motive affect experience?

Cowen：Well, people who work on cryptocurrencies want to build a system that works. It is only fair for all of us to have uncertainty about this process. But the price of crypto assets is already high, and they have been hit hard by governments around the world, but it has survived. So I don't think it's just a bubble. So what exactly that will be, is up for debate, but I think the bubble view is getting harder to sustain.

TC: Are we assuming that these things will always exist? Bitcoin won't disappear in ten years?

Cowen：This is my firm belief. Now, there are many other crypto assets, and I think most of them will disappear. There were a lot of social media companies 15 years ago, many of them are gone, but obviously social media is a very important thing.

TC: What is your view on decentralization from an economic point of view?

Cowen：I think we will end up with centralized cryptocurrencies and decentralized cryptocurrencies that will function very differently. So, clearly, there are advantages to centralized systems. You can trade faster and easier. Someone manages them and someone oversees them. But this also piled up costs. So I think both will prove to be strong. But, again, all of these points are open to debate.

TC: When do you expect governments to go all in on things like stablecoins?

Cowen：Well, you can say now. The U.S. dollar is a stablecoin. More central bank digital currencies will appear next year. Some already exist, or are simply on the brink of existence. I think five years from now, you're going to see a lot of digital currencies. Now, they're not cryptocurrencies, that's pretty clear. But I can say with certainty that they are very important.

TC: Looking back, what are the most obvious historical analogs to cryptocurrencies?

Cowen：I don't think cryptocurrency is a currency. You can't really use it to buy coffee at Starbucks. They have failed as a monetary attribute of that shopping function. I think of them as new types of computers, new types of legal systems, and new ways of achieving reliable decentralized consensus. So I think they're most akin to advances in computing rather than some sort of monetary event.

TC: Oh, interesting. So in a way, we can ignore economists because it's a technical question, not a monetary policy question.

Cowen：It's a calculation problem, but it clearly intersects with an economic problem, and the central question is how all this stuff will pay for itself, which remains unclear. Economists have, or at least could have, a lot to say in this regard. I would not say that economists are worthless. I'd say they don't have value yet. They may be late to this "fest". Cryptocurrencies aren't fundamentally new money, but you'll find people in the industry who still think these things are going to be literal money. I think cryptocurrencies have become an unfortunate name, but obviously they are currencies that can be used for certain purposes, sometimes black or gray market purposes, but I don't think that's fundamentally what they are for. You see the situation with NFTs, which is their own thing, they are closely related to cryptocurrencies. But what does this have to do with money? Is an NFT a work of art? But in the language of cryptography, it all makes more sense. It's more of a unified development, which is also a way of thinking about them rather than thinking of them as currencies.

TC: What is a CFO or even just a budding economist generally expected to do in this field?

Cowen：It depends on their starting point, but they should invest a considerable amount of time. They should read all the basics about these systems and set up a twitter feed so they can follow what's going on because the industry changes really fast and have a network where they can ask questions because it's not like cooking Like rotisserie chicken, there's a more or less tried and true formula, right? This all changes very quickly.

TC: What do you read every day to keep up with the times?

Cowen：A lot of what I do is chatting with people in private. I think Twitter is the best place to follow cryptocurrencies in general. You don't see any hardcore mainstream cryptocurrency coverage in economics journals. I don't think there's anything wrong with them, but that's not where I go to see what's happening with cryptocurrencies. Economists are really the laggards here.

TC: Is that good or bad for them?

Cowen：I think as an industry we'll regret missing this boat, but I'm not sure any particular individual will be worse off, but I think it's a sign that we're not getting enough exposure to actual innovation. This is a very difficult area to understand. Hence when I say good luck. I really mean it, it doesn't matter how old you are, or how smart you are, or how much time you put in. It's still a very difficult thing to do.