Assessing cryptocurrency with Yale economist Aleh Tsyvinski

Since emerging a decade ago, Bitcoin and other digitally based cryptocurrencies have captured the imaginations of tech wizards, Wall Street bankers, and investors of all stripes.

Proponents argue that cryptocurrencies, which are decentralized and function outside the control of governments, could someday replace national currencies as the primary means of exchange. Skeptics believe that virtual currencies amount to smoke and mirrors and expect their value to crater.

In a new study, Yale economist Aleh Tsyvinski and Yukun Liu, a Ph.D. candidate in the Department of Economics, provide the first-ever comprehensive economic analysis of cryptocurrency and the blockchain technology upon which it is based.

Tsyvinski, the Arthur M. Okun Professor of Economics at Yale, described their work and findings to YaleNews. An edited transcript follows.

What got you interested in studying cryptocurrency?

There is a lot of mystique surrounding cryptocurrency. It’s a new…