Cryptocurrency Transforming Economics into Engineering

Traditional economics is more of an art than a science because it lacks the efficient measurement and control technologies of engineering. 

Economic systems are complex and have many internal states which are mostly unobservable and/or uncontrollable. Economic systems are too complicated to be modelled because of myriad non-linear human factors, uncertainty (i.e. coronavirus outbreak), and decentralized governance (i.e. democracy).

However, optimal control theory has been exploited in economics in examples such as the FRB/US model and Taylor rule, which are used for monetary policy.

For these models to be effective, accurate measurements such as cash flow and currency velocity are needed. Unfortunately, it is not possible to have real-time measurements. For example, currency velocity is measured as a multiplier, which can only be weighed after a long time. As a…