Digital Economy: The Economics of the Digital Economy

Abstract

The digital economy is characterized by so-called infinite shelf space, zero marginal cost, increasing returns, and friction-free transactions. These and other factors have made crypto currencies an attractive alternative to fiat currency. This essay focuses on the larger implications of cryptocurrency and its role in the economy of the digital economy. While cryptocurrencies appear to be ideal for the digital era, they also have some serious limitations such as vulnerabilities to selfish mining and lack of consumer protections.