Hamoon Soleimani | Searcharxiv

arXiv2025

The Endogenous Constraint: Hysteresis, Stagflation, and the Structural Inhibition of Monetary Velocity in the Bitcoin Network (2016-2025)

Bitcoin operates as a macroeconomic paradox: it combines a strictly predetermined, inelastic monetary issuance schedule with a stochastic, highly elastic demand for scarce block space. This paper empirically validates the Endogenous Constraint Hypothesis, positing that protocol-level throughput limits generate a non-linear negative feedback loop between network friction and base-layer monetary velocity. Using a verified Transaction Cost Index (TCI) derived from Blockchain.com on-chain data and Hansen's (2000) threshold regression, we identify a definitive structural break at the 90th percentile of friction (TCI ~ 1.63). The analysis reveals a bifurcation in network utility: while the network exhibits robust velocity growth of +15.44% during normal regimes, this collapses to +6.06% during shock regimes, yielding a statistically significant Net Utility Contraction of -9.39% (p = 0.012). Crucially, Instrumental Variable (IV) tests utilizing Hashrate Variation as a supply-side instrument fail to detect a significant relationship in a linear specification (p=0.196), confirming that the velocity constraint is strictly a regime-switching phenomenon rather than a continuous linear function. Furthermore, we document a "Crypto Multiplier" inversion: high friction correlates with a +8.03% increase in capital concentration per entity, suggesting that congestion forces a substitution from active velocity to speculative hoarding.

q-fin.ST↗

arXiv2025

Bitcoin's Structural Position as Money: A Contested Synthesis of Post-Keynesian and Austrian Critiques

Since its inception, Bitcoin has been positioned as a revolutionary alternative to national currencies. This paper evaluates that claim against two competing theoretical traditions -- Post-Keynesian monetary theory and the Austrian School -- while evaluating the strongest counter-arguments within each tradition rather than treating either verdict as settled. From a Post-Keynesian perspective, Bitcoin lacks the debt-based IOU architecture and state-enforced fiscal acceptance mechanism that anchors sovereign currency (Vianna, 2021), though this framework faces definitional circularity when applied to non-debt commodity monies such as gold. From an Austrian viewpoint, Bitcoin's consistency with Mises's Regression Theorem remains deeply contested: while early-adopter subjective utility can theoretically resolve the regression problem (Davidson and Block, 2015; Peniaz and Kavaliou, 2024), a strict reading demonstrates that it lacks an independent, non-monetary commodity anchor (Hazlett and Luther, 2020; Umlauft, 2018). These theoretical frameworks are tested against empirical evidence across settlement throughput, Layer-2 Lightning Network routing dynamics, 51% attack economics, market microstructure, and sovereign adoption in El Salvador. We demonstrate that while Lightning Network routing reliability has expanded via Pickhardt-Richter multi-path flow allocations, this performance gain is structurally concentrated in well-capitalized custodial liquidity hubs -- confirming the game-theoretic centralization predicted by Avarikioti et al. (2020). The paper concludes that Bitcoin's architectural trade-offs, rather than superficial operational metrics, systematically impede its capacity to function as a sovereign monetary standard.

econ.GN↗