Cryptocurrency community reacts passively after U.S. financial expert Paul Krugman assimilated Bitcoin (BTC) to “setting the monetary system back 300 years.”
Writing for the New York Times on 31 July, Krugman decided to bring in a discussion the high costs of BTC mining and the “speculator” description of its crypto users, stating that the world’s famous cryptocurrency is below the level of stability embedded by fiat currency.
“…You’re supposed to be sure that a Bitcoin is real without knowing who issued it, so you need the digital equivalent of biting a gold coin to be sure it’s the real deal, and the costs of producing something that satisfies that test have to be high enough to discourage fraud,” Krugman stated.
“In other words, cryptocurrency enthusiasts are effectively celebrating the use of cutting-edge technology to set the monetary system back 300 years.”
Krugman is the last renowned specialist who has showed a skeptical reaction on cryptocurrencies. We would like to remind you that American economist Robert Shiller has tried repeatedly to defuse Bitcoin. The latter said the cryptocurrency will only exist one hundred years, due to the possibility to hard fork it.
Economist Krugman has received many criticisms, and one of the contradictions was from crypto pioneer Nick Szabo. Here’s what he tweeted:
“Evolution is something that happens in a very decentralized and parallel way, the central banking Krugman worships has been the opposite of that.”
Evolution is something that happens in a very decentralized and parallel way; the central banking Krugman worships has been the opposite of that.
— Nick Szabo ? (@NickSzabo4) August 1, 2018
The financial expert said governments and financial institutions have too much confidence in currency dispersion once they react to market changes:
“Banknotes worked because people knew something about the banks that issued them, and these banks had an incentive to preserve their reputation,” he wrote, adding that:
“Governments have occasionally abused the privilege of creating fiat money, but for the most part governments and central banks exercise restraint, again because they care about their reputations.”
Here’s another criticism on the economist’s opinion:
Krugman justifies large denomination fiat’s use by drug lords because it “tethers” value to the smaller denomination notes used by non-drug lords. This is his rhetorical gymnastics attempt to ignore fact that less than 1% of illicit activity uses crypto. https://t.co/V15832B5K1
— Max Keiser, tweet poet. (@maxkeiser) July 31, 2018
Author: Adriana Midrigan