Paul Krugman: bitcoin throws the economy 300 years ago
Transaction costs and the" lack of binding " of bitcoin to real assets cast back the development of the economy for 300 years. This was written by economist Paul Krugman in his author's column in the New York Times.
He argues that the evolution of money has gradually created an uncomplicated system, and bitcoin re-introduces obstacles related to the cost of mining blocks and confirming transactions.
"In the context of the history of money, the enthusiasm about cryptocurrencies looks very strange, because it goes in the opposite direction from the long — established trend," he writes.
Paul Krugman did not deny that banknotes of large denomination are often inconvenient for everyday payments, but pointed out among their advantages that their value is "tied" to smaller bills.
"On the contrary, cryptocurrencies have no support and binding to reality. Their value depends entirely on self-fulfilling expectations. So for them, a complete collapse can be a reality, " he added.
The expert also noted that the traditional Central banks" pretty good " cope with their task, providing a stable purchasing power, and bitcoin is needed "only for criminal activities, including tax evasion."
Earlier, in July, assistant Professor of Economics at the University of new York at stony brook Noy Smith said that bitcoin should be either a replacement for the us dollar in international payments, or a digital analogue of gold, otherwise he will die.
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