Paul Krugman may be a world-renowned economist, but his acumen on the subject of cryptocurrencies is way off base. After several attempts at bashing digital currencies using rationale that does nothing more than leave people scratching their heads, Krugman has shown to be nothing more than a spreader of FUD (fear, uncertainty and doubt) and completely void of any real understanding on the subject. He has previously tried to argue against crypto using the same boring anecdotes heard over and over—it has no real value, it is only good for illicit activities—but continuously ignores the fact that the same arguments can easily be said for fiat. Krugman is at it again, trying to disprove crypto’s merit as a global currency and, as usual, falls completely flat.
In a recent New York Times op-ed piece, Krug said that “transferring…a cryptocurrency unit requires providing a complete history of past transactions.” Crypto transactions are available for review—there are a number of blockchain explorers available to facilitate examination—but past history has no bearing on new transactions.
He also indicated that “…[You] need the digital equivalent of biting a gold coin to be sure it’s the real deal.” The verification is in the transaction, the same way a credit card verifies account balances when approving a purchase. To date, cryptocurrency transactions are still the most secure, most reliable type of transactions available.
Krug then attempted to show how irrelevant crypto would be if crypto enthusiasts suddenly got cold feet, noting, “If speculators were to have a collective moment of doubt, suddenly fearing that Bitcoins were worthless, well, Bitcoins would become worthless.” In more than one collective moments of doubt, fiat economies have suffered tremendously because of sudden and massive withdrawals of cash from banks. Worse yet, governments have forced economies into the gutter due to a number of reasons, an example of which we can see today in Venezuela.
The economist has a history of being wrong on world-changing innovation. In 1998, Krugman said, “By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.” Au contraire, mon ami. No one could argue against the important role the Internet plays in propelling economies—both regional and global—today.
We get it. Traditional finance stalwarts have a hard time dealing with change, as has been the case with supporters of virtually every major advancement throughout history. In an effort to maintain their level in the food chain, the supporters begin grasping at straws, looking for any reason to knock the competition down. However, all they’re doing, in reality, is furthering the expansion of whatever industry they want to suppress, creating more awareness and more acceptance.
No matter how hard some may try to desperately cling to the past, the future is always going to prevail. In this case, the future is cryptocurrency.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.