Business

Erik Gibbs

Nobel Prize winner wants to end crypto, but proves he doesn’t understand it

Joseph Stiglitz may have won the Nobel Memorial Prize in Economics in 2001, but he certainly hasn’t done much to keep up with the changing times since then. Stiglitz believes that the world doesn’t need cryptocurrencies, saying that they should be “shut down,” but his supporting reasons defy all logic and common sense and prove that certain people would do better to remain silent instead of voicing an opinion on a subject of which they have very little knowledge. 

Stiglitz told CNBC that he supports digital payment systems, stating, “I’ve been a great advocate of moving to an electronic payments mechanism. There are a lot of efficiencies. I think we can actually have a better-regulated economy if we had all the data in real time, knowing what people are spending.” 

He added, “We have a very good currency. […] There is no need for anybody to go to a cryptocurrency. […] We talk about the attributes of a good currency and the US dollar has all those attributes. The cryptocurrencies do not have those attributes. I actually think we should shut down the cryptocurrency.”

Stiglitz went on to state that crypto is only good for “illegal activities” and that transactions are “untraceable.” If being used for illegal activities and being untraceable were enough of an argument to justify a currency being shut down, fiat would have been eliminated as quickly as it was introduced. 

Stiglitz has apparently relegated himself to just perusing news headlines and not learning the true substance behind certain topics, as many legitimate experts have already shown that crypto is no good for terrorists and that criminals are not using crypto as much. 

The idea that crypto transactions are untraceable is completely erroneous—hopefully Stiglitz was more thorough in his previous research. Analysts have been able to trace crypto transactions to Hamas operatives and even exchange hackers in a lot less time than it typically takes most investigations. 

Even beyond the obvious flaws in his argument, there remains one glaring issue with the economist’s theory. He wants to shut down a peer-to-peer system that isn’t controlled by a government. Who exactly would lead the endeavor and how would it happen? Shutting down crypto through some mystery kill switch, as he has alluded to in the past, would be so resource-intensive that it becomes mind-boggling how he could have won any prize for economics work.

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