Krugman's Baby-Sitting Co-op Explains The Design Flaw At The Heart Of Bitcoin
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Re: Krugman's Baby-Sitting Co-op Explains The Design Flaw At The Heart Of Bitcoin
#2Well, I just linked to the cited Krugman article. In case anyone else has difficulty with the pkarchive.org link, here's another source:
http://www.slate.com/articles/business/the_dismal_science/19...
Re: Krugman's Baby-Sitting Co-op Explains The Design Flaw At The Heart Of Bitcoin
#3The mistake in the article is that bitcoins can subdivide AND increase in value. Bitcoins are not going to have liquidity crisis, as much as some people seem to want it to.
Re: Krugman's Baby-Sitting Co-op Explains The Design Flaw At The Heart Of Bitcoin
#4The mistake in the article is that bitcoins can subdivide AND increase in value. Bitcoins are not going to have liquidity crisis, as much as some people seem to want it to.
If/when bitcoins ever become an important currency they will have all the same problems as other currencies, and others unique to being bitcoins. E.g. central banks will try to manipulate them, governments will tax and regulate them, and people will speculate on them.
Being able to subdivide and increase in value are not attributes unique to bitcoins.
Oh, and the article DOES address this exact point.
Re: Krugman's Baby-Sitting Co-op Explains The Design Flaw At The Heart Of Bitcoin
#5To me it seems the problem with the Babysitting coop was price fixing. The price of of an hour of babysitting was always 1. If the price of an hour of babysitting was allowed to float you would not have the shortages.
Re: Krugman's Baby-Sitting Co-op Explains The Design Flaw At The Heart Of Bitcoin
#6In 1998, Krugman also predicted that "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."
http://web.archive.org/web/19980610100009/www.redherring.com...
Re: Krugman's Baby-Sitting Co-op Explains The Design Flaw At The Heart Of Bitcoin
#7The overwhelming main gripe I read not only on HN, but also on business websites is that Bitcoins aren't US dollars.
It reminds me of the apocryphal, famous Ford quote, "If I had asked my customers what they wanted they would have said a faster horse."
Re: Krugman's Baby-Sitting Co-op Explains The Design Flaw At The Heart Of Bitcoin
#8Watch out. You posted an article on HN that doesn't praise Bitcoin. And, you know, all software developers are also economists. Expect a backlash.
Re: Krugman's Baby-Sitting Co-op Explains The Design Flaw At The Heart Of Bitcoin
#9In 1998, Krugman also predicted that "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." http://web.archive.org/web/19980610100009/www.redherring.com...
That has nothing to do with whether he is right or wrong about this issue, though.
Re: Krugman's Baby-Sitting Co-op Explains The Design Flaw At The Heart Of Bitcoin
#10To me it seems the problem with the Babysitting coop was price fixing. The price of of an hour of babysitting was always 1. If the price of an hour of babysitting was allowed to float you would not have the shortages.
See the original Krugman article. It goes further into explaining efforts to try and rectify their economy, as well as a general discussion on the principles involved.