Bitcoin solved a major technical problem, but not an economic one
krugman.blogs.nytimes.com
Bitcoin solved a major technical problem, but not an economic one
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Re: Bitcoin solved a major technical problem, but not an economic one
#2Not true. Bitcoin did two things that I am aware of: 1) Create a universal currency which can be easily exchanged and that appreciates rather than depreciates (over the long run I mean, I am not referring to short term market fluctuations). 2) It created a mode where many underground (eg: gray or black market dealings) can take place without the need for laundering money. [Note: I don't condone, just pointing out the facts]
Re: Bitcoin solved a major technical problem, but not an economic one
#3I wouldn't go to Krugman for technology insights. This is the same guy who basically said the Internet has no future, and now he's repeating it for Bitcoin.
Re: Bitcoin solved a major technical problem, but not an economic one
#4The scenario with a large number of people wanting to cash out already assumes Bitcoin lost as a currency, so I'd say it could be a result, not the cause of Bitcoin's failure. Bitcoin succeeds or fails on whether you can buy useful stuff with it, buying other currencies is secondary.
Re: Bitcoin solved a major technical problem, but not an economic one
#5I wouldn't go to Krugman for technology insights. This is the same guy who basically said the Internet has no future, and now he's repeating it for Bitcoin.
Except in this case he's only quoting John Levine.
Re: Bitcoin solved a major technical problem, but not an economic one
#6Not true. Bitcoin did two things that I am aware of: 1) Create a universal currency which can be easily exchanged and that appreciates rather than depreciates (over the long run I mean, I am not referring to short term market fluctuations). 2) It created a mode where many underground (eg: gray or black market dealings) can take place without the need for laundering money. [Note: I don't condone, just pointing out the…
1) All major currencies can already be easily exchanged. The only reason they depreciate rather than appreciate is that we have decided that depreciating currencies are good for the market.
2) Bitcoin maintains a public record of every transaction. There are still ways to anonomize yourself (mixing services, proposed extensions like Zerocoin), but cash would still be my first choice.
Re: Bitcoin solved a major technical problem, but not an economic one
#7Not true. Bitcoin did two things that I am aware of: 1) Create a universal currency which can be easily exchanged and that appreciates rather than depreciates (over the long run I mean, I am not referring to short term market fluctuations). 2) It created a mode where many underground (eg: gray or black market dealings) can take place without the need for laundering money. [Note: I don't condone, just pointing out the…
You're right. The black market gives Bitcoin a "floor" value, just like Gold or Silver. It is a very efficient means of currency for the black market, as proven by the Silk Road and others.
Re: Bitcoin solved a major technical problem, but not an economic one
#8Not true. Bitcoin did two things that I am aware of: 1) Create a universal currency which can be easily exchanged and that appreciates rather than depreciates (over the long run I mean, I am not referring to short term market fluctuations). 2) It created a mode where many underground (eg: gray or black market dealings) can take place without the need for laundering money. [Note: I don't condone, just pointing out the…
1) All major currencies can already be easily exchanged. The only reason they depreciate rather than appreciate is that we have decided that depreciating currencies are good for the market. 2) Bitcoin maintains a public record of every transaction. There are still ways to anonomize yourself (mixing services, proposed extensions like Zerocoin), but cash would still be my first choice.
As for your 2): why did the Silk Road explode in popularity? I think, done correctly, Bitcoin offers people on-the-couch access to anything they could want, with the level of risk largely depending on their technical expertise.
Re: Bitcoin solved a major technical problem, but not an economic one
#9Krugman has spent the past few months qualifying, trivializing and disclaiming his previous asinine and uninformed remarks about bitcoin. Does he have a single shred of dignity left? Insufferable.
Moreover, Krugman is blissfully unaware of the hundreds of millions of people that don't have access to stable or reliable banking. How does opening the markets to untold millions, via peer-to-peer transactions, not solve an economic problem?
Re: Bitcoin solved a major technical problem, but not an economic one
#10This analysis is true to a point, but overlooks that the 'decentralized cloud bank' innovation now allows a whole bunch of other technologies to be applied into an important economic domain without the old gatekeepers and limitations. Those other technologies are a bit more familiar to people:
• global always-on connectivity
• encryption constructs
• easy discovery/formation of communities-of-interest
• open source collaboration
• instant rich search and giant archives of past behavior
• delegation of policy to ever-improving software/automation
• cheap powerful handheld computer-phones
• ...etc
These may not seem to be similarly novel breakthroughs; we're getting used to them, over the last 5-20 years. But now they're being applied to a monetary domain, via Bitcoin (and other cryptocurrencies), where progress was formerly bottlenecked.
So while I'm wouldn't generally put a lot of weight on the cheap, shallow shot against Krugman – "he thought the net wouldn't have more impact than the fax machine" – there is a somewhat similar failing here. By looking at one aspect of Bitcoin in reductionist isolation, he (and his tech friend) are missing the combinatorial effect of all these new possibilities together.