Nobel laureate Paul Krugman stops predicting Bitcoin’s demise, now says BTC ‘can survive indefinitely
Nobel Prize-winning economist Paul Krugman says he has given up on predicting the impending demise of bitcoin. The economist now suggests thinking of cryptocurrency “as a cult that can survive indefinitely.” Nonetheless, Krugman still believes that bitcoin is without foundation.
Paul Krugman compares Bitcoin to a cult that can survive indefinitely
Nobel laureate Paul Krugman said on Twitter last week that he had given up on predicting bitcoin’s demise. Krugman won the 2008 Sveriges Riksbank Prize in Economics in Memory of Alfred Nobel “for his analysis of business patterns and the location of economic activity,” shows the Nobel Prize website. The economist tweeted last week:
“I stopped predicting the impending disappearance. There always seems to be a new generation of believers. Maybe I just think of it as a cult that can survive indefinitely. “
However, Krugman is still not a fan of bitcoin and insists that the cryptocurrency has no grounds to argue.
“BTC is not a new innovation; It’s been around since 2009, and in all that time no one seems to have found a good legal use for it, ”Krugman said. “It is not a convenient medium of exchange; it is not a stable store of value; it is definitely not a unit of account. “
In an opinion piece published Thursday in The New York Times, Krugman compared the cryptocurrency craze to a Ponzi scheme. “Twelve years later, cryptocurrencies play almost no role in normal economic activity. Almost the only time we hear of them being used as a means of payment, rather than speculative trading, is in association with illegal activities such as money laundering or bitcoin ransom that Colonial Pipeline paid to the hackers who shut it down. ” Krugman described, adding the following:
Why are people willing to pay large sums for assets that don’t seem to do anything? The answer, obviously, is that the prices of these assets keep going up, so the first investors made a lot of money and their success continues to attract new investors.
“Its value is based on the perception that it is a technologically sophisticated way to protect yourself from the inevitable collapse of fiat money, which will come one of these days, or maybe one of these centuries. Or, as I say, libertarian derp plus techno-charlatanism, ”the economist also tweeted.
“This may sound like a speculative bubble to you, or maybe a Ponzi scheme, and speculative bubbles are, in effect, natural Ponzi schemes,” Krugman continued. But could a Ponzi scheme really last that long? Actually, yes: Bernie Madoff ran the scam on him for nearly two decades, and it could have lasted longer if the financial crisis hadn’t intervened. Now, a long-running Ponzi scheme requires a narrative, and the narrative is where cryptocurrencies really excel. “
Nonetheless, the Nobel Prize-winning economist concluded:
Are cryptocurrencies heading for a crash anytime soon? Not necessarily.
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