Bitcoin

Paul Krugman's 10-Year History of Being Wrong About Bitcoin

Why is it so hard for him to just admit he was wrong?

|

Nobel Prize–winning economist Paul Krugman is one of the most influential individuals in his field, which means people listen when he talks about bitcoin. Unfortunately, most of what he has had to say about the cryptocurrency over the years has been misguided, uninformed, or just plain wrong.

It's sometimes difficult for the average person to understand what economists and politicians are talking about when they debate policy, but the value proposition of bitcoin can be easily understood by anyone through its NgU technology (NgU is an abbreviation of Number Go Up and is a meme based around bitcoin's deflationary monetary policy). While Krugman has stated that his 1998 prediction that "the Internet's impact on the economy [would be] no greater than the fax machine's" was supposed to be a fun and provocative thought experiment, it may be much more difficult to explain away his many confused and oftentimes arrogant takes on bitcoin over the past ten years.

Krugman first wrote about bitcoin in The New York Times back in September 2011. In this post, Krugman mainly compared bitcoin to gold in a rather negative light. "To the extent that the [bitcoin] experiment tells us anything about monetary regimes," he wrote, "it reinforces the case against anything like a new gold standard—because it shows just how vulnerable such a standard would be to money-hoarding, deflation, and depression."

In other words, Krugman made a moral case against the adoption of bitcoin as money. In Krugman's telling, a bitcoin standard would make the world much worse off because bitcoin has a fixed supply and central bankers would not be able to increase the money supply to stimulate the economy during economic recessions.

Even if you accept the idea that the world would be much better off under a more inflationary monetary system where central bankers have the power to stabilize the economy (I don't), individuals tend to respond to incentives related to the betterment of their own lives, not necessarily the greater good of society. If holding bitcoin theoretically makes the world as a whole a bit worse off but acts as a better form of savings for an individual, is the average person going to choose to put his savings in fiat currencies that lose value over time out of the kindness of his own heart, or will he choose to just hold bitcoin? It's also important to remember that the entire point of bitcoin is to persist in the face of governments that try to force their citizens into only using the government-approved form of money.

In April 2013, Krugman invoked Adam Smith to make another moral case against bitcoin, this time claiming that the use of gold, silver, or bitcoin as money was a waste of resources. "Smith actually wrote eloquently about the fundamental foolishness of relying on gold and silver currency, which— as he pointed out—serve only a symbolic function, yet absorbed real resources in their production, and why it would be smart to replace them with paper currency," Krugman wrote. "And now here we are in a world of high information technology—and people think it's smart, nay cutting-edge, to create a sort of virtual currency whose creation requires wasting real resources in a way Adam Smith considered foolish and outmoded in 1776."

This was an early version of the energy and climate change–based arguments being made against bitcoin today. This is a faulty argument, however, because it assumes there is no difference between bitcoin and traditional bank accounts. The entire point of bitcoin as an asset is that, unlike Venmo or traditional bank accounts, users can retain full control over their digital money and are not simply holding IOUs. Claiming that this is a waste of resources is a subjective argument. It is no different from saying automobiles or YouTube are wasteful due to the amount of energy that is used to power them. People use bitcoin because it provides value for them, so the resources expended to make bitcoin possible aren't a waste.

Later in 2013, Krugman simply declared that "Bitcoin Is Evil" because, as science-fiction writer Charlie Stross put it, "BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions." That said, Krugman did at least go into the argument that bitcoin lacked any sort of fundamental price floor and contrasted that characterization with gold's use in jewelry and the U.S. dollar's use for paying taxes.

Krugman would go on to use bitcoin's lack of a price floor mechanism as his key argument against the cryptocurrency for many years to come. For example, as he argued in a 2015 interview, bitcoin "is a technically sweet solution to a problem, but it's not clear that problem is one that has much economic relevance. It's certainly not a reason to hold that currency.…If you're looking for the idea that a currency doesn't really have to be something physical, it can be something that is virtual, that's the system we already have."

But this misses the point of bitcoin, which is actually nothing like the monetary system we currently have. For one, bitcoin's long-term monetary policy was "set in stone" when the network launched in January 2009, and it is not subject to changes by a trusted third party such as a central bank. Additionally, bitcoin solves the problem of centralization that is found in the digital equivalents of both the gold and fiat-based currency systems. Bitcoin users are able to retain full ownership over their coins with no counterparty risk; a bitcoin is not an IOU. Further, due to the censorship-resistant nature of the bitcoin network, a new financial system can be built on top of the bitcoin blockchain through the use of smart contracts to enable a greater degree of user privacy for a wide variety of activities, operating in a manner that contrasts the current surveillance state.

In addition to calling bitcoin evil, Krugman has also dismissed it as "libertarian derp" on multiple occasions. He even took pleasure in the crashing bitcoin price in early 2018. Notably, some of Krugman's negative comments toward bitcoin popped up around the absolute bottoms of two consecutive cryptocurrency bear markets. In other words, it may be a good time to buy bitcoin whenever you see Krugman taking a victory lap.

Unfortunately for Krugman, the "libertarian derp" cryptocurrency hit a new all-time high once again in 2021, 10 years after his initial criticisms of the crypto asset were first published in The New York Times. Instead of acknowledging the reasons for bitcoin's staying power, however, it appears that Krugman will continue to claim there is no utility for this technology and keep dismissing bitcoin as a cult that can survive indefinitely.

Fortunately for bitcoin, it can rebut Krugman by simply continuing to exist and thrive in the marketplace.

NEXT: Indiana Said the Government Should Be Able To Take Everything You Own if You Commit a Drug Crime. The State Supreme Court Wasn't Having It.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. a bitcoin standard would make the world much worse off because bitcoin has a fixed supply and central bankers would not be able to increase the money supply to stimulate the economy during economic recessions.

    In this statement, the only thing Krugman is wrong about is that the world would be worse off.

    1. Not willing to give up government’s monopoly over the money supply.

      1. Making money online more than 15$ just by doing simple work from home. I have received $18376 last month. Its an easy and simple job to do and its SSAW earnings are much better than regular office job and even a little child can do this and earns money. Everybody must try this job by just use the info
        on this page…..VISIT HERE

    2. Sure, you spent the last year locked in your home, forced to wear a mask, but your BTC values went through the roof… until you were allowed outside, not to wear a mask, and and China took a dump.

      “The real problem with fiat currency is the currency.” – crypto-libertarians.

    3. When has Krugman ever been right? He’s great with the overly-politicized technobabble, but he’s largely been incredibly wrong with most anything he’s said.

      1. He’s the useful idiot’s useful idiot.

        1. That’s for damn sure!!!

        2. I disagree. I fail to see any usefulness.

        3. That props up other useful more dangerous idiots.

          1. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link,
            ‌Go to tech tab for work detail. ………… http://www.Go2bank1.com

      2. There was that time back in 3rd grade.

      3. I totally agree with you. Krugman once said “A country having large debt is fine, we have things they can sell”. China now owns, our movie industry, AMC theaters, Smithfield foods, GE, some of our largest hotels, Motorola phones and the list goes on and on and on. Krugman may be a brilliant economist, but is he also a fool, he can’t analyze his own findings to see if his outcome is harmful to the country or not.

    4. First of all I’m not agreeing with Krugman, that of course would be fatal to my argument.

      But here goes, Bitcoin definitely has utility as a transaction medium especially for international transactions outside the tax authorities control, hopefully.

      But it is not suitable for replacing the dollar or Euro because it isn’t flexible enough to grow and contract with the economy. However it, along with gold and silver does put a constraint on how loose monetary policy can get without people losing faith in the integrity of government currencies and fleeing to more constrained alternatives.

      1. But here goes, Bitcoin definitely has utility as a transaction medium especially for international transactions outside the tax authorities control, hopefully.

        Unless you personally own the lines transmitting the information across those borders *and* didn’t pay any tax on it, it’s under someone else’s control and the tax authorities almost certainly have their fingers on it.

        However it, along with gold and silver does put a constraint on how loose monetary policy can get without people losing faith in the integrity of government currencies and fleeing to more constrained alternatives.

        Again, skirting around the edges. Like saying, “If we only teach kids to count with gold coins, they’ll never develop calculus.” Bitcoin’s not bad (crypto in general is better), but it’s a distraction. An distraction that asserts that there is an computational algorithm for ethics and that if you apply it rigorously enough, ethics/morality/freedom will be achieved. Libertarians like it because there is an algorithm for broader ethics, the core problem is it’s not computational and rigorous application violates the algorithm.

        1. rigorous application violates the algorithm

          Better stated ‘increasingly rigorous application diminishes the efficacy of the algorithm’.

      2. It’s not suitable for replacing the euro or the dollar because prices are in euros and dollars.

      3. Exactly. It is an excellent hedge against Banking shenanigans. Unfortunately, banking controls media so it hits at Bitcoin continuously, and for whatever reason Elon seems to have done a disservice running a game to accept and collect bitcoin as a financial tool to sell cars, that increased value, but found that selling carbon vouchers to other car companies were far more practical in producing profit. He made money with the bitcoin but somewhere in there enabled doors to open on the carbon credits which he sold off at the same time he was moving out of Bitcoin. Tesla made 4 times the amount he made selling Bitcoin on another Government fake currency.

      4. “grow and contract”?
        When was the last time the dollar supply didn’t grow?

    5. a bitcoin standard would make the world much worse off because bitcoin has a fixed supply and central bankers would not be able to increase the money supply to stimulate the economy during economic recessions.

      In this statement, the only thing Krugman is wrong about is that the world would be worse off.

      You think he’s right about there being a “fixed supply” of bitcoin? Because that would come as a real shock to those who “mine” bitcoins, thus generating more of them.

      1. There is a maximum possible number of bitcoins.

        1. There is also a maximum possible number of dollars (actually, several maximum possible numbers as it is restricted by multiple different things, like supply of paper for physical currency, hyperinflation destroying the economy, etc). But that does not mean that there is a “fixed supply” of either. The supply of Bitcoin today is higher than it was last week, and will be even higher next week. That there’s a limit doesn’t make it “fixed”.

          1. Holy crap – you are pretty much wrong about every fact in that post. Are you working on giving Tony a run for his money? (pun intended)

          2. Holy crap – you are pretty much wrong about every fact in that post.

            I’m impressed by the way you refuted those facts. Oh, wait…

            So, what is it you’re asserting is false? That “fixed supply” and “limited in growth” are two different things? Or are you actually asserting that the supply of bitcoin is not growing?

            1. Does he mean as Bitcoin is sold is partials(split) that increases bitcoin by increasing the price and value? The more and more you divide it the more parts exist for sale in relation to value, but the total amount of coin can not change.

              1. but the total amount of coin can not change

                But the total amount of coin currently in supply IS changing, and will continue to grow for the next ~40 years or so…which has been pointed out repeatedly.

          3. supply of dollars is limited by paper, that is your theory? lol..even if true, that is a hell of limit. But iots not true, since most dollars are digital, or debt, or imaginary and not physical or ‘paper’, your ‘ideas’ are ridiculous nonsense, basically gibberish.

            Bitcoin literally has a hard limit at 21 million bitcoins. Yes they are mining bitcoin and there are more this week than last, but when it reaches 21 million, all mining will stop and no more will ever be created again.

            1. supply of dollars is limited by paper, that is your theory?

              No, it was only one example. But it appears to be the only part of the entire post that you bothered to read.

              Yes they are mining bitcoin and there are more this week than last

              Which means…and stay with me here…that the “supply” of bitcoin is in fact not “fixed”, and that it is growing, and can continue to do so for decades. The difference between a “fixed supply” and the limit on what that the supply can grow to has already been explained. It’s a pit you weren’t bright enough to avail yourself of that explanation before rushing to respond and make yourself look even more ignorant.

              1. It will not take 40 years to get there. I think the latest estimate I read was before 2040.

                For all of your condescension, you seem to be the one missing the crux behind the fixed supply issue.

                The fact that all Bitcoin has not been “mined” yet, is irrelevant to that fact, and the intrinsic value DUE to that fact. Not ALL the gold has been mined yet, either, but we still know it’s of fixed quantity.

                Now, either you are simply oblivious to this fact and, more importantly, it’s significance. Or more likely, you WERE oblivious to this (until corrected) and then tried to condescendingly contort the argument into a semantic one to save face.

                Either way, take the L and stop embarrassing yourself.

                1. It will not take 40 years to get there. I think the latest estimate I read was before 2040.

                  The current estimate is actually some time in 2140, though that’s based on some assumptions that likely will not hold. I cited the one given by someone else here that was far more conservative than that.

                  The fact that all Bitcoin has not been “mined” yet, is irrelevant to that fact, and the intrinsic value DUE to that fact. Not ALL the gold has been mined yet, either, but we still know it’s of fixed quantity.

                  But it’s not of fixed usable supply, which…in conjunction with demand…is what matters in determining its value. If the rate of extraction of gold from the ground suddenly increased ten-fold over night with no change in the cost of doing so, your argument says that the value of gold would remain unchanged because…after all…the finite amount of the element on Earth has not changed. Do you actually believe that’s true?

                  Let’s see who is really embarrassing themselves here.

                  1. Alright, so I’ll start with a mea culpa. You’re right that the estimate I read was 2140. After reviewing the thread, I was also wrong in viewing your condescension as a salvo, instead of return fire, which lead me to be condescending as well. This, I do regret. There’s no place for it in productive communication – I should have critiqued your premise or said nothing at all. With this in mind:

                    The problem I, and seemingly others, had with your position (which lead to my biased response), is that it’s essentially a semantic, contrarian, and most importantly, irrelevant “point” to argue. To put another way, what you were trying to argue is not only (more than likely) understood by all, it’s not germane to the over all conversation and the OP’s post. Furthermore, you’re seemingly smart enough to understand this, and yet, seem to have jumped on this one word, “fixed”, and decided to belabor a semantic argument.

                    Let me use your Gold analogy, which in my mind, only reinforces my point. Yes, if there was a sudden influx in the supply of gold, triggered by either (or both) a large discovery, or new extraction technology, the price of Gold would probably experience a temporary decline in price. This decline would only happen, appreciably, if this new supply was just dumped on the open market all at once. But let’s take an extreme example and say that this new discovery expanded the known gold supply by a whopping 25%, which was then just dumped on the open market. Yes, I recon the price of gold might plummet, similar to the great depression. But just like the great depression, this decline in price would look just like a small blip on the chart over time, just as the DJIA chart does now during the 30’s – an insignificant blip in the grand scheme of things.

                    Unlike gold, however, there can be no sudden, massive new supply with BTC. Rather, there is a definitive cap on any potential gains in supply (which can only trickle in), which ultimately (and most significant to this conversation), has already been priced in. It is one of the few reason BTC has any value at all, as far as I can tell. It’s certainly not going to be a currency, but as a value store, wow is it great!

                    Okay, so with all that said, was there some point in arguing that BTC is not currently of “fixed” supply? Perhaps there is something that we’re all missing, but if that’s the case, you did a poor job of making THAT point (and missing why people were perturbed by your contributions).

                    I humbly await your thoughts.

                    1. Alright, so I’ll start with a mea culpa. You’re right that the estimate I read was 2140. After reviewing the thread, I was also wrong in viewing your condescension as a salvo, instead of return fire, which lead me to be condescending as well.

                      OK, so we’ve established that you’ve been rushing to respond without first making sure you understand what you’re responding to.

                      The problem I, and seemingly others, had with your position (which lead to my biased response), is that it’s essentially a semantic, contrarian, and most importantly, irrelevant “point” to argue.

                      And you’re still doing it. The difference between “fixed” and “finite in growth potential” is far from a semantic one. What is truly irrelevant to any discussion about the present or the foreseeable future is the fact that the growth in the supply of bitcoin is expected to stop somewhere around 120 years hence. Calling the supply “fixed” for purposes of current economics because it will stop increasing over a century from now is just plain silly. And even that is just an estimate based on assumptions about increases in mining power and other variables that almost certainly will not hold up.

                      but if that’s the case, you did a poor job of making THAT point

                      I simply pointed out that the “supply” of bitcoin is not “fixed”, which is absolutely true. You and a couple of others may have done a poor job of understanding that (perhaps due to the already established habit of rushing to draw conclusion and respond without first thoroughly reading and understanding), but that’s not my problem.

                      and missing why people were perturbed by your contributions

                      I didn’t miss anything. I’m simply not concerned if someone opts to be “perturbed” by someone else pointing out a simple fact.

      2. Gold would be better than either (central bank dollars or bitcoins), because the supply of gold grows slowly every year as more is mined. At least until Bezos or Musk finds a golden asteroid and hauls it home.

      3. The Supply of Bitcoin Is Limited to 21 Million. You may say, “But more are mined every day!” True. And if Ferrari said they were making a limited-edition, hand-built, 100-car run of a specific model, then during the production run, would you argue “Well, it’s clearly NOT a capped supply of that model of Ferrari, because a new car of that model is being produced each week!”

        The supply is capped, it is hard-coded, it cannot be changed without a hard fork, and if it were to hard fork so as to remove the cap, it would no longer be Bitcoin. It would be some other coin, but it would not be Bitcoin. Bitcoin will only ever have 21 million coins, and the ability to mine these coins will eventually, forever, disappear. Period.

        1. What is the smallest fraction of a bitcoin that you can own?

    6. Krugman is right. Bitcoin is a solution in search of a problem. Think Tulip Mania.

      1. Joseph Weizenbaum, the famous professor of computer science at MIT , said that the computer is a solution in search of a problem

        So, what problem does cryptocurrency solve? Recall that Bitcoin is the first successful crypto, but not the only crypto. It was and is a proof of concept for how to build a distributed, trust-less database. That’s what crypto provides: the ability to disseminate information transparently, in a way that prevents the information from ever being changed, scrubbed or manipulated by anyone, anywhere. It could be used to store the complete maintenance history of every car every built, the complete ownership and repair history of every house or plot of land, provide irrefutable graduation or other credentials. It can track the supply and build chain for any product you care to name.

        That’s the solution it can provide. Those are some of the problems it can solve.

    7. Paul Krugman, like Al Gore and Barack Obama, won a nobel prize for being anti George W. Bush and nothing more. None of them produced any thing, idea, knowledge or change worthy of particular recognition. It was the start of an era when the prize became an award for expressing left leaning political views rather than for accomplishment.

    8. Think of how profitably domesticated herds could use the same vast natural resources used by useless to poor people wild herds and their natural Happy birthday wishes predators. I am perfectly serious about this even if crazy or badly ill informed or both.

  2. Unfortunately, most of what [Krugman] has had to say about the cryptocurrency over the years has been misguided, uninformed, or just plain wrong.

    FTFY

    1. Dude said the internet would only effect the economy as much as the fax machine did.

      1. Has anyone calculated how much the FaX machine changed the economy? Many industries lived off of it. His statement is a useless negative without context meant to just fill his role as a stooge.

    2. This so much!

    3. I was pretty much going to post the same thing. He’s living proof that a Ph.D. and Nobel prize don’t eliminate stupidity from a person’s profile.

  3. Paul krugman x year history about being wrong about everything.

    Krugman is to economics what fauci is to medicine. And no, that’s not a compliment

    1. Krugman at least did some important and highly regarded work in his youth. Fauci was never a highly regarded researcher and has never practiced as a clinician. Krugman’s a cunt but he’s not a bureaucrat.

    2. I consider him a minion of the notorious child molestor John Maynard Keynes, and Keynes was the Trofim Lysenko of economics.

      -jcr

      1. Funny how folks like Krugman forget about that…then again in the Keynsians DNA it does appear they love socialism, have weird old world grudges from Europe and really really dislike the free market and liberty..

    3. At least medicine is tied to reality. Macroeconomics, as most practice it, ignores a lot of reality.

  4. >>Nobel Prize–winning economist Paul Krugman …

    lol I’ll take Laughable Award Winners for $400, Alex.

    Krugman hasn’t been credible since the Clinton era, if ever.

    1. In 2009 this person won the Nobel peace prize, and then started 4 wars.

      1. lol in 2007 this person won the Nobel Peace Prize and then was charged with sexual assault.

    2. Well, he did win the Nobel Prize For Criticizing Bush. As long as you remember that his field is actually Democratic Party propagandist and not economist, everything he says makes sense.

    3. His economics work was focused on trade. Just because he did some good work in that narrow area of economics doesn’t mean he’s much of an expert in other areas of economics – as his poor track record has shown. Why he (and the NYT) thinks his political opinions matter, or are particularly insightful, is a mystery. He is a putz.

  5. Why is it so hard for him to just admit he was wrong?

    Narcissism.

    1. Krugman can’t admit he’s wrong. He can’t look back at all. He makes his money by preaching a certain point of view and being a Nobel Laureate, so he just says what talking heads of a certain ilk are willing to repeat, knowing they won’t bother to call in on it.

      Don’t get me wrong. He’s a smart dude. Figured out a way to make good money off of producing nothing and being wrong all the time. But he’s nothing other than a partisan hack spewing big government dogma that borders on the religious.

  6. Nobel Prize–winning economist Paul Krugman is one of the most influential individuals in his field, which means people listen when he talks about bitcoin.

    Just as Krusty the clown is one of the most influential people in his field, except that more people laugh at Paul Krugman than laugh at Krusty. Who the hell are these people you claim take him seriously?

    1. Shitlibs and members of the Blue Cult. But I repeat myself.

  7. “So if you are trying to get at me as a university professor, you’re really attacking not only Dr. Krugman, you are attacking economics.”

    1. “Then isn’t this an indictment of our educational institutions in general? And if so isn’t this an indictment of our entire American society? Well, you can do whatever you want to Paul Krugman, but Paul Krugman isn’t going to stand here and listen to you badmouth the United States of America.”

      1. Gentlemen!

        Actually, Krugman would let you badmouth the United States of America.

        1. I’ll bad mouth the USA any chance I get. I hate this country, but not nearly as much as it hates me.

          1. lol – hating an entire country.

            That seems useful and not at all stupid. /sarc

  8. Krugman’s base problem with Bitcoin is that he likes central bank economic manipulation and inflationary fiat currency. Of course he is going to consider Bitcoin evil.

  9. Krugman is proof that once the MSM anoints you as an expert, facts, accuracy or reliability are no long necessary. Bonus point for “Nobel Prize Winning…” as if that is some protection against ever being wrong.

  10. Thanks for sharing such amazing content which is very helpful for us. Please keep sharing like this. Also check for News or many more.

  11. Dude is in it for the clicks and hate. Lots o pundits do this shit for a living. Who cares? He long ago gave up any pretense at being rational.

  12. Because he is an asshole.

    Paulie Krugnuts is wrong, often. He bloviates about topics outside his expertise, like many people with terminal degrees and high-profile awards. See: Neil DeGrasse Tyson

    But mostly he is an asshole.

  13. Krugman’s Nobel prize is for his extremely narrow, extremely specialized academic work, on international trade, I believe. Even free-market guys acknowledge his work in yhis extremely narrow area.
    However, he sold his soul as an economist at least as early as he started working for the NYT. There are myriad examples of him saying things that are, if not directly in contradiction, in contradiction in spirit, to a textbook he wrote in the past, among other anodyne economic sources. Bob Murphy has a great record of documenting these “Krugman Kontradictions.”

    1. “Anything you can find on this subject from Krugman would help, so long as it was written before 1998. That man stopped being a serious economist the day he started writing for the New York Times.” – Actual advice given to me by my thesis advisor, c. 2003.

      Krugman essentially admitted as much some time after Obama was elected, expressing relief that he could spend his time on sober analysis instead of the bomb-throwing he practiced for the previous 8 years.

      1. So when will he start said “sober analysis”?

        Oh, I guess right after he takes his head out of his ass.

    1. I call bs, they lifted that stor from mad max

    2. It’s time to stop using dick-sucking as an insult. Dick-sucking should be encouraged, and vigorously practiced, by those who enjoy it. Telling someone to suck your dick should be a positive affirmation of warm regard. Those who suck dicks perform a valuable service for those who have dicks (and those categories definitely aren’t mutually exclusive!).

      But what would replace “suck my dick?”

      1. But what would replace “suck my dick?”

        Pay my taxes.

      2. It’s not meant as an insult here. I’m telling Portlanders to embrace gang violence with warm regard.

  14. And his idiot fellow commies in congress like Fauxcahontas Lieawatha want to ban it altogether because she says the computers are using too much energy mining it.

    I wonder if she’d consider trading me all of her Bitcoin holdings in exchange for $24 worth of beads and wampum.

    1. Also, his moron individual commies in congress like Fauxcahontas Lieawatha need to boycott it out and out in light of the fact that she says the PCs are utilizing a lot of energy mining it.
      https://www.caseprofessors.com/

    2. Hey computers mining and cows farting are destroying the planet.

      Good thing illegal wars are clean energy.

  15. If a poor student is going to try to overrule a professor, he or she should know more about that subject than the professor. Krugman is right. The only thing making him appear wrong is that there are so many morons in the world. I bought bitcoin first in 2013 because it was an opportunity to get in on an obviously brilliant scam. At that time it was a smart investment for a person who knew what a scam looks like. I have a lot of respect for the writers on this website, Reason is a great site to get news about some things. But in this case it is just a parrot for the ‘authority’ of the massive gang of stupid people who think bitcoin is going to be real money. There are lots of semi decent cryptocurrencies like numerai, mana, namecoin etc that are a lot cheaper and actually have a purpose, coins that do something other than simply exist.

    1. There are billions of stupid people that thing the dollar is real money, same as art, baseball cards, and any other holding. It is worth only what someone is willing to pay you for it.

      1. I believe the word you’re looking for is wealth. Money is not wealth. It’s something someone accepts in exchange for wealth.

        1. No, there are definitely lots of stupid people that think the dollar is real money and not just a more sophisticated monopoly dollar.

          1. Everyone knows that the economy is actually based on Beanie Babies.

    2. There are lots of semi decent cryptocurrencies like numerai, mana, namecoin etc that are a lot cheaper and actually have a purpose, coins that do something other than simply exist.

      And there will be infinitely more.

      1. angels:pinhead::transistors:chip dancing:angels::algorithms:transistors

    3. Unit of account? Check
      Medium of exchange? Check
      Store of value? Check

      Looks like money to me. Turns out credentials only seem impressive if you’re an ignorant piece of shit.

      1. Medium of exchange? Check
        Store of value? Check

        Lol… sure.

        1. Medium of exchange? Check
          Store of value? Check

          Lol… sure.

          Which of those statements are you asserting is untrue?

          1. Wait, just let me pay for that in bitcoin. Oh you don’t take it and if you did it would take 3 days to transact? and it will cost me money to do so?

            What, you are telling me that the down payment for my house I saved in bitcoin is now worth 30 percent less than two weeks ago? Fuuuuck am I stupid, and homeless.

            nuff said

            1. Wait, just let me pay for that in bitcoin. Oh you don’t take it

              Does the fact that most U.S. businesses don’t accept Pesos, Rubles, Euros or any other foreign currency as forms of payment mean that those currencies are not mediums of exchange?

              and if you did it would take 3 days to transact? and it will cost me money to do so?

              How does that disqualify something from being a medium of exchange? If I initiate a withdrawal of funds from one of my 401(k)s they will charge me a (modest) fee and it will take up to 3 business days before it shows up in my bank account. Eek! The USD is not a medium of exchange!

              What, you are telling me that the down payment for my house I saved in bitcoin is now worth 30 percent less than two weeks ago? Fuuuuck am I stupid, and homeless.

              All currencies gain/lose value over time. What you’re describing is a difference in degree, not in kind.

              nuff said

              Not about what it is you think you’re responding to. None of that blathering in any way means that bitcoin is not a medium of exchange (it clearly is, since it is used as one every day), or that it is a store of value. It might not be a particularly stable one, but it does store value.

              1. What you’re describing is a difference in degree, not in kind.

                Any yet we often make sensible distinctions based on differences in degree. Yellow fades to red. Warm becomes hot. Hills become mountains.

                1. Any yet we often make sensible distinctions based on differences in degree.

                  This is not one of those cases.

        2. I like my stores of value to not fall 50% in a month.

          1. I like my stores of value to not fall 50% in a month.

            Most people do. But that doesn’t mean that it’s not a store of value. It’s just not a particularly stable one.

    4. “…Krugman is right…”

      You’re full of shit.

    5. The only thing making him appear wrong is…

      …the fact that he has no idea what the hell he’s talking about. That he thinks there is a “fixed supply” of BC was the first clue.

      1. there is a fixed supply of bitcoin, this is the 2nd time you have implied there is not. Its 21 million bitcoin, there will never be more than 21 million bitcoin, despite the fact people are ‘mining’ bitcoin, when they get to 21 million all mining will cease, this won’t happen though for about another 40 years.

        1. there is a fixed supply of bitcoin, this is the 2nd time you have implied there is not.

          Because there is not. There is an established upper-limit on what that supply can grow to, but the supply is not “fixed”. Those are two very different things.

          despite the fact people are ‘mining’ bitcoin, when they get to 21 million all mining will cease, this won’t happen though for about another 40 years.

          In other words…the supply is currently growing, and is not “fixed”.

          1. You play semantics games to prove nothing. As with gold (barring a resurgence of alchemy), there is a fixed supply available – once it has all been mined/discovered/whatever the fuck you want to call it there will be no more. That is a fixed supply.

            Fiat can be generated ad infinitum. The fact that you cited a limit to the amount of paper (which itself doesn’t exist, one can always grow more trees) shows the absurdity of your fallacious reasoning – dollars are basically just digits in the Fed’s computer.

            Krugman is wrong. He’s always wrong. That’s what’s so right about him.

            1. You play semantics games to prove nothing.

              Words/terms have defined meanings within the context in which they’re used. Your ignorance of those meanings doesn’t make them disappear or irrelevant.

              As with gold (barring a resurgence of alchemy), there is a fixed supply available – once it has all been mined/discovered/whatever the fuck you want to call it there will be no more. That is a fixed supply.

              First off, gold that is still in the ground is not a part of the current “supply”, and does not become so until it is extracted and becomes usable for something. That’s why the current value of gold is not based on assumptions about how much is in the ground, but on how much is currently available. “Supply” refers to that which is available for use, as opposed to “reserve”, which refers to that which is not available for use.

              The fact that you cited a limit to the amount of paper (which itself doesn’t exist, one can always grow more trees)

              You think that the physical supply of material present on Earth from which paper and trees made/grow is infinite?

              Krugman is wrong. He’s always wrong.

              Is that why you’re agreeing with him?

              1. That’s why the current value of gold is not based on assumptions about how much is in the ground, but on how much is currently available.

                This is untrue. Say they found out tomorrow a huge gold deposit which will increase gold reserves by 50% over the next 50 years, you don’t think that would affect gold prices today? You’re a fucking idiot.

                You think that the physical supply of material present on Earth from which paper and trees made/grow is infinite?

                Jesus you’re dense…yes, since trees can be constantly grown there is, for all intents and purposes, and infinite supply. This is why lumber costs a lot less than gold.

                Fucking idiot.

  16. I did enjoy his performance in Ratatouille though.

  17. “…a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions.”

    Says that like, it’s a bad thing…

  18. I rest easy at night knowing Krugman hates BTC. It solidifies my belief I did the right thing betting against the dollar.

  19. Paul Krugman’s 10-Year History of Being Wrong About Everything In Economics. Maybe he does better in other areas!

  20. Krugman is acknowledged by even libertarian economists to have made contributions to the field in the 90s. Then he sold his soul and became a mouthpiece for Democrat policies.

    1. Yeah he once had some interesting things to say, now he is just a booster for Team Blue economics.

      1. He’s always been a Keynesian nutjob. There’s nothing interesting at all about it.

        1. That’s actually not true. He converted to Keynesianism at some point in the mid 90s. Before that he had some pretty good insights into international trade. Afterwards he’s been nothing but a mouthpiece for Democrats.

          1. He found out being a useful idiot pays. And it pays well and he doesn’t have to generate a single damn thing of value.

    2. Name the libertarian economists…

      1. Done Boudreaux and Russ Roberts for starters.

  21. So he’s wrong about bitcoin, like everything else.

    -jcr

    1. I’m also probably wrong about bitcoin. I don’t understand it either. Seems like it would be worth getting into, but did I miss the initial surge that made it worthwhile?

      Anyway, at least I don’t go on national low-rated cable news shows and make an idiot out of myself, talking about stuff I don’t know about.

      1. Its nothing more than gambling at this point. And a way for criminals to purchase goods in a mostly untraceable way.

        If you got in early, kudos. If not, stay away. One best case scenario, you’ll get a 300-1000% return. Alternative best case scenario (if people actually want it to become a realistic store of value and medium of exchange) is for the price to not swing wildly like it does now, so no 300% return. Under case 2, you dont have to worry about missing out on anything. Nobody is crying because they didnt exchange dollars for euros, yen or renminbi at the right time.

        For all of the BTC lovers, currency isnt supposed to be an investment that has 10000% returns. Nobody is going to be willing to buy a fucking $100 widget for $100 worth of bitcoin when that bitcoin will be worth $1000 tomorrow.

        So BTC lovers… If you want it to be a currency, you should have some other argument than that critics are haters because you got in on the top of the pyramid and they didnt.

        1. I agree at present it isn’t a currency, for the reasons you cited. But it can serve as a medium of exchange, and I think it will stabilize eventually – at what price is anyone’s guess.

          I have dabbled. Funded my HSA with profits from it, and bought my dream acoustic guitar…and set aside enough for the tax on the gain.

          If all crypto goes to zero, including what I have pulled out of it already, I will be out less that $2K. I can live with that.

      2. yes, the time to get in on a Ponzi scheme is before everyone knows about it.

        1. I suggest you learn what a real Ponzi scheme is. I say this because BTC isn’t one and learning more about actual schemes might help you understand this. Look up Bernie Madoff for an example.

  22. What’s the point of Bitcoin if the feds can confiscate it?

    1. The guy had all his info on a rented cloud server. It’s not like the government hacked into bitcoin and just stole the tokens.

      1. From the victim’s perspective, is there a meaningful difference between trespass to chattels and theft?

    2. What’s the point of Bitcoin if the feds can confiscate it?

      That’s like asking what the point is of a combination safe if someone stole stuff from yours when you left the door open.

  23. Of course bitcoin is bad for the environment. All that mining and digging tunnels in the earth….. oh…. wait….

    1. The environmental case is correct. Billions of KWH used to “mine” bitcoin. That electricity has to be generated.

      1. If you look at energy expenditure on printing money physically or digitally, its more than bitcoin..same as mining gold. And CO2 is not a pollutant. Let’s just repeal legal tender laws and let the people decide what money is…that is called freedom..

        1. “And CO2 is not a pollutant.”

          That’s the whole problem in a nutshell. If CO2 were a pollutant, it could be cleaned up and eliminated. But creating CO2 is an intrinsic part of burning fossil fuels. Just try to burn them without making CO2. It’s impossible.

          1. Try to breath or gather the raw materials for making green tech without making CO2 for that matter.

            1. It’s still not a pollutant. Pollutants are waste material. CO2 is a necessary part of breathing or burning fossil fuels.

              1. It’s still not a pollutant. Pollutants are waste material. CO2 is a necessary part of breathing or burning fossil fuels.

                Moreover or more to the 500 lb. gorilla of your point; when people refer to ‘the environment’ they typically don’t mean solid chunks of rock or ice 100 ft. or more feet below the surface, but the greenery that sits on top of it and the soil that directly supports it. Greenery for which CO2 is a fuel or resource, not a waste product.

                1. “Greenery for which CO2 is a fuel or resource, not a waste product.”

                  I agree. The problem with CO2, and this has been understood since the days of Darwin, is its heat trapping character. Green house gas in other words. Scientists are concerned that burning fossil fuels will increase temperature. Indeed it can’t help but to do so given the fact we can’t burn fossil fuels without producing CO2. That’s the whole problem in a nut shell.

                  1. It’s also one of the great benefits of CO2.

                    1. It’s definitely one of my favorite chemicals.

              2. It’s still not a pollutant. Pollutants are waste material. CO2 is a necessary part of breathing or burning fossil fuels.

                That’s a meaningless exercise in semantics. One process’s waste is another’s required input. CO2 is a waste byproduct of animal respiration, but a necessary input for plant respiration. And claiming that it’s not a pollutant because its a “necessary part of” burning fossil fuels is just nonsensical.

                Now, whether or not CO2 is responsible for the climatic effects that are claimed by many is a matter of some debate, but the comment above is just nonsense.

                1. Now he doesn’t like semantics.

                  You can’t make this shit up…

                  1. Now he doesn’t like semantics.

                    I never did, nor have I played at them…your own ignorant claims to the contrary notwithstanding.

                    You can’t make this shit up…

                    And yet you do.

                2. ” One process’s waste is another’s required input. ”

                  Burning fossil fuels does produce waste but it ain’t CO2, The waste product is soot, That black greasy stuff that comes from incompletely consumed fuel, notorious for causing cancer and lung diseases. That would be your waste. I can’t stand it when internet people bad mouth one of my fave chemsicals.

                  1. Way to completely miss the point that “waste” is a relative term that is dependent on perspective. It is not an absolute descriptor.

                  2. By the way, even soot can be used as an input for productive processes (the manufacture of inks and dyes, a component of the rubber vulcanization process, et al). So does that mean that soot isn’t actually a “waste” item? No. It just further illustrates that your use of the word is based on a fundamental misunderstanding of what it means.

              3. I’m sorry, I wasn’t disagreeing with you.

  24. The little cunt has been wrong about just about everything for years. Even his prediction about inflation had the wrong party in charge.

  25. Ron Paul did more for macroeconomics that Krugman..who honestly won the award for his politics just like Obama with the peace prize. He has shown again and again he doesnt’ understand human action..aka economics..in other words the perfect “expert” for teh NYT

  26. You have to wonder what drives his views on this…basically overthrowing the Fed/Fed Govt control on the money supply..why is that a bad thing..oh it then takes away power from the people Krugman thinks are smarter and should run our lives..again it always goes back to “old world grudges” and folks like him love of socialism and secularism..I would like to ask him his view of Catholics or say the Holomodor…

    1. Because he is TPTB’s little bitch.

  27. “Nobel Prize–winning economist Paul Krugman is one of the most influential individuals in his field, which means people listen when he talks about bitcoin.”

    That is sad. Krugman is amazingly intelligent about the New Trade Theory, even won the Nobel Prize. That does not anoint him an expert on much of anything else, like Fauci is not an expert on the economy, although he plays one on TV.

    There are websites dedicated to all the wrong predictions and comments that Krugman has written the past 20+ years. The most notorious is that he wrote in 1998 that internet growth would slow down and have about as much affect as the fax machine.

    Take him seriously at your own risk.

    1. I made a similar comment on this thread – but like your wording better.

  28. We deposit our money in banks because we trust them. Or we trust the governments who guarantee our deposits. Bitcoin attempts to automate trust by incentivizing electricity consumption, putting computers around the world to work solving increasingly complex and gratuitous math problems.

    Compared to Visa, bitcoin processes only a tiny fraction of the minute by minute transactions that Visa does. Visa also processes these transactions at a much greater speed. And, of course, Visa only needs a vanishingly small fraction of the electricity bitcoin uses. Why? People trust Visa, and they don’t trust bitcoin.

    1. And Visa requires their users to have credit. Bitcoin doesn’t.

      1. Trust is a two way street. If Visa has reason not to trust you, they won’t want your custom. I wouldn’t lend money to those I don’t trust. Would you?

        1. Bitcoin doesn’t lend money, so no one has to worry about that with bitcoin.

          1. The transactions have to be verified. That’s where the heavy computing comes in. Because the essence of bitcoin is to automate trust. And that’s a tough row to hoe as any bitcoin miner will tell you.

            1. It is very difficult to make a lot of money quickly by helping to automate trust.

              1. My point is that automating trust is difficult. That’s why there’s the exorbitant consumption of electricity verifying bitcoin transactions.

                1. The immediate cost of Visa’s electricity to process a transaction is one thing.

                  On the other hand, Visa needs to provide electricity to 20,500 employees in multiple corporate offices, and their salaries are spent in the economy in ways that require electricity and other sources of green house gases.

                  Did you factor that in?

                  1. “Visa needs to provide electricity to 20,500 employees in multiple corporate offices”

                    They need heat and lighting just like the rest of us. What they don’t need to do is perform all those heavy computations to verify transactions that bitcoin requires. I’ve read that bitcoin mining consumes the same amount of electricity of Norway, a country with about five and a half million inhabitants. A number that dwarfs the number of Visa employees. I advise you to look into this yourself if you are curious. Don’t take my word for it.

                    1. I didn’t know that.

                      Wow. Bitcoin miners love spending large amounts of energy mining bitcoin.

                    2. still you are talking about ‘visa’, if you talk about dollars and the banks and their employees and sky scrapers and buildings and vaults etc that need to exist to support and protect and churn, lend and verify these dollars what does this energy output come to? Why just count ‘visa’?

                    3. “what does this energy output come to? ”

                      You’re the expert. You tell me.

                    4. “Bitcoin miners love spending large amounts of energy mining bitcoin.”

                      Jealous? The way to a bitcoin miners heart is through his hardware.

                    5. I’m not sure how equivalent to bit coin this is but to be clear every Visa transaction cause some amount of internet traffic on servers and storage appliances. Theses appliances use energy and create a lot of heat. It’s not just employees sitting in an office, it’s massive server/storage farms somewhere.

            2. The high power cost of bitcoin comes from mining coins, not verifying transactions.

              1. It’s the same thing. But, again, I advise you to look into the matter for yourself if you are curious.

                1. “It’s the same thing. ”

                  You are comparing the Lewis and Clark expedition to me making a weekend road trip to Great Falls.

                  1. It’s no comparison. Mining is verifying.

  29. “so the resources expended to make bitcoin possible aren’t a waste.”

    But a paragraph earlier we read:

    “Claiming that this is a waste of resources is a subjective argument.”

    So, let’s put aside the subjective question of wastefulness or non wastefulness and focus on efficiency. Having thousands of computers engaged in a mad rush to win the prize is inefficient and there are plans afoot to supplant bitcoin with a system that uses energy more efficiently.

    Mad Rush by Philip Glass:
    https://www.youtube.com/watch?v=UtQpSGyPCBE

  30. When I flip a switch, I expect there to be light. If my power provider is untrustworthy or external events cause outages, it’s on me to have a backup generator. Otherwise I’m in the dark for a while, and I subsist. I hope the power provider fixes things but I can survive for longer than a while.

    If my bank or credit card or cash or government fails, it behooves me to take other measures that don’t align with current law. That’s a terribly dangerous place to be but normal for most of human existence. While I think Krugman is a fool and a partisan ass, let’s at least understand that cryptocoin tied to electricity tied to the feds is fraught with danger.

    1. “cryptocoin tied to electricity”

      If that is all it depended upon it might not be so bad. Alternate sources of electricity being almost commonplace.

  31. Nice blog and valuable information. Thanks for putting so much efforts in writing this article.Nice Post

  32. I guess if people are willing to accept payment in bitcoin then that does make it a currency of some sort, though how that differs from wampum I’m not sure. Why would I sell someone something, invoice them for payment in 30 days, and want to receive that payment in bitcoin not knowing what a bitcoin might be worth in 30 days time?

    1. At least with the dollar you know it’s purchasing power will fall, right?

      1. A dollar’s purchasing power will only fall a negligible amount in 30 days. That’s not the case with bitcoin.

        1. lololololololololololololololololollololol

          What about over 300 days?

          3000?

          1. 2/10, net 30…. no one gives you 300 days to pay.

      2. So don’t invest in dollars either. Spend them or invest in something with a good chance of ROI.

        Inflation is coming so we are putting in some home improvements. The ROI is the enjoyment we get from those and they should increase the value of the home when we sell eventually.

        1. “Inflation is coming ”

          Surely the best thing to do is to borrow now everything you can, do your homo improvement, your trip around the world, your brand new car, and then when the time comes repay in inflated dollars.

        2. Except by then your upgrades will be out of style.

          People are already tearing out granite countertops on HGTV flipping shows.

    2. Why would I sell someone something, invoice them for payment in 30 days, and want to receive that payment in bitcoin not knowing what a bitcoin might be worth in 30 days time?

      What you invoice them for and the form of payment(s) you accept are two different things. How do you think Vendors who price their products/services in USD accept BC as payment? They do so by accepting the BC equivalent of the USD amount charged at the time the payment is made. That’s fundamentally no different from any other transaction where something is priced in one currency and then paid for using another. Prices are set in one currency, but payment may be made by customers in another currency based on whatever the exchange rate between the two is at/about the time of purchase (or at some other specified time).

      1. Expats deal with currency risk all the time.

        1. Expats deal with currency risk all the time.

          Which has exactly….what to do with what I said?

          1. Yes. There are means of using financial contracts to ensure you receive what you want when being paid in foreign currency. It’s a bit of a pain, but if the deal is big enough you deal with it. If I bill in dollars but accept bitcoin I do expect the bitcoin to equal what I billed in dollars. Which begs the question of why would I bill in bitcoin?

            1. Which begs the question of why would I bill in bitcoin?

              You probably wouldn’t. But that’s not the question you originally asked, and that I was addressing, which was why you would accept payment in bitcoin. I even began my response by pointing out that what currency you bill in and what form(s) of payment you accept are two different things.

  33. I find the idea of a currency that functions outside of government control to be appealing. However, It seems that people have gotten so excited about the software advances of the internet that they forget about the hardware. If governments decided that bitcoin were a serious threat to their power they can just shut down the internet. Like the narcissist who says “If I can’t have it, nobody can.” They can redirect satellites, seize relay stations and transmission lines. It may mean throwing away all the cultural knowledge stored in the cloud, but they can still restart on their own terms. Abstract intellectual freedom is all well and good, but if people have no real control over concrete assets it is irrelevant.

    1. And you could go to another part of the world where the internet is still up, and get your BTC.

  34. Why limit the history of being wrong to bitcoin? MMT, higher taxes, higher regulatory environment, and government policies ” managing ” markets.

  35. “makes the world as a whole a bit worse off but acts as a better form of savings for an individual,” Sigh. These two things are not inverse. It’s the individual that matters. There is no “the world” without us individuals.

  36. Krugman is a hack and a shill. What has he ever been right about?

  37. I’ve heard that this guy used to be a famous economist before he became a political hack.

  38. Mr. Krugman is on the receiving end of the “appeal to authority” logical fallacy. He gets a large amount of attention due to the Nobel Prize he received in Economics. But, for example, the subjects he addresses in his periodic NYT articles have nothing to do with his area of research in Economics. Yet, people listen to him because of the NP. They, and there appear to be many, commit the “appeal to authority” fallacy. Many, if not the majority, of even highly educated people, commit that fallacy.

    1. Isn’t the “Nobel Prize” in economics some B.S. fake cuckoo in the next “Nobel” anyway? It’s not even handed out by the Nobel committee, I think it’s the Swedish Central Bank’s deal.

  39. I didn’t invest in Bitcoin because I don’t understand it. Of course I did miss out on a lot of money.

    Oh well, Isn’t it one of those investing rules “don’t look back”.

    1. At the time when you could make a significant return it was not so much an investment as a speculation.

      Ironically it has come to a point where it is effectively what it was when it started. Only with a terrible downside.

  40. Because Krugman is an egomaniac with an inferiority complex. He can never admit being wrong. It would destroy him.

  41. Remember when Krugman said the stock market would collapse if Trump were elected? Why would ANYONE listen to this partisan hack…..EVER?

  42. Wrong about bitcoin? Has he admitted he’s wrong about the internet yet, or Enron?

  43. When the Enron collapse happened, didn’t he say something to the effect of how that would be better remembered than 9/11?

  44. Krugman has been wrong about everything since his uttered his first words at age 3. The only reason he still has a platform is because his politics are correct. And he knows this and makes sure to stay true to the orthodoxy.

  45. He’s Paul Krugman, the former Enron advisor who has made a good career by being consistently wrong about everything and saying it in such a way it pleases the media people on the left who keep paying him.

  46. The real long term issue with BTC is that it’s proof-of-work. takes a lot of electricity to “mine” the coins whereas proof-of-stake requires a fraction of the power consumption as coins are “minted” (or something like that). Also BTC is incredibly slow compared to some of the POS coins like Cardano Ada. Supposedly ETH will be implementing POS via ETH2.0, but it hasn’t happened yet and the transaction fees are ridiculous. I’m taking a long bet on Ada and just seeing what happens.

    1. And you touched on the real “real problem” with bitcoin — the supply of bitcoin may be capped, but there are an infinite number of alternative cryptocurrencies available, with more on the way. Many of them will be faster, or more energy efficient, or more secure (someday), or cuter, or more meme-worthy.

  47. “People use bitcoin because it provides value for them, so the resources expended to make bitcoin possible aren’t a waste.”

    Admitted Bitcoin novice here, but the quality of the reasoning exemplified above doesn’t give me a lot of confidence in the article’s conclusions. As a categorical assertion the quote is clearly wrong (in a cost/benefit setting, it’s asserting that the costs and impacts “aren’t a waste” independent of the magnitude or even the sign of either the cost or the benefit); but a few minutes on Google suggests that unfavorable answers to the below Qs could also invalidate the *conclusion* in this particular case:

    1) How much energy is required annually to mine Bitcoin? (I gather Bitcoin currently consumes on the order of the energy use of Netherlands, much of which is generated by coal-fired Chinese power plants).
    2) What is the carbon footprint of this energy?
    3) How will the above change going forward?
    4) On the benefit side, on what scale will Bitcoin ever be practically useful as a medium of exchange, esp. as compared w/ competing cryptocurrencies? (I gather there is significant concern about scalability of its supported transactions/sec).

  48. Reason’s writers and especially the oh-so-clever Halbstarken in these comments sections are wrong more often than is commie socialist leftist icon Krugman.

  49. Guy has won a Noble Prize and is an Ivy league professor. Can some of you keyboard warriors who believe in fiat currency tell us a bullet point or two about your credentials? An untalented, illiterate hateful kook in the internet is really a sad sad thing.

    1. No credentials are needed to see that Krugman is a partisan hack, whose columns are basically variations on “Republicans bad, Democrats good”. Of course he also claims that feral government spending of non existent dollars will not cause inflation. Methinks Paulie is going to be in for a rude shock in the near future; the 50 and 100 trillion dollar Zimbabwean bills I bought at a coin shop for 7 or 8 dollars each are a useful lesson on the folly of fiat money coupled with reckless deficit spending.

      1. “Republicans bad, Democrats good” is the “I think, therefore I am” of the 21st century. Few wiser things have ever been said.

  50. “For one, bitcoin’s long-term monetary policy was “set in stone” when the network launched in January 2009″

    I don’t even know where to begin with this hilarious explosion of libertarian fanboy diarrhea. So one of the virtues of Bitcoin is that it’s not subject to any authority but God (and the speculative market). I realize you don’t like democracy, but we’re talking about a century of economics you simply throw in the shitter because it contradicts your childish utopian nonsense.

    You know what can end Bitcoin? Governments. Maybe they’ll all be run by Trumps and be very dumb governments, but even mostly dumb governments practice self-defense. That’s if somehow it became an actual currency, meaning stable and useful, rather than a shitty casino where you can get fantastically rich if you just invented a time machine.

    Without the speculative casino quality, it would be what? A middleman between moronic nerds and the dollar? What do you think it’s gonna be worth when the US is a crater? Or a fascist shithole?

    Most people get over their “MOOOOM leave me alooooone” phase when they still have a one in front of their age. If you want to be free of other people’s rules so much, simply move away from other people. Plenty of corners of Antarctica I’m sure are nice and lawless where you can (quickly) jerk off in peace to whatever it is you think you’re missing from life here.

  51. In fairness to Krugman, he was wrong about everything else too.

    Now is definitely not the time to try austerity.

  52. “Nobel Prize–winning economist Paul Krugman is one of the most influential individuals in his field, which means people listen when he talks ..”

    The scariest statement in article.

  53. well, a ten-year history of being wrong about bitcoin is swallowed up in his persistent wrongness about everything else economic for about the last 3 decades. he’s a dyed-in-the-wool Keynesian, ffs. why is it a surprise that he won’t admit he’s wrong on this??

    1. What specific turn of events proved him wrong and you right?

  54. Bitcoin currencies are an investment. Feel free to go there. Am I putting money there? No.

    Having said that, Paul Krugman is a Keynesian charlatan of an economist.

  55. Was it not Krugman who, in 2016, declared that he was going to sell all of his stocks because the markets would never recover?

    One would not only not go broke doing the opposite of whatever Krugman spews, one might make a significant amount of money.

  56. I am making 7 to 6 dollar par hour at home on laptop ,, This is make happy But now i am Working 4 hour Dailly and make 40 dollar Easily YQW .. This is enough for me to happy my family..how ?? i am making this so u can do it Easily…Visit Here

Please to post comments