Double Nobel laureate considers cryptocurrency and blockchain useless

Winner of the Nobel Prize, Economist and Observer New York Times Paul Krugman wrote an article about his skepticism regarding long-term viability cryptocurrency. His doubts focused around two arguments: cryptocurrencies are not attached to anything in the real world and therefore do not have real cost, they are and will always be too expensive.

Krugman explains its position as follows: «Fitate currencies have a basic cost, which means that their value is not a bubble that can burst if people lose faith.» On the other hand, Bitcoin is not tied to anything. The opinion of Krugman on this occasion sounds as follows: «If all the market speculators at one point were launched in the values of Bitcoin, he would really lose her in the blink of an eye.»

Another problem that the specialist designated is that the creation and use of cryptocurrencies in essence costs too expensive. He argues that the rise in price of the work on the light of new bitcoins and their translation is the necessary component for the project, if it comes to creating confidence in the decentralized system.

This position, according to him, contradicts the model of monetary history. He describes a tendency in which business operations are becoming more and less and less expensive: «We switched from coins from precious metals to banknotes provided by fractional reserves to central banks and fate money, and then to credit cards and other digital payment methods» . Krugman argues: «Cryptovaya enthusiasts effectively use advanced technologies to return the monetary system 300 years ago.»

It is worth noting that many will not agree with the statements that the cryptocurrency is inherent in high costs, since programmers work on new consensus algorithms, which they hope they will make digital assets less resource-intensive. However, there is no confidence that they really solve the problem.