Bitcoin is Still Economically Useless = Economist

[Lucius]

This guy may have made sense, though I suspect he's a Democrat. Apart from early holders making a killing off Bitcoin, how has it benefitted the world economy? Your opinion though...
~snip~

Where did you read that Bitcoin was ever supposed to do anything for anyone's economy? Bitcoin was supposed to help ordinary people (individuals) to have an alternative to the existing financial systems in order to be able to be their own bank and to be able to make transactions anytime, anywhere and with anyone. This "so-called" Nobel laureate thinks he can talk about Bitcoin because he got his prize before it even existed, but he is just another one of those who talk a lot, but in the end say nothing.

You think highly of the prize because of some of those who won this award named after the inventor of the first weapon of mass destruction. If you check the whole list, you'll see it's filled with people who not only didn't deserve the prize but also they should not even be free!

After Obama, I no longer think that the people who give these awards have any credibility, so I think that they are obviously not motivated by sincere and honest intentions, but are influenced by politics and money. Of course, there are strange decisions even when you look at the past, which only confirms even more that something is rotten in the countries of Sweden and Norway (especially the latter).

As for Krugman's prize, it's in something very silly and not exactly economy related. It's not surprising he's saying some nonsense about Bitcoin at all. Not to mention that his statements are more political (bashing a candidate in the upcoming election) than being about Bitcoin itself.

Obviously, everything is allowed in the battle for power, and how much does it cost today to put a Nobel laureate on your payroll? They are probably cheaper than a good PR manager.

[Tmoonz]

I do not expect a nobel prize-winning economist to say something like this. They will not know anything about bitcoin but prefer to start misinforming people and feeding them with wrong information.

Bitcoin pave ways to other cryptocurrencies. Exchanges then were created. Wallets were created. Many other businesses were created. These businesses employed people. The people they employed buy things which is an indirect means of helping economy.

If you hold bitcoin and earn money from it, that will indirectly help economy.

How about miners. There are bitcoin miners. They create job and pay money for electricity.

If that man know how bitcoin and crypto has created jobs and opportunities to people, he will not say such thing.

You are absolutely correct and I completely agree with you 100 %, people are only being judgemental towards Bitcoin merely without having a second thought of what they are talking about. However, I will personally assume that it could only be being Short sighted/failing and refusing to see the true potentials that Bitcoin holds over this years of it's invention, the importance of Bitcoin as one of the best if not the best when it come digital asset class can not be overly emphasis as it is too numerous to mention, but well those who antagonise Bitcoin in the past are still regretting and the same will surely happen to those doing it now that is if they don't come in good term with Bitcoin at the long run

[kryptqnick]

It seems that this economist for more interested in the political side of things than in an unbiased and focused overview of the usefulness and uselessness of cryptos. Crypto projects create whole businesses, businesses create jobs and revenue, whereas revenue one way or another makes it into the global economy (after all, all those people employed within the industry are spending money on goods and services). And while perhaps Bitcoin and other major currencies are not primarily used as payment, that doesn't make them useless. It's like arguing that stocks are useless economically because they are seldom used for transactions.
It is an opinion piece, so it's allowed to be subjective. But that doesn't make it a fair assessment.

[mumang siat]

Bitcoin does not only benefits the economy, bit its a life changer currency in which has many applicable uses in satisfying the entire financial needs of the people in this dilapidating economy all around the world,

  Yes of course, we feel that Bitcoin is much more useful in an economy like this, Bitcoin is the main investment that we feel now with the existence of Bitcoin, most people can use Bitcoin to help their economy, this can help their needs that they may understand with Bitcoin.

there are many opportunities and benefits that comes with the adoption of bitcoin for use in which we cannot start mentioning now, because they are numerous, those that have accepted to use bitcoin knows about many of the advantages and benefits in which they got served through bitcoin adoption in the economy.

  those who used to, and now adopt Bitcoin understand the Bitcoin cycle and also understand its path very well, we think this is a very good option in improving their economy, because now Bitcoin has a very broad market where investors will continue to invest in a fixed period of time.

[Rockstarguy]

This guy may have made sense, though I suspect he's a Democrat. Apart from early holders making a killing off Bitcoin, how has it benefitted the world economy? Your opinion though...

I don't really care if bitcoin have benefited the world economy or not but what I know is that bitcoin have benefited lots of people,  not just only the early adopters but Real holders. There is no doubt that bitcoin serves as a store of value real holders and it has really improve alot of people financially. Only people who don't have understanding of what bitcoin is will criticise bitcoin and think it has no value to someone financially.  For me I think if bitcoin is serving as a store of value it is solving economical problem , it doesn't mean it must be country problems . This value is what the government can't give to it citizens but bitcoin hodlers are get value in bitcoin that means it is helping the economy somehow by adding value to individuals financially.

[el kaka22]

This is what I warned people about when Trump started to promote bitcoin. I mean you may or may not like trump, it's all based on your preferences but that's not the point at all, if he supports bitcoin then there will be plenty of people who will hate bitcoin just because trump likes it. I literally met with people who hate crypto just because they dislike all these tech-bro type of people, and that's why it's quite important to realize that we are talking about something that will hurt us on the long run.

This isn't really about just Trump, like lets assume Trump hated it but Biden/Harris loved it, even in that situation we would be talking about crypto being hated, just the other side this time. That is why whenever we are talking about a situation where one political side accepts bitcoin and starts to enjoy it, that usually means that we are talking about another side hating it just for the sake of it. This dude obviously dislikes it because trump likes it, there isn't really any other reason, he is not providing any data, he is just talking about his opinion, he isn't a noble winner just for his thoughts, he did something to get that, but this one is just a simple opinion he has.

[naira]

This guy may have made sense, though I suspect he's a Democrat. Apart from early holders making a killing off Bitcoin, how has it benefitted the world economy? Your opinion though...

Nobel Prize-winning economist Paul Krugman said that Tech-bro's support for Trump and Vance seems to be related to cryptocurrency/ He said that in reality. Bitcoin is still economically useless and useful just for money laundering and extortion. He described Trump's call for the creation of some kind of national Bitcoin reserve as equivalent to the government rescuing a scandal-ridden, value- and environment-destroying industry.

https://www.nytimes.com/2024/07/29/opinion/vance-trump-cryptocurrency.html 

And unfortunately until now we do not use the benchmarks of economists on the economy, both individual and global. Because basically his benchmark is different from the benchmark that wants to escape from the centralized system. As someone who has the image and title of economist, of course Paul Krugman must express what he has learned but never compares the economic situation in depth. What is meant is that if measured globally, of course Bitcoin has not had a significant impact because in terms of market capitalization it is still below Google and gold. Will Bitcoin surpass it in the future? not 100% sure but that does not mean that Paul Krugman's benchmark is now valid in the future.

[Abiky]

This guy may have made sense, though I suspect he's a Democrat. Apart from early holders making a killing off Bitcoin, how has it benefitted the world economy? Your opinion though...

Nobel Prize-winning economist Paul Krugman said that Tech-bro's support for Trump and Vance seems to be related to cryptocurrency/ He said that in reality. Bitcoin is still economically useless and useful just for money laundering and extortion. He described Trump's call for the creation of some kind of national Bitcoin reserve as equivalent to the government rescuing a scandal-ridden, value- and environment-destroying industry.

https://www.nytimes.com/2024/07/29/opinion/vance-trump-cryptocurrency.html 

I seriously disagree with him. Especially about the "money laundering and tax evasion" part. Fiat currencies are the #1 means for criminals to perform illicit activities. Why would they break the law on a transparent public blockchain network? They would easily get caught by the authorities. The "Nobel Prize-winning economist" doesn't know what he's talking about. Although, I admit that Bitcoin is being used more as a store of value than a currency. We can blame market volatility, high network fees, and limited supply for this. Not even the LN helps.

Trump is smart by embracing the revolution. Haters will lose as Bitcoin takes over the world by storm. We can say goodbye to people like Paul Krugman, Jim Cramer, Elizabeth Warren, and Warren Buffet for good. "He who laughs last, laughs best". Right?

[uneng]

It's not something new that economists are trying to label Bitcoin as a ponzi scheme. It has been happening since the early days of Bitcoin, and what I can say is that people who listened and followed the advice of such economists have lost a big opportunity not only to make a profitable online investment, but also lost the chance of finding jobs opportunities on the internet paying in BTC.

Fact is that only time can prove who is right and who is wrong on this story. And so far, time has been at the side of Bitcoin enthusiasts. Let's see where we are going to head on the following years.

I'm pretty confident. If Bitcoin were something useless, it would have already failed and the whales who are heavily investing on it would have never adopted the idea.

[HelliumZ]

Apart from Bitcoin economic development, Bitcoin has created employment opportunities for thousands of unemployed guys like us.  Besides building careers on Bitcoin, Bitcoin is playing an important role in our global economic development.  There are many economic experts who strongly oppose Bitcoin in their case that Bitcoin is having a negative impact on the global economy.  But for those who are supporters of Bitcoin, Bitcoin is not having any negative impact on the global economy. But the world's biggest politicians are now investing in Bitcoin, and no matter how much the global economy opposes Bitcoin, it won't be able to stop Bitcoin's growth for now.

[ultrloa]

This guy may have made sense, though I suspect he's a Democrat. Apart from early holders making a killing off Bitcoin, how has it benefitted the world economy? Your opinion though...

Nobel Prize-winning economist Paul Krugman said that Tech-bro's support for Trump and Vance seems to be related to cryptocurrency/ He said that in reality. Bitcoin is still economically useless and useful just for money laundering and extortion. He described Trump's call for the creation of some kind of national Bitcoin reserve as equivalent to the government rescuing a scandal-ridden, value- and environment-destroying industry.

https://www.nytimes.com/2024/07/29/opinion/vance-trump-cryptocurrency.html 

Somehow people believe on things they know and ignore then talk about shit on something they don't know so don't expect on those people to say good about bitcoin since for sure they always believe on fiat.

But we should not get stressed or take those word seriously since even they don't like bitcoin still this coin earned success without their support. We see the global reach became more higher then there's a chance for bitcoin to became well adopted to more countries in the world.

Right now we see how fast the growth accumulated by bitcoin and provably we can see more for this coin especially that lots of people are showing some great interest for its profitability also the technology.

[Webetcoins]

What sense? Is it when he said that ' Bitcoin is economically useless and is only being used for money laundering' ? But, I think that was only an insult if you are a true Bitcoiner. Bitcoin is a currency, so what can we expect? It is normal that it can also be used to those negative things but what about other currencies and other payment methods?

Bitcoin is only decentralized and this gives those criminals an edge but there are now solutions unto it. In an exchange, crypto casino, etc.. there are now KYC's on them. As for the question if Bitcoin helps the economy, I think this one is already obvious and that is, the answer is yes. The first one is; when people make a profit out of it and they will now have a money to avail the products and services offered in their country. That should make the economy of that country healthy.

Another one that I can think of; is when a country uses Bitcoin as their main currency because their own currency is not performing well. Bitcoin's properties E.g. its limited amount of supply can make it impossible for the currency to collapse. Bitcoin as a national reserve is I think not a new thing and many governments are already doing this even before and so far they are still doing well.

[Dr.Bitcoin_Strange]

This guy may have made sense, though I suspect he's a Democrat. Apart from early holders making a killing off Bitcoin, how has it benefitted the world economy? Your opinion though...

First of all, I personally do not agree with the idea of the government using Bitcoin as a federal reserve, but if it's actually being used, that's when we can see if it''s going to help the economy at large or not. But so far, I believe that Bitcoin has contributed to the financial growth of a lot of individuals, that ouldn't have been able to gain such financial profit if Bitcoin were not there, but their Bitcoin investment yielded such a lot of profit that they were able to establish a big business or company that helped in creating job opportunities for other citizens. That's to say that Bitcoin is never useless to the economy.

Well, there's nothing anti Bitcoiners can say against Bitcoin just to discourage some people from Bitcoin. What the economist forgot to mention is that the highest rate of money laundering was committed with fiat money and not Bitcoin.

[Zoomic]

How will an economist say an invention which serves as an alternative means of payment is economically useless? The young man seems more like a politician to me and will only be saying things to please his pay master. Just maybe, he should pay some under developed countries a visit then he would better appreciate the economic impact of bitcoin in those places. Despite the fact that Bitcoin was originally intended to serve as a means of payment, people still saw investment potentials in them and are utilising it so well that many, especially in underdeveloped countries are living comfortably from the returns they get on their investments in bitcoin. I do not see how this is not economically useful enough. I see no sense in all he's saying.

[Poker Player]

How will an economist say an invention which serves as an alternative means of payment is economically useless? The young man seems more like a politician to me and will only be saying things to please his pay master.

You are right, Krugman, that Keynesian economist, a Democrat, who made a prediction like this:

A winner of the Nobel Prize in Economics, Paul Krugman wrote in 1998, “The growth of the Internet will slow drastically, as the flaw in ‘Metcalfe’s law’—which states that the number of potential connections in a network is proportional to the square of the number of participants—becomes apparent: most people have nothing to say to each other! 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.”

So, no matter how much of a Nobel Prize winner he is, he has also made a few failed predictions, and this is not the only one.

His opinion on Bitcoin is steeped in political ideology more so now that Trump and Vance clearly support it. Let's keep in mind that Biden-Harris at least until recently were for the launch of CBDCs, for an extra 30% tax on miners and against the right to self-custody of Bitcoin.

[Darker45]

Didn't care to read the garbage opinion. However, on what basis shall we decide whether something is economically useless or not?

All the Bitcoin in circulation right now is worth more than a trillion US dollars. Is that amount economically useless?

Bitcoin functions as a transparent, global, immutable, immediate, peer-to-peer, censorship-resistant payment system 24 hours a day 7 days a week. Is that not economically useful?

I can make use of my Bitcoin to buy a piece of land and build a house. Is it not economically useful?

[Jating]

And then he continue his attacks with his latest write up,

Six years ago I argued that Bitcoin and other cryptocurrencies served no useful purpose, that their market value rested on nothing but “technobabble and libertarian derp.” I stand by that judgment, which has actually been reinforced by the passage of time.

But I didn’t foresee how big a deal crypto would nonetheless become — not because it would fulfill its promise of replacing conventional money, which it hasn’t and never will, but because it has become a powerful force that is, among other things, warping our politics.

https://www.nytimes.com/2024/08/01/opinion/crypto-trump.html

But as what most of us have said, even if he is a Nobel prize winner, and perhaps he should remain an economist and not become a political pundits because he will have to lose a lot of his credibility.

So we might have another bullish inverse Krugman?

[legiteum]

Krugman is right about a lot of things in this article, and wrong about one big thing.

He's right that Bitcoin (and generally, cryptos) do not serve any mainstream purpose outside of speculation.

Satoshi created Bitcoin for one reason: to allow people who could not use a normal bank to be able to trade numerically-delineated value. He absolutely did not envision Bitcoin being used in a mainstream way for everyday transactions, and the technical architecture of blockchain makes that impossible. Satoshi never meant to Bitcoin to be used by "everybody", or even a "lot" of people: the problem Bitcoin (and blockchain generally) solves is an extremely narrow one.

Subsequent to Satoshi and his vision, however, many Bitcoin holders started ascribing things about Bitcoin that simply weren't true, and could never be true: that it could replace the US dollar or it could replace normal banks for mainstream everyday transactions.

Paul Krugman, like many (most?) who have heard a lot about Bitcoin but don't understand computer software architecture obviously believed this misinformation, and took it at face value that Bitcoin was "supposed to" do all of these things it has not, after 14 years, done.

Hence Krugman's conclusion:

All of which raises the disturbing prospect that an industry initially driven, seemingly, by libertarian instincts but which has never delivered on its economic promises will nonetheless be able to buy itself a huge government bailout.

In the context in which he is speaking, he's right about this.

But Krugman is wrong to say that Bitcoin serves no economic purpose. Speculation is a valuable product, and one that has been in existence since human beings started trading with one another thousands of years ago. Bitcoin, as a meme investment, is useful for people, and will continue to be useful for people--as will meme investments in other cryptos, and other digital currencies.

[Minor Miner]

He's right that Bitcoin (and generally, cryptos) do not serve any mainstream purpose outside of speculation.

Besides investing in bitcoin, I am still using bitcoin to transfer money and make payments to some overseas customers and services, so is he correct in saying that bitcoin is only used for speculative purposes?

Bitcoin was not created to be a speculative asset, but we turned it into a speculative asset. So clearly you and he are wrong in saying that bitcoin doesn't serve any mainstream purpose. It was our behavior and usage that distorted the original concept of bitcoin's creation and now we blame it, LOL.

What is Bitcoin and what it can do, we need evaluation from the world community. None of us have the right to judge anything about it, you or that guy or I don't represent other people or this world. So what you say is just a representation of you and there is no guarantee that you are right and the rest of the world is wrong.

[vjudeu]

He absolutely did not envision Bitcoin being used in a mainstream way for everyday transactions, and the technical architecture of blockchain makes that impossible.

The current system where every user is a network node is not the intended configuration for large scale.  That would be like every Usenet user runs their own NNTP server.  The design supports letting users just be users.  The more burden it is to run a node, the fewer nodes there will be.  Those few nodes will be big server farms.  The rest will be client nodes that only do transactions and don't generate.

See? He used even those words: "large scale". And also "big server farms". If he didn't think about mainstream, why he used words like that?

Satoshi never meant to Bitcoin to be used by "everybody", or even a "lot" of people: the problem Bitcoin (and blockchain generally) solves is an extremely narrow one.

Simplified Payment Verification is for lightweight client-only users who only do transactions and don't generate and don't participate in the node network.  They wouldn't need to download blocks, just the hash chain, which is currently about 2MB and very quick to verify (less than a second to verify the whole chain).  If the network becomes very large, like over 100,000 nodes, this is what we'll use to allow common users to do transactions without being full blown nodes.  At that stage, most users should start running client-only software and only the specialist server farms keep running full network nodes, kind of like how the usenet network has consolidated.

So, is it "a lot of people", when you think about "over 100,000 nodes"? And again, there are "the specialist server farms" mentioned.

Edit:

Eventually at most only 21 million coins for 6.8 billion people in the world if it really gets huge.

See? When typing "for 6.8 billion people" of course he thought only about a small niche.