Krugman: Is the Computer Revolution Coming To a Close?

[tvbcof]

I am skeptical that Bitcoin can/will permanently change the world in this way, even if it became very popular for a while, if only because bank notes and a new fractional-reserve lending system could easily be constructed on top of Bitcoin (using BTC, instead of gold/silver, as the base asset in terms of which notes are denominated), and, if, at some point, a sufficiently powerful government lacked enough BTC to redeem its outstanding notes, it could simply "close its BTC window" (just like Nixon "closed the gold window" in the early 70s) and then we'd be right back at fiat currency again.  Then we'd be in a precarious situation again, vulnerable to the threat of inflation, just as we are today with the (formerly gold-backed) dollar.  The mere existence of a cryptocurrency like BTC doesn't preclude new fiat currencies (historically derived from it) from ultimately winning out in the marketplace for currency, any more than the existence of gold did.

What damages your thesis (or would...see below) is that there is relatively less reason for people not to hold their own BTC and thus have counter-parties, necessary for fractional reserve schemes, involved.  This contrasts with gold in that there are very compelling reason to relinquish control of the medium to a (supposedly) secure custodian.

Of course as it becomes less and less practical to hold one's own BTC, and more and more common to rely on bank-like entities due to the scaling issues popping up, this principle is muted.  A potentially saving grace is that what one actually has are private keys and certain solutions do not require complete surrender of value.  But then again most people are to lazy and/or uneducated and/or not sufficiently paranoid to prefer such solutions I'm guessing.  In any event, a bank-like entity could likely gain control of many people's secret keys by offering some 'interest'.

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[furrycoat]

That guys a idiot. How can he think the computer revolution is coming to a close when technology is growing at an exponential rate?

[drakahn]

#4 decentralized currency, end of central banking monopoly: ~2020 and onwards

As nice as that sounds, I want to see
#4 Decentralized living, end of government monopolies and big corporate : now and onwards

[foggyb]

That guys a idiot. How can he think the computer revolution is coming to a close when technology is growing at an exponential rate?

The Collapse of Moore’s Law: Physicist Says It’s Already Happening

[tvbcof]

That guys a idiot. How can he think the computer revolution is coming to a close when technology is growing at an exponential rate?

The Collapse of Moore’s Law: Physicist Says It’s Already Happening

I'm guessing that Kaku is right about milking silicon technology to the limit (and I'm not holding my breath for quantum computers to do almost anything useful in my lifetime.)

I think that one mistake people make (especially those Bitcoiners who are relying on Moore-like principles to solve all problems) is to assume that just because technology exists, it will be readily available.  If anything, what technological improvements that are in the cards will likely produce major and potentially terminal challenges to Bitcoin as it is currently implemented.  As always, just, my gut feeling.

[foggyb]

I think its like any other frontier: most of the easier technological advances have been exploited almost to the limit. Real progress will become more and more difficult with diminishing returns per R&D dollar.

[paraipan]

Don't expect Krugman to really grasp complex concepts as this one. Here is an accurate description cited from Erik's blog:

http://evoorhees.blogspot.com.es

I wouldn't expect Krugman to "get it," but wiser/real economists need only observe metals to start understanding why Bitcoins have value.

[grue]

That guys a idiot. How can he think the computer revolution is coming to a close when technology is growing at an exponential rate?

you DO realize the we're reaching a limit for silicon CPU frequency, right?

[malevolent]

Let's hope we learn to make use of graphene when silicon reaches its limits.

[darkmule]

The geniuses who invested in BTC "stocks" and pirateat40 are certainly far wiser and greater people than Krugman.  I should just ignore him and pay attention to people I've never heard of instead.

[tvbcof]

Don't expect Krugman to really grasp complex concepts as this one. Here is an accurate description cited from Erik's blog:

http://evoorhees.blogspot.com.es

I wouldn't expect Krugman to "get it," but wiser/real economists need only observe metals to start understanding why Bitcoins have value.

I expect that Krugman would grasp the major concepts of Bitcoin in about 5 minutes...and likely already has.  They are vastly more simple than the complexities of Keynesian economics that he adheres to.  I think that Krugman is on a dead-end along with the current monetary system which is due for a re-set.  Further, that he is probably well aware of this.  But that would not necessarily present itself in his writing in part because it would not serve his purposes which are, at least in his opinion, in the best interests of the American public.

[justusranvier]

Let's hope we learn to make use of graphene when silicon reaches its limits.

Photonic computing will be ready one of these decades.

[Rockefoten]

That guys a idiot. How can he think the computer revolution is coming to a close when technology is growing at an exponential rate?

So when Krugman says

What Gordon then does is suggest that IR #3 has already mostly run its course, that all our mobile devices and all that are new and fun but not that fundamental. It’s good to have someone questioning the tech euphoria; but I’ve been looking into technology issues a lot lately, and I’m pretty sure he’s wrong, that the IT revolution has only begun to have its impact.

what he really means is

I am an  an idiot. I think the computer revolution is coming to a close even though technology is growing at an exponential rate

[furrycoat]

Interesting, kaku is a brilliant man and I believe what he is saying. However growth never really stops. It may be the end of exponential growth of "classical computers" but their are other gateways such as quantum computing. Maybe in 20-30 years quantum computers will be made available for everyone and who knows what new advances in computing will be discovered.