Yesterday on January 11 the American economist and professor of economics, Paul Krugman, seemed pretty excited about The North American Bitcoin Conference not being able to accept bitcoin for tickets. Krugman tweeted our recent article to his 4 million followers gloating that bitcoin is “too clunky and expensive.”
Does Bitcoin’s Fee and Congestion Issues Give Paul Krugman the Upper Hand?
On January 10 news.Bitcoin.com reported on the unfortunate predicament organizers of The North American Bitcoin Conference (TNABC) had to deal with — due to fees and network congestion, TNABC stopped processing bitcoin payments for tickets. The news spread like wildfire throughout the cryptocurrency community, with people clamoring about how depressing it was one of the largest bitcoin conferences couldn’t accept the cryptocurrency for entry into the event. The economist and New York Times contributor Paul Krugman thought the subject was interesting as well when he tweeted our story yesterday. When Krugman shared our article to his followers he stated:
Krugman’s Odd Technological Predictions
Krugman has always been a ‘hater’ towards bitcoin and cryptocurrencies in general, unless they are produced by a centralized entity. The renowned economist has always had an interesting way of describing the currency’s demise. However, most people don’t take his commentary seriously, as his theories and predictions have always been odd. Krugman at one time said the internet would have no impact on the economy and that its growth would slow drastically.
“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,” Krugman stated in 1998.
When responding to that specific quote while also discussing bitcoin, Krugman says he doesn’t like to make predictions about emerging technologies. The only reason he wrote that in 98’ is because “the assignment required that I do that sort of thing,” emphasizes Krugman in an interview.
“The issues about Bitcoin, however, are not technological. Everyone agrees that it’s technically very sweet — But does it work as money? That’s a very different kind of question,” Krugman details.
Krugman Last Month: There’s Been No Demonstration Yet, That [Bitcoin] Actually Is Helpful in Conducting Economic Transactions
Then last month Krugman told Business Insider that bitcoin is in a “bubble.” He believes the decentralized currency does have a “mystique about it” because it’s a technology no one understands, he explains.
“There’s been no demonstration yet that it actually is helpful in conducting economic transactions,” Krugman states.
There’s no anchor for its value — You know, unlike pieces of paper with dead presidents on them, those are anchored by the fact that you can use them to pay taxes — There’s no anchor for bitcoin. But bitcoin has developed this mystique — The price is going up, partly, it’s tied up with libertarian stuff.
Fees and Congestion Issues Have Been a Problem for the Bitcoin Core Network — Which Has Led to Economists Like Krugman Gaining an Upper Hand in the Debate
Unfortunately, the story regarding TNABC not accepting bitcoin has given Krugman and those who agree with him the opportunity to claim the upper hand. Fees and congestion have been an issue for the Bitcoin core network for quite some time now, and businesses are slowly turning away from BTC and have started to accept alternative cryptocurrencies.
This has led many cryptocurrency proponents to believe that a “store of value” cannot work well if it fails to be a means of exchange for all global participants, not just the wealthy. Because of this dilemma, Keynesian economists are elated to prove that a decentralized free market tool like bitcoin cannot work compared to the central banking system used today.
What do you think about Paul Krugman gloating about the issues tethered to bitcoin core’s network fees and congestion time? Do you think bitcoin’s scaling dilemma gives people like Krugman the upper hand? Let us know what you think in the comments below.
Images via Fabius Maximus, Pixabay, and Twitter.
Need to calculate your bitcoin holdings? Check our tools section.