insidebitcoins.com / Kyle Torpey / Aug 20, 2015 8:00 AM EDT
Early last month, Economist Paul Krugman was asked for his opinion on digital currencies, such as bitcoin, at a 92Y event called The Genius of Economics. Krugman has shared his views on bitcoin more than once over the past few years, and he has even gone as far as to say it is “evil.” During the recent event, which also featured Thomas Piketty and Joseph Stiglitz, Krugman again talked about his perceived problems with bitcoin; however, anyone who truly understands digital cash could tell that the Nobel Memorial Prize in Economic Studies winner had no idea what he was talking about.
No, We Don’t Already Have Digital Cash
The key problem with Krugman’s view on bitcoin seems to be that he doesn’t understand why it was created in the first place. It’s easy to understand why Krugman would believe bitcoin is “a bubble in multiple senses” when he does not see the key attributes of Bitcoin that make is so revolutionary. It became clear that Krugman was completely out of his element on bitcoin when he compared the digital cash system to credit cards:
“If you’re looking for the idea that a currency doesn’t really have to be something physical, and it can be something that is virtual — that’s the system we already have. You know? If you want it to be [a] way to make payments electronically, that’s credit cards. So, exactly what it is that this thing is supposed to be doing that we don’t already mostly do — I mean, there are technical differences, but it’s pretty wild.”