Topic: Bitcoin is Still Economically Useless = Economist (Read 1241 times)

Don't forget that these economists are divided into two those who accept realities and support them while the others are those who are critics of evolution and advancement. Since the evolution of the financial system, some of economics are doing so much to see that its won't work out well.  The idea is that the traditional system has been working for years now and moving into the digital system they are scared that the practice of Bitcoin and another digital system of money is not safe and is dangerous to the financial system. One main reason the government funds cannot be converted to Bitcoin, USDT, or any other digital currencies is because they do not want to take a chance for scams, and hacks in their system. Few clicks and billions of moneys has been swept off from the country's treasury.

I don't know who those economists are and what remarkable achievements they have achieved. But I believe people like Elon, Trump, Larry Fink or Michael J. Saylor would not be stupid to invest billions of dollars in BTC for no reason. I don't think so-called billionaires are stupid enough to not know what they are doing when they spend billions of dollars investing in bitcoin.

Bitcoin is useless to those who missed the opportunity with it, who were not able to make significant profits from it and now they started spreading negative things about it with many wishing people to become like them. Those are just selfish, jealous actions of losers, not fair comments from an economist.

Only few will get rich from cryptocurrencies, it's just economically impossible for everyone to become rich.

Simple fact.

Exactly. Economists won't admit Bitcoin is a real currency, especially when they're tied to the corrupt Fiat money system. It's in their best interests to side with banks. Not even the institutionalization of Bitcoin will convince them. If you're smart, just ignore these jerks. Time has proven them wrong as Bitcoin becomes bigger and stronger than ever. Adoption is rising, with some countries going as far as making it legal tender. It doesn't seem BTC will be going anywhere soon.

What will fail is Fiat as inflation continues to undermine people's trust in central banks. Once the vast majority of people worldwide start using Bitcoin on top of Fiat currencies, banks will be doomed. At least, that's what many bitcoiners dream of. Who knows what the future will bring?

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?

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

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.

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:


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.

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


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?

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?

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


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.

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.

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.

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.

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.

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.

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.

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?

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.

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.

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.

  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.


  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.

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.

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

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.

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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).


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.

Although bitcoin has a public blockchain but tracking it is not easy and we cannot deny that bitcoin has been a favorite medium for criminals. That's why the government has cracked down heavily on coin mixing services over the past year, as it's difficult to track criminals when they use bitcoin in conjunction with mixers. But we cannot blame bitcoin because criminals are also using fiat currency, banking system, cash for their crimes. After all, all illegal acts originate from human behavior, not the fault of fiat or bitcoin.

I agree with you, if someone can make money by investing in bitcoin then it means it has a positive impact on the economy. Bitcoin is creating many millionaires and billionaires in the world, so saying that it is useless is a stupid statement.

An economist making such a statement about an asset such as bitcoin fails from the standard of economist practice, because if he can make such a statement about bitcoin not having economic value how much more will he say about gold and other none non-transferable assets?

Trump's support for crypto was born out of his convictions about the technology and what role bitcoin can play in increasing the economic values in the state, take El Salvador for example, how far they have gone in their bitcoin state reserve.

Anything that has a value can be used for money laundering and extortion, actually it's harder for Bitcoin to be used for money laundering and extortion since the blockchain is public and can't be deleted, unlike traditional ledger in banks where they can delete or manipulate the data, if it's trade in physical, it has no trace and better than Bitcoin for illegal usage.

Speaking about economy, it's really a wide subject. If someone earn profit by investing in Bitcoin, it already has economy beneficial.

I totally agree with you. Bitcoin can introduce a sustainable financial system regardless of rich and poor in today's mostly capitalist state system that advocates financial independence and ownership of its valuable assets. In his opinion, if useless, he should explain why Bitcoin's price skyrocketed in such a short period of time and that its upward trend is increasing. Bitcoin has emerged as an important hedge with any financial system.

Due to the decentralized system, investors are so interested in Bitcoin that it can create separate economic zones beyond the borders of different countries, which is happening now and will expand in the future.

I would object if someone said that bitcoin has a big impact on the world economy but I also disagree when saying that bitcoin is completely useless for the economy. Bitcoin can create profits for many people, bitcoin-related services such as exchanges, ETFs, investors...all these things not only create jobs for some people but also bring significant tax revenue to the government. How can we say that bitcoin is useless for our economy?

I have no idea who this guy is and I suspect he doesn't even know what bitcoin is. In addition, I think we can see for ourselves everything from bitcoin, the advantages and disadvantages that bitcoin brings us. We don't need to ask someone to evaluate bitcoin for us, especially someone who doesn't know what it is.

It is wrong to say that Bitcoin is "economically useless". Everything new is attacked; this is how things go. But emphasising issues like money laundering ignores the whole picture. The truly big picture. Bitcoin is about financial freedom, folks. People can utilise Bitcoin in nations without sophisticated banks. Their pass to the marketplaces of the globe. That is actual economic value just there. Blockchain is amazing; its security is unchangeable. That is enormous for every type of company.

This goes beyond just money, folks. Its about empowering people and tearing down obstacles. Bitcoin upends the old systems, links us all, and generates new employment. Although some people might not understand it yet, that is normal. Bitcoin seems to me to be an innovation and a real tool for good. Believe me.

Bitcoin is actually able to provide quite good changes to economic progress. For example, in El Salvador, after the country adopted bitcoin, the country's economy slowly experienced quite good improvements. Apart from that, if someone says that Bitcoin is widely used for fraud or used for money laundering. I think this is a very inappropriate opinion for this person to express. Because did he know that paper money is much more often used to do these evil things? The reason is that in 2022 the US Treasury Department and Europol also said that fraudsters were targeting paper money more than virtual assets. So with these facts, it means that saying that crypto or bitcoin is an asset that is widely used for criminal acts such as money laundering is very wrong.

Source: https://www.unit21.ai/blog/combat-crypto-fraud-via-fiat

So in my opinion, people who say that crypto assets or bitcoin are often used to commit criminal acts, I think those people only see the case from one side. Plus it seems like the person doesn't like bitcoin and doesn't study it at all. That's why this person only talks about Bitcoin from the bad side, which is actually very small.

A 71-year-old economist who won the Nobel Prize in 2008 because of his work on economic geography and global trade patterns shouldn't be taken seriously. The field of economics is broad and dynamic, and an individual, no matter how intelligent he is, cannot understand all its intricacies. Maybe he does not know about cryptocurrencies, and instead of learning, he chooses to throw shades.

This attack might also have a political undertone since Paul Krugman is a well-known critic of the Republican party. He once called it the "party of the stupid". He is still in the dark and might be disappointed by the steady growth of Bitcoin's popularity. Let him check the statistics of the currency that is highly used by criminals and his perspective will change.

If you’ve never been in a situation where you have your money held hostage by banks or governments, you might not appreciate what Bitcoin has to offer. If you haven’t lived long enough to watch inflation change people’s quality of life, you might not appreciate what Bitcoin has to offer. If you’ve never had to send funds quickly to another country, you might not appreciate what Bitcoin has to offer. I’m guessing the author has lived a life void of real world experiences.

It's a personal opinion and every individual can have a personal opinion on everything under the sun. I don't see any issue here. Bitcoin has a long list of influential haters. That includes people like Warren Buffet, Jemie Dimon, Almost all Democrat senators in US etc. It's just one addition to that list. It has no impact on Bitcoin whatsoever. The environment things a long-standing narrative against Bitcoin. So that's all fine. Haters gonna hate!

But one thing I agree about Trump. He is seeing that Bitcoiners in US need support due to the actions from various enforcement agencies and ongoing harassments. So Trump is very cleverly targeting this community and promising to become their support system. It is true that Trump will eventually win this election. The chance is very promising after the attack on him. But never trust a politician unless you see some actions in reality. Take a cautious approach in proclaiming yourself as an ardent Bitcoin supporter in US. Might not go well with the enforcement agencies in case Trump looses the election.  

"Environment-destroying"? It's 2024 and the crypto haters are still bitching and whining about crypto mining polluting the environment, even though many crypto miners moved to green energy.
Krugman and most macroeconomists are crypto haters. I get their point and I totally understand that Bitcoin/crypto has a questionable utility.
However, they are missing the point about "being your own bank" and holding a valuable asset in your own wallet, without relying on third parties and middlemen. I also agree that Trump's idea about a Bitcoin national reserve is kinda stupid and pointless.

Why not?
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!

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.

Lol, and that's why we really love Bitcoin, everyone has it's own opinion, from a nobel price winning economist to a simply average joe you can find here. And with that, it's obvious that we have seen the effect of Bitcoin. We have the pandemic and there are reports that it has been used as a hedge by some wealthy people. So there's a lot of pros and cons of Bitcoin that even if it has existed for the last 10 years, everyone's opinion is totally different. Or every one is opinionated about it, even if they don't have the experience (I assumed that Paul Krugman doesn't own BTC, or at least do not understand what cryptocurrency is). So for me, his opinion doesn't matter to us, we've been here, done that and no one can take that away from us.

Before, he's right. Even so, there's been a small economic contribution already from the Bitcoin community.

But he should look at the actual scene on how Bitcoin is being used right now. There's so more to what he said but I disagree to what he has said.

Anyway, no matter what the title of someone has. It seems that it's no longer wisdom that they're saying but he's entitled for that.

I think the world has moved past the point where people would cling on to the word of a man just because of his title, degree or awards. Politicians, economists, and some so called financial experts have always labeled bitcoin as a scam and a currency used only by criminals and terrorists. Their story hasn’t changed one bit. I think they believe that if they can paint Bitcoin to be bad then people wouldn’t get involved in Bitcoin.

If financial inclusion of the poor does not benefit the economy then what is?
If the creation of job does not benefit the economy then what is?
If technological advancement does not benefit the economy then what is?
If the increase of ability of an individual in purchasing power does not benefit the economy then what is?

I believe the person who stated that Bitcoin is economically useless failed to understand the features of Bitcoin and the technology behind it.

It is worth reading this article: https://www.pelicoin.com/blog/what-is-the-economic-impact-of-cryptocurrency that explains the economic impact of Bitcoin and its features.

First time on this forum, but this economist only exists to support the current scam that is known as fiat. That's basically any mainstream economist. I haven't trusted an economist since Milton. Milton had some sound arguments, but he never thought of dissolving the dependency on the government money supply.

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, 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.

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.

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