Paul Krugman is known as a crypto skeptic, and he recently offered a more complex picture of his views on Bitcoin and blockchain.
During ChainXChange, a blockchain conference in Las Vegas that took place just recently, Krugman joined Fundstrat co-founder Tom Lee and Ripple’s chief marketing strategist Cory Johnson in a discussion that was focused on the future of money.
Krugman understands only Bitcoin’s mechanism
From the very beginning, Krugman admitted that he hasn’t looked at the whole crypto industry at large and instead has focused on trying to learn how Bitcoin works.
“Bitcoin is the only one I halfway understand,” Krugman said, reports Nulltx.
Krugman also said that despite his concern that the Bitcoin mining process uses a lot of energy, the leading crypto already has a more increased utility if compared to gold for example.
“Gold is dead… Bitcoin has more utility than gold. There is some chance for Bitcoin to be valuable in the future.”
When comparing the utilities of Bitcoin with the ones of fiat currencies, Krugman stated that his primary issue is the cost of transactions that are used to transfer BTC.
He believes that if those fees were reduced this would practically eliminate the main problem of the cryptosphere.
Krugman explains why cryptos have a long way to go before proving their utility
Krugman has recently written an op-ed at The NewYork Times called Transaction Costs and Tethers: Why I’m a Crypto Skeptic.
In his work, he explained that Bitcoin and all cryptos still have a long way to go in order to prove their utility for daily deals in the mainstream economy.
“Indeed, eight years after Bitcoin was launched, cryptocurrencies have made very few inroads into actual commerce,” he writes.
“Cryptocurrencies have a large market valuation, but they’re overwhelmingly being held as a speculative play, not because they’re useful as mediums of exchange,” Krugman believes.
Regarding the impact of smart contracts and more aspects involving the blockchain, he says he doesn’t have an opinion formed yet beyond the crypto’s potential use as a currency.