Noble prize-winning economist Paul Krugman has said that Bitcoin (BTC) is a useless and wasteful Ponzi scheme that adds no real value to finance.
Any success the sector has achieved is based on speculation, hype and third parties’ own interest to secure a better value for a worthless asset, he added.
Earlier this year, the laureate said that the downturn in the crypto market reminded him of the subprime mortgage meltdown.
Krugman has been one of the most consistent critics of the sector and was not swayed even at the height of cryptocurrencies, when prices skyrocketed in early 2020 through mid-2021 and carried that momentum in 2022.
The latest cryptocurrency winter seems like a vindication for Krugman, but many cryptocurrency holders believe that the laureate is in the wrong.
Krugman based his objection to economic and financial wisdom. He argued that real resources are wasted to create something that has no immediate value.
For an asset to be considered money, it must have a reasonable claim to being a store of value and a medium of exchange – something that BTC is not, according to Krugman.
As early as 2018, Krugman said that crypto assets had no tether to reality, and were purely speculative, and therefore worthless.
He also believes that cryptocurrencies such as BTC may survive in the long-term, but they will mostly be consigned to black market operations and transactions.
As far as Krugman is concerned, cryptocurrency has been a successful marketing effort rather than a good example of building a new vessel of wealth. Still crypto skeptics are beginning to invest in the sector.
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