💠[Analysis] Economist cites transaction costs, tethering for continued skepticism – Paul Krugman
Paul Krugman believes that cryptocurrencies will not succeed for two reasons:
- Cryptocurrency increases transaction costs.
- All other monetary innovations have reduced friction.
- Cryptocurrency could "set the monetary system back 300 years."
- Few firms accept them as payment.
- Cryptocurrency is not backed by anything.
- "Fiat currencies have underlying value because men with guns say they do."
- The value of cryptocurrencies depend on self-fulfilling expectations.
- Total collapse is a real possibility.
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