Paul Krugman Blows It Big Time On Bitcoin

Paul Krugman, a world famous economist asks a REALLY Silly question …

Placing a ceiling on the value of gold is mining technology, and the prospect that if its price gets out of whack for long on the upside a great deal more of it will be created. Placing a ceiling on the value of the dollar is the Federal Reserve’s role as actual dollar source, and its commitment not to allow deflation to happen.

Placing a ceiling on the value of bitcoins is computer technology and the form of the hash function… until the limit of 21 million bitcoins is reached. Placing a floor on the value of bitcoins is… what, exactly?

Regarding the silly question he asks … “Placing a floor on the value of bitcoins is… what, exactly?”
The answer to that is so painfully obvious it is almost embarassing to have to point it out to such a world famous economist…

Sir, the fundamental value of Bitcoin is that it is a totally new protocol much like http was a new protocol that spawned the Internet.

If you still have a problem understanding it then let’s just say that it’s ability to send money to your relatives anywhere in the world incredibly more efficiently than any competitor (commonly known as the “remittance” industry) or it’s ability to conceal money from taxing authorities ( commonly known as “Swiss banks” for lack of a better term) are two very valuable underpinnings. I believe just those two uses alone (there are more) are much more valuable of an underpinning in the long run than what you ascribe to gold (i.e. “Underpinning the value of gold is that if all else fails you can use it to make pretty things.”).

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