Cryptocurrency has set the monetary system back by 300 years: Paul Krugman

Nobel Prize-winning economist Paul Krugman has given a two-fold explanation outlining his scepticism regarding cryptocurrencies. He says that cryptocurrency, despite its cutting-edge technology, has “set the monetary system back by 300 years”.

In an article in  The New York Times titled “Transaction Costs and Tethers: Why I’m a Crypto Skeptic”, Krugman, a vocal critic of the digital currency, has highlighted the transactional cost it carries. According to Krugman, the basic nature of a bitcoin transaction, which involves furnishing the complete history of past transactions, goes against the long-running trend which has continually moved toward “frictionless” transactions.

“Set against this history, the enthusiasm for cryptocurrencies seems very odd, because it goes exactly in the opposite of the long-run trend. Instead of near-frictionless transactions, we have high costs of doing business, because transferring a Bitcoin or other cryptocurrency unit…