Cryptocurrency Has Set Us Back 300 Years: Krugman

Cryptocurrencies have got a big critic in Nobel Prize-winning economist Paul Krugman. Despite the promising cutting-edge blockchain technology that underlies cryptocurrencies, he claims that cryptocurrencies have “set the monetary system back by 300 years.” (See also: Nobel Winners Are Economic Prizes.)

In an op-ed written for The New York Times, the columnist attributes his cryptocurrency skepticism primarily to two factors: transaction costs and the absence of tethering.

‘Cryptos Make Transactions Difficult’

Raising his concerns about the high transaction costs associated with popular cryptocurrencies like bitcoin, Krugman compared their working with the traditional payment methods. Starting with precious metal coins minted of gold and silver, which required security as well as resources to produce, the friction was reduced by launch of banknotes guaranteed by central bank reserves. The flow of value was further smoothened with the introduction of checks, followed…