Paul Krugman upset the Bitcoin community over the weekend when he wrote a blog post titled “Bitcoin is Evil.”
In the post he said he was “deeply unconvinced” that Bitcoin can actually work as a form of currency. He doesn’t think it works as a “store of value” because there isn’t anything underpinning it.
After writing the post, Bitcoin supporters started flogging his inbox with “rage-filled missives,” says Krugman in a follow up post.
He also said that the Bitcoin people have no sense of humour, and he suggested his “Bitcoin is Evil” headline was a “joke.” In his defence, he really didn’t write a post about why it was “evil,” he just said he was sceptical that Bitcoin could work.
In addition to jamming his inbox with angry emails people in the tech world have started passing around his dreadful prediction from 1998 about the impact of the Internet.
Here’s the image which we’ve seen tweeted:
We emailed Krugman for a comment about this old quote. His response:
Well, two things.
First, look at the whole piece. It was a thing for the Times magazine’s 100th anniversary, written as if by someone looking back from 2098, so the point was to be fun and provocative, not to engage in careful forecasting; I mean, there are lines in there about St. Petersburg having more skyscrapers than New York, which was not a prediction, just a thought-provoker.
But the main point is that I don’t claim any special expertise in technology — I almost never make technological forecasts, and the only reason there was stuff like that in the 98 piece was because the assignment required that I do that sort of thing. The issues about Bitcoin, however, are not technological! Everyone agrees that it’s technically very sweet. But does it work as money? That’s a very different kind of question.
And the fact that people are throwing around my 98 quote actually shows that they don’t get this point — that they’re confusing technology with monetary economics.
And speaking of confusing tech and economics, he had a third blog post on Bitcoin that was basically just an email from a friend. The email is one of the better explanations of why tech people are so excited about Bitcoin. Here’s an excerpt:
It occurs to me that part of the disconnect is that Bitcoin solved a major technical problem, one that people had been thinking about for about 20 years, and we nerds just can’t believe that it doesn’t also solve an economic problem. The technical problem is double spending — if I have some digital money, it’s easy enough to verify cryptographically that it’s real, but if I give it to you, how can you tell that I haven’t also given it to someone else? Until Bitcoin, the answer was to have a bank that knew which coins were valid, so you’d present my coin to the bank, which would check its database and if it’s valid, cancel it and give you a new one. Bitcoin has its decentralized blockchain which is a very clever recasting of the problem so that the state of the “bank” is whatever the majority of bitcoin miners agree that it is. Getting enough of the miners to agree is known as the Byzantine Generals problem, and has a technical history of its own.
So with this breakthrough, we must have an economic breakthrough? We don’t? Well, then you just don’t understand/are in the pocket of the illuminati/whatever.