Paul Krugman, the famed economist who’s made a career out of being wrong about things, is wrong again. That in itself is no more surprising than the fact that his latest op-ed takes aim at his favorite bête noire – bitcoin. The surprising part is that Krugman has resorted to the same hackneyed arguments he always uses to attack cryptocurrency. It’s an odd decision from such a learned scholar when there are far more lethal lines of attack for a crypto sceptic to take.

Also read: Japanese Bitcoin Exchanges Planning Several Trading Restrictions: Report

Krugman Swings and Misses

In 1998 Paul Krugman famously predicted: “By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.” On the rise of communication networks (read social media) he said they’ll fail because: “most people have nothing to say to each other”. Now he is at it again, but with Bitcoin.

“Beware that, when fighting monsters, you yourself do not become a monster,” Nietzsche warned, “for when you gaze long into the abyss, the abyss gazes also into you.” Bitcoin is Paul Krugman’s monster, and despite having swung at it repeatedly over the years, he’s yet to strike a meaningful blow. In an op-ed published in the NYT today, Krugman outlines, for the umpteenth time, why he’s a crypto cynic.

Cynics, for all their doom and gloom, are a welcome antidote to the mindless euphoria, shilling, and moon predictions that pervade the crypto space. Paul Krugman, therefore, is perfectly entitled to take issue with bitcoin. But why has he chosen to attack the very things that make bitcoin so appealing? It’s astonishing how many times someone can be wrong in the course of a single article – and one penned by a Distinguished Professor of Economics, no less. Either Paul Krugman is the world’s subtlest troll or he’s the world’s most benighted professor of economics.

Paul Krugman vs Reality

Here’s a sample of what Paul Krugman has to say during the course of his NYT op-ed:

PK: “Instead of near-frictionless transactions [with fiat], we have high costs of doing business, because transferring a Bitcoin or other cryptocurrency unit requires providing a complete history of past transactions.”

Reality: Er…no it doesn’t. If anyone cares to look up past transactions using a blockchain explorer they’re welcome to, but that has no bearing on doing business with bitcoin, and has zero correlation with the cost of sending bitcoin.

PK: “You’re supposed to be sure that a Bitcoin is real without knowing who issued it, so you need the digital equivalent of biting a gold coin to be sure it’s the real deal.”

Reality: The same could be said of everything digital. Have you ever seen a Facebook in real life? Or squeezed a YouTube video to see if it was ripe? Have you ever fondled a tweet in the palm of your hand or tripped over a computer virus on the way down the stairs? And as for knowing who issued a bitcoin, that is no more relevant than knowing who printed those benjamins in your wallet or that diamond around your beloved’s ring finger. Or, if you want to get really meta, we still don’t know who issued planet earth and all life upon it, and yet here we are, muddling along just fine.

PK: “If speculators were to have a collective moment of doubt, suddenly fearing that Bitcoins were worthless, well, Bitcoins would become worthless.”

Reality: The same argument can be applied to such incongruous things as ancient fossils; Renaissance art; peace treaties; and the earning power of celebrities. In other words, the market pays what the market is willing to pay for an asset, be it a product endorsement from Kim Kardashian or one unit of magical internet money.

If You’re Gonna Pick a Fight with Bitcoin, Go for the Achilles

Time will tell whether Paul Krugman’s position on cryptocurrencies – that they will ultimately collapse and go to zero – is vindicated. In the meantime, if he wants to be taken seriously and to land some painful blows on bitcoin, he would do well to rein in the cheap shots and aim for bitcoin’s achilles instead. There are plenty of criticisms that could be made against crypto; the way it’s primarily benefited the privileged rather than the impoverished; the internal in-fighting over block sizes and arcane politics; the lack of privacy by default with bitcoin transactions; the fact that cryptocurrency is still somewhat unsuited to the tech illiterate. While none of these weaknesses constitutes a fatal flaw in bitcoin’s design, they are all reasonable grounds for attack.

A man of Paul Krugman’s wisdom and reputation ought to be capable of launching much more erudite attacks on bitcoin, but instead he resorts to recycling the same old cliches, while completely missing the astonishing properties that bitcoin provides over regular money, like the ability to transact with anyone without seeking permission from some higher power, and the ability to retain full custody of your wealth, with 100% uptime and 0% asset freezing. Krugman could pen another 100 salty op-eds about bitcoin (and he probably will), but no matter how wrong he’s shown to be, and no matter how high bitcoin climbs, his failure to recognize the second greatest invention of the 21st century won’t be his epitaph. Instead, his obituary shall be determined by his inability to recognize the first:

“By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.” – Paul Krugman.

What do you make of Paul Krugman’s latest pronouncement on bitcoin? Let us know in the comments section below.

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The post Paul Krugman is Wrong Again appeared first on Bitcoin News.

Source: Bitcoin.com
Original Post: Paul Krugman is Wrong Again

Today is the one-year anniversary of the ‘Bitcoin Independence Day’ that took place on August 1 2017. Since that day the Bitcoin Cash (BCH) network and community have had a very productive year as the decentralized cryptocurrency has celebrated a ton of milestones including successful network upgrades, massive merchant adoption, and a wide variety of applications built using the BCH chain.

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August 1 2017, Bitcoin Independence Day

A year ago today Bitcoin proponents celebrated independence from the scaling debate stagnation that took place within the Bitcoin community for far too long. On August 1, 2017, after block 478,558 was found, the Bitcoin blockchain effectively split as miners began processing blocks from two protocols — Bitcoin Cash (BCH) and Bitcoin Core (BTC). While many Bitcoin Core supporters didn’t think BCH would survive after the split, the BCH network proved them wrong by continuing to grow stronger every day that followed the event on August 1. During the first week of August, the BCH chain’s hashpower steadily grew more powerful and the currency’s value went through a small period of price discovery.

Bitcoin Cash Gains 145% in One Year

On August 13, 2017 the Bitcoin Cash spot price closed the day at $310 USD per BCH and the currency is today priced at $760 per coin which represents a solid gain of +145.16 percent since last year. Additionally, much like many of the other digital assets that touched all-time highs (ATH) this past December, bitcoin cash prices reached an ATH of $3,000 per BCH and even $4,000 per BCH on a few international exchanges. Because of the growing demand and high prices, BCH proponents often laugh at Bitfury’s George Kikvadze who sold his bitcoin cash at $668 per coin and thanked all the “fools” who purchased them.

November’s Successful DAA Upgrade

During its first few months, the BCH network and its participants gathered lots of support from infrastructure services like wallets and exchanges, while at the same time BCH accumulated a massive amount of merchants. A few months later on November 13, 2017 the decentralized protocol completed a successful upgrade which saw the BCH network’s Difficulty Adjustment Algorithm (DAA) change to a more stable system of operation. That day, at approximately 4 pm EDT, at block height 504031 the consensus rules upgraded the DAA and mining profitability between both the BTC and BCH chains has remained consistent ever since the fork.

Exponential Hashrate Growth and Remarkable Commitment to Innovation

Since August 1, BCH miners have processed close to 63,000 blocks and the network is over 6,800 blocks ahead of BTC. On August 4, 2017, the BCH network’s absolute hashrate was 339 Petahash per second. Now, thanks to the past year of growth, the BCH hashrate has gradually increased to 4-5.5 Exahash per second. At the moment there are eight known miners who process BCH blocks, and three unknown mining pools as well. Known BCH miners include Coingeek, Bitcoin.com, Viabtc, BTC.com, Antpool, SBI Crypto, Rawpool, and BTC.top. One of the mining pool operators, Alejandro de la Torre from BTC.com, a pool that typically commands 12-14 percent of the BCH hashrate, thinks the Bitcoin Cash network has had an amazing year so far.

“Bitcoin Cash has demonstrated a remarkable commitment to innovate upon community engagement with applications like on-chain social network — Memo, and a smart contract protocol layer called Wormhole that is built using Omni Layer, the token-issuance protocol that is the same technical basis for tether (USDT),” Alejandro details. “We think these community-driven networks can be very effective at moving the needle in the adoption of Bitcoin Cash as a medium-of-exchange, which is the primary reason it was forked and developed.”

One year after its creation, BCH has continued to expand onto 19 different services, e.g. Bitpay, Coingate, Viabtc, Coinpayments, Coindance. Bitcoin Cash is also involved in fourteen different projects, e.g., Openbazaar, Joystream, and Counterparty, and tradable on 41 different exchanges. Now entering its second year, BTC.com is poised to help the Bitcoin Cash community shift focus from investment, thinking only in terms of storing of value, to cash, thinking as a medium of exchange for merchants and consumers.

A Fourfold Block Size Increase, and Re-enabled Satoshi Opcodes

After the successful upgrade in November that fixed the protocol’s DAA, the BCH network upgraded once again a few months later on May 15, 2018. The Bitcoin Cash protocol extended the 8MB block size fourfold to a 32MB block size cap. The consensus change was one of the largest block size increases in the history of blockchain and the upgrade also re-enabled a few old Satoshi OP_Codes and increased the network’s data carrier size. The data carrier size upgrade and the OP_Codes unleashed a plethora of innovation from developers building social media apps, trustless betting protocols, and tokenization and smart contract mechanisms.

Transactions & Merchant Adoption

In just one year, the BCH protocol and its network participants have been able to push adoption, create a wide variety of applications, and do all of these feats in the face of trolling, skepticism, and negative criticism. Every aspect of the protocol has seen exceptional increases including price, hashrate, merchant adoption, daily transactions, and new applications. Over time, BCH on-chain transactions continue to grow despite the opinion of naysayers. For instance, from August 1 to October 22, 2017, Bitcoin Cash transactions (tx) averaged between 6,000-12,000 tx per day. From October 22, 2017 to February 7, 2018, BCH transactions averaged 20,000 to 60,000 tx per day. From February 7 until June 30, 2018, BCH transactions averaged 20,000 tx per day. The recent stress test has increased daily BCH transaction volume to 25,000 to 85,000 tx per day.

Moreover, as far as merchant adoption, BCH has gathered nearly every merchant that the BTC chain has and no other cryptocurrency in existence has experienced such a rapid network effect. This includes merchant acceptance from Bitpay and Purse.io, and the wide variety of stores that accept BCH that can be found on the Accept Bitcoin Cash initiative and Marco Coino.  

Bitcoin Cash fans have a lot to celebrate this year and the next 12 months should be just as exciting as proponents look forward to everything that lies ahead.

What do you think about the Bitcoin Cash one-year anniversary? Let us know in the comments below. 

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Images via Shutterstock, Coindance, Bitinfocharts, Pixabay, and Satoshi Pulse.

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The post Bitcoin Cash Fans Celebrate Independence Day One Year Later appeared first on Bitcoin News.

Source: Bitcoin.com
Original Post: Bitcoin Cash Fans Celebrate Independence Day One Year Later