A couple of days back, former Federal Prosecutor, Kathryn Haun, sat down with Nobel Prize laureate, Paul Krugman, for a debate titled ‘Let’s Settle This’. The objective of the conversation was to talk about the various core aspects of Bitcoin (as well as other cryptocurrencies) and whether such assets have any intrinsic value of their own.
Starting off the debate, Krugman talked about Bitcoin and how the premier alt-coin can be likened to the early version of the internet. He elaborated by saying just like we couldn't predict what the internet would eventually offer us a couple of decades down the line, crypto technologies seem to be doing the same. However, Krugman did add that unlike the internet (which had many use cases from the get go), crypto assets still have a fair distance to go before they can be employed on a global scale.
Following the above comments, Haun then started discussing the price and volatility side of crypto. In regards to the matter, she added:
“I think now what we’re seeing is the price is the volatility is lessening and I grant you there’s still a lot of volatility I think things like stable coins are really interesting and really important to this ecosystem to hedge against that volatility”
Krugman: “Bitcoin Still Has Very Little Real-World Application”
On the subject of usability, Krugman continued to harp on the point that crypto assets (at this point in time) have very limited functionality. Not only that, he also mentioned how the daily BTC trade volume was quite miniscule when compared to the daily USD Forex.
He also added:
“We can tell the dollar value of Bitcoin transactions peaked at the beginning of this year and that’s actually fallen substantially since then. There’s very little sign that it is becoming any kind of widespread means of payments and that’s ten years on. So when is that going to happen?”
Defending her position, Haun then remarked that crypto adoption had been slow to come by because most financial institutions and startups only started taking notice of these digital assets over the past 2-4 years.
While Haun did concede that Bitcoin had not yet achieved Satoshi Nakamoto’s original vision of establishing an electronic peer-to-peer cash system for payments, she did round of the debate by saying:
“[…] it’s main use is certainly not that. However, Bitcoin Cash is trying to do that. The reason Bitcoin is been held back aside from volatility is the scaling. And right now, you have things like the Lightning Network, which are being built and Lighting Network is aiming to increase the ability to use Bitcoin for payments”
In closing, the arguments put forth by the panel carried a lot of weight with them. However, as we all know by now, everytime someone talks poorly about Bitcoin, the currency seems to make an amazing market push.