09.07.11
Krugman gets to Bitcoin
But does that make the [Bitcoin] experiment a success? Um, no. What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that’s not at all what is happening in Bitcoin …
[There] has been an incentive to hoard the virtual currency rather than spending it. The actual value of transactions in Bitcoins has fallen rather than rising. In effect, real gross Bitcoin product has fallen sharply.
Krugman likens Bitcoin to a “private gold standard.”
“[It] reinforces the case against anything like a new gold standard – because it shows just how vulnerable such a standard would be to money-hoarding, deflation, and depression,” he writes.
Previously, DD’s experience with Bitcoin:
You can leave your processor on for a century and maybe see the equivalent of a few bucks worth of bitcoins. Even semi-hard days of mining them are well over.
Think of it as the citizen’s gold mining crew shown in Pale Rider, except there’s no chance you’ll find the big rock like Spider Conway before he was gunned down by Stockburn and his marshals. And no Clint Eastwood as “Preacher,??? either.
Bitcoin is all now Coy LaHood.