Katie Haun debates Paul Krugman on crypto

 

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I didn't see Krugman. No debate.

It's a playlist. There's 3 videos, the last one is the debate.

Good to know. I watched the first minute where she the raised 3 myths she would demolish and all of them were strawman. (like everyone who uses bitcoins is a criminal rather than bitcoins have been subject to market manipulation (threatening their founding assumption) and aren't stable units of value.).

Krugman himself has argued in the past that Bitcoin was evil because it is untraceable. So at least that myth seems useful to dispel.

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HODL, to the moon.

Or something like that. Though oddly, this website seems to be less interested in following up on its previous enthusiasms when they fall out of attention or run into problems.

The ability to get less interested in something is a good thing. You should try it sometime.

Like Tom and Daisy Buchanan.

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Krugman by and large simply replaces the common myths of crypocurrency with new ones. @ about 11:30 into his talk he says that we are trying to replace fiat currency with cryptocurrency. Nope, strawman. And it directly contradicts what Krugman says at the outset, that fiat paper money has value because you can pay taxes with it. So long as governments require fiat currency to pay taxes fiat currency cant be replaced.

We will no sooner replace fiat currency with crypto than we would replace fiat currency with shares of Microsoft. Crytpo is just another thing you can trade.

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Around 15:30 he bemoans the cost of crypto transactions. While its true that crypto has a transactional cost, isnt it up to the users to determine if that cost is worth it?

A few minutes prior, Krugman pretty quickly and cavalierly dismisses the experiences of people suffering through hyperinflation but then proceeds to wonder why anyone would pay the transaction cost of bitcoin. Well Paul, when you wave away the reality of anyone who isnt just like you then, yea its a total mystery.

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At around 22:30 K declares that Crypto has no use and therefore no fundamental value. Its not tethered to reality to use his words.

Its use, its value is that you can make a transaction online without the trust or approval of a middleman. Maybe that use has no value to K, but that is not the same as no use whatsoever.

What reasonable online transaction could you make with Bitcoin? Other than a transaction based on speculating on the value of Bitcoin? The thing is worth 40% less than it was worth last month. Who would want to negotiate a deal that relied on a "currency" that moves around like that? I reckon we're in no use whatsoever territory.

Anyone with little to no alternative.

Such as...?

People in totalitarian countries for one.

Hahahaha!

Bitcoin fundamental use is that with a bitcoin you have an inaliable right to write to the bitcoin blockchain. This right cannot be stoped by anyone in the world and unlike the ownership of other rights requires no third parties to enforce.

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>Its use, its value is that you can make a transaction online without the trust or approval of a middleman.

Why is this better then using my Credit Card? Is it faster? Is it Cheaper? Is it more Secure? My Current Card takes less then 1/2 a second, doesn't charge me, and has 100% protection against theft or fraud. Can it do any thing better then my current payment method?

This value it has, why would I put a premium on it? Why do I want no middle entity. Please, let me know, because I have asked this question to many people who support bitcoin. What problems do I have that Cryptocurrencies solve.

Well said. I think the ultimate value might end up being 'digital gold', that is a commodity to store wealth. Gold has some problems that crypto can solve. But it's never going to replace real currencies.

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And, like in most other debates, people forget how the operational costs of maintaining appropriate security for keys/wallets is something that is not manageable by individuals. Losing any kind of digital asset with money-like properties is far harder than keeping money safe. Hyperinflation environments? None of those countries are ready for the physical security required to keep a significant amount of money with cryptocurrency limitations. Heck, a large percentage of exchanges have the right level of security themselves, so imagine individuals.

There's something Trumpian about cryptocurrencies: There are so many valid criticisms that people just can't focus on how big of a disaster the entire whole is.

And what exactly is disastrous about cryptocurrencies?

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I agree with your sentiment but you do make a bit more of a fuss than needed. Nowadays, people use seeds for wallets and can keep them on paper if it’s a large amount of crypto.

No real reason for that much physical security.

Kindly define Trumpian.

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Hardware wallets are cheap, easy, and extremely secure. There are also multi-signature wallets that require signatures from two or more different keys/people for any outgoing transaction. Wallet software such as Copay makes this fairly easy for a regular person to do at almost no cost.

I personally use hardware wallets and do not know my seed. I used a nifty utility to split the seed into multiple parts and need only a few of them (not all) to restore the full seed in the future. I sealed and scattered the fragments geographically and periodically check to ensure that they haven't been tampered with. Someone would have to go on a cross-country roadtrip of theft in order to get the seed that would unlock the funds in my hardware wallets. I also made sure to test the restore procedure with my shard backups before committing to this method of storage. I have high confidence that it will work if needed. That's probably more security than most people need, but it wasn't expensive and I didn't have to be a coder to set it up.

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so I only watched the first video. I share the view (the myth) that Crypto is for criminals. Katie's counter argument is that you can trace Crypto better than you can trace cash. And that most money laundering doesn't get caught.

Not sure that's a knock out argument. I've always assumed that the value Crypto has is to help the Chinese get money out of China.

"...the value Crypto has is to help the Chinese get money out of China"

Probably, but is that an illegitimate use?

It's illegal. So, it does support the argument that crypto is largely for criminals.

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Do you also share the view that cash is for criminals?

Increasingly, this is true.

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This is really interesting stuff, and I think such high profile individuals debating the topic shows there is something there.

I think that Krugman misses how cryptocurrencies and related platforms like Ethereum is that they are emergent phenomenon - logical macro arguments don't always apply to these kinds of ecosystems.

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She has cute arms--that is why I watched the video. If you want to listen to something intelligent, avoid listening to females.

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Isn't Crypto a dog from Krypton?

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