[Cryptography] Krugman blockchain currency skepticism

[Stefano Quintarelli]

On 31/07/2018 13:05, William Allen Simpson wrote:
> Krugman has a column today that's saying some things that have already
> been posted here.  Hopefully will gain traction.
> 
> https://www.nytimes.com/2018/07/31/opinion/transaction-costs-and-tethers-why-im-a-crypto-skeptic.html 

IMHO...
(this is what I replied elsewhere)

the argument about friction leads basically to the friction of building 
trust. his argument is that the proof of work consumes loads of energy 
and overall is a friction greater than a building a central bank 
emitting fiat

this is possibly true with the present trust mechanism which is the 
distributed proof of work. it might change, though. for example the 
proposed Algorand system by Turing prize Micali from MIT would solve 
this issue with a trust model that somehow resembles the mechanism of 
election of the Doge used in the republic of venice from 1260 to 1780..
(likely the longest lasting election system in the world, surely longer 
than the election of the Pope which changes frequently)

I think crypto has induced an acceleration to some trends (at least in 
Europe). when BTC started, money transfer transactions took days and 
were costly (when not on the same bank) now we have quite ubiquitous 
same day transactions at 0 variable costs as part of the account cost. 
And we are heading towards europewide realtime money transfers between 
all banks. Not saying it is because of BTC, but it’s a part of the scenario.

about tethering to “real economy” usefulness, would he be living in 
venezuela, having savings abroad, it would solve him the problem of 
buying stuff.

[or, putting it differently, not everywhere in the world people can 
trust the local fiat currency and having a global crypto which is 
tethered to the rest of the world, who are tethered to their countries, 
it's an advantage for those people]

cryptography (generalizing from btc and blockchain) has the power of 
bringing private property back to data.

as today information is not rival and not excludable (unless centrally 
managed, with access limitations)

private property need the asset to be rival and excludable. cryptography 
could help making it so. (and blockchain can well be a part of the picture)