“Twelve years later, cryptocurrencies play almost no role in normal economic activity.”

That was the New York Times Nobel Prize-winning economist and columnist Paul Krugman, who in a recent article questioned the tangible value of crypto.

The self-described “cryptoskeptic” writes that while he often uses Venmo to split checks and buy groceries and PayPal’s own PYPL peer-to-peer payment service, which was started with Bitcoin BTCUSD, -8.16% im In 2009, but it has not yet done so, Bitcoin, Dogecoin DOGEUSD, -11.37% or other digital tokens are not used as quickly by the masses for daily transactions. And that leaves him wondering what the digital assets are really worth.

“When a technology gets as old as cryptocurrency, we expect that it has either become part of everyday life or has been abandoned as a non-starter,” he says, before asking why people are willing to pay so much in digital tokens invest that “seem to be doing nothing”.


“That might sound like a speculative bubble to you, or maybe a Ponzi scheme.”

Krugman says any long-running Ponzi scheme needs a narrative that crypto has in its spades. And that includes crypto boosters who use “Technobabble” to get everyone to believe that they are offering a revolutionary technology, “although blockchain is actually quite old by Infotech standards and has not yet found convincing uses,” he writes .

He also features what he calls “libertarian derp” or “allegations that fiat currencies, government-issued money with no concrete backing, will collapse every day” to stimulate the desire to invest in digital tokens.

Connected: Bitcoin has gone from trendy to cheesy, says the Deutsche Bank analyst

It should come as no surprise that the crypto community had some criticisms of his column. In fact, Krugman even tweeted his article predicting that “this is going to get a lot of hate mail” because “the cult must not be ridiculed.”

Some critics cited predictions Krugman made in the past that have not come true in order to discredit his skepticism about the cryptocurrency. In particular, a 1998 article was passed around online. In it Krugman predicted: “By about 2005 it will be clear that the impact of the Internet on the economy was no greater than that of the fax machine.” The same column also suggested that the growth of the Internet would slow “drastically” because “most people have nothing to say to each other!”

Oddly enough, with a lot to say to Krugman, critics used the internet to roast him. Krugman’s name and column were trending on Twitter TWTR, + 0.05% through Friday morning.

It was a chaotic week for cryptocurrency holders, with Bitcoin falling 30% on Wednesday morning after China issued a crypto warning before bouncing back a bit that afternoon. On Friday morning, Bitcoin and Ether ETHUSD were down more than 40% from their recent highs at -11.15%, and Dogecoin had lost half of its value.

Continue reading: Bitcoin leads to another sell-off as China repeats plans to fight crypto

Continue reading: Why is crypto crashing? Will Bitcoin Prices Ever Rise? This is what traders and investors say