What do mainstream economists think about virtual currencies?

Why anthropologists are more interested in Bitcoin than economists.

What do mainstream economists think about virtual currencies?

Mick Morucci, a user experience researcher who describes himself as having “gone down the Bitcoin rabbit hole,” has a background in both anthropology and economics, and recently wrote an article discussing “why anthropologists are more interested in Bitcoin than economists.

In Morucci’s view, mainstream economists have a top-down view of the world, with a set of models and assumptions on which they base their reasoning. They were deeply influenced by classical Newtonian physics and its concept of “celestial equilibrium”, but were not at all moved by the “systems view” that emerged from thermodynamics and spread to engineering. As a result, “orthodox” economists tend to view bitcoin as a bubble, a speculative asset, and a pop culture for digital natives. However, anthropologists who believe in cultural pluralism are more interested in people’s opinions and beliefs, and don’t care if there is an official endorsement behind Bitcoin, they have begun to study the world of Bitcoin miners, holders, speculators, and local Bitcoin traders.

Mainstream economics considers money to be “legal tender,” meaning that its value is determined by the final judgment and official decree of the state. In the eyes of Nobel Prize-winning economist Paul Krugman, cryptocurrency assets, led by Bitcoin, are nothing more than a Ponzi scheme. Moreover, for more than a decade since its inception, cryptocurrencies have played little to no role in normal economic activity; aside from speculative transactions, the only things we hear about Bitcoin being used as a means of payment are related to illegal activities such as money laundering or ransom payments to hackers.

Nouriel Roubini, the “Dr. Doom” and professor of economics at New York University who accurately predicted the U.S. subprime mortgage and international financial crises, has also repeatedly warned: “First of all, Bitcoin is not a currency. It’s not a unit of account, it’s not a means of payment, it’s not a stable store of value. Second, it’s not even an asset.” Roubini argues that cryptocurrencies like Bitcoin have no intrinsic value and that “the price is completely manipulated by a group of people and a group of market predators” – which refers directly to Musk, who tweeted about Bitcoin – and that, in Roubini’s view, Bitcoin is close to the moment when the giant bubble bursts.

In contrast, David Graeber, author of “Debt: The First 5,000 Years” and anthropologist who passed away last year, does not deny the monetary identity of virtual currencies, arguing that they have in fact always existed and that people have lived through several virtual currency eras – from Nixon’s 1971 ending the gold standard, which can be counted as a new round: “We have credit cards and other non-cash economies where we can financialize everything.”

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/what-do-mainstream-economists-think-about-virtual-currencies/
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