Paul Krugman, a Nobel prizewinner in economics, criticised Bitcoin in an article in the New York Times in September:
"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. Bear in mind that dollar prices have been relatively stable over the past few years – yes, some deflation in 2008-2009, then some inflation as commodity prices rebounded – but overall consumer prices are only slightly higher than they were three years ago. What that means is that if you measure prices in Bitcoins, they have plunged; the Bitcoin economy has in effect experienced massive deflation."
Writing in the September/October edition of Technology Review, the New Yorker financial writer James Surowiecki noted that Bitcoin might indeed be trapped in a deflationary spiral:
"With ordinary currencies, though, there's a limit to how far down the spiral can go, since people still need to eat, pay their bills, and so on, and to do so they need to use their currency. But these things aren't true of bitcoins: you can get along perfectly well without ever spending them, so there's no imperative for people to stop hoarding and start spending. It's easy to imagine a scenario in which the vast majority of bitcoins are held by people hoping to sell them to other people."
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