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âIf a digital currency isnât actually used for any transactions, is it, you know, actually a currency?â tweeted Nobel laureate economist with the ears of American progressive politicians, Paul Krugman. He was prompted by a colleagueâs recent article regarding a push by Rippleâs XRP to urge users to do more than just speculate. Mr. Krugman, it turns out, backed into one of the main arguments for bitcoin cash (BCH).
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Paul Krugman Trolls Ripple, BTC
Useless. Evil. Antisocial. Worthless. Impractical. Bubble. Fraud. Those are the kinder adjectives the preeminent US court US economist, with exclusive access to freer world leaders, has used to describe the cryptocurrency phenomenon. Heâs also maniacally cheered bitcoin core (BTC) price haircuts, tacitly approving investors being wiped out and worse. More recently, he took to Twitter yet again to troll XRP and BTC enthusiasts, chiding, âIf a digital currency isnât actually used for any transactions, is it, you know, actually a currency?â
Mr. Krugman, interestingly enough, backed into a main argument for bitcoin cash (BCH), at least as proponents see things. He made no mention of the fourth largest decentralized currency by market capitalization, but the bitcoin cash gang maintains that for a cryptocurrency to be a currency in any meaningful sense it must be used. Otherwise, itâs just an exercise in greater fool game theory.
Mr. Krugmanâs snide, smug take has to do with Nathaniel Popperâs, âHereâs Some Cryptocurrency. Now Please Use It,â published in The New York Times this week. Mr. Popper examines Rippleâs recent press barrage, shoving its XRP in front of mainstream audiences from Los Angeles (Ellen DeGeneres) to New York (Stephen Colbert), which have hosted giveaways totaling more than $30 million ⊠and just for those two shows, mind you.
âNow comes the hard part,â Mr. Popper explained, âpersuading people to use XRP for something other than speculative trading. It is an issue facing most of the still-young cryptocurrency industry. Digital tokens like bitcoin and its many imitators (like XRP) were designed to make electronic transactions of all sorts easier. But today almost no transactions are happening, other than on virtual currency exchanges where people bet on their price.â
Cash Flush, Business Light
Itâs an all-out push by Ripple, including getting perpetually inebriated rapper Snoop Dogg to host after parties. Theyâve even forked over $300 million to grease the wheels of getting businesses to use XRP. Theyâre looking to lure developers. This desperation has its own term, âcash flush, business light.â
Store of value arguments have held the day, and so most enthusiasts do hold their positions rather than use, at least as it concerns XRP and the worldâs most popular cryptocurrency, BTC. Mr. Popper notes how many âpeople who bought the digital tokens created by these projects did so in the belief they will one day be useful for real transactions of some sort. If the projects want to keep those investors from selling, the projects have to convince them the tokens will have some long-term value.â
For XRP the campaign to get users to see it as a functional currency might be less than a philosophical harkening back to cryptoâs rebellious roots. Projects like it are in grave danger of being legally relegated to securities, meaning âthey will be subject to restrictions on trading and movement, making it even less likely that people will use the tokens for their intended purposes,â Mr. Popper insists, something Ripple executives are keen to avoid at all cost. Theyâve gone to great pains to separate Ripple the company from the currency XRP, with an obvious irony, âIts efforts to promote XRP could demonstrate how reliant XRP is on Ripple.â
In any event, the crypto community has at least one example of a currency gaining adoption and medium of exchange use case. Seemingly daily, an innovation or re-adoption of a previous concept long abandoned by bitcoin core as it veered off into settlement layer/digital gold land is implemented, resurrected, as bitcoin cash is, you know, actually a currency.
Does Paul Krugman have a point? Let us know in the comments section below.Â
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