Transaction costs and “no peg” bitcoin to real assets set back the development of the economy of 300 years ago. This was written by economist Paul Krugman in his newspaper column in the New York Times.

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— Paul Krugman (@paulkrugman) July 31, 2018.

He argues that the evolution of money has gradually created is not burdened with unnecessary complexities of the system and the bitcoin re-introduces the obstacles associated with the cost of mining blocks and confirming transactions.

“In the context of the history of money, the enthusiasm for crypto-currencies looks very strange, because it goes in the opposite direction from the long-emerging trend,” he writes.

Paul Krugman did not deny that banknotes of large denominations are often not useful for everyday calculations, however, have among their advantages the fact that their value is “tied” to smaller bills.

“Cryptocurrencies, on the other hand, no support and anchor to reality. Their value depends entirely on self-fulfilling expectations. So for them, a complete collapse could be a reality,” he added.

The expert also noted that traditional Central banks “quite well” cope with its task, providing a stable purchasing power, and the bitcoin need “only to engage in criminal activities, including tax evasion”.

We will remind, earlier in July, the Professor of Economics at the state University of new York at stony brook Noah Smith stated that bitcoin should be either replacement of the us dollar in international settlements, or the digital equivalent of gold, otherwise it will die.