• Andy Gonzalez

Krugman, Ponzi's, & Ignorance

Is the act of supporting Bitcoin akin to supporting a Ponzi scheme? Detractors like Paul Krugman in his Seattle Times article seem to think so. Such statements are misguided since they demonstrate a lack of understanding as to what Ponzi schemes actually are and how the bolstering of Bitcoin is more like the typical activity seen in honest market participants around the world. Taking Krugman's criticism to its logical conclusion, if supporting Bitcoin is analogous to propping up a Ponzi, what does that say about representatives and brokers of the stock markets, bond markets, ETFs, and every other investment vehicle/platform providing the services of investment, liquidity, and diversification? Krugman's statement of "...people who invested with Bernie Madoff also made lots of money, or at least seemed to, for a long time " rings just as true for any participant of the stock market who's naturally looking to have more value as opposed to less once he/she exits. Where does that leave half of American families who participate in the stock market? I doubt anyone is squirreling away hard earned money into stocks just to lose its value. But see, a deeply educated pundits such as Krugman and others cannot be that ignorant, right? Or are they willingly using selective bias to attack a technology and legitimate asset (because the creation of a Bitcoin is achieved through the expenditure of time and energy) for some ulterior motive? We can give the benefit of the doubt here, as the oft-used Hanlon's razor suffices to explain away malevolence for ignorance, and I'm inclined to agree.

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