Nobel Prize-Winning Economist Says Bitcoin 'Ought to be Outlawed' (cnn.com)

Bitcoin "is drawing harsh criticism from Wall Street investment firms," writes Slashdot reader rmdingler -- and even from some prominent economists. CNN reports: The harshest assessment came from Nobel laureate Joseph Stiglitz, who said that bitcoin "ought to be outlawed. Bitcoin is successful only because of its potential for circumvention," he told Bloomberg TV. "It doesn't serve any socially useful function." Robert Shiller, who won a Nobel for his work on bubbles, said the currency appeals to some investors because it has an "anti-government, anti-regulation feel. It's such a wonderful story," he said at a conference in Lithuania, according to Bloomberg. "If it were only true."

Wall Street titans were getting in on the action, too. Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud." Billionaire investor Carl Icahn said on CNBC that it "seems like a bubble." The digital currency previously attracted the derision of JPMorgan boss Jamie Dimon, who called it a "fraud" that would "eventually blow up." Warren Buffett has warned of a "real bubble."
Wednesday the price of bitcoin shot past $11,000 -- just ten days after rising past $8,000.

Comments

I see

[nospam007]

" Bitcoin is successful only because of its potential for circumvention,"

Like cash?

Re:I see

[Applehu Akbar]

What has happened to Bitcoin is the opposite of inflation. Because its money supply is now fixed, it has been driven out of circulation as a currency (Gresham's law) and has become a hoarded virtual commodity.

BTC is also outside the banking system, which means that you can't earn interest on it and the centuries of antifraud experience that banks have does not apply to Bitcoin trades. That is why exchanges are continually embezzling your coins and getting hacked.

Re:I see

[StikyPad]

Cash probably would be outlawed, if governments themselves didn't need to conduct untraceable transactions. Unless you think we ship pallets of cash to third world countries because we can't figure out how to give people bank accounts and wire transfers.

Re:I see

[Ol Olsoc]

That is why exchanges are continually embezzling your coins and getting hacked.

In the end, Bitcoin is another funny money vehicle that will probably bubble and collapse just like the other bubbles of pretend money do.

Re:I See

[Freischutz]

Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud."

Whereas Goldman Sachs is a vehicle for what exactly?

Goldman Sachs and the rest of that entire system is, to quote Adam Smith, a vehicle for perpetrating a "conspiracy against the public'. Bitcoin is a way of circumventing that system which is why the system feels threatened by it. I don't think there is a real way to kill Bitcoin or rather what it represents. I've heard people like Stiglitz try to argue against Bitcoin because it 'helps terrorists' or 'facilitates criminality' but so do cash and uncut diamonds, those excuses are just fig leaves. The real threat is that Bitcoin facilitates the circumvention of the established gate keepers of the financial system. Even if Goldman Sachs and the rest of that ilk get their bought politicians to kill Bitcoin people will find other forms of portable wealth and use it as a way to circumvent the established financial system and the harder Wall Street and the politicos try to block these circuitous routes the more motivated people will become to invent new ones.

Re:I see

[cas2000]

[...] in order to sustain its false value.

and what real value do you think bitcoin has?

It's the ultimate "fiat currency", created by wasting enormous amounts of electricity to produce absolutely nothing of any value in the physical world.

and then speculated on by gamblers and wanna-be finance-industry scammers (playing kiddie versions of the same scams in their bitcoin sandpit just like the big boys on wall st) to inflate it's non-value to completely ludicrous prices.

and the funniest/worst of it is that even though it's the ultimate fiat currency, it's not actually a currency at all, and barely even pretends to be one. It's a greater fool gamble that the purchaser can offload their worthless gimmicks for an even greater price than they paid for it to someone even dumber than them.

It's digital fucking tulips - something that has little or no actual value, but an over-inflating price just because people think they can buy it at any price and sell it on for more...and as long as they're not the ones holding onto the worthless shit when the bubble inevitably bursts, that's totally OK. Because they're too smart to be those final suckers, right?

blah blah government bad government bad government bad blah blah blah

you dumb, brainwashed and over-propagandised yanks need to stop blaming government for fucking everything and start blaming the corporations who stole your government from you decades ago...and start thinking "cui bono" from your country being turned into a shithole and following the fucking money.

Re: I see

[sound vision]

They "print" money in the same way you "hit the gas" on a Tesla.

Re: I see

[sjames]

No, they buy it because they believe it's currenmt price is lower than it's peak price. They hope and expect to sell it off somewhere just before that peak price. Then the bubble pops and people who held too long hold a fire sale.

Re:I see

[Powercntrl]

The dollar is no longer guaranteed by anything, not gold, nor silver, nor land, nor oil reserves, or anything else. Thus, we need to judge its value on other criteria, not real value. Things such as trust, or scarcity.

Its value is guaranteed by the legal requirement that it must be accepted to pay off previous debts.

When I agree to a finance contract to purchase a car, they're agreeing to accept my $280 per month for the duration of the loan, even if $280 no longer buys a burrito at Taco Bell. Funny thing is, this "trust" major financial institutions have in the dollar leads to another trait Bitcoin sorely lacks: stability.

Electricity consumption ensures that it cannot be created without cost, thereby preventing anyone from artificially increasing the supply.

No. Bitcoin's scarcity hinges on the fact that the bulk of the miners all agree on which version of the Bitcoin software is the "one true Bitcoin". Anyone can easily modify the software to spew out coins galore, or change a few parameters they didn't like - and people have (Bitcoin cash, anyone?). There's only one rule in the game of cryptocoins: mob rule.

Once again, bitcoin is in no way inferior other currencies, and you must look to other measures to determine its worth. The concept that bitcoin seems impossible to debase makes it considerably desirable.

No way inferior? Try buying anything with it without jumping through a bunch of hoops, and losing some of it due to transaction fees and value fluctuations.
Maybe if you're trying to fund ransomware (or other illegal activities) with it, it's an easier way to transfer money than traditional means - but for legitimate purposes, it's still a far bigger hassle than just using cash, your debit/credit card, Western Union, or PayPal.

Obligatory Gandhi

[DontBeAMoran]

First they ignore you, then they laugh at you, then they fight you, then you win. - Mahatma Gandhi

We're at step #3 now.

Neither do you.

[king neckbeard]

It doesn't serve any socially useful function.

Neither do you, or just about anybody else brought up in this conversation.

Perpetrating fraud you say?

[quonset]

Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud."

If anyone should know about perpetrating fraud, it would be Lloyd Blankfeind. And his buddy Jamie Dimon as well.

Re:Perpetrating fraud you say?

[Ol Olsoc]

We should listen to him, but always while keeping in mind that he's only trying to help himself, not us.

Never trust anyone with your money that doesn't lose when you lose.

pot kettle

[crimson tsunami]

Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud."

Well he would know...

JPMorgan boss Jamie Dimon, who called it a "fraud"

Ditto

Potential of circumvention = protection of rights

[JoeyRox]

Stiglitz believes those who endeavor to protect their rights such as privacy must be doing something illegal. It's the old "it shouldn't matter if you have nothing to hide" defense of infringing on civil liberties. He also claims bitcoin has no societal value - the fact people are using it in society is prima facie evidence he's wrong about that as well.

Re:Yes it's a scam, but it does have a purpose

[DontBeAMoran]

Its only purpose is to avoid detection in order to purchase illegal goods and services.

You really don't have a clue.

It's accepted in almost no legitimate business establishment.

Try again.

Its "value" fluctuates wildly for no reason.

The value fluctuates wildly because it's being bought and sold by people, who don't always act logically. It crashed a bit after reaching $10K because a lot of people had sell orders for that price. It's already back up to $11K.

Once lost it cannot be recovered. At least cash can be found and used.

Not cash stored in computers. If someone attacked the country with EMP bombs, they'd wipe a lot of "regular cash" too.

Re:Yes it's a scam, but it does have a purpose

[religionofpeas]

What is it backed by? Precious metals are rare enough plus they can be used for other purposes.

Industrial use of rare metals is a distraction. Only 10% of the mined gold goes to industry. The rest is hoarded. Gold is also not accepted by most legitimate business establishments.

Plus the only people making any money are the ones who got in early. That's a pyramid scheme.

People who got in early on AAPL or MSFT also made a ton of money. Does that mean these are pyramid schemes ? No. People got in early because they understood how some cheap things have a great value.

Contradiction

[bradley13]

Bitcoin is successful only because of its potential for circumvention," he told Bloomberg TV. "It doesn't serve any socially useful function."

Circumventing governments is a socially useful function. Virtually all modern governments have grown to be far too powerful. Bitcoin represents a small but important struggle against one, small aspect of this power. Likely it will be either squashed or (worse) absorbed, but...maybe not. There's also a vanishingly small chance that people will realize that modern governments need to be massively reduced in scale, focusing on the essential needs of their constituents, rather than the global fantasies of the elite.

Geez, that doesn't sound half bad. Maybe I should become a propaganda writer :-/

Re:The government and corporations hate it

[DontBeAMoran]

Slashdot really needs to either fix this apostrophe problem or at least convert the character to one it can display when we submit comments.

Re:Yes it's a scam, but it does have a purpose

[Anonymous Coward]

> ding ding ding! Gold is also a fiat currency.

I don't think you quite understand what that term means... gold is a commodity currency.