There is perhaps no compliment greater than a criticism from the econostrologist in chief, Paul Krugman.
He is right about one thing tho. Bitcoin IS a bubble. But that is not a pejorative. Any good that becomes money will have a price that is far higher than is warranted by its use demand. It doesn't matter whether the floor price is 10% of the monetary premium, 1% or 0%. The monetary premium is based not on the good's use value, but its serviceability as money. I.e., is it fungible, divisible, transportable, verifiable etc. And along all these attributes bitcoin shines - even more than gold.
The best explanation of this so-called "bubble theory of money" is proffered by Moldbug. To wit:
He is right about one thing tho. Bitcoin IS a bubble. But that is not a pejorative. Any good that becomes money will have a price that is far higher than is warranted by its use demand. It doesn't matter whether the floor price is 10% of the monetary premium, 1% or 0%. The monetary premium is based not on the good's use value, but its serviceability as money. I.e., is it fungible, divisible, transportable, verifiable etc. And along all these attributes bitcoin shines - even more than gold.
The best explanation of this so-called "bubble theory of money" is proffered by Moldbug. To wit:
http://unqualified-reservations.blogspot.com/2011/04/on-mone...
and
http://unqualified-reservations.blogspot.com/2013/04/bitcoin...