Binance CEO CZ takes on renowned skeptic Paul Krugman in Cryptocurrency MasterClass

“I’m part of the crypto skeptic community, you would say,” said economist Paul Krugman, opening a 30-minute talk with Binance CEO Changpeng “CZ” Zhao produced for a new MasterClass course.

Krugman perhaps understates his position on cryptocurrency and blockchain when he penned a New York Times column last week, saying the hype surrounding cryptocurrency and blockchain technology is a “tragedy” that has led to “waste on an epic scale.” have. He was certainly an ideal sparring partner for CZ for the online class. MasterClass granted Decrypt access to the fifth lesson introducing the expert pair.

“Our rap has always been that we can’t see what problem crypto solves, what it really does that we’re not already doing, or how — to the extent there’s a problem — it can solve it better than other more traditional methods,” he said.

Education is the key to adoption. Masterclass is one of the most engaging educational platforms in the world. I spent more than 6 hours shooting for it mainly because I do a lot of NG. They also made a nice poster. Really cool. 🙏 https://t.co/LMJ27cLpXU

— CZ 🔶 Binance (@cz_binance) December 8, 2022

Zhao responded by pointing out that the original concept of bitcoin and cryptocurrency was to provide a new way of transferring value, just like the internet is a new way of sharing information.

“Bitcoin specifically is a slightly better form of money — it fixes some of the problems we have today with money that’s limited, not easy to use, doesn’t have a lot of freedom, and doesn’t have very low fees,” Zhao said. “If you think about global trade, international remittances, remittances, micropayments, etc.

“To be blunt, bitcoin’s first use case was payments, but it didn’t catch on. But the other use cases do,” he continued.

CZ pointed to crypto’s ability to raise millions of dollars in funding and revenue streams for artists using non-fungible tokens or NFTs.

“It’s global fundraising; it’s much easier for entrepreneurs to raise money around the world,” he said. “By using cryptocurrencies, a serious entrepreneur can raise the equivalent of $10-20 million in crypto in a matter of days.”

Krugman remained skeptical.

“I’m a little confused — it’s not clear why blockchain itself should make it easier to raise money,” Krugman said, noting that the idea may seem to have value just because of crypto’s popularity.

“I think the biggest difference lies in the cross-border use of this technology,” Zhao said, citing the difficulty of making cross-border payments with traditional banking. “Blockchain offers that, and I think that’s the main reason.”

Noting the global disparity in economic opportunities, the Binance CEO cited the dynamic economy of the United States versus China, Vietnam and African countries.

“It’s very difficult for someone outside the US to transfer money there because of international Swift fees and so on,” Zhao said, comparing the differences in banking in the United States with those in China, Vietnam and African countries.

“But [that isn’t] not a technological issue, but a regulatory issue,” countered Krugman.

While regulations are part of the problem, Zhao said it’s more of a legacy issue and a problem with the high cost of sending money from country to country.

“There is nothing that makes us illegal to invest in a project for a person in Dubai to invest in a project in South Africa,” he said. “But the mechanics of doing this are very difficult for traditional financial services.”

Zhao said that because technology makes the world smaller, entrepreneurs can access a global pool of liquidity using blockchain technology.

“Why not just reform the banking rules?” asked Krugman, comparing the problem to cell phones and how two US carriers can have different policies for the same regions.

Krugman also questioned how long it took for Bitcoin to be adopted compared to innovations like the internet, saying that the argument that crypto is still new is getting old.

“If you want to compare it to the internet in 1995, we all lived on the internet in 2008,” Krugman said. Bitcoin was created in 2009, 13 years ago.

Zhao conceded that Krugman made a good point, but noted that what we know today as the Internet was developed in the 1960s with the US Advanced Research Projects Agency Network, or ARPANET, followed by the use of email by the US military in the 1980s.

“The problem seems to be with governments and regulations rather than technology,” Krugman replied, noting that he would believe in crypto if it could get him through immigration faster when he travels to Europe. Noting the ease with which travelers can enter the United States with Global Entry, he added, “The problem is that they are non-transferrable and blockchain doesn’t help.”

Many crypto enthusiasts point to the 2008 financial crisis as the reason Bitcoin and the industry that grew out of it is necessary. But many have questioned the practicality of expecting the average person to understand the technology and its financial implications.

“What’s interesting is that after 2008 and all these disasters, we didn’t respond with education, but with regulation, we responded with Dodd-Frank, with things that were basically trying to bring more of the financial system under the umbrella of regulation,” he said Krugman.

“Wouldn’t the lesson in all of this be to not expect high school students to be able to understand all that stuff you’re telling me about?” he asked.

“It’s not black and white,” Zhao replied. “I think from a regulatory perspective it’s important that regulations evolve with new technologies and new industries to protect consumers, I think that’s necessary.

Zhao added that people must learn to protect themselves at the same time.

“No solution is perfect. I’m not saying that education will solve all problems, [but it would] improve something,” said Zhao.

Krugman said there will be a gradual expansion of the regulatory grid, adding that he believes most cryptos are used to circumvent and avoid regulations. Despite this, he believes crypto will survive, “but they will be indistinguishable from regular finance.”

Founded in 2004, MasterClass is an American online educational subscription platform that offers tutorials and lectures recorded by experts in various fields. The Crypto and the Blockchain MasterClass course also includes sessions led by Emilie Choi, President and COO of Coinbase, and Chris Dixon, General Partner at Andreessen Horowitz.

Stay up to date on crypto news and receive daily updates in your inbox.

Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers