Currently, it is normal to talk about cryptocurrencies, especially due to the popularity of Bitcoin. In May 2021, three renowned Nobel Prize-winning economists: Robert Shiller, Erick Maskin, and Paul Krugman, issued their opinions regarding cryptocurrencies (especially Bitcoin); below, we share some of their statements:
Robert Shiller, winner of the 2013 Nobel Prize in economics, professor of economics at Yale University (New Haven, Connecticut, United States), claimed not to have bought Bitcoin but mentioned that he would like to have done it as an experiment. Shiller affirms that the crypto market is a psychological market with impressive technology. The ultimate source of value is “ambiguous” since it has more to do with our narrative than reality.
Shiller mentions that the strength of Bitcoin does not lie in its value as an asset, but because of the pressure exerted by public opinion. He mentioned the famous tweet by Elon Musk, owner of Tesla, which caused the price of Bitcoin to rise on a specific date. Shiller also commented that Bitcoin “looks like” a bubble and questions whether the currency will exist in about 100 years.
Paul Krugman was a Nobel Prize winner in economics in 2008; he mentions that Bitcoin is not an innovation for him and that it has not achieved enough in its time of existence. It resembles Bitcoin with a Ponzi scheme for being speculative. He adds that cryptocurrencies will not necessarily collapse in a short time, making the comparison with gold; he also affirms that Bitcoin and the other cryptocurrencies have not achieved any relevant economic role, and what happens with their value will not matter for those who do not participate in the cryptocurrency economy.
Erick Maskin, a 70-year-old professor at Princeton University (New Jersey, United States) who won the 2007 Nobel Prize in economics, is known for his theory of the functioning of the market when there are no conditions under which its behavior is efficient. In his opinion, those who bought Bitcoin will likely lose their money as an investment, as it is not known what will happen to cryptocurrencies later on. He mentions that “they are in fashion for the moment,” but that, like all fashion, this one will pass.
Maskin mentions that Bitcoin has no intrinsic value like gold since gold can be used in jewelry; instead, Bitcoin has no other purpose than to be an asset, and if people say that Bitcoin is not worth much, it will not be worth much. The Nobel mentions that if people used it as normal money, it would cause governments to have a monetary policy. Regarding regulation, Maskin says that so far, Bitcoin is only a fraction of the money supply. Still, if it becomes substantial or total, the government will have to regulate cryptocurrencies, just as it does with other assets.
Analysis of these opinions
As can be seen, these opinions are quite conservative and reflect (for the most part) the traditional thinking of “traditional banking,” we must consider that FIAT money still continues to be influential in the sector. However, it is interesting to see if Future Nobel Prizes take blockchain technology more into account in their awards, only when there are more Nobel Prizes related to blockchain technology and there are more countries that officially adopt this currency (as in the case of El Salvador) these criteria or opinions possibly change in favor of cryptocurrencies.
What do you think about this topic? Which of the three opinions do you think is the most conservative or “anti-Bitcoin”?
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