Nobel Prize Laureate Paul Krugman Warns of an Eternal Winter for Blockchain – News Bitcoin News

Nobel Prize-win­ning econ­o­mist Paul Krug­man has warned about the pos­si­bil­i­ty of a peren­ni­al win­ter for blockchain projects, includ­ing cryp­to. In a recent arti­cle pub­lished in the New York Times (NYT), the econ­o­mist crit­i­cizes blockchain as a tech and its uses cit­ing sev­er­al signs that he believes pre­cede this upcom­ing winter.

Paul Krugman Compares Crypto Winter to Fimbulwinter

Paul Krug­man, the Nobel prize award win­ner, is warn­ing about an upcom­ing eter­nal cryp­tocur­ren­cy win­ter for blockchain-based projects, includ­ing Bit­coin and oth­er cryp­tocur­ren­cy net­works. In an NYT opin­ion piece pub­lished on Dec. 1, the econ­o­mist dis­cuss­es the real util­i­ty of this tech, and how there are already signs that pre­dict a future downfall.

Krug­man crit­i­cizes the real util­i­ty of this tech­nol­o­gy when there are oth­er cen­tral­ized alter­na­tives that cur­rent­ly func­tion quite well. On this, Krug­man explained his skep­ti­cism, stating:

What’s the point?” Why go to the trou­ble and expense of main­tain­ing a ledger in many places, and basi­cal­ly car­ry­ing that ledger around every time a trans­ac­tion takes place?

With base on this, and also on the recent down­fall of one of the biggest cryp­tocur­ren­cy exchanges in the world, FTX, Krug­man believes that this cryp­to win­ter might bring a com­plete aban­don­ment of blockchain and cryp­to tech. He com­pared it to the Fim­bul­win­ter, a win­ter that pre­cedes the end of the world accord­ing to nordic mythology.

Signs of the Fall

To Krug­man, in the last few months, there have been sev­er­al signs of this aban­don­ment com­ing. The econ­o­mist cites the recent write-off that sev­er­al com­pa­nies like Maer­sk and the Aus­tralian Stock Exchange have made regard­ing their blockchain-based projects as part of its justification.

Also, Krug­man crit­i­cizes Bitcoin’s rai­son d’être open­ly, stat­ing that “banks rarely steal their cus­tomers’ assets, while cryp­to insti­tu­tions more eas­i­ly suc­cumb to the temp­ta­tion, and extreme infla­tion that destroys money’s val­ue gen­er­al­ly hap­pens only amid polit­i­cal chaos.”

In the same vein, Krug­man calls out Bitcoin’s proof-of-work (PoW) con­sen­sus, esti­mat­ing the dam­age that it had brought to the envi­ron­ment in the tens of bil­lions of dol­lars, with no appar­ent ben­e­fit besides pro­duc­ing “worth­less tokens.”

How­ev­er, this opin­ion is dif­fer­ent from the one that he expressed on May 2021. At the time, he expressed that while he did not believe in the fun­da­men­tals behind Bit­coin, he was sure that the mar­ket was a “cult that can sur­vive indef­i­nite­ly.” In June, he com­pared cryp­tocur­ren­cies to the hous­ing bub­ble and the sub­prime mort­gage cri­sis, telling “it is a house built not on sand, but on noth­ing at all.”

What do you think about the opin­ion of Paul Krug­man on the future of blockchain and cryp­to? Tell us in the com­ments sec­tion below.

Sergio Goschenko 

Ser­gio is a cryp­tocur­ren­cy jour­nal­ist based in Venezuela. He describes him­self as late to the game, enter­ing the cryp­tos­phere when the price rise hap­pened dur­ing Decem­ber 2017. Hav­ing a com­put­er engi­neer­ing back­ground, liv­ing in Venezuela, and being impact­ed by the cryp­tocur­ren­cy boom at a social lev­el, he offers a dif­fer­ent point of view about cryp­to suc­cess and how it helps the unbanked and underserved.

Image Cred­its: Shut­ter­stock, Pix­abay, Wiki Com­mons, TANYA LARA, Shutterstock.com