Crypto lacks utility and could enter ‘endless winter’, says Nobel Prize-winning economist Paul Krugman
Nobel Prize-winning economist Paul Krugman believes crypto could be headed for an “endless winter” as most digital assets fail to prove they have real value.
In a new opinion piece for the New York Times, Krugman says he has never seen the point of blockchain technology and predicts that the latest market-wide plunge could be the beginning of the end for the industry.
“We are, many say, going through a ‘crypto winter.'” But that may be understating the case. This is looking more and more like Fimbulwinter, the endless winter that in Norse mythology precedes the end of the world – in this case the world of crypto, not just cryptocurrencies, but the whole idea of organizing economic life around the famous “block chain.”
Krugman, a longtime crypto skeptic, has voiced criticism of the space long before the current bear market began. The economist argues that blockchains have not proven that they actually have any utility, noting that many companies are reluctant to embrace the nascent technology.
“Five years ago, it was supposed to be a big deal – a sign of mainstream acceptance – when Australia’s stock exchange announced it planned to use a blockchain platform to clear and settle trades.
Two weeks ago, it quietly canceled the plan, writing off $168 million in losses. Maersk, the shipping giant, has also announced that it is discontinuing work on using a blockchain to manage supply chains.
A recent blog by Tim Bray, who used to work for Amazon Web Services, tells us why Amazon chose not to implement its own blockchain: It couldn’t get a straight answer to the question ‘What good does it do? ‘”
Krugman’s record for predicting future technology is far from stellar.
Back in 1998, he wrote an article in Red Herring magazine in which he said that “by 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than that of the fax machine.”
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Featured image: Shutterstock/Philipp Tur
