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

Nobel Prize-winning economist Paul Krugman has warned of the possibility of a multi-year winter for blockchain projects, including crypto. In a recent article published in the New York Times (NYT), the economist criticizes blockchain as a technology and its use, citing several signs that he believes are ahead of this coming winter.

Paul Krugman compares Crypto Winter to Fimbulwinter

Paul Krugman, the Nobel laureate, warns of a coming eternal cryptocurrency winter for blockchain-based projects, including Bitcoin and other cryptocurrency networks. In a NYT opinion piece published on December 1, the economist discusses the real utility of this technology and how there are already signs predicting a future doom.

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

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

Based on this, and also on the recent downfall of one of the largest cryptocurrency exchanges in the world, FTX, Krugman believes that this crypto winter could bring a complete abandonment of blockchain and crypto technology. He compared it to the Fimbul winter, a winter that precedes the end of the world according to Norse mythology.

The sign of the Fall

For Krugman, in recent months there have been several signs that this abandonment is coming. The economist cites the recent write-off by several companies such as Maersk and the Australian Stock Exchange regarding their blockchain-based projects as part of the rationale.

Moreover, Krugman openly criticizes Bitcoin’s raison d’être, saying that “banks rarely steal customers’ assets, while crypto-institutions fall more easily to temptation, and extreme inflation that destroys the value of money usually only happens in the midst of political chaos.”

Similarly, Krugman calls Bitcoin’s proof-of-work (PoW) consensus, and estimates the damage it had done to the environment in the tens of billions of dollars, with no apparent benefit other than producing “worthless tokens.”

However, this opinion is different from the one he expressed in 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, saying “it’s a house built not on sand, but on nothing at all.”

What do you think of Paul Krugman’s opinion 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 spike occurred during December 2017. He has a computer engineering background, lives in Venezuela and is influenced by the cryptocurrency boom on a social level, offering a different point of view on crypto success and how it helps the unbanked and underserved.

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