Nobel Prize-winning economist Paul Krugman thinks crypto could be headed for an “endless winter” as most digital assets fail to prove they have real-life value.
In a new opinion piece for the New York Times, Krugman says he’s never seen the point of blockchain technology and predicts that the most recent market-wide plunge could be the beginning of the end for the industry.
“We are, many people say, going through a ‘crypto winter.’ But that may understate 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 crypto world, not just cryptocurrencies but the whole idea of organizing economic life around the famous ‘blockchain.'”
Krugman, a longtime crypto skeptic, has expressed criticisms of the space long before the current bear market kicked off. The economist argues that blockchains haven’t 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 that it was planning 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 winding down its efforts to use 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 a blockchain of its own: It couldn’t get a straight answer to the question, ‘What useful thing does it do?'”
Krugman’s record on forecasting the future of technology is far from stellar.
Back in 1998, he wrote an article in Red Herring magazine stating that “by 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.”
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