While the term blockchain was previously enough to gain interest from retail investors, blockchain-related start-ups have had to look for other creative means to capture the same attention. According to Bloomberg, these creative means now include Nobel Laureates who are joining and partnering with a number of blockchain-related start-ups.
Nobel Prize Laureates Partner With Leading Blockchain-Related Projects
Bloomberg reported that there are a number of blockchain-related start-ups partnering with award-winning economists. The most recent example is the Covee Network, a blockchain-based organization with the goal of shifting the future of work from centralized corporations to distributed, decentralized, self-organizing teams. The start-up launched a partnership with Alvin Roth, who shared the economics Nobel Prize in 2012.
Roth by phone said to Bloomberg:
“When I was first approached about joining, I spent a good deal of time thinking about whether I would just be a decoration, or whether I would actually be able to contribute.”
He was, however, persuaded to join when he realized that he could bring his knowledge, skills, and expertise to the project. He added:
“They are embracing game theory as a way of incentivizing participation.”
Prysm Group, a global blockchain economics, and governance design firm led by PhD-level economists from top international universities, is also working together with Oliver Hart, a 2016 co-recipient from Harvard University.
While partnering with one Nobel Prize winning laureate is enough to spark interest, Cryptic Labs LLC, a research institute focused on solving problems in security in blockchain, has partnered with two winners — Eric Maskin, a co-laureate for the Nobel Prize in 2007, and Christopher Pissarides, who also shared the prize in 2010.
Maskin, who won the prize for his work in mechanism design theory, will help Cryptic Labs understand how projects can undergo token economics in a more effective manner. Pissarides will provide the organization with a greater understanding of macroeconomic trends. The two Nobel-winning laureates will fill in the gaps that exist when it comes to economic knowledge in the blockchain and cryptocurrency industry.
The Term “Blockchain” Is No Longer Enough
In the past few years, the term blockchain was enough to gain interest and intrigue from venture capitalists and retail investors. The term blockchain has, however, been overused. In many circumstances, it has been used to kick-start zombie companies like Kodak and increase share prices of an unrelated firm, like Long Island Ice Tea’s rebranding to Long Blockchain Corp.
In January 2018, Kodak partnered with WENN digital to launch KodakOne, an image rights management platform. Kodak also launched the KodakCoin, a cryptocurrency token designed to help photographers gain greater control over their images. When news of the token spread, Kodak’s shares increased by 272 percent. Unfortunately, the KodakCoin was not considered a viable blockchain solution to the management of intellectual property and failed dismally.
A similar situation can be seen with the Long Island Ice Tea Corporation. Bloomberg reported that the soft drink company rebranded to Long Blockchain Corporation in Dec. 2017. The rebranding led to an increase of as much as 289 percent for the company’s shares. It was, however, quickly accused by Nasdaq of misleading retail investors and was threatened to be delisted from the company.
While the buzz surrounding blockchain peaked in 2017, the high percentage of scams from initial coin offerings (ICOs) also began to surface. ICO advisory firm Statis Group noted that in 2017, more than 80 percent of ICOs were scams. Autonomous Research also found that in Aug. 2018, the level of ICO funding also dropped to its lowest in 16 months. The cryptocurrency market also fell significantly, with Bitcoin losing over 65 percent of its value from its all-time high in Dec. 2017. According to CoinMarketCap, Bitcoin is valued at $6,605.92 at the time of writing.
Not All Nobel Prize Winners Are Optimistic About Bitcoin and Blockchain Technology
Although many Nobel-winning laureates have joined blockchain-based start-ups, not every Nobel Prize winner in economics agrees with the advantages and benefits of cryptocurrencies. In Dec. 2013, Paul Krugman, a 2008 Nobel Laureate, wrote in the New York Times column that “Bitcoin Is Evil.” He mentioned in an interview with Business Insider that Bitcoin is more of a bubble than the housing bubble crisis in 2008.
Richard Thaler, Nobel Prize winner in 2017, agreed with Krugman. Eugene Fama, Nobel Prize winner in 2013, also believes that cryptocurrencies are not superior over fiat currencies and are only advantageous for criminals.