Nobel Laureates Flocking to Crypto Startups

The crypto industry may finally be starting to catch on among some of the brightest people in economics. Nobel laureates are flocking to the fledgling industry, as more blockchain start-ups see the value of being associated with economists of the highest standing.

Three startups; game theory-focused Covee Network, governance design firm Prysm Group, and blockchain research company Cryptic Labs, were all mentioned by Bloomberg as examples of new companies that have successfully lured over highly regarded economists as their advisors.

Alvin Roth, recipient of the Nobel Prize in economics in 2012, joined Covee Network after thinking long and hard about whether he wanted a crypto start-up to simply use his name for decoration, or if he would actually be able to contribute. However, the team’s dedication to applications of game theory was what persuaded him to actively contribute. “They are embracing game theory as a way of incentivizing participation,” Roth was quoted as saying by Bloomberg.

Marcel Dietsch, CEO of Covee Network, said that the interest shown by some of these great thinkers “shows that the blockchain sector is growing up.”

Prysm Group, on its end, has a number of Ph.D.-level economists associated with it, including 2016 Nobel Prize laureate Oliver Hart of Harvard University. Among other things, the “tokenomics” and governance-focused firm is lead contributor to the MIT Cryptoeconomics Lab at the Massachusetts Institute of Technology, considered the first blockchain-related research initiative bridging economics, computer science, and business.

Meanwhile, in September, Cryptic Labs added two Nobel Laureates in Economics — Eric S. Maskin and Sir Christopher Pissarides — to its Economics Advisory Board.

“Blockchain is the most exciting development in financial markets in recent years, but we still don’t know enough about it to recommend a wholesale transition of all our transaction records to blockchain,” Pissarides was quoted as saying in an announcement by the startup.

However, not all Nobel Prize-winning economists support the ideas behind cryptocurrencies, although the arguments vary from “it has no value” to “bitcoin is evil,” as Paul Krugman famously put it in a 2013 opinion piece.

Still, Robert Shiller, another Nobel-winning economist, voiced a cautiously optimistic stance towards crypto when he said in an interview about bitcoin that “something good may come out of this.” Shiller, who used to be known as a crypto-skeptic, further admitted that bitcoin is “getting people enthusiastic,” while adding that even some of his own students were trading cryptocurrencies in during class.