Bhagwan Chowdhry, a professor of finance at UCLA, has nominated Satoshi Nakamoto, for the 2016 Nobel Prize in economics, according to the Huffington Post. The professor was asked by the Nobel Prize committee to nominate someone for the prize.
Chowdhry said likely candidates for the prize include Paul Romer at New York University, Doug Diamond at the University of Chicago, and Steve Ross at the Massachusetts of Technology, for the work they did in the 1970s and 1980s.
But in thinking about whose ideas have had a disruptive influence in the 21st Century, Chowdhry said Nakamoto jumped to his mind. He noted that Nakamoto has not published in any of the scholarly economics or finance journals where one would normally look to for an honoree. But Nakamoto has published a 9-page white paper, “Bitcoin: A Peer-to-Peer Electronic Cash System” which he posted on May 24, 2009 on the Internet.
The nomination of Nakamoto is somewhat whimsical as he is an outsider to the economics profession, similar to Romain Rolland nominating Sigmund Freud for the Nobel Prize in 1936 – in literature, not medicine.
But Chowdhry said he is completely serious in nominating Nakamoto since bitcoin is a revolutionary invention. Physical currencies have been used historically for currency. Paper currency is now ubiquitous globally with countries and regions using their own currencies to support exchange. Bitcoin, on the other hand, exists only as a mathematical object and is digital. The currency offers numerous advantages over paper and physical currencies; it is secure as it relies on a cryptographic code. It can divide into smaller sub-units, and it can transfer nearly instantaneously and securely from one individual to another via the Internet, circumventing central banks, governments and financial intermediaries. The ability to bypass intermediaries reduces time delays and transaction costs.
In addition to creating a reliable currency, bitcoin has spawned innovations in the financial technology sector since financial contracts can be digitized, stored, verified and transferred instantaneously. Chowdhry said this will result in an open, decentralized public infrastructure for transacting money.
Bitcoin will change how people think about money and will likely disrupt central banks’ role in conducting monetary policy, Chowdhry said. It will also undermine costly money transfer services like Western Union and eliminate the transaction tax levied by intermediaries like MasterCard, Visa and PayPal. In addition, it will remove lengthy and costly notary and escrow services.
Industries such as banking, law and finance will transform due to bitcoin.
The poor will benefit from greater financial and social inclusion in the future.
“I can barely think of another innovation in economic and finance in the last several decades whose influence surpasses the welfare increases that will be engendered by Satoshi Nakamoto’s brilliant, path-breaking invention.”
While Nakamoto cannot be contacted, Chowdhry said that does not mean he does not exist. He exists online. Nakamoto has anonymously communicated with the computer science and cryptographic community. If he accepts the award, he will be able to communicate his acceptance.
While Nakamoto will not likely appear in person to accept the award, Chowdhry said he will accept it for him at the ceremony in Stockholm, Sweden in December.
Nakamoto could choose to send an acceptance speech which Chowdhry said he would be happy to present on his behalf.
Chowdhry said he is not looking to get the prize money by accepting the award on Nakamoto’s behalf. He said the Nobel committee can buy bitcoins from an exchange and transfer it to him. He noted there is a known bitcoin address for Nakamoto from an early transaction.
Images from Shutterstock, UCLA & Wikimedia.