As every year, October comes with the Nobel Prize nomination ceremony. Not many people know about this event and there are even fewer who knows its significance. In general, the Oscars or the Golden Globe are the most watched television events each year, but this is only because marketing produces a lot of money and people stopped focusing on important things. Movies, scandals and other stuff like these, are more important nowadays than science, literature or economics.
Therefore, this year, the nominations of the Nobel Prize have started last Monday, on 05.10.2020, and the last prize will be announced on Monday, on 12.10.2020.
What happens at the Nobel Prize?
A committee of representatives from Sweden and Norway elects those who have had the best results in science, literature, economics. They also offer the Nobel Prize for peace. Usually, people go to Oslo or Stockholm to personally receive the prize, but this year, due to the pandemic, the prizes will be awarded during a digital ceremony. Many events will be cancelled and those that are still on, will gather a very small audience. This year comes with a major change, the Nobel committee announced that each prize will be bigger. In the past, the amount was 9 million Swedish krona, but from this year, the prize will be 10 million Swedish krona, which is approximately $112,000.
Who is Alfred Nobel?
As the name suggests, the Nobel Prize comes from Alfred Nobel. According to Wikipedia, Alfred Nobel, in full Alfred Bernhard Nobel, (born October 21, 1833, Stockholm, Sweden—died December 10, 1896, San Remo, Italy), Swedish chemist, engineer, and industrialist who invented dynamite and other more powerful explosives and who also founded the Nobel Prizes.
Crypto and the Nobel Prize
A former Nobel laureate for economics, Eric Maskin, who is a professor at Harvard, said that money owned by banks will better survive than cryptocurrencies. What he means is that central bank digital currencies or CBDC are stronger and more powerful than cryptocurrencies and will driven them out. Still, he also mentioned that the blockchain technology brings many benefits to the economic system. Maskin considers that this is one way economic growth can be ensured, because market will be expanded and other possibilities are born.
The only thing that I did not understand is why he considers that central banks have such an important role. I understand that their main role is important and crucial, in the same time, in managing money. This is indeed true, because central banks managed to avoid another deep crisis in 2008, while they failed to prevent it in the 1930s.
I think that instead of loaning money to people and companies, central banks could choose crowdfunding, but in a wise way. I've personally seen on the Internet hundreds of ideas that are funded and the results were almost nil. If banks provide funding for all projects, then they will probably run out of money, which is not good. Also, when a bank offers money for a project, the bank should come with the expertise too.
The problem with cryptocurrencies is the price itself. It is too volatile and nobody knows what to except. Insecurity brings more insecurity and problems. In short, you have some money, but in a couple if hours you don't have them anymore (or you have even more).
One of the good things regarding cryptocurrencies is the blockchain technology. Using this money can be easily transferred, cheaply, securely and quickly. But central banks can also choose to use this technology in order to manage the CBDC. It's a story with a very uncertain future.
I will closely watch the development of this.
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