Yesterday, UCLA Professor of Finance, Bhagwan Chowdhry tweeted his nomination of Bitcoin inventor Satoshi Nakamoto for the 2016 Nobel Memorial Prize in Economic Sciences. He then proceeded to publish an article in the Huffington Post explaining his thoughts.
The Nobel Memorial Prize in Economic Sciences was established by Sweden's central bank, Sveriges Riksbank, in Memory of Nobel Prize founder Alfred Nobel. Although the Prize is not officially a Nobel Prize, the Royal Swedish Academy of Sciences has been awarding it alongside the official prizes, according to the same principles, since 1969.
The process of choosing the Laureates for the 2016 award started in September, when confidential nomination forms were sent out to approximately 3,000 selected individuals, including professors from universities all over the world.
Nomination is by invitation only, and according to Professor Chowdhry, this was the first time the committee has invited him to do so.
The selection process starts early in the season, they have yet to hold the Award Ceremony for 2015’s winner. The deadline for nomination submissions is typically in January, with the award ceremony following in December, so the bitcoin community will have to wait a year before they know if their secretive founder won the prize.
Professor Chowdhry explained the reasons behind his decision in great detail, even though he admitted that no one really knows who Satoshi Nakamoto is nor how exactly to contact him.
“I am completely serious in suggesting Satoshi Nakamoto for the Prize. The invention of bitcoin -- a digital currency -- is nothing short of revolutionary.”
- Professor Chowdhry
The Professor understands that his choice is unconventional, unlike the usual suspects Paul Romer from NYU, University of Chicago's Doug Diamond, or MIT's Steve Ross, for their influential work in the 1970s and '80s. However, once he started thinking about ideas that “have a disruptive influence,” Chowdhry states that the name of Bitcoin’s inventor “jumped up in my consciousness and I have not been able to get it out of my mind since then.”
“Not only will Satoshi Nakamoto's contribution change the way we think about money, it is likely to upend the role central banks play in conducting monetary policy, destroy high-cost money transfer services such as Western Union, eliminate the 2-4% transactions tax imposed by intermediaries such as Visa, MasterCard and Paypal, eliminate the time-consuming and expensive notary and escrow services and indeed transform the landscape of legal contracts completely.”
This appreciation for the social ideals that Bitcoin promotes is nothing new to Professor Chowdhry. In 2010, he initiated a campaign called Financial Access at Birth (FAB), a social and economic innovation attempting to bring formal financial access to the world's poor.
The FAB program aims to create an electronic bank account, with a balance of US$100, for every newborn child in the world. Children will be required to keep the $100 in their account until age 16, at which time the principal and interest could be enough to start a small business, or pay for higher education.
Before Professor Chowdhry nominated Nakamoto, he had already expressed his opinion that Bitcoin can help FAB. “Give one #Bitcoin to every child at birth,” he stated on Twitter.
Chowdhry has been consistently tweeting about the digital currency over the past year, along with writing articles that both hail Bitcoin’s attributes and called for easing regulations aimed at it.
“When we discourage innovation and proliferation of convenient, secure, and costless digital alternatives to money for fear of money-laundering and related crime, we are continuing to disenfranchise nearly 3 billion poor people in the world who would benefit the most from the financial inclusion that frictionless digital money and payments will generate for them.”
However, there are some in the Bitcoin community who find winning the Nobel Prize in Economic Sciences less of an accomplishment than Chowdhry.
This particular award has detractors due in no small part to their extremely low opinion of Paul Krugman, who won the award in 2008.
Krugman is the NY Times columnist famous for predicting that “the internet’s impact on the economy could grow no larger than of the fax machine,” because “people have nothing to say to each other.”
Among this Keynesian economists proposed economic relief plans are such gems as “faking an alien attack to fix the economy” and minting a Trillion dollar coin to pay off debts with, stating that “it can do no harm at all.”
Perhaps it's not too late to salvage the awards’ good name. Historically, Laureates came from diverse backgrounds and mindsets. If Satoshi Nakamoto were to win, he’d be joining John F. Nash Jr., Milton Friedman, and a founding father of Austrian economics, Friedrich August von Hayek.
The Bitcoin economic model, featuring a finite, predictable money supply, modeled after the mining of precious metals, is strongly influenced by the Austrian economic school. As much as recent years have shown a steady leaning towards progressive, Keynesian-minded Laureates, a new generation of judges, including Chowdhry, may make selections more varied.