June 18, 2021: Satoshi Nobel Prize🎖️🏆
Setting odds on who will be the first cryptocurrency thinker awarded the honor
It’s nice that people are finally picking up on our call for Satoshi Nakamoto to win the Nobel Prize.
Let’s break this down though, will Satoshi actually be the first cryptocurrency thinker to win a Nobel Prize? Possibly, but there’s some steep hurdles. We handicap it here.
WEN
One thing to remember is that the Nobel Prize often has a very large lag between when the individuals are active and when they are awarded. We’re not privy to the inside baseball involved, but it appears to be a bit of a lifetime achievement award for the cool kids.
Of the most recent recipients, all had a very long career behind them. Richard Thaler’s lifetime of work was finally recognized in 2017, when he was in his early 70s. Paul Romer was in his early 60s in 2018. Paul Milgrom and Robert Wilson in 2020 were early 70s and 80s respectively.
Everybody knows no economist can do productive work at that age. The prestigious Bourbaki math society expels members when they turn 50. So if we’re going to handicap the timeframe, we’d have to assume Sweden won’t get around to awarding the current crop of crypto thinkers for at least a few decades.
So let’s toss out some numbers to handicap the timeframe for the first “crypto” Nobel prize recipient. For all this we presume cryptocurrencies continue to exist with meaningful adoption over this timeframe, because otherwise the odds will fall to zero:
By 2030: 20 to 1 odds
By 2040: 3 to 1 odds
By 2050: better than 1 to 1
A bit aggressive? Well, so was our suggestion that Satoshi Nakamoto be nominated, but that’s become conventional thinking.
Our back of the envelope math goes like this. For this decade, most prizes will be going to people for severely lagging achievements, probably a bell curve distribution around a mean of 25 years. Probably 7-8 of the 9 remaining prizes between 2021 and 2029 will be flushing out prizes to people who did their most notable work last century, leaving one or two for a more “out-of-the-box” clickbait. It’s entirely possible such a prize is for a cryptocurrency influencer if adoption continues picking up steam, maybe even odds, so we’re around maybe 20 to 1 odds overall for this decade.
We can gauge future decades by looking at priors from existing recipients. 2019 recipient Abhijit Banerjee weighed in on cryptocurrencies negatively, 2018 recipient Paul Romer weighed in positively, and 2017 recipient Richard Thaler weighed in negatively. We couldn’t find statements from 2020 winners, so let’s take a ratio of about 2:1 pro/con attitude cryptocurrencies - a rather conservative ratio under our previous assumption crypto survives this timeframe.
At this rate, we might expect about 10 pro-cryptocurrency economists to win over the next 30 years. This just then becomes a function of smoothing out the timing. Who did their research during an era where cryptocurrency use was widespread? The odds that a pro-cryptocurrency economist wins in 2049 who doesn’t have some research based on widely available blockchain data in their lifetime? Difficult to imagine.
WHO
There’s surely going to be some quibbling over definitions as to what constitutes a “crypto” Nobel Prize. You might give the honors to Paul Krugman, who won in 2008 and has a proud tradition of engaging with crypto Twitter (a notable choice of medium given his predictions about the internet). Or might you consider Thaler, who weighed in positively?
For our purposes, we’re interested in considering people who are specifically notable within their career for contributions to cryptocurrency before they receive a prize. As we go through and handicap a few names, it will be more clear. For all our odds, we’re putting the odds that they are the first notable cryptocurrency influencer to win the prize. All could win at some point, but who starts the trend?
Satoshi Nakamoto: 10 to 1
The argument that Satoshi gets the first crypto Nobel Prize is pretty clear — it would be improper to honor other cryptocurrency thinkers without recognizing the person who started the entire field.
That said, there’s a lot working against him. As near as we can tell, there has never been a Nobel Prize for Economics awarded to a non-person. It’s usually the Peace Prize that tends toward wildcard type prizes, frequently rewarding organizations instead of people. There’s a pretty strong argument that Satoshi Nakamoto in fact deserves a Peace Prize too, but we’d expect the Peace Prize committee would kick this to Economics. Maybe other fields?
The real challenge is that posthumous nominations are not permitted, and nobody knows if Satoshi Nakamoto is alive or not. Therefore it would be an extraordinary breach of tradition for the committee to award Satoshi Nakamoto the Nobel Prize, and the notoriously conservative Economics committee is not known for such boldness.
Vitalik Buterin: 20 to 1
As a human being capable of accepting the prize, Buterin would clearly have an advantage over Nakamoto. It would also be improper to consider other people within cryptocurrency without recognizing the brainchild of the protocol that ultimately enabled such innovation.
The big problem with him being the first is that he’s too young. Browse the list of Nobel Laureates by age (note these are just the Norwegian prizes, so no Economics) and note how seldom they recognize people under the age of 40 — probably about 5% of prizes total. A Nobel Prize in his lifetime is deserved, but if they make him wait then somebody might swipe the prize before him.
Brian Brooks: 50 to 1
We expect the first Nobel Prize to a cryptocurrency person will follow the template of a Brian Brooks type person, if not him specifically. That is, it will be a more mid-career economist who has made major contributions to cryptocurrency (in his case his policymaking on stablecoins). The committee will then recognize them specifically for some non-cryptocurrency research they publish, so as to not ruffle feathers, but it will be implicitly clear that it’s a pseudo-endorsement of cryptocurrency.
The fact that Brooks is currently at Binance, which is under investigation, would mean he specifically is probably too controversial for a few years. But expect somebody with a similar template. Quite likely somebody involved in development of CBDCs, so as to not to incur the wrath of governments.
Michael Egorov: 250 to 1
As Curve maximalists, we discounted his odds a bit for fairness (he’s probably even more likely than this if he chooses to pursue it). We’d argue that he has better odds than anybody would assume for a few reasons.
For starters, Egorov’s Special and General Invariants are inarguably innovative. Much of cryptocurrency is just transcoding things that already exist in traditional finance. There is really no such thing as stablecoin pools in traditional finance, so not only did Egorov essentailly create them, but he managed to optimize them and present the results as a simple math equation. Economists are always impressed when complex theories are expressed as a beautiful formula (c/f Graham Farmelo’s The Universe Speaks in Numbers).
Better yet, it’s not simply an elegant theory, but also generating verifiable experimental results. The tricrypto pool is a phenomenal breakthrough, being tested in a highly public setting and with large amounts of funds. It’s applying complex experimental math nobody can understand, yet it worked perfectly out of the gate. Its internal price oracle, essentially a byproduct of its construction, is proving so remarkably accurate it could one day render Chainlink obsolete.
The reason we place him is that if Economics and Peace committees defer on crypto, Egorov has a reasonable chance of being recognized Physics committee. This might sound a bit crazy, but hear us out. It probably also sounded a bit crazy when we first started advocating Satoshi Nakamoto win the Nobel Prize.
So here’s our wild idea, and bookmark it because you heard it here first. Within the next 100 years we’ll see the academic fields of Physics and Economics unify into one discipline. They are the exact same thing: applied mathematics for real-world observable phenomena.
If you think it’s crazy, read through Vaclav Smil’s “Energy and Civilization, a History”, a dense but clear accounting of energy usage and its downstream economic effects. The correlation between energy policies and GDP is well understood at this point. The advent of Bitcoin simply provides the clearest data yet on the nexus of energy and economics. People are starting to refer to Bitcoin as a battery, an apt analogy. All we’re missing is an overt push to unify these fields.
This unification may well happen within 100 years. So why not start it today? Such a movement would require some foundational equations for the physics of economics, of which a unified theory of stablecoins and a working tricrypto pool could be critical pieces of the infrastructure. Should this movement pick up steam, who would be a key player? How about a galaxy-brain physics genius…
We’ll Start Our Own Nobel! With Blackjack!
A final note — there’s been some great chatter about publishing scientific papers as NFTs. Academic publishing nowadays is an obscene relic. This would be the first useful application of NFTs we’ve yet seen. For the sake of humanity, somebody needs to build such a platform:
When somebody inevitably takes the time to build an NFT platform for academic papers, you may as well kill two birds with one stone. Launch your own “Nobel” DAO that programmatically accepts votes and issues an annual prize for contributions to cryptocurrency.
The Nobel Economics prize was not established by the official Nobel committee anyway, Sweden just wanted to get in on the action. Nothing would stop anybody from issuing a new prize to honor the memory of Alfred Nobel, until one day people forget it was ever different. Heck, you can even seed this contract with the odds I tossed out above so there’s already a built-in market.
Free alpha for anybody who wants to take it.
So yeah, it’s a wilder than usual Fractal Friday, but we’d be interested in your thoughts? Who else should we add to our list for crypto winners of the Nobel Prize? And where can we place our bets?
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