Nouriel Roubini has not ceased his criticisms of distributed ledger technology. In his latest tirade, he has referred to blockchain as “nothing more than a glorified spreadsheet” in a Project Syndicate article on October 15th. Many might balk at the sheer audacity of such a statement, ignoring the billions of dollars invested in the industry by governments and corporations, the proliferation of cryptocurrencies, and the multiple practical applications of DLT.
However, there is little need for incredulity. Nouriel Roubini has a list of credentials which explain his ‘arguments’ against DLT. He has worked for the International Monetary Fund, the Federal Reserve, the Clinton administration, and the World Bank.
Nouriel Roubini – sheer and utter hypocrisy
What was notable about Roubini’s rant was that he used the arguments most typically leveled against the fiat system and turned them towards the cryptocurrency industry. He used a very common subversive tactic, which is to attack the enemy with the very same arguments that you are guilty of.
He claims that Bitcoin and other cryptocurrencies are centralized so that the wealth remains in the hands of the few, indicating that – “wealth in the crypto universe is even more concentrated than it is in North Korea.” He follows this up by stating how financially fair the USA is in comparison. The problem with this type of thinly veiled propaganda is that it ignores the fact that the current fiat wealth system is obscenely centralized, with the USA regarded as by far the leaders concerning wealth polarization.
Even official reports from the Federal Reserve are indicating how wealthier families are getting wealthier in terms of the overall percentage share of wealth. What this means is that despite technological and social progress, wealthy families are still gaining a greater proportion of the existing wealth. In other words, the trend of wealth centralization is increasing in the current system. Further, it is estimated that the world’s 500 largest industrial corporations control 25% of the world’s wealth. Bitcoin was created primarily to battle this trend and has thus far been remarkably effective.
Roubini also noted the apparent discrimination in the blockchain industry, with a lack of women and minorities. But this imbalance is not particular to the blockchain industry. Just 24 CEOs from the Fortune 500 companies are female, according to CNBC, a figure down from last year.
Most brazen was his claim that blockchain is governed by a group of cartels, and that is was strange that people were choosing these blockchain ‘cartels’ instead of apparently trustworthy banks and financial institutions. The public is now aware of the relationships between national governments, large corporations, and central banks, and are not in any uncertainty about which side is run by cartels. One side consists of open source code that is public, often featuring an anonymous ledger where names are not linked to wallets. The other side consists of a world reserve currency (USD) where every financial transaction is monitored, and the people have no say whatsoever in the rules and regulations that get passed. If they don’t follow the rules and regulations they never agreed to, they get thrown in prison.
There are too many falsities to go into in detail. Roubini has also claimed that Bitcoin transaction fees are USD 60. This is just a lie. They are closer to USD .10, which anybody with a Lightning Network wallet can easily attest to. Fees are publicly verifiable on the blockchain, indicating that Nouriel Roubini has no idea what he is talking about and simply wants to bash the technology.
Accidentally valid points made by Nouriel Roubini
Nouriel Roubini does, to his credit, make a few valid points on the side while he is trying to sabotage the industry using outright lies and misdirection. There is definitely greed in the blockchain industry, and the area is rife with scams and fraud. Also, many of the so-called decentralized ledgers do end up being centralized in some fashion. Bitcoin mining is centralized in China, and this is a cause for concern.
However, to equate it to the mammoth centralization of the financial industrial complex and the USD 1.2 Quadrillion derivative market is misleading, to say the least. There is a proliferation of cryptocurrencies and ledgers which people have the option of selecting, as opposed to being born into a particular fiat system intrinsically tied to a money printing central bank, laden with the debt of prior generations.
These sort of attacks simply help to further the demise of the banking industry. It is obvious to see why Roubini is so against DLT, as the technology would essentially render his positions redundant, not to mention reduce his salary as an obvious beneficiary of the current economic structure. Charlie Munger, Warren Buffet, and Robert Schiller have also unleashed a number of transparent assaults on DLT, using weak arguments as a thin veneer to cover their obvious biases and conflicts of interest. Thankfully, their influence is lessening as people continue to work with DLT to the betterment of wider society in general.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.