Over the years renowned Turkish-American economist Nouriel Roubini has been tagged as a blockchain and cryptocurrency skeptic, so it was something of a surprise to see him handed a 25-minute opening speaker slot at the recent Blockshow Americas event in Vegas.
Such positions are rarely handed to critics.
As “Dr. Doom,” a nickname attributed to him upon predicting the global economic crisis in 2008, took to the stage there was no doubt that the following 25 minutes or so was going to be interesting.
Let’s say that Nouriel Roubini did not disappoint.
The mother of all bubbles
After thanking the organizers for inviting him, the IMF and World Bank consultant wasted no time in getting to the point of his argument.
“Bitcoin and cryptocurrencies are the mother and father of all bubbles, a bubble that has already burst…”
Nouriel Roubini’s citation of a recent highly publicised study that found that over 80 percent of Initial Coin Offerings (ICOs) are “scams” was next on his agenda, followed by a claim that “blockchain is probably one of the most overhyped technologies ever… (with) the amount of hype vastly exceeding what are going to be the applications of it.”
During his 25 minute talk, Nouriel Roubini also claimed that –
The term ‘cryptocurrency’ is a misnomer
“These are neither money nor currencies,” he claimed, with no cryptocurrency seeing consistent use as a unit of account.
Roubini also claimed that cryptocurrencies are not viable means of payment, with minimal transactions taking place in crypto in comparison to fiat, and that crypto isn’t a reliable store of value due to its volatility.
Central banks have done more to stabilize economies than hurt them
On the matter of central banks and the role they have played in stabilizing economies, Nouriel Roubini claims that “There is also a lot of misunderstanding of financial crises…(with) the conventional wisdom in this industry that…financial crises are caused by reckless central banks who are printing money.”
“The reality is that asset and credit bubbles inflation/deflation were occurring even before central banks were even created, and they were actually more violent, more virulent and more severe before central banks were created…(which) were created to stabilize crises and stabilize prices…since we have created fiat currencies…the extent of these financial crises are much less than before.”
The most overhyped technology ever
When discussing blockchain technology, Nouriel Roubini claimed that it was “the most overhyped technology ever,” claiming that traditional financial institutions, at the behest of shareholders, have been forced into conducting blockchain trials, thousands of which have apparently failed, proving that the technology is “total nonsense.”
“And why is it total nonsense? It’s because there is no standard protocol like there was with the Internet. There’s no HTML, no HTTP. There’s total chaos- total incompatible systems of one sort or another,” Roubini claimed.
“Why would any firm anywhere in the world want to put…his spreadsheet on a public ledger…on hundreds of thousands of individual computers?”
“The reality is the only systems that are going to work are going to be private rather than public, permissioned rather than permissionless, and based on a trustee…approving these transactions.”
“But even if you have a private permissioned blockchain, what is it? It’s just a glorified spreadsheet.”
“Enterprise DLT is just doing a bigger spreadsheet, and at the end of the day…it’s like the old system.”
Lover of all things crypto, blockchain and AI, professional tech scribe & part of the editorial team at Crypto Disrupt.