Economist Nouriel Roubini Thrashes Cryptocurrencies
This Thursday, economist Nouriel Roubini added more paragraphs in his criticism of digital currencies. Best known for predicting the 2008 financial crises, he said that virtual coins create chaos and confusion in the world of payments.
At the Fluidity Summit in Brooklyn, he said, “It’s totally inefficient. It’s never going to work. You are going to the world of the Flintstones to buy any good you have to exchange; you go back to the Stone Age of bartering.”
The economist became popular after his prediction about the financial crises came true and since then has been known as Dr. Doom. He stressed on the discomfort a user faces whenever he tries to buy something as digital currencies are highly volatile. It is evident in the case of bitcoin which gained 1,300 percent of its value in 2017 but has lost almost half of the gains in the first quarter of 2018.
Although Roubini believes that digital currencies will not be a part of the future yet, he is still backing up the blockchain technology and digital payments platforms like Venmo, Alipay, Square, and Paypal.
He added, “I’m affirmative on that significant disruption, but most of this has nothing to do with blockchain, nothing to do with cryptocurrency.
Moreover, Roubini had the harshest comments against Initial Coin Offerings or ICOs as he called them “mostly scams.”
He also gave the example of research released by Satis Group, an ICO advisory firm in which it was reported that 81 percent of the ICOs were created by charlatans, swindlers and con artists for duping innocent investors.
Currently, Roubini serves as a professor at New York University’s Stern School of Business. On Thursday he had a debate with Joseph Lubin, -founder of Ethereum and CEO of ConsenSys. It should be noted that Ethereum is the second largest digital currency by market capitalization, which is about $74 billion, after bitcoin.
Lubin informed that blockchain is the basic foundation upon which ethereum and bitcoin operate, but unlike bitcoin, ethereum uses smart contracts to secure the transactions. He stated that self-regulation is necessary for the crypto space and his company ConsenSys is trying to develop a database that uses “peer pressure” to force projects in self- disclosing their information.
Roubini, who also worked as a senior advisor to Treasury Secretary Tim Geithner was not settled with Lubin’s narrative. He said, “The reality is the industry does not self-regulate. They’re Ponzi schemes. If you wanted to self-regulate, you’d stop this, and you’re doing nothing about it.”
He has always been known as a crypto critic, and that was more solidified after his column named blockchain “one of the most overhyped technologies ever.”
Bitcoin was one of the initial uses of the blockchain technology which is a distrusted ledger that is technically tamper-proof. The coins are produced by miners who continuously solve complex mathematical puzzles with sophisticated computing hardware.
After the underperformance this year, many experts have voiced against the technology, but there are some that believe in bitcoin surpassing the $20,000 mark by the end of the year.