Nouriel ‘Dr. Doom’ Roubini calling cryptocurrency a scam, the mother of all bubbles, and an even bigger bubble than tulip mania (yes, he did) is no longer something new. Roubini has been vocal in his opposition to both Bitcoin, calling it a scam whose intrinsic value is zero; and the blockchain, terming it unnecessary and capable of being replaced by other technologies. He was recently at it again, this time using two platforms on the same day to call out cryptos, ICOs, and blockchains.
‘Centralization Is The Future, Cryptos Have No Place’
Roubini was one of the panelists at a roundtable discussion on the future of cryptos and their role in the financial system which was held on May 10 in New York. The other panelist was Joseph Lubin, the CEO and founder of blockchain technology company ConsenSys, and also one of the founders of Ethereum. The panel came barely a week after Roubini’s crypto onslaught at the Milken Institute in Los Angeles where he called Bitcoin and its idea of decentralization bulls**t.
While he recognized that the financial industry was in dire need of a revolution, he is of the conviction that cryptos are not the drivers of this revolution. In his mind, centralized systems are the way to go, as they enable authorities to reduce risk and protect consumers through the use of technology.
There is a significant need for a revolution in financial services. But it’ll feature artificial intelligence and big data and payment systems like Alipay and Venmo and Square and PayPal. And those are centralized systems.
He further criticized the principle of decentralization upon which the crypto revolution is premised, terming it utter nonsense. While theoretically, cryptos are decentralized, the reality is that some miners and exchanges have a significant say on the direction that the industry takes, he pointed out.
Lubin was quick to counter these arguments and defend the crypto industry.
We’re not trying to move into a radically decentralized world right away. The internet has transformed society but it didn’t happen instantly, and the internet is broken because there’s no identity construct and there’s no money construct. We’re fixing that.
However, Lubin pursued a more civil discourse than the heated exchange which took place last week between Roubini and some prominent crypto personalities including the CEO of Abra, in which the moderator had to jump in constantly to restore order. Lubin concurred with some of the arguments that Roubini presented, all the while reminding the audience that, cryptocurrency being a nascent industry, there were rough edges that needed to be worked out. One of those issues is the susceptibility of the industry to mining centralization, an issue Roubini is always quick to point out.
‘ICO Charlatans Taking us Back To The Stone Age’
Earlier in the day, Roubini had taken to writing to call out ICOs as retrogressive. In his article for Project Syndicate, he had criticized ICOs as scams which should instead be referred to as ICSs – Initial Coin Scams.
That is precisely where the ICO charlatans would effectively take us – not to the futuristic world of “The Jetsons,” but to the modern Stone Age world of “The Flintstones” where all transactions occur through the barter of different tokens or goods. It is time to recognize their utopian rhetoric for what it is: self-serving nonsense meant to separate credulous investors from their hard-earned savings.
He also referred to a survey by Satis Group, an ICO advisory firm, which found that 81% of ICOs are scams “created by con artists, charlatans, and swindlers looking to take your money and run.” According to the survey, only 8% of ICOs end up being traded on an exchange.