Crypto Execs React to Dr. Roubini’s ‘Damning’ and ‘Disheartening’ Senate Hearing
Dr. Nouriel Roubini, Professor of Economics at the Stern School of Business at New York University, has in the recent days earned the nickname of ‘Doctor Doom’ amongst the crypto community. His nickname is as a result of his constant ‘attacks’ on cryptocurrencies and blockchain technology.
In one of his recent tweets Professor Roubini took a jab at Bitcoin (BTC) and its recent volatility as follows:
Bull run? Crypto-currencies are bust. BTC down 70% this year. Other major ones down 80%. The rest down 95%. Major cryptos down another 10% yesterday alone. In which La La Land do these Crypto Lunatics live? They can’t think as they lost 90% in less than a year. Wake up!
Another tweet would dismiss the Lighting Network and Segwit advancements of Bitcoin:
Total vaporware. Scalability achieved via effective centralization and lack of security. Impossible trinity. Always peddling vaporware like 1000s of other shitcoins. Who is using your crappy coin and for what? Almost no one. It is just traded speculative for other shitcoins
Senate Hearing, 11th October
Earlier on today, Dr. Roubini gave his testimony to the US Senate Committee on Banking, Housing and Urban Development, on the state of cryptocurrencies and the blockchain industry. His testimony has since been made available online.
In the well researched analysis of the Crypto and Blockchain Industry, Dr Roubini’s statements can be summarized as follows:
Crypto is ‘the mother of all scams’ and a bubble
Blockchain is the most over-hyped technology ever, and no better than a spreadsheet/database
Crypto is not money and not scalable
Supply of crypto is massive
Crypto has no intrinsic value
Crypto can never replace fiat
The real revolution is in FinTech and not blockchain technology
Vitalik Buterin is inconsistent and has not provided a scaling solution for Ethereum
Cryptocurrencies are only used by criminals and terrorists
Cryptocurrencies are not secure
There is no true decentralization in crypto and blockchain
Crypto investing can not be compared with the Internet era
81% of ICOs are scams and run by Cartels
Crypto is manipulated by pump and dump schemes
Energy consumption of crypto is an environmental disaster
Crypto-land is corrupt, full of con-men and scammers
As earlier mentioned, his full testimony is available online in pdf format. The full committee hearing can also be viewed on the Senate.gov website.
Reaction by Crypto Execs
Since Dr. Roubini made his testimony to the Senate Committe, plenty of cryptocurrency executives have expressed their opinion that generally debunk his comments.
Ken Nguyen, CEO of Republic, the AngelList & NEO Global Capital-backed crowdfunding platform for startups and blockchain projects, had this to say:
Roubini’s prepared remarks argue that cryptocurrencies are not a viable unit of account, means of payment or store of value. He also stated elsewhere that Bitcoin can’t scale and is not decentralized. I generally disagree, and find these damning statements mostly good for their entertainment value, but not particularly thoughtful.
Bitcoin and ether are very much viable means of payment, and their “stored value” characteristics are not disputed by market participants or regulators. Any deficiency to date with respect to scalability or absolute decentralization can and will be improved over time. CoinCenter’s viewpoints are more nuanced and balanced, but that’s not what gets the attention these days.
Marshall Hayner, Founder and CEO of Metal, the platform behind consumer grade applications for blockchain-based payments, investing, and rewards added the following:
Dr. Roubini’s presentation was disheartening to witness, and his statistics were majorly taken out of context. His comments on prices dropping 80% instills an unnecessary fear in individuals looking to enter the crypto fray, and raises alarms unjustly for those newly invested in the ecosystem.
Those of us who have been attuned to the maturation of the industry understand that dips in the market are temporary — and certainly do not negate the lasting disruptive nature of cryptocurrencies as a whole. Dr. Roubini’s testimony today was irresponsible and rooted entirely in his own distrust of emerging technology rather than fact; most of his criticisms, particularly about stability and scalability, are currently being remedied by many well-known companies.
I applaud our federal legislators for making strides towards formally exploring what a blockchain ecosystem would look like in the United States, however it is critical that they seek input actual industry experts, and not get distracted by doomsayers on the wrong side of history.
Mick Hagen, CEO of Mainframe, the blockchain-powered network enabling censorship-resistant data transfer, file store, and transaction management, had similar views:
Dr. Roubini’s comments today, specifically that there is no potential for institutional integration of blockchain technology, are completely unjustified. This year we’ve seen exploding interest from legacy financial institutions to find ways to work with, not against, adoption of blockchain’s immutable ledger.
Roubini’s recommendation that financial services rely on permissioned databases — technology from the 80s — reflects a school of thought that places strangleholds around innovation and competitive advantage in the global economy.
Furthermore, his arguments that the current ecosystem isn’t decentralized at all because of a hotbed of mining efforts led by other countries (while misleading) highlights the pressing need to create a friendlier regulatory environment in the United States for participation in the development of decentralized technology.
Zach Warsavage, North American Strategist of Elastos, the decentralized smart-web operating system, urged Congress to do its own research on Blockchain technology:
Emboldened by Dr. Roubini’s fear-mongering testimony, Senator Doug Jones questioned the dangers that come with blockchain technology and cryptocurrencies, when it comes to money laundering, human trafficking, and more. Although these are the questions that need to be asked and answered, one thing people frequently fail to realize is that all transactions are tracked and recorded on a public ledger — the last thing criminals want.
Congress needs some serious education on this new technology, and fast, before other countries take the lead on an industry that will not only make the vast majority of our processes and industries more efficient, but will also create jobs, grow the economy, and become a global mechanism of trust. It is time for the United States to lead on blockchain — not fear it.
What are your thoughts on Professor Roubini’s testimony to the US Senate Committee? Do you think he is right? Please let us know in the comment section below.