Nouriel Roubini Slams Blockchain And Crypto Before Senate – Industry Reacts

Investing, News, Regulation | October 11, 2018 By:

Economist Nouriel Roubini and CoinCenter director of research Peter Van Valkenburg testified before the US Senate Committee on Banking, Housing and Urban Affairs today to discuss the cryptocurrency and blockchain ecosystem.

Roubini, nicknamed “Doctor Doom” for his accurate call on the 2008 financial crisis, called cryptocurrency “the mother or father of all scams and bubbles,” and dubbing blockchain as a “glorified database.” He also claimed that no one uses these technologies besides criminals and those who plot terrorist acts, stating that blockchain creates environmental damage, that crypto is not scalable, and that decentralization is a farce.

Needless to say, Van Valkenburg was a bit more upbeat on prospects.

The blockchain and cryptocurrency industry were outraged by Roubini’s comments. Some reactions:

Ken Nguyen, CEO of Republic, the AngelList & NEO Global Capital-backed crowdfunding platform for startups and blockchain projects:

“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:

“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:

“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, a decentralized smart-web operating system:

“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.”

Ken Lang, ndau Collective Member, digital currency designed and optimized for a long-term store of value:

“Roubini’s testimony and prepared remarks offer an incorrect characterization of the cryptocurrency and blockchain space. Some of his critiques are legitimate – no one is disputing that volatility is presents a barrier to cryptocurrencies becoming a true store of value. However, he ignores the potential for the industry to adapt and evolve over time. We can now create solutions by approaching economics and monetary supply in a way traditional economists have not considered before, because they didn’t have blockchain technology to solve their issues with.

What we’re creating at ndau is in response to some of the shortcomings that Roubini has outlined. Blockchain allows us to build an ecosystem using the properties of blockchain tech to create accountable governance and hopefully, price stability. Cryptocurrencies can vary in their use cases – it’s possible to have one cryptocurrency that’s a better unit of account than the dollar, one that’s a better store of long term value, and another that’s a superior means of payment. All three of these concepts can work together to exceed the utility of a fiat currency.  It will take time to get this right, but judging a new technology so soon is foolish when you look at the long history of the many such disruptions.”

Salman Habib, CEO & Co-Founder of Hellofriend, a blockchain-based social platform that incentivizes in-person interactions:

“We are in a battle between innovation and legislation. There are naysayers in the space who have vested interests in the existing financial systems and innovative new players that are challenging existing rules in productive ways. Blockchain technology is at the same critical point in adoption that television, film, and internet once were. There is no escaping the fact that there are severe challenges that exist to mainstream adoption, but one cannot dismiss the revolutionary nature of this technology. We have to focus on real use cases and recognize its long-term potential.”

Kalin Stoyanchev, Project Lead and Head of Blockchain at RNDR, a blockchain-based graphics rendering platform:

“Blockchain technology is much more than just a “glorified database” – it provides the ultimate luxury for users, companies, and institutions – trust. Centralized infrastructures are easy to use and widespread today, however, they lack the element of indisputable and consensus driven trust in the overall system. Blockchain is still in its early days – naturally, there will be some scams and bubbles here and there as there were in the early internet days, or really any young industry. However, as a whole, blockchain represents the next revolution in the tech space, and can even help alleviate issues surrounding social change, resource allocation, and countless other fields.”