Nouriel Roubini’s skepticism in the lead-up to the crash in 2008 was well placed. He was one of the few voices sounding the alarm over synthetic bonds, which ended up driving the world’s markets to the brink of the abyss. Now Nouriel Roubini has taken a harsh stance on everything crypto, including blockchain.
Nouriel Roubini, Image from US Virtual Embassy Iran
In a recent interview with Naeem Aslam, Nouriel Roubini was vocal on his views towards blockchain and cryptocurrency. He told Mr. Aslam that, “
The whole ICO industry is a scam. People are robbing, raising funds for projects with zero value.”
Nouriel Roubini was also hard on blockchain, which he views as a dead end technology that will amount to nothing.
Many people who respect Nouriel Roubini, but are positive on blockchain and cryptos, have been put off by his remarks. There is little doubt that his extremely negative stance towards all things cryptocurrency and blockchain is probably well off the mark. The incredible amount of development money entering the sector is proof of widespread interest, but blockchain is also getting support from forward thinking governments as well.
Nouriel Roubini is Likely Wrong on Blockchain
There is no doubt that blockchain is new, unproven, and in the beginning phases of its commercialization as a technology. While blockchain entered use around a decade ago with Bitcoin, it really didn’t enter the global arena until the last two years. The reaction it has gotten in a short space of time is tremendous. There are numerous events that show that governments and corporations are taking blockchain development seriously.
When asked about banks and blockchain, Nouriel Roubini had this to say,
“There is nothing new or unique about banks testing new technologies. They test thousands of new technologies every day.”, and continued, “If a bank throws a small amount of capital on testing a new technology, it doesn’t mean they are going to adopt it.”
Nouriel Roubini’s view of blockchain is clearly limited. Many major banks are not only “testing” blockchain technology, they are creating patented systems to handle numerous tasks with blockchain. This is a lot bigger than a fad, and Nouriel Roubini will probably find himself in an increasingly isolated position if he sticks to a view of blockchain that is now meaningfully detached from objective realty.
Governments LOVE Blockchain
One of Nouriel Roubini’s constant criticisms of blockchain and cryptos is scalability. There is little doubt that Bitcoin won’t be the platform that completely replaces the existing global financial system. Bitcoin is slow, cumbersome, and uses a ton of electrical power. It was also the first blockchain platform to be widely used, and probably wasn’t designed to take over the world.
Now there are billions of dollars entering the blockchain development space, and nations like China, South Korea and Hong Kong are working to get the edge in blockchain technology. The government of South Korea has more than 4 billion USD earmarked for various blockchain development programs, and they are actively encouraging developers to find new ways to use the technology.
China has also been on a blockchain investment spree. Today there are more registered companies in China that have blockchain in their name than anywhere else. They will benefit from development programs like the one that the city of Nanjing has created, which will pump more than a billion USD into local blockchain companies.
Not Going to Pop Anytime Soon
Like any new technology, there is probably a little froth in the blockchain space. Most startups burn money no matter what field they are in, and blockchain developers will probably be the same. This isn’t a criticism of blockchain, just the facts of how new ideas are brought to market.
Blockchain development isn’t going anywhere, and in a decade’s time it will likely be a widely used technology. The fate of the first crop of crypto is less certain, and the cozy relationship that blockchain enjoys with governments doesn’t extend to decentralized currencies. If Nouriel Roubini is going to keep bashing something, he should probably stick to Bitcoin.