Dr. Nouriel Roubini, aka Dr. Doom, has posted his prepared testimony in advance of the Senate Banking Committee Hearing scheduled to take place tomorrow (October 11, 2018).
As one may expect, Roubini has not held back one iota. His testimony is entitled; “Crypto is the Mother of All Scams and (Now Busted) Bubbles While Blockchain Is The Most Over-Hyped Technology Ever, No Better than a Spreadsheet/Database.”
Roubini, a prominent Professor of Economics at the Stern School of Business at NYU and an expert in international financial markets as well as financial bubbles, eviscerates crypto and the underpinning technology that some proponents describe as more important than the internet.
The testimony states:
“It is clear by now that Bitcoin and other cryptocurrencies represent the mother of all bubbles … Scammers, swindlers, criminals, charlatans, insider whales and carnival barkers (all conflicted insiders) tapped into clueless retail investors’ FOMO (“fear of missing out”), and took them for a ride selling them and dumping on them scammy crappy assets at the peak that then went into a bust and crash – in a matter of months – like you have not seen in any history of financial bubbles.”
Even better, Roubini hammers cryptocurrency by calling it less valuable than excrement;
“Actually calling this useless vaporware garbage a “shitcoin” is a grave insult to manure that is a most useful, precious and productive good as a fertilizer in agriculture.”
He says the crypto-apocalypse is the mother and father of all bubbles – unparalleled in its collapse.
Roubini is a believer in Fintech, the more plebeian type such as big data and AI. He is of the opinion that innovation in financial services will have nothing to do with blockchain technology and most certainly not cryptocurrencies.
He calls out cryptocurrencies as not scalable, not decentralized, and not secure .
“Whichever way you try to slice it blockchain leads to centralization and lack of security. And this fundamental problem when you try scalability will never be resolved. Thus, no decentralized blockchain will ever be able to achieve scalability that is critical to make it useful for large scale financial or any other type of transactions. Indeed, even those blockchains that do not have any scalability, like Bitcoin and those based on PoW, have massive mining concentration problems. The nature of mining implies that any form of mining has economies of scale that require massive scale – think of the massive energy hogging mining factories of crypto-land – and lead to massive oligopolistic concentration of power and lack of security …. With the centralization of power comes a serious problem of lack of security…”
Wherever you come out on this debate, this is classic Roubini and, most certainly, some of the most memorable Senate testimony in recent history. A must read.