Nouriel Roubini, known as Dr. Doom for his notorious but accurate predictions of bubbles, minced no words when speaking about crypto-currencies.
“Crypto is the mother of all scams,” Roubini said.
Roubini, who is a Professor of Economics and New York University, was testifying in front of the Senate Banking Committee in a hearing entitled: “Exploring the Cryptocurrency and Blockchain Ecosystem.”
“Blockchain is the most overhyped technology ever,” Roubini continued, “It is no better than a glorified database.”
Roubini made both statements in his opening remarks.
Roubini continued in his opening remarks by noting that recent study found that 81% of all recent Initial Coin Offering were scams.
He continued that Bitcoin has fallen by over 70% in 2018, while other crypto-currencies have fallen by 80-95%.
“This entire asset class is literally imploding now. Just yesterday, major crypto-currencies plunged another 10% in a day.”
Even that was mild compared to his next criticism: “These assets are NOT currencies. Calling them crypto-currencies is nonsense. They’re not a means of account, they’re not a means of payment, they’re not a stable store of value.”
Roubini then said that while Bitcoin can handle five transactions per second, Visa can handle 25,000 transactions per second.
“Nobody is using bitcoin for transactions, apart from criminals and terrorists.” Roubini said.
Roubini said crypto-currency is based on a “libertarian utopia” with no central banks, no government, and no corporations, which Roubini called, “utter nonsense.”
Roubini went so far as to say that using crypto-tokens, rather than a technological advancement, would “mean a return to the stone age of barter, even the Flintstones knew better than crypto, as they used clam shells as their one currency.”
But Roubini was hopeful about technology, he said that a financial revolution is occurring in fintech.
“It is based on a combination of AI (artificial intelligence), big data and the internet of things,” Roubini said, “there is no blockchain in fintech.”
Roubini’s pessimism on crypto-currency was contrasted by the optimism shown in the other witness, Peter Van Valkenburg the Director of Research at Coin Center.
Coin Center is an independent non-profit which studies the policy issues surrounding crypto-currency.
“What is bitcoin? It is the first public crypto-currency and it works because of the first public blockchain network. What does bitcoin do? It’s simple. It lets you send and receive value using nothing more than a computer and an internet connection.”
Van Valkenburg said the genius behind Bitcoin is that it was able to cut out any middleman when sending and receiving currency.
“The lack of any corporation in between means that Bitcoin is the world’s first public digital payments infrastructure. By public, I simply mean available to all and not owned by any single entity.” Van Valkenburg said.