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.
So says American economist Nouriel Roubini in his written testimony for the Hearing on Cryptocurrencies and Blockchain at the US Senate Banking Committee.
Roubini is a Professor at Stern School, NYU, Chairman of Roubini Macro Associates and Co-Founder of Rosa & Roubini. He is also known as Doctor Doom for his role in predicting the 2008 financial crisis.
The financial services industry has been undergoing a revolution, he observes. But the driving force is not blockchain applications such as Bitcoin. Rather, it is artificial intelligence, Big Data and the Internet of Things.
“Already, thousands of real businesses are using these technologies to disrupt every aspect of financial intermediation. Dozens of online payment services – PayPal, Venmo, Square and so forth – have hundreds of millions of daily users in the US. Billions more use similar low cost, efficient digital payment systems all over the world: Alypay and WeChat Pay in China; UPI-based systems in India; M-Pesa in Kenya and Africa,” he writes.
“And financial institutions are making precise lending decisions in seconds rather than weeks, thanks to a wealth of online data on individuals and firms. With time, such data-driven improvements in credit allocation could even eliminate cyclical credit- driven booms and busts.”
Similarly, insurance underwriting, claims assessment and management, and fraud monitoring have all become faster and more precise. And actively managed portfolios are increasingly being replaced by passive robo-advisers, which can perform just as well or better than conflicted, high-fee financial advisers.
“Now, compare this real and ongoing FinTech revolution that has nothing to do with blockchain or cryptocurrencies with the record of blockchain, which has existed for almost a decade, and still has only one failing and imploding application: cryptocurrencies,” he argues.
Somewhat unsurprisingly, the crypto/blockchain community was quick to hit out at Roubini on social media. Leading the way was ShapeShift CEO, Erik Voorhees.
Fiat is the scam, Nouriel. Some of us are tired of it, so we're building an alternative. You're under no obligation to use it. https://t.co/3S6PJTN1QC
— Erik Voorhees (@ErikVoorhees) October 10, 2018