Nouriel Roubini, NYU economics professor has caught the financial world’s attention first when he predicted the worldwide recession to occur in 2008 in as early as 2006 and again when he called Bitcoin “the mother or father of all scams” and blockchain “the most overhyped and least useful technology in human history.” He unofficially dubbed as Dr. Doom in financial circles. In his latest article The Big Blockchain Lie, he attacked the promoters of distributed ledger technology (DLT), the umbrella term for the technology behind most cryptocurrencies.
Roubini believes that “blockchain is nothing more than a glorified spreadsheet.” He also remarked that it has been misused to represent an ideology that treats governments, central banks, and other centralized institutions as “evil concentrations of power” by a few self-serving white men pretending to be messiahs for the world’s impoverished, marginalized, and unbanked masses.” Contrary to that statement, there are substantially a high number of Asians and men of colour representing blockchain technology as there are more immigrant developers in Silicon Valley than there are white male developers. In fact, cryptocurrencies are very popular in Asia countries like South Korea, Japan, and Singapore, as well as Africa, considered the most impoverished continent in the globe.
Bitcoin.com reports that the economist actually makes some valid points about enterprise blockchain solutions flaunted by banks, governments, and big corporations not being decentralized as such institutions are not interested in transparency or as he explains it, “There is no institution under the sun that would put its balance sheet or register of transactions, trades, and interactions with clients and suppliers on public decentralized peer-to-peer permissionless ledgers.”
Furthermore, he notes that when enterprise blockchain solutions or DLT are actually being used by established organizations, they have nothing to do with blockchain. They are permissioned, private, and centralized, recorded on just a few ledgers. And regarding DLT solutions being talked about in the media, he explains that whenever there are trials being piloted by these organizations, “it has either been thrown in the trash bin or turned into a private permissioned database that is nothing more than an Excel spreadsheet or a database with a misleading name.”
Meanwhile, multinational IT company IBM continues to explore blockchain solutions on businesses. They are investing billions of dollars looking into blockchain integration on IoT, supply chain management, as well as banking solutions.
With IBM’s own blockchain platform fully operational, they have been able to provide a variety of industries with a blockchain-based solution for their specific needs which led them to a number of remarkable partnerships worldwide.
It needs to be noted that IBM isn’t alone in this race of big corporations in the crypto market. Oracle and Microsoft are also offering blockchain-as-a-service to companies hoping to deploy the distributed ledger technology without the expenses associated with embracing the technology in-house.
At this point, we couldn’t tell if Roubini’s predictions will hold true. However, discrediting an entire industry and technology like cryptocurrency and DLT is also a big financial risk. Even if he was right about Bitcoin being the mother of all bubbles, that doesn’t mean the technology isn’t useful. The Dot Com Bubble crashed in the early 2000s yet Amazon, EBay, and Priceline are still here and the internet is still considered very useful to society.