Dr. Doom vs Mr. Ethereum: When the engineer and the economist is faced in the world of cryptocurrency
What conclusions can be drawn from the discussion Nouriel Roubini and Vitalik Buterin.
Economist Nouriel Roubini, whose forecasting financial crisis of 2008 called Dr. Doom, exchanged harsh words with cryptocurrency guru and founder of Ethereum Vitalik Baleriny. Summing up their epic dispute, we can say that both are right about something, but everyone looks at things differently. The conflict between them is fundamental, even philosophical.
It all started with Roubini speech at the hearings of the Senate Committee on banking on Wednesday. Professor at new York University, long known for his negative attitude to the virtual currency and blockchain, this time he has hit that industry particularly hard criticism.
“Swindlers, crooks, criminals, charlatans, cryptocurrency whales and oberly with insider information gave unsuspecting retail investors FOMO (fear of missing out on your chance) and had sold them fraudulent and unsecured assets at the peak of the hype that has depreciated only a few months. This financial bubble burst with unprecedented Bang”.
He gave all the usual arguments of the opponents of cryptocurrencies: they have no intrinsic value; fees held in their transactions are too large for micro-transactions, making them pointless to use it as a substitute for money; their production requires too much energy consumption.
Roubini said that the most popular cryptocurrency in the world of bitcoin (Bitcoin) by its very nature is deflationary as it is limited to the issue (in a growing economy, this means that prices are set in bitcoins, definitely will fall), and that “most other cryptocurrencies, the mechanism of emission is arbitrary, and it is worse than any vietna currency”.
Roubini cited a study according to which nearly four-fifths of the ICO turned out to be a fraud. According to him, cryptoamnesia flourishes in countries with mixed legal systems such as China and Russia, and that this creates “greater economic inequality than in North Korea.”
As for blockchain, it is, according to the economist, cannot be considered a revolutionary technology because it is based on the blockchain financial solutions are not scalable, fully decentralised or safe.
In short, the performance Roubini became a full-blown attack on cryptocurrencies, although the arguments he brought not so much. However, Roubini allowed himself numerous personal attacks on Baterina, accusing him that he was not able to create a scalable system that promised to do more in 2013, and even criticizing the code for the Ethereum platform, supposedly full of bugs.
Buterin immediately responded to these words, questioning the competence of the Roubini. In his Twitter, he wrote:
“Officially predict that by 2021 there will be another financial crisis. Not because I have some information, or I really believe that, and because I have approximately a 25% (or whatever) chance to then I recognized the “guru who predicted the last economic crisis””.
After that, Baleriny and Roubini discussion ensued on Twitter, which could most precisely be defined as “a dispute between an economist and an engineer.” Not that they spoke different languages, but close to it.
For example, Roubini criticized for sharding technology to expedite the processing of transactions in the blockchain — calling it vaporware (a term denoting non-existent). Cryptomnesia once pointed out to him that Google uses sharding in cloud computing.
On the other hand, Buterin could not deny the words of Roubini that at the moment cryptocurrencies are useless as a financial technology; in fact, his answer boiled down to the fact that a search for solutions to these technological problems.
This discussion revealed fundamental differences in the worldview of its participants. The economist looks at the current situation and sees a familiar situation: superheated bubble, in which asset growth is not confirmed by fundamentals, and a very imperfect technology at the moment is inferior to existing solutions. (Roubini mentions of leaders in the FINTECH sector, as PayPal and Alipay).
The engineer, however, sees an interesting technical challenge — in this case, exclusion from the financial system the Central body responsible for confirmation and certification of transactions and all types of contracts, and begins to work on a solution.
For the economist it is important that this technology constantly fails, and it disturbs a lot of scams in this area. To engineer failure — it’s just the new data and scammers don’t bother him.
In this case, Roubini allowed himself more and personal attacks, but Buterin quickly (and calmly) told him. As the founder of the second capitalization of the cryptocurrencies in the world after bitcoin, it is not a simple billionaire, wealthy in cryptocurrency HYIP, and using the blockchain for its transactions are relatively transparent.
However, all this does not matter. In a world where the increasing role played by technology, the only important difference in the philosophical approach. Do we want to use the same technology, which will go on as before, except a little more efficiently, or we are ready to try out the technology that attempts to change the system itself, in which we interact with each other?
This is the question we need to ask ourselves as often as possible — it applies to genetic engineering, and unmanned vehicles, to communication and commercial relations, deprived of privacy, and to the possible use of the blockchain.
For the most part I adhere to in these matters a conservative point of view, but also understand and respect the engineers who are willing to transcend the existing borders.
Even if, as some analysts predict, the cryptocurrency market collapses, the engineers will continue to work on these technologies. Cryptocurrencies may disappear and return again; this has happened more than once. Remember the electric cars, tablets and virtual reality. Smart money is not HYIP, but research and hard work.
The opinion of the author may not coincide with the position of the editorial Board