His testimony is near comedic in its disdain for the hype surrounding cryptocurrency. He claims the main victims of the bubble and recent crash have been the financially illiterate preyed on using FOMO-based marketing schemes:
“Individuals who could not tell the difference between stocks and bonds – went into a literal manic frenzy of Bitcoin and Crypto buying. 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,” says Roubini in the beginning of his statement.
Roubini isn’t new to his skepticism where the digital currency is concerned, the professor began warning investors as early as 2013. Since his original outburst on the subject, the price has risen from $600 to $6000 now even at its current bottom floor. While his testimony does shed light on important issues in the community that beg to be resolved, his attacks have now extended to distributed ledger technology as a whole, which is where the decentralized community’s outrage mostly rests. From China to the U.K. policies are becoming increasingly: pro-blockchain technology, proceed with caution if crypto.
He goes on to tell the U.S. Senate Committee on Banking that the concept of decentralization is born out of right-wing Libertarian extremism:
“Everything will end up on a public decentralized distributed permissionless trustless ledge; or better millions of ledgers on computers that are now already consuming more energy than Canada to verify and confirm transactions without the use of [Libertarian appointed] evil centralized institutions.”
Roubini brings up gender and racial inequality in a crypto space dominated by white male actors, highlighting an important point about the barriers that exist in the industry for women and minorities. While those of differing political ideologies and those who enjoy participating in identity politics would have varying opinions on the reason for why this is statistically and undeniably true of not only the blockchain industry but of STEM spaces as a whole, it is a notable parallel between our current centralized power structures and this new burgeoning decentralized tech landscape.
Many reporting parties want to draw a line in the sand and say Roubini is either on the right side of history or the wrong side when he essentially calls crypto a seminal bubble of deception fueled by right-wing extremist greed in front of government officials. The Web 3.0 culture and news cycles are obsessed with projections and predictions with headlines like “What Entire Billion Dollar Industry Will Blockchain Disrupt Next?” or “New Bitcoin Price Prediction for January 2019.”
Maybe it is time the community put down their crystal balls and started examining current behaviors and asking: Are we trading in one oligarchy or another under the guise of decentralization?
Roubini remains steadfast in his beliefs that decentralization is centrally orchestrated, manipulated for personal gain by a new ruling class, and the complete opposite of what it claims to be:
“Decentralization is a myth: massive centralization and concentration of oligopolistic power and cartels among miners, exchanges, developers, wealth holders The reality is one of a massive centralization of power among miners, exchanges, developers and wealth holders, the total opposite of the lie of a decentralized system.”
Those within this space who have legitimate non-capitalistic intentions seeking to use decentralization as a means to distribute power and improve daily life for all in a utilitarian way that works to enhance personal privacy and dismantle centralized government and corporate institutions may very well be trading in one oligarchy for another more energy-intensive one. Roubini has stimulated us to consider these possibilities and the power structures and paradigms rising up out of the decentralized tech frenzy. That is not to discount the inherent usefulness of the technology in its innovation and construction or insinuate we should throw the decentralized baby out with the distributed ledger bath water, but instead really question 1) how the technology it is being deployed, 2) by who, and 3) under what guise.