Blockchain Is Useless and All ICOs Are Scams, Claims Economist Nouriel Roubini

Forbes contributor Naeem Aslam caught up with renowned Turkish-American economist Nouriel Roubini at the Blockchain Conference in Las Vegas last month. Notoriously pessimistic about all things crypto, Roubini didn’t mince any words.

Nouriel Roubini is a world-renowned economist and author of more than 70 papers on international macroeconomic issues. He is a professor of economics at NYU’s Stern School of Business and CEO of Roubini Macro Associates, LLC. He is also a vocal critic of both blockchain technology and cryptocurrency, so it is, perhaps, surprising that he would be found speaking during a blockchain panel at last month’s BlockShow Conference in Las Vegas. But speak, he did, and, as he is wont to do, Roubini didn’t hold anything back.

According to Naeem Aslam, a Forbes contributor who also happened to be speaking on the same panel, Roubini was adamant in his proclaiming that “blockchain is nothing but a scam, or even worse the biggest fraud of the century.” He has made similar declarations in the past, spiking the ire of blockchain believers around the world.

Roubini Knocks Blockchain…

Aslam caught up with Roubini poolside after the panel. By that time, news of the SEC’s latest ETF rejection had broken and as Aslam’s commented on the development, Roubini didn’t miss a beat, remarking:

No surprise there at all. […] It isn’t the real asset, it is nothing but a fad.

Of course, Roubini is hardly the first person to downplay the significance of a Bitcoin ETF. Tech entrepreneur and staunch Bitcoin advocate Andreas Antonopoulos admitted in recent YouTube video that he thought ETFs were a bad idea and that they would be “damaging to the ecosystem.”

As the conversation veered away from Bitcoin and back toward blockchain, Roubini declared that blockchain technology was nothing but “useless and over-hyped technology,” primarily due to its scalability issues. He believes that blockchain technology is simply too slow and that it is a shortcoming that cannot be overcome.

This is a major point of contention in that, while Roubini believes that scalability issues leave blockchain tech dead in the water, the blockchain and crypto communities view them more as growing pains that can eventually be overcome.

Aside from scalability issues, two other areas Roubini cited as blockchain shortcomings are custody and decentralization – specifically, the issues of exchanges being routinely hacked and the fact that, while blockchain is all about decentralization, the exchanges are primarily centralized.

Roubini’s arguments fall short over these last points, however, as neither issue is a direct failing of blockchain. From a security standpoint, the blockchain is damn near bulletproof. It’s the exchanges that are being breached, whether because of poor security protocols or their centralized nature giving them a single point of entry – or both.

What Roubini has to remember is that blockchain technology is still in its nascency, as is the technology that allows us to interact with it. The majority of exchanges are centralized because that is what we had to work with initially. But we are slowly starting to move beyond that as more and more decentralized exchanges are beginning to emerge.

…and Slams ICOs

Roubini’s opinion of blockchain technology may be low – he dismissed people’s comparing blockchain to the Internet’s early stages as “complete nonsense” – but his opinion of ICOs (Initial Coin Offerings) is positively subterranean in comparison.

Discussing Ethereum’s use cases as they relate to token creation and ICOs, Roubini scoffed:

It’s a scam. The whole ICO industry is a scam. People are robbing, raising funds for projects with zero value.

It is true that most projects launching ICOs ultimately fizzle out and go nowhere. It is also true that there are a lot of blatant money grabs and outright scams in the ICO space. But there are also legitimate projects being funded to completion. Ideas that might otherwise have failed to come to fruition are being brought to life because of the concept of the ICO as a means of fundraising.

At the end of the day, Roubini is an economist, and he views blockchain and cryptocurrency through an economist’s eyes. Hopefully, as the technology improves and begins to make more mainstream inroads, he will take another look at how far we’ve come, at what we’ve accomplished, and adopt a less myopic view of the technology.

Do you agree with Roubini’s take on blockchain tech and ICOs? Why or why not? Tell us in the comments below.

Images courtesy of Flickr/World Economic Forum