This past Thursday, a Senate committee convened a hearing on cryptocurrency and blockchains that had all the allure of an Ultimate Fighting Championship matchup. The two witnesses voiced opposing viewpoints in the Great Crypto Debate: a heated dispute about whether cryptocurrencies like Bitcoin are a fraud or the future. (I was reminded of a similar showdown that recently took place in Mexico City.)
The delegate for the killjoys was Nouriel Roubini, an economics professor at New York University known as “Dr. Doom” for his glum outlook on the global economy as well as his prescient prognosis of the Great Recession in 2006. At the outset of his speech, Roubini labeled crypto as “the mother or father of all scams and bubbles.” He knocked “blockchain,” the computerized ledgers upon which cryptocurrencies such as Bitcoin are based, as “the most overhyped technology ever” and, planting an uppercut, added, “it is no better than a glorified database.”
Roubini’s challenger—the Conor McGregor to his Khabib Nurmagomedov—was Peter Van Valkenburgh, an actor-turned-lawyer who directs research at Coin Center, a crypto-focused think tank. Unfazed by Roubini’s pummeling, Van Valkenburgh described Bitcoin as “revolutionary” and related blockchain technology as “our best hope” at building more secure digital infrastructure. “Is it perfect? No,” Van Valkenburgh said, feinting at his opponent. “But neither was email when it was invented in 1972.” Delivering a roundhouse to the jaw, he added: “It’s a computer science breakthrough and it will be as significant for freedom, prosperity, and human flourishing as the birth of the Internet.”
The fight was full of satisfying moments, when each pugilist landed blows. Roubini shot holes through crypto proponents’ self-proclaimed goal of “decentralization,” saying that public blockchain infrastructure and mining equipment is concentrated “in authoritarian countries, like China and Russia.” Van Valkenburgh disagreed with the implication that these countries can manipulate the system; and he countered that present payment technology, such as the WeChat app in China, is already a “tool for totalitarians,” since the Chinese government can use it to inspect any user’s financial records.
There were humorous, if puzzling, moments too, such as when Roubini praised a cartoon to illustrate a point. “Even the Flintstones knew better than crypto,” he said, since the show’s Stone Age characters used clamshells as currency instead of Bitcoin.
As entertaining as this altercation was, it held no candle to the combat that followed the fight. Like the recent mixed martial arts contest between McGregor and Nurmagomedov, the feud spilled out of the ring. Roubini has continued his trash-talking on Twitter, dunking on crypto boosters and calling the industry a “cesspool of shitcoins.” He even picked a fight with Vitalik Buterin, the twenty-something creator of Ethereum, saying the entrepreneur founded a “criminal…scam,” that he is a “disingenuous” peddler of “vaporware,” and commanding Buterin to “just shut up.” (Buterin had knocked Roubini’s credentials too.)
As is often the case with such debates, the outcome is in the eye of the beholder. Are you an optimist who believes the technological challenges can be overcome? Or are you a skeptic who believes the obstacles are insurmountable, and that greedy charlatans are using the opportunity to fleece unwitting investors? Both sides are likely right—despite their hyperbolic tendencies.
We will continue chronicling this quarrel until a trouncing or triumph materializes. With no clear victor as yet, expect this grudge to smolder.
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