The US Senate e-Banking Committee’s hearing for “Exploring the Cryptocurrency and Blockchain Ecosystem” entered into a fantastic debate as witnesses Dr. Nouriel Roubini and Peter Van Valkenburgh argued the opinion for and against cryptocurrencies and blockchain.
The Committee on Banking, Housing, and Urban Affairs met in an open session to discuss the current state and future of Cryptocurrency and Blockchain Ecosystem on October 11, 2018. As part of the hearing, the Senate listened to the skeptic perspective of Nouriel Roubini, Professor of Economics and International Business New York University Stern School of Business and a positive perspective of Peter Van Valkenburgh, Director of Research Coin Center, trying to draw a conclusion on the best and worsts of the world of blockchain and cryptocurrencies.
The testimony began with Dr. Nouriel Roubini, colloquially known as Dr. Doom for his seemingly constant bearish approaches, calling the cryptocurrency space the “mother of all scams”. He further claimed that cryptocurrencies aren’t scalable, are full of scams, and aren’t being used by anyone but criminals. In his testimony, which a lengthy 37-page document, Dr. Roubini claimed blockchain technology is no more than “overhyped technology” and a “glorified spreadsheet or database.” He also addressed the crypto market’s slump, and ‘shitcoins’. In his initial presentation during the Senate hearing, Roubini claimed there’s “no blockchain technology” in fintech, as while there is a revolution going on, it isn’t related to cryptocurrencies or their underlying technology. He also mentioned that most tokens issued by initial coin offerings (ICOs) would be considered securities. He pointed out even the Securities and Exchange Commission (SEC) launched a website with a fake ICO to warn investors. An interesting quote from his testimony which was all against cryptocurrency and blockchain said,
“ Instead 99.9% all crypto-currencies instead have no backing whatsoever of any sort and have no intrinsic value of any sort; and even the so called “stable coins” have only partial backing at best with true US dollars reserves or, like Tether, most likely no backing at all as there has never been a proper audit of their accounts.”
In contrast to Dr. Roubini, Peter Van Valkenburgh claimed that Bitcoin is revolutionary. In his presentation of testimony, which was a 67-page document, Valkenburgh noted that bitcoin isn’t perfect, but neither was emailed in 1972 when it was first introduced to the world, implying bitcoin is still in its early days and still has a lot of room to grow, provided it’s given the chance. The director of research at CoinCenter said that it’s not yet widely accepted, it isn’t yet a stable store of value, and isn’t yet used often to quote prices. He added:
“ The mere fact that it works without trusted intermediaries is amazing. It’s a computer science breakthrough, and it will be as significant for freedom, prosperity, and human flourishing, as the birth of the internet.” Valkenburgh, further stated, that Bitcoin must be embraced because the privately owned infrastructure has been becoming increasingly more powerful, and its failures increasingly grave and added that Blockchain isn’t yet ready to answer all of the questions raised against it yet, but “it is our best hope,”
Senator Doug Jones then asked the witnesses about the dangers of cryptocurrencies as they pertain to money laundering, sex trafficking, and other illicit activities. Replying, Valkenburgh noted that while bitcoin and other cryptocurrencies have been used by criminals, this could be a good sign as “if criminals aren’t using your technology, your technology is not worth anything.”
While both Dr. Roubini and Peter Van Valkenburgh submitted their perspective, Senate had to adjourn the hearing so that it could submit more questions to the witnesses after further deep diving into the matter.
Whose perspective was more apt and futuristic: Dr. Nouriel Roubini or Peter Van Valkenburgh? Do let us know your views on the same.
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