In a recent interview, Nouriel Roubini, the economist who predicted the 2008 financial crisis, spoke about cryptocurrencies like Bitcoin [BTC], the entire concept of the cryptocurrency market and the reason why he still thinks centralized systems are far more superior than decentralized platforms.
Roubini had made news recently when he went all out on the cryptocurrency industry, calling it the “mother of all scams” and trashing blockchain technology by stating that it was the most “over-hyped technology ever”. In the interview, Roubini stated that he would choose the centralized system any day as he believes there is nothing wrong with the already established workings.
In the interview with Cointelegraph, he compared decentralization to the economics of North Korea and stated that the concept of complete decentralization is not feasible at all. He said:
“There’s a lot of talk about decentralization: Miners are centralized as an oligopoly, coders are centralized, exchanges are centralized — as 99 percent of all transactions occur on a centralized exchange — and there’s a massive concentration of wealth. This is worse than North Korea in terms of income and wealth inequality.”
He also acknowledged that there were problems in the centralized system, but they can be rectified without the use of blockchain technology. Roubini focused his argument on the fact that there is already a financial revolution taking place, but one without the use of any decentralized assets.
He quoted the example of various payment methods such as PayPal, M-Pesa, and UPI to point out that millions of people already conduct billions of transactions without the intervention of blockchain technology and cryptocurrencies. In his words:
“Why does a poor farmer who already uses M-Pesa need blockchain technology? For absolutely nothing. So, there is a revolution and it has nothing to do with blockchain.”
On being asked about the transparency that is brought in by cryptocurrencies, Roubini retorted by saying that even though the technology has existed for more than a decade, there is still no “killer app” for cryptocurrencies.
The economist was also frank in admitting that he does not trust some random party in Russia or China to approve his transactions but rather put his faith in already established banks. He stated that there are plenty of security laws if a centralized bank conducts fraud, but the laws that govern the fintech industry are flimsy and unreliable.
Roubini further added that he has no position on the cryptocurrency market and that he would not make any money off it. He concluded by stating:
“I may be right or may be wrong, but crypto could go to the moon to go to zero; I’m not going to make a penny out of it. I’m an intellectual. I’m an academic. I have no conflicts of interest.”
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