Harvard alumni and NYU professor, Nouriel Roubini, recently gave his views on Ethereum [ETH], calling it a scam due to the technology behind it. He also spoke about the failure of DAO, and the state of dApps on the Ethereum blockchain.
He began by calling smart contract “buggy” stating that they aren’t “real contracts”. Moreover, he quoted the statistic of smart contracts having more than 10% of its code as bugs. He also spoke about dApps, stating that 75% of them were apps such as CryptoKitties. He went on to state:
“You know, there’s a lot of people [who] talk about their DApps or their distributed apps. 75 percent of those apps are what? CryptoKitties, Ponzi schemes and other pyramid schemes, and other casino games, like Las Vegas. So, after a decade, what does Ethereum have to show us? CryptoKitties and Ponzi schemes? And that’s what they’re doing? They’re not doing anything that is of any use to anybody.”
Roubini spoke about the centralization of mining, stating that cryptocurrencies are not scalable and that there was “no system that makes them scalable”. He also stated that they are not decentralized due to the general nature of the system becoming centralized. Roubini went on to say that there were “so many ways to hack them”, proving them to be “not secure”. He stated:
“So, it doesn’t have any functions [it] should have: It’s not scalable, it’s not secure, it’s not decentralized. So, what is it worth for? With Bitcoin, you can do five transactions per second; with Visa, you can do 25,000 transactions per second.”
He even spoke about the potential release on the horizon for cryptocurrencies which has presented itself in the form of proof-of-stake. Roubini said it “has not worked yet”, and that even if it was scalable, it was going to be centralized.
“At least financial systems that we know are centralized, yes, but they’re secure and they’re scalable.”
Vitalik Buterin, the creator of Ethereum, famously said that a blockchain cannot be scalable, decentralized and secure at the same time. Roubini drew on this as well, stating:
“They’ve been talking about fixing it, but Vitalik Buterin, who is the creator of Ethereum, said you cannot have a blockchain system that has three characteristic of the same time: being scalable, decentralized, and secure.”
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