- Nouriel Roubini will speak about crypto bubbles.
- Peter Van Valkenburgh wil prove the point why blockchain is useful and revolutionary technology.
Cryptocurrency markets might get another reason to get more volatile after a prolonged period of lull and low trading activity. The United States Senate Banking Committee will hold hearings focused on “Exploring the Cryptocurrency and Blockchain Ecosystem” later today with Dr. Nouriel Roubini, Professor of Economics and International Business, New York University Stern School of Business, and Mr. Peter Van Valkenburgh, Director of Research, Coin Center invited as witnesses to testify before the Committee on the subject matter.
Naturally, the speakers represent the opposite camps in the crypto holy war that spread across the globe.
Mr. Roubini, also known as the man who predicted the global financial crisis 2088-2011 and got the nickname Dr. Doom for his gloomy forecasts, will try to prove that cryptocurrency is the mother of all scams and bubbles, while Blockchain is no more than an over-hyped spreadsheet.
According to the prepared remarks, the cryptocurrency bubble has gone bust, sending the whole industry into the apocalypse which is a natural fate of all bubbles and manias.
“A chart of Bitcoin prices compared to other famous historical bubbles and scams – like Tulip-mania, the Mississippi Bubble, the South Sea Bubble – shows that the price increase of Bitcoin and other crypto junk coins was 2X or 3X bigger than previous bubbles and the ensuing collapse and bust as fast and furious and deeper.” he writes.
Mr. Roubini explains why Bitcoin or any other digital coin is useless as a means of payment, citing high volatility, low adoption level, and unscalability as main reasons for failure.
“No one prices anything in Bitcoin. Few retailers accept it. And it is a poor store of value because its price can fluctuate by 20-30% in a single day. And since its price has been so unstable or volatile almost no merchant will ever use it as a means of payment… As is typical of a financial bubble, investors were buying cryptocurrencies not to use in transactions, but because they expected them to increase in value.”
Mr. Peter Van Valkenburgh is on the other side of the barricade, stating that digital money promotes financial inclusion and streamlines e-commerce and online interaction. He compares blockchain technologies and cryptocurrencies to the emergence of the Internet in 1995, that led to many innovations and changed our life in so many aspects.
“Electronic cash promises efficient micro-transactions and enhanced financial inclusion; robust digital identity may solve many of our online security woes and streamline commerce and interaction online; and blockchain-driven Internet of Things systems may spur greater security, competition, and an end to walled gardens of non-interoperability for connected devices,” he writes in his prepared comments.
Mr. Van Valkenburgh believes that regulators and governments should allow the blockchain industry developing with as little interference as possible to ensure technological progress and competitiveness.
“In order to make good policy choices and ensure that the U.S. remains competitive in a global technological market, we need a more detailed and productive discussion of these new tools. We need a basic understanding of how consensus works, what it might help us build, and why public and pseudonymous networks, despite their easily apprehended risks, offer significant and otherwise unattainable benefits,” he adds.
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