Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Trump tariffs could wreck South Africa’s vehicle manufacturing industry

      14 July 2025

      Legislative overhaul on the cards for South Africa’s ICT sector

      14 July 2025

      The 1940s visionary who imagined the Information Age

      14 July 2025

      Microsoft South Africa to get new MD as Lillian Barnard moves to regional role

      14 July 2025

      Zuckerberg used open source to scale AI – now the lock-in begins

      14 July 2025
    • World

      Grok 4 arrives with bold claims and fresh controversy

      10 July 2025

      Bitcoin pushes higher into record territory

      10 July 2025

      Cupertino vs Brussels: Apple challenges Big Tech crackdown

      7 July 2025

      Grammarly acquires e-mail start-up Superhuman

      1 July 2025

      Apple considers ditching its own AI in Siri overhaul

      1 July 2025
    • In-depth

      Siemens is battling Big Tech for AI supremacy in factories

      24 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025
    • TCS

      TCS+ | MVNX on the opportunities in South Africa’s booming MVNO market

      11 July 2025

      TCS | Connecting Saffas – Renier Lombard on The Lekker Network

      7 July 2025

      TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

      4 July 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      3 July 2025

      TCS+ | First Distribution on the latest and greatest cloud technologies

      27 June 2025
    • Opinion

      In defence of equity alternatives for BEE

      30 June 2025

      E-commerce in ICT distribution: enabler or disruptor?

      30 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Cryptocurrencies » Dr Doom and Mr Ethereum debate crypto

    Dr Doom and Mr Ethereum debate crypto

    By Leonid Bershidsky12 October 2018
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Economist Nouriel Roubini, nicknamed Dr Doom for predicting the most recent global financial crisis, has crossed swords with cryptocurrency guru and ethereum founder Vitalik Buterin. In the epic battle of words, both are right about some things, and neither is quite wrong. Theirs is a fundamental, and philosophical, conflict.

    It started with Roubini’s testimony before the US senate’s banking committee on Wednesday. The New York University professor, who has long disparaged virtual currencies and the blockchain technology behind them, delivered a particularly stinging indictment of the industry.

    ā€œScammers, swindlers, criminals, charlatans, insider whales and carnival barkers (all conflicted insiders) tapped into clueless retail investors’ Fomo (ā€œfear of missing outā€), and took them for a ride selling them and dumping on them scammy, crappy assets at the peak that then went into a bust and crash — in a matter of months — like you have not seen in any history of financial bubbles,ā€ said Roubini, about the crypto phenomenon of the past two years.

    Roubini’s testimony was a comprehensive, tersely argued takedown of crypto. But it was also full of personal attacks on Buterin

    He made all the familiar arguments about cryptocurrencies: that they have no intrinsic value; that they impose transaction costs that are too high for small payments, making them useless as currencies; and that they use up too much energy to generate. He warned that bitcoin, the most popular cryptocurrency, was deflationary in nature because of its finite supply (in a growing economy, that means prices denominated in bitcoin cannot but fall) and that most of the other virtual currencies ā€œhave an arbitrary supply-generation mechanism that is worse than any fiat currencyā€.

    Roubini pointed to research showing that almost four-fifths of all initial coin offerings have been outright scams. He argued that the crypto economy was concentrated in dodgy jurisdictions such as China and Russia, and that it created a wealth inequality ā€œgreater than that of Kim Jong-un landā€.

    As for the blockchain, it isn’t a revolutionary technology, the economist said, because the financial solutions based on it are not scaleable, truly decentralised or secure.

    Takedown

    In short, Roubini’s testimony was a comprehensive, tersely argued takedown of crypto. But it was also full of personal attacks on Buterin for his failure to deliver a scaleable system he’s promised since 2013, and even for the allegedly buggy code of his ethereum platform.

    Buterin was quick to counter with an attack on Roubini’s credentials. ā€œI officially predict a financial crisis some time between now and 2021,ā€ he tweeted. ā€œNot because I have any special knowledge or even actually think that, but so that I can have a ~25% (or whatever) chance of later being publicly acclaimed as ā€˜a guru who predicted the last financial crisis’.ā€

    This started off a debate between him and Roubini in several Twitter threads which can best be described as an economist’s conversation with a technologist; it’s not quite as bad talking over each other in two different languages, but it’s close. For example, Roubini attacked sharding — a technology meant to speed up transactions recorded on a blockchain — as ā€œvapourwareā€; crypto enthusiasts quickly responded that Google used a version of it in cloud computing. On the other hand, Buterin had no clear answer to Roubini’s arguments concerning the immediate uselessness of crypto as a financial technology; all he could say, essentially, was that technological problems were in the process of being resolved.

    For the engineer, the failures are merely inputs, and the scams are irrelevant

    The exchanges reflect a fundamental difference in worldview. The economist looks at the present state of affairs, and sees a familiar phenomenon: a hype-based bubble without workable fundamentals, and a highly imperfect technology that, at the moment, works worse than other solutions. (Roubini’s examples include fintech leaders such as PayPal and Alipay.) The engineer sees a problem worth solving — in this case, removing a central approving and certifying authority from financial transactions, and all kinds of contracts — and works on solutions. For the economist, the current failure rate is important, and the sheer number of scams surrounding a particular technology triggers red alarms. For the engineer, the failures are merely inputs, and the scams are irrelevant.

    In this particular case, Roubini resorted to an ad hominem attack, too, but Buterin had a quick (and calm) rebuttal ready. Even as the founder of the second biggest cryptocurrency after bitcoin, he’s not a paper billionaire, getting wealthy off the crypto hype, and, thanks to the blockchain, his transactions are relatively transparent.

    Philosophical difference

    This, however, isn’t important. In our increasingly tech-dominated world, what matters is the philosophical difference. Do we want to stick with technology sufficient to run the world as we know it, just a bit more efficiently; or are we okay with technology that tries to change the nature of our interactions? That’s a question we need to ask more and more often — about gene editing, self-driving vehicles, communication and commerce without privacy and, yes, potential applications of the blockchain.

    I’m with the retrogrades on most of this, but I also understand and respect the engineers’ refusal to recognise existing boundaries as red lines.

    Even if the crypto market implodes, as some predict, the engineers will keep working on the technology. A second coming should not be ruled out. There are plenty of precedents: electric cars, tablet computers, virtual reality. The smart money isn’t on the hype, it’s on the research and development.Ā  — (c) 2018 Bloomberg LP



    Bitcoin Ethereum Nouriel Roubini top Vitalik Buterin
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleWPA3 promises far better Wi-Fi security
    Next Article Tencent is a huge falling knife – time to catch it?

    Related Posts

    Bitcoin pushes higher into record territory

    10 July 2025

    Burning millions on the blockchain: how hackers used bitcoin to send a message

    30 June 2025

    Crypto shakeout: bitcoin soars, altcoins crater

    30 June 2025
    Company News

    Banking on LEO: Q-KON transforms financial services connectivity

    14 July 2025

    The future of business calling: Voys brings your landline to the cloud

    14 July 2025

    How digital twins and AI are shaping the future of security

    14 July 2025
    Opinion

    In defence of equity alternatives for BEE

    30 June 2025

    E-commerce in ICT distribution: enabler or disruptor?

    30 June 2025

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.