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Economist Nouriel Roubini Declares Bitcoin a Ponzi Scheme
Nouriel Roubini: BTC is a Ponzi Scheme
Economist Nouriel Roubini declares bitcoin as a Ponzi scheme and says that it has a “lousy” store of value. Roubini, also know as the “Dr. Doom” of the business world, refutes the digital currency and took to his twitter account this past Sunday to list its faults.
The bearish economist said:
“Bitcoin isn’t a currency. It is by the way a Ponzi game and a conduit for criminal/illegal activities. And it isn’t safe given hacking of it.”
In Roubini’s view, no goods or services were being priced in digital currency, and says that they never would be. He adds that the digital currency’s store of value is “lousy” and offers “little wealth”. In addition, Roubini feels that bitcoin’s volatility and price fluctuations do it more harm than anything else about it.
Since November 2013, bitcoin has lost half of its value after hack attacks targeted on bitcoin exchange platforms.
In another one of his twitter posts, Roubini claims:
“Bitcoin bugs like gold bugs are fanatics who speak of BTC in cult-like religious ways. Like gold bugs they have paranoid conspiracy views on the dollar.”
Bitcoin Advocates
Though most bitcoin advocates disagree with Roubini’s thoughts on the digital currency, they are certain that more has to be done in order to fully utilize bitcoin’s technology.
Chairman of the Bitcoin Foundation, Peter Vessenes, works to promote bitcoin, but he too realizes the risks in dealing with the engaging digital currency. Vessenes states on the Bitcoin Foundation website:
“There are botnet operators, hackers, and Ponzi-scheme runners floating around our space.”
The bitcoin community is not blind in realizing that criminals can use bitcoin for criminal activities just as they could use the U.S. Dollar or any other fiat currency for such activities.
Roubini remains pessimistic of bitcoin even after many retailers such as Overstock.com, and more recently eBay, have showed more attention towards the digital currency industry. Overstock has seen a flood of new customers shopping on their site with bitcoin, while eBay filed a patent for a bitcoin currency exchanger.
Roubini neglects to see the innovative side of Bitcoin and deems Bitcoin as if it is only beneficial towards criminals. He also feels that those who use bitcoin will come crawling back to the fiat currencies which are controlled by central banks.
Stay tuned to Coinreport for more Bitcoin news.
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Roubini is famous for calling the sub prime crisis (along with various Austrian school people). He is essentially a Keynesian statistician, not much able to advice on investment strategies other than of the most generalised nature. Recently calling for greater intervention by the Fed in the markets ie more money printing.
He is incapable of seeing the value in Bitcoin. It runs counter to all his predispositions. He is in favour of the fractional reserve. He is a collectivist keenly attuned to the role and activities of the central banks, which he regards as essential to the stabilisation of the world economy. Money printing is ok as far as he is concerned. Inflation is preferable to deflation. Control over the essential levers of the economy such as money and credit supply, interest rates etc. are far better left in the hands of the professionals such as himself, rather than the situation where the economy rotates as a spontaneous gyre under its own steam, efficiently co ordinating all scarce resources through the operations of the free market. Such ideas repel him apparently.
Whatever Roubini and his ilk are worrying about is really not important. If he bothered to educate himself properly on the subject he might have something credible to contribute. As it is Bitcoin is driving forward without him.
Watch for a “Road to Damascus” moment sometime in the near future.