Abra’s CEO Bill Barhydt responded to Nouriel Roubini, an economist who earned the name Dr. Doom by predicting the financial crisis of 2008, in a blog post yesterday. At the Milken Institute Global Conference last week, Roubini proceeded to bash Bitcoin and call it “bullshit” and the people who invested “suckers”.
Roubini’s argument rested on 3 points. Firstly, he stated that Bitcoin is not useful for storing of value due to its price volatility. Secondly, he stated that decentralization of Bitcoin is “bullshit” due to mining centralization and exchange desks being centralized. Thirdly, he said that Bitcoin is not scalable and is useless for payments.
Bill Barhydt had previously mentioned that Roubini ‘sounds like a horse salesman saying we don’t need combustion engines’. He also said that Roubini had ‘no real insights into Bitcoin or my work’. He then proceeded to lay out the facts of how Roubini’s arguments were flawed and had ‘no basis in fact’.
He said that Bitcoin revolutionalized, the store of digital value through its existence, as there existed no previous way to store value digitally before Bitcoin existed. He also brought up the point that even though Bitcoin is not stable when compared to fiat, it was ‘not created’ to do so.
Instead, the value of 1 Bitcoin will always be 1 Bitcoin. He also said that Bitcoin exists in the ‘vacuum of pure mathematics and that is a good thing’. The hedging techniques used by multinational corporations to avoid volatility risk in currency markets can be done with cryptocurrencies as well, Barhydt says. He concludes by saying that volatility exists for a ‘good and important reason’.
In response to Roubini saying that ‘the idea that Bitcoin is decentralized is bullshit’, Barhydt said that Bitcoin cannot be shut down because it is everywhere’, and that Bitcoin does not have a single choke point in its design or current iteration.
In response to Roubini’s argument about 1 individual controlling more than 50% of mining power, he says that the network will either be out of sync and will proceed to fork. He also mentions the processing power required for the task and that the ‘US Government would have trouble funding such an attack’. He says:
“Bitcoin’s digital nature as well as it’s permission-less design makes it more decentralized than either fiat or gold.”
On centralized exchanges, he says:
“It is the underlying software of Bitcoin that determines whether or not Bitcoin is decentralized. Centralized exchanges have nothing to do with the technology of Bitcoin and therefore play no role in determining its level of centralization.”
On scalability, Barhydt simply asks, “Can you remember the last time an important technology was invented that couldn’t be made to scale by human inventiveness? I certainly can’t.”
He also went on to say that Roubini is an economist and does not know about scaling technology. He stressed upon the creation of the Lightning network and how it would allow users to conduct many transactions in a ‘payment channel’ thus removing the need to validate every transaction and only needing to pay transaction fees while opening and closing the channel.
This is aimed to greatly increase scalability by reducing miner fees and allow for faster transactions without the need to announce it to the entire blockchain.
He concludes by saying that he believes that Roubini is not really interested in the viability of Bitcoin, and that:
“He is really interested in his personal brand as a post-great-recession doomsayer pundit to promote his speaking fees, consulting business and future book sales. I sincerely wish that were not true but I believe it is.”
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