This @Nouriel fella seems pretty pissed at crypto right now. Feel like it's a good opportunity to live tweet my reading of his testimony to the senate
First, let me note that I composed my hit single "Scam Train" about the crypto space back in 2014. I don't know what Nouriel was up to then, but I'm gonna stake my claim. Here's a later recording:
Ok, so testimony starts with credentials. Nouriel is a smart dude, Harvard, Yale, NYU, predicted the financial crisis. Seminal stuff.
Crypto is the mother of all bubbles. Lots of people ask him if they should buy.
That's cool, lots of people ask me that too. I tell them to put 1% of their wealth in BTC and forget about it.
That's cool, lots of people ask me that too. I tell them to put 1% of their wealth in BTC and forget about it.
Gold quote: "Actually calling this useless
vaporware garbage a “shitcoin” is a grave insult to manure that is a
most useful, precious and productive good as a fertilizer in agriculture"
Yeh, I'm a big fan of poop in agriculture as well.
vaporware garbage a “shitcoin” is a grave insult to manure that is a
most useful, precious and productive good as a fertilizer in agriculture"
Yeh, I'm a big fan of poop in agriculture as well.
Then he claims, "in practice [blockchain] is nothing better than a glorified
spreadsheet or database"
Yawn. I guess he's not familiar with state-of-the-art replicated state machine engines like @tendermint_team ?
spreadsheet or database"
Yawn. I guess he's not familiar with state-of-the-art replicated state machine engines like @tendermint_team ?
Next up, a bunch of fallacious rhetoric about currency. Apparently bitcoin transaction fees are $55. I sent a ~$20k tx today and paid $0.30 in fees. That's like one-thousandth of a percent in fees. Pretty amazing if you ask me.
Of course, he quickly follows up with the illegal activity bit. Bitcoin is only used for illegal stuff. It's not like any of the world's financial institutions laundered more than the market cap of Bitcoin for drug cartels...
Then he claims that fiat currencies are protected from value debasement. Isn't this guy supposed to be a world leading economist? Hasn't the USD collapsed ~95% of its value over the last century?
Next, a bunch of nonsense about forks. Apparently the existence of BCH means the 21 million limit for BTC is bogus.
Then some praise for central banks, because they've done wonders for economic stability. Cool story bro.
Now some clarification about the FinTech revolution. Blockchains are overhyped, the real revolution is in "AI", "Big Data", and "IoT". Those things are definitely not overhyped at all.
Next, a highly informed critique of blockchain scalability with no mention of sharding or L2 solutions. Nouriel has obviously done his reading. He seems mainly concerned that this stuff isn't actually decentralized. I guess he thinks The Fed is?
Or not: "Conventional payment systems based on fiat currencies, central
banks and private banks are scalable and secure but centralized".
But I wonder how this guy defines "secure"? Maybe he means "insured"?
banks and private banks are scalable and secure but centralized".
But I wonder how this guy defines "secure"? Maybe he means "insured"?
Ok, he qualifies the security bit. There's many "layers" to protect the consumer, for which society only pays "a small fee".
Not sure about you, but I don't consider credit card interest, merchant fees, and the possibility of censorship to be "small fees"
Next, a diss against Canada: "millions of ledgers on computers that are
now already consuming more energy than Canada".
Can anyone corroborate this? We use a lot of energy in Canada. Pretty sure it's more than Bitcoin uses, but who even cares about facts?
now already consuming more energy than Canada".
Can anyone corroborate this? We use a lot of energy in Canada. Pretty sure it's more than Bitcoin uses, but who even cares about facts?
"very few women or minorities are allowed in the blockchain
space"
ALLOWED? Where does he come up with this stuff? Maybe he was thinking about the White House?
space"
ALLOWED? Where does he come up with this stuff? Maybe he was thinking about the White House?
Next, more lies: "There are hundreds of stories of greedy crypto-criminals raising billions of dollars with scammy white papers"
The only people that raised a billion, to my knowledge, are EOS. But sure, "hundreds of stories".
The only people that raised a billion, to my knowledge, are EOS. But sure, "hundreds of stories".
Then it looks like he takes a shot at Brock Pierce. Sure, I'll let that one stand.
Then some fear mongering about the threat of China. Though again, not sure if he's talking about blockchains or U.S national infrastructure.
Then a shot at Vitalik. I think Nouriel is just jealous that Vitalik will have (has already had?!) a greater impact on society than him.
Obligatory comparison of crypto-elite to North Korea re Gini coefficient.
Maybe Denis Rodman can help us here too.
Maybe Denis Rodman can help us here too.
Next, some reasons why Crypto is not like the Internet, mostly because we don't have enough users or apps. Apparently crypto is imploding, a failing set of technologies. Yawn.
A bit about ICOs being scams. No mention of how accredited investor laws are also a rich-get-richer scheme. Very thoughtful critique.
Then a shout out to Preston. Preston's writings are way more thoughtful and entertaining than this guys - read him instead!
Next up, massive price manipulation. At least, an admission: "While price manipulation does occur in a variety of financial markets, there are strict laws against it and it is subject to draconian criminal prosecution"
Riiiiight. How many bankers were criminally prosecuted?
Riiiiight. How many bankers were criminally prosecuted?
Some stabs at Tether. Yep, Tethers a scam. Moving on
Then, classic critique about energy usage. Apparently the egregious waste produced by the global financial and administrative systems are justified because they "produce value". Good stuff!
More on why blockchains are overhyped. No one wants to put their data on public chains, they're just glorified spread sheets. Then a bunch of mumbled garbage about protocols and speed and the efficiency of financial institutions.
Apparently, banks won't adopt blockchains because high frequency traders need speed. Then some nonsense about how blockchains are slower than Visa because they're stateful (and Visa is not?!)
"every financial contract in existence today can either be modified or deliberately breached by the participating parties. Automating away these
possibilities with rigid “trustless” terms is commercially non-viable" - I tend to agree on this point :)
possibilities with rigid “trustless” terms is commercially non-viable" - I tend to agree on this point :)
In summing up, Nouriel owns no crypto. "The only thing that is
at stake is my personal, intellectual and academic reputation."
I don't think this report bodes particularly well for him there.
at stake is my personal, intellectual and academic reputation."
I don't think this report bodes particularly well for him there.
Must have been thinking about the White House:
