The technology behind the bitcoin is presented as a possible remedy for all the evil in society, from poverty to famine. But behind a speech that speaks of decentralization and technological freedom, blockchain is nothing more than a profit race for a minority, Nouriel Roubini says in an article published in collaboration with Project Syndicate 2018 by the French daily Les Echo.
Bitcoin has fallen since early this year by 70%. But, in fact, all cryptocurrency has experienced significant drops in their quotations, up to nearly 90%. At the same time, virtual coins have a large exposure to fraud, meaning that four out of five issued coins are still fake.
In the face of the drop in the value of virtual coins, new advantages of blockchain technology, the electronic registry that manages the issuance and transactions of cryptocurrency, have been found.
In fact, blockchain technology is the most overestimated and least useful in the history of mankind. Instead of being an ideal, technology is actually a form of economic inferno, Roubini says.
A handful of people claim to be some kind of Messiah in the economic field, saying they are defending poor, marginalized and out-of-bank people and that they can create a wealth of billions of dollars out of nothing.
But the extreme centralization of this system, which is in the hands of a few initiates called "miners", must be noticed. Scholars and system administrators have nothing to do with democracy or decentralization, but they are just in a profit race.
A small group of companies, established in Russia, Georgia or China, controls between two-thirds and three quarters of their "mining" activity and regularly increases transaction costs to increase their profits.
Thus, virtual money supporters invite investors to trust an anonymous cartel defying the rules of law instead of the regulations of central banks and financial intermediaries.
The same is true of trading. 99% of transactions are carried out on centralized scholarships that are periodically pirated, and stolen coins can never be recovered. At the same time, access to blockchain registers is limited and controlled by so-called "qualified" people.
No serious institution can afford to allow its transactions to be checked by an anonymous cartel, controlled by the shadow of authoritarian cryptocracy, concludes Nouriel Roubini.
Despite these views, bitcoin continues to be interesting for the traditional financial area. Thus, Morgan Stanley's investment bank reports in a report quoted by the French daily Les Echo that virtual currencies have become a class of assets like any other bank and investment fund. If one year ago the head of the US investment bank said bitcoin that "one thing" that grows 700% in one year is by speculation, now cryptocurrency is on the list of institutional assets.
How did it get here? Morgan Stanley states in the internal report that the market has evolved. In the past few months, Fidelity investment fund managers have announced the launch of a bitcoin business, Goldman Sachs has been working for a few months on launching a " crypto desk," and the Black Rock fund has formed a team of virtual coin specialists. Institutional investors now have $ 7 billion in assets, estimated at $ 200 billion. An important increase if we think that purchases were zero at least two years ago.
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