I have attended the Blockchain Economic Forum in Davos this year, as one of their sponsors. This is my takeaway-focused summary of the event for those who want to know more about the current state of the blockchain.
The realists…
Some say there are two types of people in this world: the realists and the dreamers. In the case of the Blockchain Economic Forum in Davos, Nouriel Roubini and Tim Draper personified these two polarized personality types while debating the future of cryptocurrency. In the tech world, we often become caught up in the ideas of the dreamers—after all, those are the individuals who bring us modern, cutting-edge inventions that were previously unthinkable. However, is there a place for the realists of the world? And, in the particularly divisive world of cryptocurrency, what role do realists play in keeping the dreamers in check? In this article, we’re going to explore the two very different mindsets of Nouriel Roubini, an award-winning economist and Tim Draper, an enthusiastic venture capitalist.
Watch the full debate here:
Nouriel Roubini is a self-proclaimed pessimist, often nicknamed “Dr. Doom” (which should be an indicator of his feelings on blockchain and cryptocurrency). To Roubini, there are only extremely limited applications of cryptocurrency—and his influence in blockchain is prominent but as a negative force. Roubini’s recent article on initial coin offerings (ICOs) refers to the issuers’ rhetoric as “self-serving nonsense meant to separate credulous investors from their hard-earned savings.” Well, then. He’s also called blockchain “the most over-hyped technology of all time” and recently wrote on his blog that “the claim of decentralization is a myth propagated by pseudo-billionaires who control this pseudo-industry.” However, it’s not all doomsday for Dr. Doom—he does believe that digital currencies will eventually come from central banks—he just doesn’t buy that those currencies will continue to be decentralized.
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And the dreamers…
On the complete opposite end of the spectrum is Tim Draper, a well-known venture capital investor who is a blockchain and bitcoin enthusiast. He often blends the division between bitcoin and blockchain, referring to all things blockchain as “bitcoin.” Imagine a man wearing a tie with a bitcoin symbol on it (which he was, indeed, wearing on-screen during his talk at Davos with Roubini). Draper believes that blockchain (or bitcoin) is the answer for many of the world’s problems and that everyone (including Roubini) will pay for goods with crypto within the next 5 years. He also believes that the price of bitcoin will continue to rise, and has made significant (to the tune of 260 million dollars worth) investments in bitcoin. He also invests in a long list of bitcoin and blockchain companies through his VC. It’s safe to say that Draper is optimistic about the relevance of bitcoin and blockchain, and his investments in the area show where his beliefs fall on the “realist versus dreamer” debate: he’s a dreamer.
At Davos, Roubini and Draper turned up the heat in the debate on whether cryptocurrency is the currency of the future. Draper likened Roubini to the Internet nay-sayers who believed that the significance of the Internet was overhyped in the 1990s—of course, those nay-sayers were proven wrong. Draper also discussed the expansiveness of cryptocurrency, and its ability to soon support payment-related applications. He even, amusingly, told Roubini that “even you [Roubini] will soon be using crypto.” When asked about the security and speed flaws that currently plague cryptocurrency, Draper asserted that those would be solved in the near future.
Dr. Doom, also known as Roubini, argued that cryptocurrency is an inherent niche technology, and its use is limited to particular, specific cases. He also asserted that decentralized exchanges are ineffective, and stated his belief that the future of cryptocurrency is in centralized exchanges such as Ripple. Roubini’s underlying belief in these arguments is that central banks still maintain power and that once central banks issue digital cryptocurrency, all other exchanges will become irrelevant.
The debate between Draper and Roubini was not only entertaining to watch but a fascinating example of how two industry professionals (a “dreamer” and a “realist”) can have vastly different points of view on the future of cryptocurrency. At KISSPatent, we pride ourselves on staying up-to-date on the latest industry news and trends in blockchain/cryptocurrency, so we can pass along our knowledge to our clients.
