World-renowned economist and financial expert Nouriel Roubini (Nouriel Roubini) called the blockchain one of the most overrated technologies of all time and added that it is unlikely to replace the existing banking system and eliminate intermediaries.
Supporters of the technology of the distributed registry claim that it can reduce the number of paper documents, reminded Roubini. For example, a contract between two or three parties can be done on the blockchain, and instead of numerous paper copies will be one document in which changes are made by different parties. But Roubini believes the people do not quite understand what it means to run a blockchain.
“At blockchain less effective than existing databases. When someone says they have something to start applications on the blockchain, it usually means that they are running a single instance of the software application, which is replicated on many other devices,” he said.
The head of the Roubini Macro Associates noticed that since the blockchain requires that all transactions are checked cryptographically, they are often slower than the traditional processes. Skeptical, he spoke about the possibility of a decentralized transaction verification to eliminate financial intermediaries:
“It is absurd for the simple reason that every existing financial contract today can either be changed, or deliberately violated the parties involved. Automation of these capabilities with a hard “unreliable” conditions commercially viable, not least because it would require all financial agreements to be 100% provided financial, madly, from the point of view of cost of capital.”
According to Roubini, the Ethereum blockchain “is vulnerable to manipulation by influential insiders,” and the Ripple technology will not replace the existing system of SWIFT cross-border money transfers between financial institutions. The economist is sure that the blockchain will not become a “new universal” Protocol, like HTML online.
However, added Roubini, the blockchain technology can be used “in cases where a compromise of speed/verifiability really worth it”.
“Ultimately, the use of the block chain will be limited to specific, well-defined and complex applications that require transparency and resistance to breaking more than they require speed — for example, communicating with self-propelled vehicles or unmanned aerial vehicles,” concluded Nouriel Roubini.
Earlier, he called bitcoin “the mother of all bubbles” — the biggest bubble in the history of mankind. Roubini also emphasized that the only application of blockchain technology for the period of its 10-year existence, became bitcoin and other cryptocurrencies.