Like with any new industry, resistance is key to understanding the early challenges and the daredevils who come forth and become our early customers.
Recently, at an invite-only event in NYC, I heard the famous Economies and Professor Nouriel Roubini shares his perspective on blockchain technology and cryptocurrencies.
Walking us through a small window of the history of money as a value system, he came across the Flintstones. The American animated sitcom produced by Hanna-Barbera for ABC is a TV series that takes place in a romanticized Stone Age setting.
“Stone was a form of currency…so the Flintstones was more advanced than a barter [system of exchange] and this world of tokenization,” he said.
Roubini’s point is disturbing in that as an educator the subject of debate should be education around monetary policy or on the various systems of exchange. On another note, comparing stones and tokens, apples and oranges, doesn’t factor the exponential growth of the new technology. Roubini went on to say that cryptocurrencies don’t display any sort of economic logic and referenced cartels to draw attention to the drivers of these industries who control pricing. The controllers are the miners — of which 2 control 80 percent of the supply — who don’t “don’t know anything about money and finance.” And they are oligarchs, according to Roubini, located in Russia, Belarus and China.
Perhaps the miners are a new wealth class category in the decentralized era. They may not be any different from the few dozen families that control global wealth and are from the Industrial and Centralized Era; ie, the Rockefellers, Carnegies, and Rothchilds. These families like the miners influence the production of money. Whether money is issued via Federal Reserve (private bank) or on the blockchain, wealth continues to evolve.
On wealth, Roubini mentions inequality. “Regarding the coefficient of inequality for US is 0.5, Europe is 0.35, N. Korea is 0.86, and Ethereum is 0.88…there is more concentration of wealth than in N. Korea.” However, N. Korea is a dictatorship while cryptocurrency isn’t. Roubini adds, “decentralization is bullshit.” Well, in my opinion, so is centralization as it restricts access to the supply. In decentralization, it is also the case since it depends on a good internet connection.
Financial institutions and governments; ie, Venezuela are already creating their own token while Switzerland has laid down the legal framework of utility tokens. The World Health Organization and the World Trade Organization are looking into ways to tokenize their pension fund. Private business like Facebook is considering its own token. These people know money and they understand banking.
As the business and law evolve around decentralization, particularly the use of crypto and smart contracts, we must look up to the educators who can provide a balanced, voice of reason rather than an emotional reaction that compares apples to oranges.