Finding Evidence Of Crypto Progress

Do I owe Dr. Doom an apology?

Nouriel Roubini (aka Dr. Doom) is a widely respected economist who is fond of pontificating about everything bitcoin cannot do. He recently earned a place in a column I wrote for our First Stage Investor newsletter when he said, “How could [the SEC] ever approve such ETFs given widespread price manipulation of bitcoin and other cryptocurrencies?”

Roubini is part of a “proud” tradition of people making dismissive predictions about new technology. IBM Chairman Thomas Watson issued one of the most famous ones in 1943.

“I think there is a world market for maybe five computers,” Watson said.

Respected astronomer Clifford Stoll joined the naysaying tradition in a 1995 Newsweek op-ed with this doozy of a statement about the internet.

“The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works,” Stoll wrote.

When technology hits a roadblock, the naysayers get louder. And when markets crash, like the crypto market did in 2018, investors immediately take it as an indictment of a technology’s viability. It’s more of a gut reaction than anything else, but it’s powerful.

The general public has soured on blockchain and crypto-related technology, and Roubini has given this largely emotional response a pseudo-intellectual sheen…

Which makes him an irresistible target for me. But you know what?

I think I’ve done him wrong. I’ve unintentionally put Roubini in the position to do the impossible. To understand what I mean, let’s back up a little.

Bitcoin wants to replace government-issued (and controlled) money and middlemen of all stripes (though Satoshi Nakamoto had mostly bankers in mind). Nakamoto’s whitepaper spelled out in broad terms the technology that could do all this.

It is precisely these claims that Roubini is trying to prove false.

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