(Bloomberg) -- Last week, economist Nouriel Roubini tested his arguments against cryptocurrencies at the Milken conference, only to ignite a verbal brawl on stage. On Thursday evening in Brooklyn, the whole audience was hostile.
Speaking to a packed room of blockchain believers in Williamsburg, and sitting across from Joseph Lubin, the co-creator of No. 2 cryptocurrency Ethereum, Roubini tried starting with an icebreaker.
“Great being here today where everyone, like me, is a crypto-skeptic,” said the professor from New York University’s Stern School, a line that drew one or two nervous chuckles but mostly silence. “Just joking.”
Though Roubini would go on to call cryptocurrencies “nonsense,” the debate in Brooklyn was mostly civil, unlike at the Milken Institute conference last week in Beverly Hills, California, where the moderator called for a time out. Lubin and crypto believers see the financial world moving away from centralized control, with digital coins underpinned by blockchain ledgers enabling transactions and collaboration.
“We’re not trying to move into a radically decentralized world right away,” said Lubin, chief executive officer of Consensys Inc., which is developing applications using Ethereum blockchain. “The internet has transformed society but it didn’t happen instantly, and the internet is broken because there’s no identity construct and there’s no money construct. We’re fixing that.”
Roubini, famous for foreseeing the 2008 financial crisis, predicts a revolution in the other direction: centralization, with authorities using technology to reduce risk, protect consumers and hone efficiency.
“There is a significant need for a revolution in financial services,” he said. But it’ll feature “artificial intelligence and big data and payment systems like Alipay and Venmo and Square and PayPal. And those are centralized systems.’’
The Fluidity Summit at the domed headquarters of the former Williamsburgh Savings Bank was an assault on the old structures of global finance. Roubini said he came to participate in an intelligent discussion. On Thursday he also published an op-ed on initial coin offerings, which startups use to raise money and facilitate business. It cited data showing 81 percent of ICOs “created by con artists, charlatans and swindlers looking to take your money and run.’’
If any venture wants to maximize profits, he said on stage, “the last thing you should do is limit the possibility to buy those goods and services by first requiring them to buy a token.”
He was clearly in a small minority in the room.
“The purpose of inviting Roubini is to have an intellectually honest debate, to make sure we aren’t drinking our own Kool-Aid,’’ said Sam Tabar, strategist at AirSwap, a peer-to-peer cryptocurrency marketplace and conference sponsor.
©2018 Bloomberg L.P.