Lou Kerner on Nouriel Roubini and Hardline Blockchain Skepticism
(This is Part II of a two-part interview. Read Part I here.)
Lou Kerner is the founder of Crypto Oracle and an accomplished venture capitalist. He has been extremely active on the American and Israeli startup fronts and threw his hat into the crypto and blockchain ring just over a year ago. We picked his brain for thoughts on the current industry and where people can improve their knowledge of blockchain.
In last week’s article, Lou Kerner explained his reasons to be optimistic about the future of blockchain. This week, we will publish his thoughts on the recent testimony of crypto skeptic Nouriel Roubini and why he believes it was especially misleading.
Lou is not known for arrogant critiques and has been a voice of wisdom for different sectors of tech for years including connected cars, adtech, cybersecurity, and others. So when he comes out this strongly, there is a serious feeling behind it.
“I don’t hate the haters — there’s a lot of energy, too much, in crypto spent hating the haters,” Lou opined. “My point is that it is ludicrous what’s happening in the US from a regulatory standpoint.”
That didn’t stop him from unleashing on Nouriel Roubini, the so-called ”Dr. Doom” whose constant advocacy against crypto has been a thorn in the industry’s side for a while. However, his recent words set Kerner off.
Debunking Roubini
Following Roubini’s Senate testimony, Kerner wrote a post highlighting the “10 Stupidest Things Nouriel Roubini Said in his Testimony” in response to the latter’s testimony before the US Senate Banking Committee.
“The idea that these cryptocurrencies are ‘currencies’ is ludicrous,” Lou asserted, attacking one of Roubini’s many points (that have been maligned by his critics). “A small percentage of them are trying to be [currencies], but the bulk of them are ‘frequent flier miles.’ It shows a total lack of understanding of what’s going on.”
He went into specifics, saying Roubini simply “doesn’t understand that forks create a new thing.”
“His statement that the forks of Bitcoin Cash and Bitcoin Gold prove Bitcoin isn’t actually limited to 21 million units because they show you can copy the currency, shows a complete disregard for how forks work.”
Separating Rants from Analysis
“I don’t know whether he is ignorant, or if he is [deliberately] misleading. I don’t know what problem he is trying to solve, other than being negative,” Kerner speculated. “From my point of view, it is amazing that this is the best that Congress can find because he clearly doesn’t understand what’s going on.”
The technology is still central to the industry’s fortunes. Several aspects of blockchain technology — a relatively straightforward and simple concept — are still not well understood. Kerner thought one aspect in particular would open more eyes, including Mr. Roubini’s: zero-knowledge proofs.
“People have very little understanding of what zero-knowledge proofs are. I could have written ‘The 50 Stupid Things that Roubini Said.’ He said large companies aren’t going to put their data on public blockchains. With zero-knowledge, they can prove whatever they want without having to show anybody anything.”
Institutions are the Future, whether Roubini Likes it or not
As if Roubini’s words perfectly epitomized mischaracterizations of cryptocurrency and blockchain technology, Kerner saw general errors in the testimony that seem common in some corners. Roubini’s take on potential institutional investors particularly irked him.
“The belief that ‘no institution under the sun’ would use public blockchains — or corporations would completely limit themselves to permissioned blockchains — is utterly wrong.”
From that perspective, Roubini can’t see the benefits of open access to data, so things like open-source development do not carry any value.
It is also important to note that Kerner is not just speaking to institutions’ willingness to invest in public blockchain projects, but actually use the technology themselves. TD Bank is considering it for asset tracking according to an 2016 patent filing. Ripple is also pressing companies and even China on its public blockchain system.
“In my mind blockchains that aren’t permissionless are pretty much just databases — they go against the very spirit of what the blockchain is and what it’s supposed to be about.”
Kerner’s insights are a great example of the entire industry’s reaction to Roubini’s testimony, but as well as a conduit for correcting some common misunderstandings about concepts in the cryptocurrency and blockchain industries. Kerner clearly welcomes skepticism, but like many other people invested deeply in the industry prefers to deal with more sophisticated criticisms and points, not blanket and perhaps out-of-date such as what Roubini brought to the fore several weeks ago. The blockchain and crypto space is clearly moving forward, bear market or not, so observers and critics need to stay in sync with progressing discourse within the industry.
(This is Part II of a two-part interview. Read Part I here.)
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