Roubini compared the system involving cryptocurrencies to North Korea. He says that miners and exchanges are centralized. He labeled developers, particularly the ETH co-founder, as centralized dictators. He also called Bitcoin’s Gini inequality coefficient as worse than that of North Korea.
On Decentralization as a Myth
Vitalik expresses the same opinion as Roubini that there is a problem with centralization in cryptocurrencies. This is why Ethereum is currently working on a system that will prevent centralized situations.
On Being Called a Centralized Dictator
The programmer and Ethereum co-founder countered Roubini’s comparison. He said that there are technical elites in Ethereum governance, like in every cryptocurrency, but his involvement in Ethereum is not as pivotal as it is to an outside observer.
On the Gini Inequality Coefficient
Vitalik says the 0.88 estimate for Bitcoin’s Gini coefficient is misleading. He gave a two-point response to explain why this is:
- He correlates the Gini coefficient of cryptocurrency to cello ownership. Though people owning cellos are more than 0.88, it does not make the musical instrument plutocratic.
- He iterates that each wallet address signifies a user. And the addresses that belong to big exchanges have beneficial owners.
Bitcoin evangelist Alistair Milne also responded to Roubini.
4/ The inequality coefficient of Bitcoin is *not* higher than North Korea. The largest Bitcoin wallets are owned by large groups of people (e.g. Coinbase's wallets are shared by up to 25million users). The number of people with some exposure to Bitcoin has ~30x'd since 2014— Alistair Milne (@alistairmilne) October 8, 2018
Roubini’s twitter post occurred as he prepares for this week’s hearing on Exploring the Cryptocurrency and Blockchain Ecosystem held by the US Senate Committee on Banking, Housing and Urban Affairs.
I officially predict a financial crisis some time between now and 2021.— Vitalik Non-giver of Ether (@VitalikButerin) October 10, 2018
Not because I have any special knowledge or even actually think that, but so that I can have a ~25% (or whatever) chance of later being publicly acclaimed as "a guru who predicted the last financial crisis".