The very fact that Roubini is having to write this nonsense is some measure of Bitcoin's success. I'm sure he wouldn't have predicted having to write it 5 years ago during the 2013 "bubble" when it reached the dizzying exchange rate of 266 dollars to the bitcoin.



Where to begin taking this desperate appraisal apart ? Maybe we should start with the idea that pricing denominations define what is a valuable asset and what isn't which is implicit in Roubini's assertion that "No one prices anything in Bitcoin".



The requirement of having to function as a "unit of account" for monetary media relates to its fungibility, not to its commercial adoption. In other words it needs to be divisible to a sufficient degree for exchange rates to be calculated between either goods or other monetary media. Whether the world decides to price their goods in units of bitcoin, dollars or potato chips however, has no bearing on its viability as a digital asset as long as bitcoin is able to back the value in monetary transactions.



Example: There are now an increasing number of financial services which let you deposit bitcoin in an account and "spend" it on the Visa network. Visa is not money. It's a non-denominational trade clearing facility which requires to be asset backed to work. Further, it matters not what units the trade is denominated in because the value that backs it is the bitcoin that was deposited in such accounts. Bitcoin is therefore highly functional as a monetary token and is being capitalised as such.



Roubini would arrive at a more constructive conclusion if he asked himself...why does bitcoin exist ? The answer to that question lies, not in economics but in simple systems analysis which is probably why it's passed him by.



Any trade, whether monetary or barter, is characterised by two fundamental properties:



• ownership

• posession



The only unit of monetary media in which these two properties of the trade are co-incident was commodity money or so-called "bearer tokens" such as metal coins. Exchange a gold coin for a horse and the trade is both agreed and settled in the same exchange.



Over the duration of the 20th century, the large majority of trade migrated to electronic platforms, leaving behind the concept of "possession" in terms of monetary exchanges. Until 2009, only ownership could be exchanged electronically and even that required a monumentally expensive and widely corrupt system of counterparties known as the "banking system" engaging in a complex sequence of electronic smoke signals to facilitate settlement.



Bitcoin is a revolution. It is the first widely acknowledged and valued electronic bearer token in existence and as such is about as likely to "go to zero" as cast iron blast furnace. Roubini is also inaccurate in his rate of adoption comparison with the web and email. Even by the end of the 1990's - 10 years in - getting companies to adopt email was like pulling teeth in many cases. The world wide web 8 years in was regarded as a "quaint but useful" service for geeks.



Also, contrary to his assertion, the "False promise" of scarcity is actually a feature, not a bug. The fact that blockchains can be forked does not prevent the market from arbitrating over distinct assets and placing them in monetary roles, one of which is a store-of-value reserve which is where bitcoin is increasingly consolidating its presence. The Mona Lisa is also infinitely reproducible but try getting $400 million for your perfectly reproduced laser copy.



Roubini needs to think again if he wants to avoid being on the wrong side of history.