Bitcoin proponent Andreas Antonopoulos spoke before the Canadian Senate about the bitcoin. The 11th meeting Senate Committee on Banking, Trade and Commerce featured discussions on threats, risks and advantages of cryptocurrencies.
At the beginning of the speech, Antonopoulos pointed to the benefits of the decentralized financial system in comparison with centralized model.
According to him, centralization had a negative influence on the financial system and caused risks through the layers of regulation. This created “cosy relationships between regulators and industry insiders” which provoked corruption and financial crises.
Antonopoulos added that decentralized system is more secure. Still, he said bitcoin is not unregulated, it is “regulated by mathematical algorithm”. He noted: “The ability to innovate without permission at the edge of the bitcoin network is the same fundamental force that has driven internet innovation for 20 years at a frenetic pace, creating enormous value for consumers, economic growth, opportunities and jobs.”
Although the questions from the senators were positive, some of them expressed concerns that cryptocurrency could be used for money laundering, terrorism financing and other activities.
In a response, Antonopoulos said bitcoin is not anonymous and its transparency and accountability features are easier to implement than anonymity. He gave the example of mobile phone technology, which had enabled millions of people to leapfrog over landline technology and its limitations.
When asked about the possible regulation of digital currency, Antonopoulos said it is better to wait until the technology is more spread and understood. He asked that bitcoin not be “contorted into structures made for banks”, as it is a new financial paradigm.
Senator Campbell asked if people of his generation (age 67) are able to understand bitcoin. He said: “I don’t understand it still and we’re on our 11th meeting […] I’ve been told to keep my old nose out of it.”
In a response to the Senator Stephen Greene’s question about whether bitcoin could be hacked, Antonopoulos said: “There has been no shortage of people trying to hack bitcoin.”
He noted the risks are more to the individual wallets rather than the overall system. Moreover, he said that within 5 years there were no hackers attacks related to bitcoin. “A dynamic system that is constantly exposed to threatening stimuli will develop resistance […] a concept often called ‘antifragile’,” he said.
When asked by Senator Paul Massicotte if it is possible to reject identification requirements, Antonopoulos answered: “What you don’t see is who’s behind the chain.”
Other questions related to the viability of other cryptocurrencies and whether a state could adopt a cryptocurrency as its official currency. There were also discussions on how Canadian consumers would be protected from dishonest actors if bitcoin were widely used by the masses.
The Department of Finance, the Bank of Canada, the Canada Revenue Agency, and the Canadian Payments Association have already given their presentations at the meeting.
Such companies as PayPal, Visa, MasterCard and Interac were among the payments industry representatives.