Despite the excessive use of technical jargon, Bitcoin technology was the most prominent in all presentations. The lack of a common domain language is what makes it difficult to understand cryptocurrencies.
On Wednesday, November 20th, the Argentine Senate began the first cycle of debates on cryptocurrencies, by the hands of the economy and investment commission. Senator Silvia Elías de Pérez said that the debate aimed to help senators better understand this technology in order to determine whether it is necessary to regulate cryptocurrencies and the path to be taken for this, which indicates an unusual opening to the stage of regulating non-state currencies.
Balance, Language and Technical Jargon
The data protection specialist, Johanna Caterina Faliero, highlighted the balance that there should be between the regulation and privacy of cryptocurrency users, as well as the existing challenges to make an effective regulation that does not stifle innovation or is invasive regarding the use of technology.
She also noted the lack of a common domain language to refer to this technology. In this regard, Faliero and other speakers present in the Argentine Senate indicated that words such as “crypto assets”, “cryptocurrencies”, “digital currencies” and “virtual assets” are used interchangeably in the ecosystem, thus generating confusion.
For his part, the engineer Francisco José Faliero confused those present with explanations and comments about the operation, advantages, and disadvantages of cryptocurrencies, since his presentation was full of technical jargon and technological inaccuracies.
Among the most surprising comments, it is possible to highlight irreversible transactions and limited issuance as being disadvantages of Bitcoin, the trade of EOS cryptocurrencies in Ethereum and Ripple as being superior to Bitcoin, the complaint about the energy expenditure generated by mining and the unceasing argument of the “lack of real support”.
It is necessary to clarify that irreversible transactions are a requirement of the system to achieve decentralization, as Satoshi Nakamoto well explains in the introduction to his little-read white paper on Bitcoin.
Bitcoin to the Rescue
Cristian Bruno, Technology Director of Bitex, an Argentine company dedicated to the trade with Bitcoin, explained to the audience that Bitcoin effectively addresses three problems: ownership of money, money held in the account and money double-spending.
Bruno compared asymmetric or public-key cryptography with a vault (public key) and a key (private key), the hash function with a machine to generate fingerprints of any digital thing, and miners with scribes responsible for the integrity of accounting records (blockchain) to whom the network encourages for their work.
After explaining how the network operates without a central entity, the executive told the Senate that he does not consider Bitcoin to be equal to Libra or other cryptocurrencies, and that he does not believe that it should or may be regulated.
BCRA Follows Good Examples
Those in charge of the BCRA financial stability commission highlighted some crypto asset categorization models, such as the Swiss one, which divides them into value tokens, payment tokens and utility tokens. They also mentioned some examples of advanced regulations in Switzerland, Japan, the US and others in Europe, highlighting the fact that regulating cryptocurrencies is a challenge.
They also mentioned the alerts issued by global entities, such as the G20 or the FAFT, about the risk of cryptocurrencies and stablecoins (anchored cryptocurrencies) for global financial stability.
Danger without the Community
What happened in the Argentine Senate was a step in the right direction, but it is necessary that the entire community of users and cryptocurrency companies be involved. In line with the spirit of transparency of cryptocurrencies, the recordings of the senators’ debates should be published for anyone to see and citizens invited to participate since cryptocurrencies are the future of the national and world economy.
By Willmen Blanco
