Skepticism dominated an audience on Tuesday over cryptocurrencies and the blockchain in parliament.
Martin Walker, director of the non-profit center for evidence-based management and a former product developer at the blockchain R3 consortium, said the technologies are unlikely to solve inefficiencies in the financial sector, specifically criticizing current products of Ripple.
Ripple’s defense record was regulatory relations director Ryan Zagone. Dr. Grammateia Kotsialou, a postdoctoral researcher at King’s College London and Chris Taylor, chief operating officer of Everledger, Blockchain’s new asset tracking firm, completed the group, which answered questions from the Select Committee of the Treasury of the British Parliament.
During his argument, Zagone cited the ability to track money transfers as a central benefit of the company’s technology. However, Walker argued that the company’s model offers little more than the existing SWIFT messaging system, saying that “the hard part of keeping track of payments is making the people involved in the payments actually load the state.”
“So, simply having a chain of blocks does not make people update the payment status,” he continued.
He also criticized the Ripple pilot projects that propose using XRP as a means to join two currencies in an international transaction, a function that the US dollar does. UU Usually occupy.
“You have the concept of a” crossing “currency to deal with that scenario in which there is a lack of liquidity,” explained Walker, commenting more:
“Someone is needed to provide liquidity to get in and out of Ripple. And keep Ripple, a currency that has seen its price fall 80 percent and then go back 100 percent over the course of the last two months, therefore placing cryptocurrencies in the financial sector is a great source of risk. “
The ministers at the hearing also turned their attention to Ripple, specifically expressing confusion regarding the relationship of XRP with Ripple Labs.
MP Stewart Hosie commented that “if people buy XRP, a financial asset of Ripple Laboratories, it does not entitle them to a share in the property, there is no right to convert back to conventional currencies, and they do not pay any returns. It also apparently has no purpose. ”
However, Zagone retracted this claim, saying that “that is a common misperception”.
He told him:
“XRP is open source and was not created by our company, so it existed as an open source technology. We created a company that was interested in modernizing payments and then we started using that open source technology to do it … We did not do it ‘We did not create XRP … What we do have is that we have a significant amount of XRP, which was given to us by some the open source developers that created it. But there is no direct connection between Ripple and XRP. “
Asked if XRP was designed to avoid regulations, Zagone reiterated its statements from a previous hearing that Ripple only sells XRP to institutional investors and not to retail consumers, and in the same way that the company simply uses XRP, but does not. It is directly connected.
With the conclusion of the hearing, Walker advised the Committee to think critically about blockchain technology and cryptocurrencies, concluding.
“I would simply urge the committee not to repeat the mistakes that are made over and over again of being blinded by the word innovation, particularly in relation to financial products.”