Antonopoulos to Australian Senate: Bitcoin Regulated by Math

NEW YORK (InsideBitcoins) – Andreas M. Antonopoulos provided testimony on bitcoin and digital currencies to the Australian Senate yesterday, and he was able to use that opportunity to educate the senators on cryptocurrency and provide some suggestions on how the regulators should approach the digital currency. After providing a brief overview of how bitcoin works and why it is important, Antonopoulos was able to answer some questions for the Senate Economics References Committee of the Australian Senate.
Regulated by mathematics
One of the more interesting points made by Antonopoulos during his opening remarks was that regulation already exists in bitcoin. However, Antonopoulos was not referring to regulation via elected officials or government regulators. Instead, he was pointing out how the open-source code that powers the bitcoin network regulates the currency by default. He explained:
‘Contrary to popular misconception, bitcoin is not unregulated. Rather, several aspects of the bitcoin network and financial system are regulated by mathematical algorithms. The algorithmic regulation in bitcoin offers predictable, objective, measurable outcomes. Algorithmic regulation provides certainty without nationalist or geopolitical influence. In a time of unprecedented currency wars, mathematical neutrality is a safe haven.’
Antonopoulos went on to state that traditional financial regulations may not be effective when applied to bitcoin. He urged the Senate Committee to avoid attempts ‘to apply centralized solutions to this decentralized network.’ After receiving his first question from Senator Matt Caravan, Antonopoulos clarified that these centralized solutions may work when applied to custodial accounts, such as exchanges or web wallets, built on top of the bitcoin network.

This post was published at Inside Bitcoins on Mar 4, 2015.