Oct 01, 2016 at 13:10 // Blockchain

Patrick Thompson Author

In a recent interview, head of research at Banco de Desenvolvimento de Minas Gerais in Paris advised the world to beware of Bitcoin.

Daniel Boutrin, a former security and cryptology expert at the central bank of France, who has been working in the banking and finance industry (JP Morgan, BNP, HSBC, Société Générale, Crédit Agricole) for twenty years and has been working with blockchain for two years, stated against using Bitcoin and Blockchain.



The crypto-community agreed with Boutrin that recommending Bitcoin jeopardizes a banking/finance employee's employment status, but other than that, the number of individuals who support Boutrin’s statements is low. Here are a few counter-arguments that experts were able to provide to Boutrin’s ideology.



Bitcoin experts respond



Daniel Boutrin said “Concerning money laundering, when a buyer agrees to transmit X + loss value, and when a seller agrees to receive X + win value, the laundering occurs. Because there is no collateral, loss/win value is actually created out of air. From Tracfin’s point of view that’s nothing less than a door for money laundering and upon some suspicion they can/should/will hold the transaction. With crypto-currency you share the ledger file, so the only way for Tracfin to intercept the cash would be early termination (when you convert your cash to bitcoin) or by checking the ledger once addresses are bonded. I will not go any further into detail, but don’t forget that money is by definition an exchange of collaterals. Trying to sell money without having money is basically asking the last payer to lose his cash.”

David Duccini, the lead developer of GiveCoin 2.0 and founder of the Strength in Numbers Foundation said:



“The same can be said for just about ANY stock on exchange — there is no collateral… For that matter, whole countries default on their bonds all the time.”



Beginning in 1971, the United States stopped backing their currency with gold. The only thing that the USD is backed by is mutual agreement and trust. In that sense, all we do is exchange 75% cotton/25% linen bills that we deem valuable because everyone has agreed to use it as a medium of exchange. “Because there is no collateral, loss/win value is actually created out of air. From Tracfin’s point of view that’s nothing less than a door for money laundering” … In that case, must we consider all cash transactions instances of money laundering?



It is easy to launder cash because you cannot track dirty money unless there is a paper trail, however, that’s not the case for Bitcoin. When Coinidol.com asked George Basiladze, Founder of Cryptopay why money laundering is not as feasible with bitcoin – as Boutrin believes it to be – he said, “it’s hard to launder through bitcoins because they are traceable. [That is why] Cash is the preferred option in this case [money laundering]. On top of this, bitcoin is such a small fraction of the world economy, that it physically cannot handle the volumes of “dirty money”[that it would experience from money laundering].”



Another concern Boutrin had regarding fraud and laundering was the use of RSA. Boutrin claimed “RSA is a weak system of encryption, regardless of 64 bit, 512 bit, 2049 bit, it takes 1 second to crack.”







Basiladze was able to provide insight on why people do not need to worry about the compromisation or cracking of RSA.



“RSA is secure, just login into your online bank - your money is still there. Most of the financial institutions use RSA/AES for secure messaging and authentication. If you can crack RSA/AES, you can be infinitely rich :)”



A large part of the crypto-community respectfully disagreed with most of what Boutrin had to say. Michael Morton, Senior Trading Analyst at Ethereum Labs said, “Daniel Boutrin, I challenge you to a friendly debate on the future of banking and finance. It's easy to dismiss technology that is a threat to the central banks with no one to defend against your illogical points”

Do you think our experts provided sufficient evidence to refute the statements made by Boutrin? Or, do you believe Boutrin’s statements to be objective?