Saxo Capital Markets hosted the second instalment of its TradingDebates series yesterday at the iconic British Museum in London, UK.

The ‘Future of Trading’ event attracted many people from the City’s trading and investment community to discuss topics such as the geopolitical risks surrounding the energy markets and the future of the European Union. And of course, bitcoin and cryptocurrencies made an appearance.

In the last panel discussion of the afternoon, three speakers participated in the debate titled ‘Are Cryptocurrencies a Ponzi Scheme or a Real Currency Alternative?’

The panel comprised of the following members:

• Sean Park, Founder of Anthemis Group, a digital financial services investment and advisory firm
• Steven Englander, Currency Strategist at Citigroup
• David Birch, Consultant at Consult Hyperion, a consultancy specializing in electronic transactions

The discussion was moderated by Izabella Kaminska of FT Alphaville.

Good PR?

The debate kicked off on the back of yesterday’s news that Bloomberg is now listing bitcoin prices on its financial terminals. The speakers largely agreed that it did not mean legitimization for bitcoin.

“What does it mean? Frankly, nothing,” said Birch, adding that it was good for companies’ publicity.

Using the example of the local merchants now accepting bitcoin he said:

“There are many shops that take bitcoin where you can buy pizzas. Nobody [uses bitcoin to buy goods], but you get featured on the BBC. If you are one of those places, it’s good publicity.”

Park added that Bloomberg was “late to the game”.

History lesson

In lieu of the fact that this event was held at the British Museum, which is home to some eight million pieces from all continents documenting human life from its beginnings to present, many references were made to the evolution of money from coins to paper to digital currency.

“If we would be having this conversation 400 years ago,” said Birch, “people would say, ‘you know what, that central bank idea sounds absolutely lunatic’.”

Topics like bitcoin and crime, its volatility and deflationary nature, and technology behind cryptocurrencies also came up, as they do at many bitcoin events and talks.

However, when one of the panellists polled the audience to see how many people understood the technology behind cryptocurrencies, at least 80% of the room did not put their hands up.

Explaining the technology

The debate was poised to discuss the question if crytpocurrencies like bitcoin are an alternative for fiat currency but it turned out to be more of a high-level introduction session for the uninitiated in the audience.

In fact, one member of the audience said in the question round following the debate:

“You guys have been talking Chinese.”

Naturally, a lot of time was spent explaining cryptocurrencies and the technology behind it.

When Park was trying to draw the distinction between the Bitcoin protocol and bitcoin as a currency, he got the two mixed up himself. He said “Big B was the currency and small b was the bitcoin protocol.”

In the end, the general consensus of the panel was that they thought that bitcoin – particularly the block chain – as a technology was promising, but they did not say it would replace fiat currency.

Support for bitcoin

That was probably good news for many people from the banking industry in the audience.

Some prominent members of London’s financial community were present at the event, including Lars Seier Christensen, the co-founder and co-CEO of Saxo Bank.

Christensen made headlines earlier this year when he revealed his support for bitcoin and acknowledged that his online investment company was exploring bitcoin’s potential use.

British Museum image via Shutterstock