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Music Silence Applause Finally, we have Torsten Hoffmann, who is the producer of the Cryptopia film. Thanks, Peter. Five years ago, I made a film about the history of money, banking and Bitcoin. Buckle up, we said, it's going to be a bumpy ride. And now, some of the big brains and big egos who championed cryptocurrency claim they are building a crypto-utopia. Magical things will happen. It's something called blockchain technology, and it just might change your life. And they really could compete with, if not even take down, the Facebooks and the Googles and the Amazons. My name is Torsten Hoffmann, and I'm going to put some of these claims to the test.
Some critics say, you kind of hurt the community. What's your response to that? This innovation has enabled a lot of criminals and scammers. But basically, looking at it now, you lie to us. Forget all the hype, we'll explore the true potential of this new invention. See who is already using it. Making it really easy and simple for people to own a piece of a solar farm or a wind farm. And go deep into a secret bunker that holds billions in Bitcoin. And we cannot talk too much about it, because it's pretty secret what is down there, right? If Bitcoin succeeds, it will be at least a million dollars per coin.
We'll learn lessons from the past and meet those building the future. But they are those who want to kill it. Join with me in introducing a bill to outlaw cryptocurrency so that we nip this in the bud. Control it. Next year, people are going to start seeing that we have hundreds of patents and everything changes. Or change the world with it. Welcome to Ground Zero in the battle for the future of the Internet. Web 3. 0. They wanted a science fiction dream. What they actually did was build forthcoming disaster. A lot of people were not willing to learn and were not willing to admit they were wrong. They're idiots.
Why is this fraud allowed to speak at this conference? Stop telling me that I have no clues. That's just why. If you don't support free speech, you don't support Bitcoin. You're an enemy of Bitcoin. This is bigger than the Internet, the Iron Age, the Renaissance, the Industrial Revolution. This affects the entire world. For years and years, I've been researching blockchain technology, cryptocurrencies, the market booms and busts. And many have asked me to explain Bitcoin to them. But I think this is why it's so difficult. I think the most important thing is to make sure that you're not just a The total value of all the world's money is about $120 trillion.
What you probably didn't know is that it's worth the money. And there never will be. Oh, and almost all of the world's money is already digital, just entries in a ledger, usually managed by a bank. Only a small portion exists as physical currency, like cash or coins. Think of it this way. Your employer deposits $1,000 into your bank account. Then you pay $200 in taxes, $500 for rent, $200 for bills and shopping, and so forth. Whether you use credit cards, debit cards, PayPal or bank transfers, they're all just pluses and minuses in different digital ledgers. That's why there's almost no need for physical money in our daily lives.
During the financial crisis in 2008, a mysterious figure called Satoshi Nakamoto published this nine page white paper. It said with Bitcoin's open source software, we can create our own money without banks or governments. This new nerd money called cryptocurrency is created and stored in computers. And before long, there was a growing fan club, mostly guys like Roger Veer. Today, he's a polarizing figure. But back then, he gave away thousands of coins to kickstart the movement, and they all called him Bitcoin Jesus. I think that for many years, he brought more people to Bitcoin than anyone else. And we will forever be grateful to him for doing that.
When I was a kid, I was reading all these science fiction books. They were talking about how the world is going to be when we have this like anonymous digital cash that people can use on the Internet that's not controllable by anybody. And then when Bitcoin came along, it was like, wow, the science fiction money that I had been reading about as a kid is finally here. So I got so excited about it. I heard about it at about 10 in the morning and I was planning to go to work that day, but I didn't. I stayed home the entire day reading about it.
Didn't leave us, stayed up all night that night reading about it, stayed up all night the next night. He went deep down that rabbit hole to the point of physical exhaustion. I called up a friend of mine and said, please help me. I'm so sick. Can you bring me to the hospital? Yeah. Roger got bit bad by the Bitcoin bug. It's truly one of the most exciting inventions ever in the entire history of humankind. But how does it work? When my friends ask me to explain, well, I often start with this analogy. Imagine a bank vault where you have a safety deposit box.
The key opens one of the boxes where you can securely store physical valuables like gold coins. In Bitcoin, there are digital keys. Think of them as very long passwords. Your private key gives you access to a wallet, which unlocks billions of unique Bitcoin addresses. Each one is a virtual safety deposit box that only you can open with your key. And there are more addresses in this virtual vault than atoms in the universe. The doors to these boxes are transparent. You can see inside them. Here's one with digital money,. 21Bitcoins. Sending them from one box to another is what's called a Bitcoin transaction. We'll explain that later.
But for now, just remember that these digital coins can only exist inside these transparent address boxes, can't be copied, and can't ever leave the vault. And this vault is owned by no single entity. You don't need permission from a government, a bank, or a corporation to use it. For most early adopters of Bitcoin, it was all about global peer-to-peer electronic cash. Room 77 in Berlin was one of the very first businesses to accept Bitcoins as payment for physical things, beers and burgers. Back in 2011, there were no mobile wallets, right? So you had to go there, bring your laptop, type in this long address, risk losing the money if you didn't type it correctly.
So the first guy who built the mobile vault was some guy in Berlin who built it in order to buy his beer with his phone instead of his computer. We can accept credit cards. Okay, what's your problem with credit cards? My problem with credit cards is that as a merchant it costs me 3% of my fees, that I have to be afraid for 180 days that my money won't be recovered. Credit cards are an old technology and actually pretty complex. And your payment details are shared with many middlemen. Each of these parties are also taking a cut of the action, which is built into the price of nearly everything you buy.
If you purchase something internationally, double the number of middlemen and triple the fees. Credit cards handle almost 20 trillion dollars of transactions per year. Early Bitcoin adopters like Room 77 avoided paying credit card fees. But Jörg's real beef was with the bankers who collect them. The problem I have with banks is that we in our society have managed to build an ineligible box with the banks, an ineligible criminal syndicate that is too big to fail, too big to jail. An HSBC is a great example of ten thousand times more help for murder. Nobody even has to go to court because the top prosecutor in the US has complained, we can't do that, the economy will collapse.
Collapsing economies, murder, I didn't sign up for this. Let me get a drink. Well actually I need to buy my German crew some hot glühwein and explain why they won't get paid until after Christmas. You see, transferring money from Australia, where I live, to Germany can take several days and it will cost 30 dollars plus exchange fees, just for updating numbers in digital ledgers. After all it's just moving data. I can send a picture or video to anyone on the planet almost instantly for free. We live in the age of the internet but the banks won't send the data after 5 pm or on a weekend? That doesn't make any sense.
So what if those slow and expensive middlemen with their multiple ledgers could be replaced by a giant database synchronized over the internet? That's the big idea behind Bitcoin. And it's run by a decentralized global network of powerful mining computers and regular laptops. Here's how it works. When I pay my cameraman, what's really happening is that I use my key to open my wallet and then instruct the network to send Bitcoins to his address. Most Bitcoin apps use QR codes to identify an address. You scan it, then swipe to use your key and approve the transaction. This information is shared throughout the global network within seconds.
Every 10 minutes or so, one miner, using a tremendous amount of energy, beats all the others in a contest to solve a very difficult math problem. That miner is authorized to arrange the most recent transactions into a structured block and is rewarded in Bitcoins for this work. All of the data contained inside each block is represented by a checksum. The miner now adds the new block to the previous one. That's why it's called the blockchain. Now the ledger will be updated globally. The checksums of the previous block match the beginning of the new one, which are baked together forever. It's impossible to tinker with the data inside the block without changing the checksums and breaking the chain.
This immutability is the first rule of Bitcoin. It means no one can ever change what was once recorded in the blockchain or spend the same coin twice. That's also called censorship resistance, and it's critical to Bitcoin being used as real money. Award-winning journalist Laura Shin tells me a story about women bloggers in Afghanistan being paid in Bitcoin. One of the women had an abusive husband and saved up her Bitcoins and eventually was able to divorce him because she was able to control her money when she earned the Bitcoins. In my first film, the early adopter said that this kind of financial freedom for everyone was just around the corner. The world's most populous network is adopting Bitcoin. That's the internet.
The world's largest economy is adopting Bitcoin. That's the internet. We have transcended borders. It's totally failed as electronic cash. David Gerard says it has unbanked the banked more than it has banked the unbanked. He's an outspoken critic of this technology. It's not very good as a payment system. There's a small payment use case if you want to trade in things that the government doesn't want you to trade in. That's David's polite way of saying illegal stuff. In 2011, most of my partner colleagues were saying three things. So whether the drugs, pornography, arms sales. I don't know.
The Silk Road was a black market on the dark web where buyers and sellers used Bitcoins to fly under the radar of the authorities. It had one million users until the FBI showed up and shut it down. They caught this guy for running it and confiscated the coins held in escrow by snatching his computer. And then they locked him away for life. It seems like a pretty straightforward case of law enforcement doing their job. But in crypto, not everybody sees it that way. People have an absolute right to put whatever they want in their own bodies because their bodies belong to them.
That makes Ross Ulbricht and the users of the Silk Road heroes not criminal lawbreakers in a bad sense. They were criminal lawbreakers in a good sense the same way that Harriet Tubman or Rosa Parks or Thomas Jefferson or George Washington were. No doubt, cryptocurrencies can be a tool for criminal activity. But so are dollar bills or the banking system. And let's not forget, the blockchain is a public ledger. It's actually been quite useful for uncovering crimes. A former federal prosecutor named Catherine Hahn, she was the one who discovered that there were a couple federal agents that were pilfering the Bitcoins that the government had obtained from the Silk Road case for their own gain.
And what was interesting was she got a tip that there might be one agent that was doing this, but from looking at the movements on the blockchain itself, she realized that there were two people. The prosecutor could see those Bitcoins being moved. And when the dirty cops tried to sell them for dollars, they got busted. But what makes Bitcoins worth stealing? Why do they have value at all? Let's go back to where Bitcoins are stored, in transparent digital deposit boxes, protected by strong cryptography. They can never be copied or leave the vault, because any transaction of any Bitcoin, down to a 100 millionth fraction, is recorded in the blockchain for eternity.
This synchronized global ledger is shared among thousands of computers worldwide. That's why it can't be compromised or altered. Think about that. We can make an infinite number of perfect digital copies of a movie, a song, any file. But for the first time in history, this distributed record keeping allows us to have a truly unique and fungible digital object that is also scarce. If you could count all of these virtual coins, you'd find about 18 million of them today. The mining reward is the only way new coins are created. In the first years of Bitcoin, miners competed for 50 Bitcoins every 10 minutes. Then, their reward for processing transactions dropped to 25 Bitcoins, then 12.
5, and then half again and again every four years. It's good old-fashioned supply and demand. If investors or users of Bitcoin create a higher demand than this decreasing supply, the price will go up. When the cap of 21 million is reached, the protocol stops the network from creating any more. It's the opposite of our traditional money supply, which keeps growing and growing. An unlimited amount of dollars versus a very limited supply of Bitcoins. You do the math. If you use euros or dollars, you might not care about a little inflation per year. But if your currency isn't stable, you might be a trillionaire on paper and be dead broke.
I grew up in Patagonia in the southern part of Argentina. My parents are ship ranchers there. And I remember growing up in my childhood, I saw my parents lose everything three times. First because of a huge devaluation, then because of hyperinflation. And the last time because the government confiscated all bank deposits. I think that today there are billions of people, at least four billion people, who would be a lot better off by having access to a form of money that is non-political and more democratic. We think of finance, we think of banking, we think of money. In terms of the experience and perspective of a Western European or a developed nation person.
And that is really just a billion and a half people who have a very privileged financial life. What about the other six billion? Every single country that is free has essentially a legal status for cryptocurrencies that is very open and permissive. And every single country that is unfree has a restrictive or banned cryptocurrency status. This is the Berlin Wall, still a powerful symbol of a government trying to control its citizens. But this is what happens when people want to be free. The people who are free are the ones who are not. And the people who are not are the ones who are not.
The government is trying to control its citizens, but this is what happens when people want to be free. The very first open crypto war is playing out in Venezuela, where the local currency loses value every hour due to hyperinflation. A lot of people in Venezuela are trying to mine cryptocurrencies, and the government views this as a threat, obviously, because they're trying to keep the boulevard propped up. The government actually provides electricity to a lot of people, and if they perceive that your electricity usage has gone up, they will come and check if you have mining equipment in your house, and they will confiscate it if they find it. And that brings us to the big question.
Can governments or banks ban Bitcoin? So the title is Jamie Dimon, Here's Why You're Wrong About Bitcoin. Diamond runs JP Morgan Chase, one of the largest banks in the world that moves $6 trillion every single day. He said of Bitcoin, eventually it will be closed. And then I said to anyone who knows anything about the technology, this is an incredibly absurd statement. I even said it was a little bit hilarious because I did find it kind of funny, the idea that he thought you could close Bitcoin. You'd have to shut down the Internet, which also doesn't make sense. I could understand if you wanted Bitcoin shut down or hoped it was a fraud.
I mean, if I were you and if I really understood the disruption crypto assets could bring to financial services, I'd be very scared. And I think whatever Jamie Dimon says or thinks about Bitcoin is as relevant as whatever the postmaster general thought or said about email. Who cares? Then I wrote, Sincerely, Laura Shin. But some politicians still think they can stop open source software. I look for colleagues to join with me in introducing a bill to outlaw cryptocurrency purchases by Americans so that we nip this in the bud, in part because not an awful lot of our international power comes from the fact that the dollar is the standard unit of international finance and transactions.
Clearing through the New York Fed is critical for major oil and other transactions. And it is the announced purpose of the supporters of cryptocurrency to take that power away from us. Cryptocurrency represents a litmus test for governments. It reveals how much your government believes in the fundamental freedoms and human rights. Because if they don't trust their own citizens to have control over their own money, that says a lot about the government. There's very little about cryptocurrency. You see, the reason why some governments and most banks are threatened by this technology is simple. Your private key and your wallet can replace your bank account.
The network is run by software and its currency is made and maintained by computing power and electricity. It can't be manipulated by central bankers, Wall Street lobbyists or politicians. But with new freedom comes new responsibility. Simple rule. If you control the keys, it's your Bitcoin. If you don't control the keys, it's not your Bitcoin. Your keys, your Bitcoin. Not your keys, not your Bitcoin. Your keys, your Bitcoin. Not your keys, not your Bitcoin. Got that? If you lose your key, you will never be able to access your coins again. And if someone hacks your computer where you store those passwords, your coins will be stolen in a second.
And remember how Wences' family had their money stolen by their own government? Well, maybe that's why he built the Fort Knox of Bitcoin security. Zepo. Most of our 7 million customers are in emerging markets. In countries where there's problems with the currency, we have explosions in activity like Venezuela right now or Turkey. And we developed this system of vaults where we have five private keys for each one of our Bitcoin addresses. We keep those private keys in an offline server that has never been online, will never be online. It's inside the vault. The vault is inside a bunker, usually deep underground. Our main one is in Switzerland in a decommissioned military bunker.
I just had to see it for myself, even though it took months for us to get cleared for a tour. We were met by Christoph Oswald, a former military commander who runs the place and a representative from Zepo. Christoph said the guards would rather shoot us than show us around. I hope he was kidding. They need to bring in the material to the other side of the personal lock. First up, one more check of our IDs, a pat down for weapons or any other monkey business and gear inspection. Even the boss was searched. It took nearly an hour to get my team through security, but it was worth it.
No other film crew has been allowed access. We are the largest custodian of Bitcoin in the world because a lot of the largest holders in the world use us for security. Rumor has it that 10 percent of all Bitcoins are stored here and in their four other secret locations. Unfortunately, I can't confirm any of those numbers. From the mountain, we are getting a lot of benefits, earthquake proof, flooding proof. But on the other side, you're facing a lot of additional cost. Like maintaining seven independent backup power supplies. The labyrinth of tunnels deep into the mountain is interrupted by nuclear-grade doors.
Good? It's a level of security applied to all of the data Christoph protects here, not just for example. And we cannot talk too much about it because it's pretty secret what is down there, right? Are we allowed to film there? No. There were doors that remained shut and security measures we weren't allowed to see. And some of those checks may be biometric, including the eye and a fingerprint scan. And the fingerprint scanner also makes sure that you are alive, that you didn't cut someone's finger and you're just using it to open a gate. Yeah, so you must have a pulse. Don't touch the racks. These aren't Zappos actual servers.
But if you've ever wondered what cryptocurrency thieves dream about, it's sitting somewhere down here, unplugged from the internet. But there is absolutely no way, zero way to attack the data which is on the cold storage side. But here's my question. Why do I need the cold offline servers to be inside a mountain? Can it be in my basement? While the server is in your basement, it still can be stolen, right? So this is like money. It is data. Yes, it's bit and bite, but it is money at the end and a lot of money. And this is why this data center is more a bank than a data center. OK, let's do a quick recap.
We now have billions of dollars worth of data secured in digital banks deep inside secret military bunkers. If you don't think Bitcoin is already changing the world's concept of money, you haven't been paying attention. Remember Mervin? He used to be a senior executive at Deutsche Bank. His colleagues once said Bitcoin was for lawbreakers and troublemakers. He now runs a hundred million dollar crypto fund out of Malta. Our research shows that the crypto markets are going to probably be worth about 8. 7 trillion in 2027, which is a 50 X from today. Exactly. Most financial analysts say you better stick to your shares and bonds and dollars. Bitcoin is dangerous nonsense, far too risky as investment.
To others, Bitcoin is an escape hedge that will take them away from risk. An insurance against a financial doomsday. A way out of the debt crisis, negative interest rates, trade wars and economic downturn. They say it's an anti-fragile asset uncorrelated to financial markets. So who's right here? Well, every time I turn on the television, it gets even more confusing. Bitcoin is worth about a little bit under 200 billion dollars today. All the gold in the world is worth 8 trillion and it could become the next gold. In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending.
But if Bitcoin is out there and gold is out there, it can be a participant in bringing down the dollar. I say it's the mother of all bubbles and it's also the biggest bubble in human history. I think this is a currency. A currency that's really going to work eventually. I think it is working and there will be other currencies like it that may be even better. Bitcoin is successful only because of its potential for circumvention, lack of oversight. So it seems to me it ought to be outlawed. It doesn't serve any socially useful function.
This film is an investment advice, but it strikes me that most of these TV shows just want to stir a controversy. They don't understand what's going on, but they know that filling airtime with a controversial topic will get them higher ratings. So how about the general public? In America, the younger generation already starts to trust this new asset class. And Wences says Bitcoin may reach a million dollars per coin. I would say the biggest financial mistake you can make is that you don't have a good financial system. The biggest mistake you can make right now is to own an amount of Bitcoin that you cannot afford to lose because it's super risky and you may lose it.
The second biggest financial mistake you can make is not to own any because you put 1% of your net worth in Bitcoin. Most people can afford to lose 1% of their net worth. And if I am right, it's going to be more than 100% of your net worth. So with a non-material exposure, you change your life. What you would spend on a romantic weekend with your wife, say sorry, we're not going to do that this weekend. I'm going to just buy Bitcoin, consider it spent, it disappears, check in seven years. I either give you bad advice and cost you a weekend or I want a grand kid called Wenzito.
But what you failed to mention is the currency, the microtransaction. All of that is irrelevant, right? Meaning all of the cryptocurrencies are way too volatile for anyone to take them seriously. Hold on. Let's go back to where we started. Bitcoin was created as peer-to-peer electronic cash. That was the killer app, a payment directly from you to me, from me to the coffee shop. I have bought a bag of coffee for two Bitcoin in 2012, which today cost me $12,000 in today's money. That is a deflationary effect. As long as Bitcoin keeps doing sudden increases in prices, that's going to stop retail use in its tracks.
With Bitcoin, you can send one dollar or one million dollars worth of value anywhere in the world. You can do it for free. But basically looking at it now, you lie to us. Yeah, that's what they all used to tell me. Cheap, easy, fast, global, unstoppable. I'm not done with you, pal, but I need to explain what happened here. Every block contains about one megabyte of data, much smaller than a photo you post on Instagram. That means only a limited number of transactions can fit into each block. If you want your payment to jump the line, you can choose to pay a premium fee or sit and wait.
At one point, the blocks became so full that the transaction time went to several hundred hours. That's days. And it was more expensive than international wire services. It got so bad that a Bitcoin conference wouldn't take payment in Bitcoins. And he's the guy who promised me moving money fast and for free. What went wrong? And that's a direct, intentional result of Bitcoin Core's policies of intentionally making it slow, expensive and unreliable. And Roger blames this guy for Bitcoin not becoming a mainstream global currency. There are no shortage of conspiracy theories. Blockstream was founded in 2014. The original co-founders are a lot of core developers.
Those are the software coders who continued building Bitcoin after Satoshi vanished. Roger thinks those guys sabotaged the scaling of the network so Blockstream could promote its own software solutions. Samson says, come on, the blockchain is already 200 gigabytes large and growing. Every transaction made has to go out to the whole network. And every block that contains that transaction that is mined has to also go out to the whole network and it has to be stored for eternity. The argument? More independent miners will continue running Bitcoin and ensure decentralization if the blockchain is kept small. In his view, this decentralization is what makes Bitcoin valuable, a store of value.
So holding Bitcoin is also a use case. And that store of value hypothesis, I cannot get my head around. It's the most nutty thing I've ever heard. One philosophy could be described as Bitcoin as digital gold and the other philosophy could be described as Bitcoin as digital cash. The other team said you guys have it the wrong way around. First, Bitcoin needs to be usable as a currency, a medium of exchange. Then maybe it will become stable and a store of value. The solution is easy. Just increase the size of the blocks from one to two for eight megabytes so that more transactions fit into them.
This will lower the fees and people will start using Bitcoin as cash again. The original title of the Bitcoin white paper is Bitcoin an electronic peer to peer electronic cash system. But you know, Satoshi's white paper isn't the Bible. It's not a religion. It's tough changes. We evolve. We might find out new things. So why this fixation on that white paper, you know, created 10 years ago? There isn't any fixation. It's not the version of Bitcoin that I got involved with and it's not the version of Bitcoin that I want to support.
So Roger joined forces with a controversial online gambling billionaire, Bitmain, a Chinese crypto mining company, and this guy. I'll do whatever the fuck I want with my money. OK, anyway, they forced a software fork, which is a split into two separate blockchains. Every holder of Bitcoin now also owned the same amount of Bitcoin cash. Roger had nothing to do with the creation of Bitcoin cash. Roger didn't know about it until a few weeks before it actually happened. But still, Bitcoin Jesus had become Bitcoin Judas. Every revolution is followed by the counter revolution, which is usually a purge of the original revolutionaries.
People are very passionate about Bitcoin, and that's why they show a lot of emotion. When you're part of a tribe, you get very religious about your tribe, making the other tribe almost your enemy. It's very hard to debate Roger because a lot of what he's saying is just his opinions and his emotions. You cannot debate someone's emotions. And then they basically diverted the entire Bitcoin project into something that wasn't usable as peer to peer cash. When he gave his talk, I kind of knew that that whole debate slash panel, I kind of expected it was going to go off the rails. I didn't expect killing babies.
So that means more babies are dying in countries around the world because they have less economic freedom. More people are starving to death because they have less economic freedom. People are literally dying because of this. I'm not exaggerating. This is a life and death matter. And remember that list of promises the early Bitcoiners championed? Cheap, easy, fast, unstoppable. I forgot one. If you don't support free speech, you don't support Bitcoin. You're an enemy of Bitcoin. Censorship shall not be abided. In fact, I myself have tried posting just a direct quote from Satoshi Nakamoto, the creator of Bitcoin. I think Roger complains a lot about censorship on Reddit.
But Reddit is just one of many platforms. Word for word quote from Satoshi without any additional commentary from myself at all. And I've had that post deleted. Even though I may not agree with a lot of things that Roger Ver is doing now, I do sympathize with him and his frustration with being censored. They're literally censoring the words of the creator of Bitcoin. Ultimately, this is a forum that these guys set up to talk about Bitcoin. And they can do whatever they want with it, right? When I first started covering the space, everyone was united in their struggle against the establishment.
Now the industry has grown so much that there are competing parties, propaganda machines, conspiracy theories. It looks a lot like politics. The biggest fight within the Bitcoin ecosystem is over at the moment is who has the right to the name Bitcoin. But at the end of the day, I think the version of Bitcoin described in the Bitcoin white paper has the strongest claim to the name Bitcoin than anything else. And that's Bitcoin Cash. Roger owns Bitcoin. com and he has every intention of bringing Bitcoin Cash to the masses. Even if it means that some people coming to his website think that they're buying Bitcoin, but they're getting Bitcoin Cash.
I think it's fraudulent to say that and causing people to buy Bitcoin Cash when they actually want to buy Bitcoin. So Bitcoin Core fans say Roger's hijacking the brand name and Bitcoin Cash supporters claim that Blockstream is hijacking Bitcoin's development. I mean, yeah, it is a conflict of interest because they're developing this open source protocol in a way where their company can benefit from it. Everything we're doing is open source. So it's not like there's some secrecy or anything. You can see all the code that's committed and it does go through this vetting process.
I mean, they have had influence and I wouldn't say it's not true, but I don't think they have enough influence to actually corrupt Bitcoin. We no longer have anyone maintaining the project just because we don't want that potential conflict of interest. But in a way, now they've won the battle anyway. So who won Bitcoin's first war? Well, both parties got their way. After the split, the market valued Bitcoins much higher and Bitcoin Cash transaction fees were much lower. The benefit of the scaling debate or civil war was Bitcoin was battle tested. A lot of companies and a lot of powerful people tried very hard to try to change Bitcoin and they failed.
This thing that Satoshi Nakamoto launched is much more resilient than anyone even hoped. I know, I know. You want to find out what any of this has to do with this new cryptopia, a revolutionary internet. We'll get there, I promise. But first, we need to go from Bitcoin's original blockchain to hundreds of blockchains. Back in 2011, when Charlie Lee was a Google engineer, he wanted a faster and lighter version of Satoshi's cryptocurrency and was one of the first to experiment with the open source software. The actual coding in terms of the code differences between Bitcoin and Litecoin was actually pretty trivial.
And what does that mean in time? I would say like four or five hours. Litecoin was positioned as silver to Bitcoin's gold and its network value grew to billions of dollars. Some critics say, well, you sold at the highest point and you kind of hurt the community. What's your response to that? When I sold, no one knew it was the highest point. I didn't know it was going to be highest point. So everyone thought it was going to keep going up. In hindsight, it was good timing selling at the high. But I'm still focused full time on Litecoin adoption and working on Litecoin development.
So it's not like I sold and just quit. Nobody gets to kind of dictate how Bitcoin improves or grows. Whereas with Litecoin, I have a strong influence on the growth of Litecoin, which is good and bad. It's kind of like the difference between a benevolent dictator versus a democracy. The benevolent dictator is more efficient, but you have to assume that the benevolent dictator stays benevolent. Let's put a pin in that. Litecoin was one of the first alternative cryptocurrencies or altcoins. Some of the early adopters like Charlie made fortunes. Soon there were hundreds of coins made by cryptographers, copycats and conmen.
There's a coin for bloggers, a currency for online gamers, one with anonymity and even one for banks. But can this invention unleash something even more powerful than digital currencies? Back in 2014, I met the kid who knew how to do it. Hi, I'm Vitalik Burderen, co-founder of Bitcoin magazine, founder of Ethereum and just general Bitcoin and cryptocurrency advocate. Just 19 years old, Vitalik was on a mission to make money programmable. Vitalik is a very, very smart guy. The thing about Vitalik is he was pushed away from Bitcoin because he had gone to Bitcoin core developers and tried to build Ethereum on top of Bitcoin. And they basically said, nope, not interested.
So he built a separate blockchain called Ethereum with its own currency called Ether. The comparison might be Bitcoin is like a spreadsheet and Ethereum is like a spreadsheet with macros. Using our analogy, Ethereum allows you to store cryptocurrency and computer code in the same secure box. Here's how a smart contract might work. Let's say I bet Charlie that a Litecoin will be worth $200 on January 1st of next year. We each put an Ether into a box along with a smart contract, a simple program that automatically checks the price of Litecoins on that future date. If I'm right, the money goes to me. If I'm wrong, it's sent to Charlie.
A smart contract is neither smart nor contract. It's a dumb program. Once you understand that all it is is a dumb program, that clarifies a lot of stuff. The word contract there is in the meaning of finance. Most financial arrangements are pretty simple and clear-cut. A bet with Charlie, your home loan, an insurance policy, just two parties and some form of exchange of value based on a set of rules called a contract. The same is true for global financial markets. Think bonds, futures, derivatives, credit default swaps. They're all just contracts and the world economy runs on them using middlemen who all charge high fees.
Proponents say that if we used smart contracts, we could tell the bankers, lawyers, escrow agents and Wall Street finance guys to take a hike. A soda machine is a smart contract machine, right? You stick in a dollar, you get a soda. It's very, very simple. The soda machine does take statistics and it has to make sure that you can't scam it by stealing the soda. But Ethereum and the people that are trying to decentralize this will tell you that that transaction, that smart contract between you and the soda machine is so critical that it needs to be globally processed and saved on a hundred thousand decentralized computers because it is so sensitive.
And in reality, 99% of all of these contracts, they don't need this kind of censorship resistance. You know, in two years' time when people will see this film or in four years' time, I think it will be an interesting historic moment. So what we're doing is we're saying we have this Ethereum network. Inside the Ethereum network, there's this asset called Ether and we're actually going to be selling Ether. We're going to be selling Ether at a rate of one thousand to two thousand Ether for one Bitcoin. And that's how we're going to raise all the money. It worked.
Vitalik figured out a way to fund the Ethereum project and it made his investors very rich. This new model for fundraising soon had a name, an initial coin offering or ICO. IPOs and ICOs sound similar, but they're nothing similar. The only thing similar about them is they both help you raise money. IPOs you don't do until you have a company, until you have revenue, until you have users, until you actually prove to the public investors that this is a valuable company that's worth investing and it's worth buying their stock. ICOs, it's pre-product. You have maybe a couple of people on the team. It's just a white paper.
And so people are just buying into trust, into faith that this is something that will exist. And this is the guy who opened the floodgates. He created a standard called ERC20, enabling you or me or anyone to create an ICO. So on the one hand you have these smart contracts, these little programs that can talk to each other, but you have to define how do they talk to each other. And because everybody now agrees to that same standard. Smart contracts can interact within the entire Ethereum network, and the ERC20 standard allowed the creation of tokens. The goal here is like ultimately I'd like to see eight-year-olds building their own financial systems.
Yeah, but what if some of these eight-year-olds are also scammers? So let's say I'm trying to do an ICO and I create a smart contract where I create a million coins. And one of the transactions is that if you send me $100, I will send you that many worth of coins. It was a mad gold rush. People realized, wow, if I can just pull up a pulled together project in a white paper, I can raise money. Like a lot of money. Some people hawking new coins didn't actually exist. This handsome chap is the graphic designer of a Bulgarian ICO. Actually, they just posted a photo of Ryan Gosling.
Another project raised millions in Ether and then vanished, leaving investors with this website. Look closer. That's nice. Most of the scam coins were built on Vitalik's smart contract platform Ethereum using Fabian's token standard. This innovation has enabled a lot of criminals and scammers. So I would say the amount of scams in that system are rather low. It sometimes looks bigger than it is. I would assume that the actual scams, purposeful scams in that system maybe were like 2 or 3 percent. I would say actually most ICOs were not scams. I would say about 2 to 5 percent of the thousands of ICOs that are happening are actually legit.
And the rest is? Pretty scammy or just not going to work. Can you define for me what a shit coin is? I think it's just a derogatory term people use on coins that they don't like. For Bitcoin maximalists, people who only care about Bitcoin, everything else is a shit coin. In my point of view, I think a coin that is kind of a scam is a shit coin. So people create coins just to get rich from it, print a lot of tokens out of thin air, try to pump the price up and make a lot of money from it. And that's not really providing a lot of value to the world. No value for the world.
But they did add value for their creators. If you can print billions of tokens out of thin air like a central bank, well that's why this guy was one of the wealthiest men on earth for a brief moment. Here's how that happened. There will only ever be 21 million Bitcoins. And its inventor had to earn them by mining with his computers, just like everyone else. There are more Litecoins and even more Ether in circulation. Vitalik kept some portion to fund the development team. And then there's Ripple. They created 100 billion XRP, but kept 80% for themselves and their clients. And the other 20% they gave as a bonus to the founders.
That's how you get to be one of the richest men on earth. Okay, maybe I was a bit too harsh on ICOs. Democratizing startup finance can be a good thing. There were many legit companies raising capital too. Over the years I've met many founders who have real offices with real people trying to solve real problems. But to Bitcoin maximalists, Bitcoin is the be-all and all of cryptocurrency. Other blockchains, ICOs, smart contracts, that's all a waste of time. There is no such thing as blockchain. Revolutionize the healthcare industry and the automotive production of things. Of course there is. What you're saying is a maximalist point of view.
You are speaking about from a perspective of a cult or a sect. My problem is that you are hijacking a movement of a technology that is far greater and has far more potential than just these individuals. There's all of these different things that you could use blockchain for. And so people have, they're almost like different ecosystems. And then what you see is almost like an evolutionary process, right? Where the blockchains fork and they have the same ancestries, but they adapt to different environments. And we see this ever-increasing level of diversity in the number of blockchains.
So I think the idea that there's one blockchain going to be one blockchain and it's going to be fit for everything, it's almost like disregarding the nature of evolution. Meanwhile, the big corporations have been studying cryptocurrency. And they think that Bitcoin's underlying database is where the magic is. The mod on the boardrooms? Blockchain, not Bitcoin. Back in Germany, my friend Oliver keeps tabs on the men in suits. He used to be one of them. What are the big companies that are interested in blockchain? There are almost all big companies that have activities there. I know for example the big car manufacturers. BMW has one.
BMW is looking at using the blockchain for their future fleet of electric cars to interact with public transport. Lufthansa wants to see if the blockchain can better track parts and maintenance. And Deutsche Telekom is using smart contracts to negotiate tariffs for roaming costs with other telecoms. If we can store trade certificates and shipping documents on the blockchain, you can check to see where those organic avocados really came from, who grew them, who packed them and who shipped them. Besides, the Internet of Things needs a ledger of all those things. Well, that's the idea behind private centralized blockchains, maintained and controlled by corporations. A famous example, the Walmart supply chain trial, which they're working with IBM.
That's completely centralized. They use a blockchain-derived product, Hyperledger, but all the nodes reside on the IBM cloud and they're all administered by Walmart and their suppliers use it because Walmart told them to. It's a centralized database system, but they marked it blockchain. So that means, one, they wouldn't have got a New York Times headline if they just said database. You might wonder, what's the point of a blockchain if it's controlled by a company? Well, I compare it to the open Internet versus company-owned intranets. They both exist. Meanwhile, Facebook announced a cryptocurrency for their 2 billion users. Such a system might be more efficient than a public blockchain, but there's a downside.
Some governments banned it within weeks. Right now, the way pieces of paper that's being shifted around, that doesn't make any sense. That infrastructure needs to be replaced. Why occupy Wall Street when we can build a new one on the blockchain instead? In the future of decentralized finance, stock certificates, corporate bonds, insurance policies, property deeds, mortgages, all can be turned into crypto tokens and made tradable 24-7. What's more exciting than tokenized securities of traditional businesses, where it's just equity that you pass around, is totally novel digital securities that you couldn't do before. Novel use cases where you could kick any of these traditional securities. I think it's a solution. I think it's a solution.
I think it's a solution. I think it's a solution. I think it's a solution. I think it's a solution. I think it's a solution. I think it's a solution. I think it's a solution. I think it's a solution. But in fact, it's something that we couldn't do before, right? Novel use cases where you could kick back cash flow on a continual basis. I think some examples of this that we're seeing now are MakerDAO, Binance, which has Binancecoin, co-founder and the chairman of Powerledger. And we use the blockchain to enable electricity trading, energy asset financing and carbon markets. This award-winning Australian company wants to take us to a carbon-free economy faster. Gemma has identified a problem.
Our apartment buildings, often the buildings are tenanted and it means that if there is solar panels, the owner of the apartment isn't really incentivized to put in solar panels or batteries because the tenant benefits. But using our platform, the tenant will pay their electricity bill to the body corporate. Using Powerledger, the tenant pays the owner, not the power company, for the electricity. And if the tenant isn't at home, the unused energy will be sold to a neighbor, lowering their power bill and making a profit for the owner. So it actually creates the mechanism to justify investing in the capital in the first place.
This system could speed up investment in sustainable energy projects by making it easy to own a piece of a solar or wind farm. Why do I need a blockchain for this? Can't I invest in a solar farm without this new fancy tech? The blockchain acts as a kind of asset register and income register. And in tokenizing the asset, it becomes tradable on an exchange. You might own two or three solar panels of a thousand in a solar farm and you would receive the income associated with that amount of ownership. Now, bankers don't very much like being cut out of the cash flow loop. So they took another look at Mr Nakamoto's curious little white paper.
And they've recently been spending a billion dollars a year in blockchain research. Isn't it ironic? Satoshi's anti-bank invention is now being used by the banks to move money faster and by big business to track supply chains. Cryptocurrencies, digital tokens, public blockchains, private blockchains. Where is the killer app? Well, adoption of new technology often follows old trends. My name is Mark Ventresca. I'm here at Oxford, the University of Oxford on the faculty. I'm an economic sociologist by training interested in how large scale infrastructure changes. So great to see you after nine years. I know. Mark teaches a class on innovation and system building.
He tells me what must align for new technology to become fruitful. All technologies start out as interesting ideas. Some of them begin to develop into innovations. And we know that that arc from invention to innovation takes a lot of time. It takes a lot of work. Some of those innovations eventually become commercially viable. Case in point, the automobile. In the early days, cars looked like a pretty lousy idea and poorly executed. Early on, there were electric cars, there were battery operated cars. The combustion engine was a relative late comer. It took Henry Ford's mass production to create the standards.
What a car looked like, what parts it needed, how it operated. That's when complementary assets and infrastructure emerged. So you have paved roads and petrol stations. Then you have secondary things like motels and restaurants and places to eat while you're on the highway and buy food. Then you have interesting questions like what side of the road should we drive on? An entire ecosystem had been built, but it wasn't a smooth transition by any means. The imagery here is there are maybe a couple of hundred, three or four hundred companies that try to get into this space, but they're not car companies. They're bicycle manufacturers or steam engine manufacturers.
At some point in this account, all that period of ferment settles around a dominant design. And then you have what, again, what innovation economists would call a shakeout. They would say you go from three or four hundred producers, all of them vying to shape this emerging space, this emerging thing called the automobile. You may then drop to 20 or 30 manufacturers, and then you may drop to five or six. It took 50 years for cars to go from purest invention to finely tuned mass market product. 50 years to change the world as we knew it. Your destination is on the left. But our story isn't about cars or roads.
I want to learn about dominant designs of digital technology. That's why I came to the Computer History Museum in the heart of Silicon Valley. So you're looking at the console for Sage, which was probably the first computer network. There were 23 centers around North America to warn against Soviet bombers, and they were waiting for World War III. The U. S. military and some American universities asked this guy to create a new kind of network to connect their separate networks.
This young girl got up and she had a bunch of questions, but her first one was, how did I manage to convince all the governments of the world to let us build the Internet? And I said, well, except for the handful of us that were actually working on the Internet, nobody else really thought it was a very good idea, and so you didn't think it was going to lead anywhere, and you know, we pretty much had a free running room. Yes, that's the man who co-invented TCPIP about 50 years ago. That's the original academic paper. You can think of TCP as the backbone of the Internet. But back then, there were many competing technologies.
There was a very big battle over the protocols. TCPIP didn't just win by default. It won through attrition by basically being better, simpler, easier to deploy than all of the other proposals. And more scalable. And it had a lot of competition from phone companies that tried to make the Internet a closed, metered, controlled system. They tried to do what people are trying to do today with blockchains, which is take the open decentralized network and turn it into this sterile, closed corporate system where they can charge by the minute and be in control. The Internet's ultimate victory has a dirty little secret.
The men in charge of promoting it were employees of the military, with the muscle and the cash to beat the competition. And then there's email. Email? I heard that's really neat. Email was perhaps the Internet's first killer app. Then, in the early 90s, Tim Berners-Lee introduced the World Wide Web as a 20-page proposal. Soon, there were browsers that made it more accessible and user-friendly for the general public. I think that the Internet is going to be one of the major forces for reducing the role of government. The one thing that's missing, but that will soon be developed, is a reliable e-cash. Still, few understood the potential of this new tech.
From people that thought it would just be the world's greatest library to some of the early cipher punks, who are the direct fathers of crypto and certainly blockchain-type ideas, who thought, not just today, that it would create kind of a commons that was outside of the direct control of normal laws and governments. That's ironic, because the U. S. government funded it in the first place. The spiritual forefathers of crypto who built the early Internet thought it was a new technology for global freedom of expression and a blank canvas upon which they could build their dreams. Boy, that sounds familiar. And the media? They didn't quite know what to make of this new thing either.
But sure enough, they found juicy stories about the dark side of it. Which was the Internet is full of criminals and pedophiles and pornographers. And it's too dangerous to use your credit card on it. It's full of scams. We're seeing the exact same story now. We envision technology as if it were autonomous, as if it were simply outside of human and social experience. What we see are technologies that become shaped by commercial interests, by political and regulatory infrastructure, by actors who are acting for many reasons, right? Where do you want me? Remember Bob? The big telecoms wanted his thoughts on a little idea that were kicking around.
They had a meeting where they were trying to figure out how they could buy the Internet. If they couldn't kill it, well, why not own it? I got asked that myself by an executive at a large information company. It was probably in 1990 if they could buy the Internet. I remember asking them, well, why don't you buy the world economy? Then you can have everything. Why don't you buy the weather? And you can control that too. As the Internet's momentum and hype grew, investors threw money at entrepreneurs and shady characters.
The joke in the dot-com era was that you put a dot-com behind your company, even if it had nothing to do with the Internet. And the venture capitalists just throw money at you. It took a few decades and hype cycles, but the wild Internet was eventually domesticated, co-opted by trillion-dollar companies and then fundamentally transformed how we shop, work and communicate. Speaker's Corner in London's Hyde Park. For 150 years, this has been a safe place to stand on a soapbox, to sell your ideas, preach the gospel, badmouth the king or promote communism. Today, with the World Wide Web, we can stand on giant digital soapboxes.
Using Facebook, Twitter, YouTube, we can share our ideas or start a fight with anyone on the planet. Well, almost anyone. Of 65 countries studied, China has the least free Internet, worse than Iran, Cuba or Syria. A police force of more than two million cybercops and the world's most sophisticated artificial intelligence system keep China's web content clean and users in check. So sorry to break it to you, but there's no longer World Wide Web. Welcome to the Splinternet. No, it's not just in China. In Russia, Wikipedia is illegal. Facebook is outlawed in Bangladesh. There's no WhatsApp in Dubai.
Twitter was banned in Turkey after news about government corruption spread and Saudi Arabia shut down the region's largest news service, Al Jazeera and the BBC. Meanwhile, in India, the entire web was turned off 100 times last year. To be fair, some of the censorship is to prevent terrorist recruitment or to stop violent mobs from hurting people. But I think government's control over the Internet has gone just a little too far. Hello, I'm from the Australian Government. Do you have something to hide? We've taken the UK's fascist spying law and made it even more fascist.
To test this shitfuckery, we chose Australia, the weakest of the Five Eyes Alliance, thanks to our lack of a Bill of Rights. So international data requests will now be funneled through us, compromising not just Aussies, but all of you fuckers too. You're welcome. Hold on. Satoshi turned money into code. Code is just letters and numbers, which is speech, right? So money now is speech, which is a pretty powerful idea if you think about it. But if Bitcoin is this uncontrollable, unsensible technology, can the blockchain also enable global free speech? In some places, it already does. One chain One Chinese student tried to report a sexual assault and was silenced by her college.
But she knew that she could attach a message into the metadata of an Ethereum transaction. So she spent 15 cents. And now her letter outlining her story and the threat she received is on the public Ethereum blockchain, where it will remain unchangeable forever. The early crypto pioneers wanted to democratize money, finance 2. 0, if you will. But now the believers in the blockchains have their eyes on a bigger price. They want to decentralize everything. Web 3. 0. Facebook without the propaganda. Twitter without the terms of service. Reddit without the censorship. Online identity without the hex. Internet without the internet. And now, the transit without the censorship.
Online identity without the hex. Internet browsing without tracking software. Websites without the advertising. We pay with either attention or privacy. So we either have advertising thrown at us, our attention is monetized, or we pay with micro violations of our privacy. And that is why the internet today is the ultimate surveillance economy. One privacy tool is the Brave browser. It doesn't store data and pays users and content publishers in their basic attention tokens. What most people in the crypto space are probably most excited about is this notion that we can create these kind of user-owned decentralized networks.
You can, for instance, offer file storage in the way that an Amazon does, or that you could offer search, you know, the way Google does, but do it in a peer-to-peer fashion without this behemoth at the center extracting rents. And do it in a way where all the people that are users of it can benefit. Blockstack is the next evolution in computing. We've seen three main eras of computing before. We had mainframes that were these large computers that everyone depended on. Then we got desktops where users were in control and they own their own computers and their data and information.
And then we saw cloud computing where we are dependent on these large companies running services for us. And we are about to embark on this major shift in computing called decentralized computing, where users are getting back in control. And they really could someday compete with, if not even take down, some of the big tech giants like the Facebooks and the Googles and the Amazons that we know. That's a tall order. It is, it is, but I mean who would have thought at the beginning of the internet that Wikipedia would beat out and card at. These web three promises sound good, but my professional network is on LinkedIn. My personal photos are on Instagram.
If I deleted my accounts, I'd lose everything. These services aren't just walled gardens. They are digital prisons. Data is locked up in several companies and we don't own it. The companies own it. But they use the data to mine it, to advertise to us, to sell us things, to manipulate us, to change our behavior. And Ocean Protocol is the answer to freeing up the data and giving the power back to individuals. So how do you plan to do that? It's essentially an operating system on top of Ethereum that allows for people to share data, storage, algorithms and computation in a way that preserves privacy.
It's too early to tell whether projects like these can succeed. But I do like the idea of digital property rights. Wouldn't it be nice if companies paid us in cryptocurrency when they use our data and if we control who has access to it instead of our digital overlords? And then there's the question of our most precious information, our very identity. If you take the history of mankind, a lot of blood has been shed getting to democracy, right? The idea that every man has a vote in the world. And I take it kind of personally because I was born in South Africa during apartheid, a child of Indian immigrants, and we were not allowed to vote.
Vinnie tells me that in the United States alone there are 14,000 different paper forms of birth certificates issued by local authorities. There are mistakes on them and even identity theft starting from birth. All your information is already out there. There's five hacks a day happening. So how do you prove that you are who you say you are? Our crypto celebrity Andreas has 10 imposters on Instagram. Ryan Gosling's alter ego is committing financial fraud in Bulgaria. And who knows what's happening with your compromised information? Blockchain based services like civicsidentity. com or Microsoft's Ion say they can give us control of our identity and protect it.
Currently we are having our reputation, our history with different systems of different companies like Facebook and Twitter. With the blockchain, the core important information sits on that trusted system which we control and we can take from wherever we want to go to something else. Meanwhile, Vitalik has inspired thousands of software developers to build his vision of decentralized finance. But early in Ethereum's history, something went wrong with one of the first smart contracts called the DAO. The DAO went like this. They wanted a completely decentralized autonomous organization. They wanted a science fiction dream of an independent computer program that was immune to human influence. So what they actually did was build a forthcoming disaster.
The problem? Some sloppy code left their safety deposit box wide open and somebody just helped themselves. Allowed them to pilfer 50 million dollars from the smart contract. And that's why when I say it's not even clear whether or not it was a hack, you know, the smart contract allowed them to do that. And what happened was the majority of the community did decide to roll back the blockchain and to pretend like the DAO never happened. And yep, you heard that correctly. The top decision makers forked Ethereum into two separate networks. One where the money was gone and a new one where the money was restored to its original owners.
Breaking the first rule of cryptocurrency. Never alter the blockchain. Immutability lasts only as long as the big boys haven't lost money. Just like Bitcoin, Ethereum also experienced scaling problems. When a decentralized app called CryptoKitties, I'm not kidding, went viral and the Kitties spread like rabbits in its blockchain, the system ground to a halt. The network is now being upgraded, but there are many competitors who claim that their blockchains are faster, fairer and more scalable. The next checkout will sure be interesting to watch. It's never easy to admit that some that you've been fooled. Maybe I've been fooled. Maybe.
The crypto community doesn't agree on much of anything, except when it comes to this guy. Hello, my name is Dr. Craig Wright. I'm the chief scientist of Nchain Limited. On the balance of the evidence, Craig Wright almost certainly is not Satoshi Nakamoto. The proofs that he gave were not real proofs. In the end, he either chickened out or didn't actually have the proof. Craig Wright obviously seems to be a scammer. I'm happy to say that Craig Wright is a fraud. I know he's controversial. No one really changes the world without being bold, without disrupting people's ideas and without driving a little controversy around the way.
But the majority of the industry says Craig is crazy or a con man. So Craig, kindly join us on stage. And that giving him screen time is irresponsible. And I'll say this quite frankly, because I've got more money than your country. But I was in the area and just couldn't resist. A few quick facts. Craig is the person who claimed to be Satoshi Nakamoto on the BBC. But his cryptographic proof didn't check out. And since then, many just see him as an imposter. I'm the guy with a law degree that used to work for federal police and military intelligence.
You would actually be the perfect supervillain for us because everybody kind of doesn't believe you, hates you. What do you say to your critics? Do I start with a muhahaha? Many people are hated early on because they're not understood. If it doesn't have a use, it shouldn't have a value. Right now, practically everything is a ponzi. I don't particularly like Ethereum. It's a dead end. They can say whatever they want about ERC 20, except practically everything they're doing that they want to solve, I solved years ago. Decentralisation was never the point of Bitcoin. Ever. I was called a fool then, and I'll be called a fool again.
And every single time I'll be right. I picked up Mastering Bitcoin the other day and I opened page one and I went, this is wrong. Silk Road was the worst thing to ever happen to Bitcoin. You seem to think that nobody else has anything interesting to say, you've already solved the problems many years ago. That's kind of the vibe that I'm getting here. Fairly much, yes. Turns out, Craig's playbook is patents. Some say he's a patent troll. Well, I've got a bucket list bit, which is to beat Edison, which, as silly as it sounds, came from a Simpsons episode. To beat Mr Edison, I need to get 1085.
And right at the moment, I'm on white paper 1074. For each white paper, he claims to file about 1. 1 patents. The first 163 will be very shortly public. Next year, people are going to start seeing that we have hundreds of patents and everything changes. We file PCT and keep them secret as long as we can. That's a huge philosophical disagreement between myself and Craig. So I think government patents are a government-granted monopoly. The big brains and big egos who broke away from Bitcoin couldn't hash out their differences. So there was another split. Craig's new coin also claims to be the real Bitcoin. And he wants to enable blocks a million times larger.
Updating and storing this giant blockchain will be impossible for normal computers. I just can't figure this guy out. Is he a genius, a madman, a fraud? Maybe all three. And a lot of the things he's saying are very just wrong, technically. However, I did calculate that nchain spent tens of millions of dollars to develop and file these patents. And some have been granted. What's the point of having a war chest full of IP if they aren't going to enforce it? So basically what I'm looking at is stuff that nobody's ever really seen in the community. That's correct, yes.
As soon as the price of Bitcoin and the cryptocurrencies went higher, what did most people do? All they did was start adopting all the worst behaviors of bankers. Scamming the market, centralizing wealth in a few hands. I think that's called human nature. So everyone wants to change the world simply because they're not in the position of power. As soon as they get into that position, they do exactly the same thing. So guys like you will build a better future and we can trust you guys better. You guys better than the bankers? You don't have to trust us. That's the beauty. We're building a trustless, decentralized system that gives power to people.
Trustless sounds like there's no trust, but actually it means we don't need to trust you. I think the better word should be trust free. About one third or maybe half of all the cost of all the transactions are paid to establish trust between trading parties. Like we're paying for lawyers, we're paying auditors, we're paying even police, even regulators, government to build trust to ensure everything will be enforced. So trust is quite expensive. Blockchain is the first time that we saw some technology that can eliminate the cost or reduce the cost of trust dramatically. Magical things will happen. Trust may be expensive, but it's also in short supply.
All around the globe, people have been losing faith in the media, institutions and governments. So what if this new technology could fix one of society's biggest issues? But the question remains, what if you are cheated? What if your password is stolen and the money, the contracts, your identity is gone? If code is law, who administers justice? Aren't you worried that the promise of decentralizing power is kind of in jeopardy with you and Charlie and Vitalik and Craig as such central figureheads? I really wish there weren't public figures or leaders. I want everyone to lead themselves. But sadly, that's not the world we live in. If you're going to look to a leader, choose your leader wisely.
But just how different are they from our current political, financial and business leaders? Are their systems really resistant to corruption, immune to manipulation and worthy of our trust? Maybe that's why the best bet is on the only project without a figurehead. Bitcoin doesn't care about human drama, bad press or what anyone thinks. Yeah, sure, it hasn't succeeded as a global currency yet. But in the past decade, it has been the world's best performing financial asset. So we're back to where we started. The genius who vanished. With Satoshi being gone from Bitcoin, Bitcoin is really a very decentralized network and currency.
He was intelligent enough to know that a system without a father was going to be much more robust than a system with a father. No father, maybe. But without leaving a will, the kids are now fighting over the meaning of his invention and the inheritance, projecting their fears and their fantasies onto his legacy. For some, it's money for the internet that can replace middlemen and bank the unbanked. And maybe a tool for illicit trade. Or is it digital gold, a totally new asset class? A bet against the bankers. An insurance against inflation. Protection from corrupt politicians. And a weapon against the state. Maybe the end of money as we know it.
For some entrepreneurs, it represents a shortcut to fund their dreams. A platform for fairer finance. Which is why incumbents fight it. Some say public blockchains are just slow and useless. Databases. While big business is busy building private blockchains to boost efficiency. Or maybe this decentralized technology is a new protocol layer for the internet. Upon which we can build a better web. To dethrone the tech giants. Reclaim free speech. Protect online identities. And facilitate free trade in a borderless digital economy. Oh, and a tool to rebuild trust in our societies. And yes, maybe even save the world. And even save the planet. That's a never-ending list of cryptopian ideas.
Isn't this a bit too much to ask of a nine-page document? Yeah, sure. The internet and the web started out as white papers too. But it took decades before its infrastructure was built. And now it's user-friendly and ready to scale globally. We kind of domesticate the wild potential of technologies into what's familiar. And we dramatically underestimate or under-imagine what that technology may eventually do. It'll be the users, maybe billions of them, who will adopt this technology without even knowing what a blockchain is or how it works. Because here's the thing. The average users don't care about the wires that move their money quicker. Don't know about the software that moves this movie or that picture.
What will move them are services that'll make the days a little brighter. Their chores a little lighter. And their lives a little richer. I don't want to cause a real power-trusty with my money. We'll never trust it with my life. Well, I have been told that life is control. But this morning ain't over. Hey! That gas-fixed code runs a full node. This is new money production. Talk redwoods of illicit goods. This is a weapon of math destruction. That lady squeaks on her feet late in her tweets as she takes on the haters. Nothing can break her. The web could be much safer and our freedom quite greater. And it's all in this white paper.
All in this white paper. I don't want to cause a real power-trusty with my money. I don't want to cause a real power-trusty with my life. My daughter, my soul, they'll let me be bold. And Bitcoin is bold. Bitcoin is gold. .
S K R Y B O T
Skrybot. 2023, Transkrypcje video z YouTube
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