The Rise and Rise of Bitcoin

( whirring ) DON'T BE FILMING MY PASSWORDS I USED TO HAVE A SHIRT IN HIGH SCHOOL THAT SAID "TECHNOLOGY MUST BE USED TO LIBERATE THE INDIVIDUAL

" AND I DIDN'T REALLY KNOW WHAT IT MEANT FOR YEARS, 'CAUSE I DIDN'T REALLY THINK ABOUT IT BUT TODAY I LOOK BACK AND I'M LIKE, "OH MAN, HELL YEAH, I LIKE THAT SHIRT" I'M GLAD I WORE THAT SHIRT, 'CAUSE IT'S HOW I REALLY FEEL TODAY MY NAME IS DANIEL MROSS TODAY IS MAY 3rd, 2012

I GO THROUGH COLLEGE AND WATCH THE INTERNET COME AND ALL THESE DIFFERENT THINGS AND NOW, LIKE, BITCOIN, IT'S JUST A SINGLE TECHNOLOGY BUILT ON TOP OF THE INTERNET, BUT IT'S SO FASCINATING BECAUSE THERE'S SO MANY FREAKING THINGS YOU CAN DO WITH IT IT'S ALSO JUST A BIG EXPERIMENT THERE'S NO GUARANTEES WITH IT WE MIGHT JUST ALL BE WASTING OUR TIME

EXPLORING CONCEPTS AND IDEAS IT'S AT THIS CROSSROADS OF TECHNOLOGY AND PHILOSOPHY AND POLITICS AND EVERYTHING JUST BE A PART OF IT

IT'S FUN IT'S CRAZY THOUGH, BUT IT'S FUN Nick Mross: UM, FIRST QUESTION IS WHAT IS BITCOIN? – ( chuckles ) – ( dramatic music playing ) Daniel: I CAN'T TELL YOU WHAT BITCOIN IS IN JUST A FEW SENTENCES IT TAKES TIME TO UNDERSTAND IT, THE SAME WAY IT TOOK PEOPLE TIME TO UNDERSTAND WHAT THE INTERNET WAS BACK IN 1994 THAT LITTLE MARK WITH THE "A" AND THEN THE RING AROUND IT

– "AT"? – SEE, THAT'S WHAT I SAID – MM-HMM – KATIE SAID SHE THOUGHT IT WAS "ABOUT" – Katie: YEAH – Elizabeth Vargas: OH, INTERNET IS

– THAT MASSIVE COMPUTER NETWORK – Katie: RIGHT THE ONE THAT'S BECOMING REALLY BIG NOW

ALLISON, CAN YOU EXPLAIN WHAT INTERNET IS? Daniel: WHEN THE INTERNET WAS TAKING OFF, I WAS IN COLLEGE AT VIRGINIA TECH STUDYING COMPUTER SCIENCE LOOKING BACK, IT'S AMAZING TO THINK ABOUT HOW MUCH THE WORLD WAS CHANGING Hey, Dan, ready for the game? I'm just finishing up here with my new kayaking friends Kayaking friends on your computer? Yeah, I just got America Online Daniel: THAT SAME TYPE OF INNOVATION IS HAPPENING AGAIN WITH BITCOIN

IT'S THE SMARTEST PEOPLE IN THE ROOM THAT ARE THE MOST EXCITED ABOUT THIS SO WHAT ARE THEY SEEING? Daniel: THE INTERNET CHANGED THE WAY THE WORLD COMMUNICATES BITCOIN CHANGES THE WAY MONEY WORKS YOU CAN BASICALLY PUT A BANK IN YOUR POCKET PSST! WANNA BUY SOME SECRET STUFF? THERE IS NOW A NEW NOTE THAT PEOPLE ARE STARTING TO TALK ABOUT– THE BITCOIN THE MONEY OF THE FUTURE

Daniel: BITCOIN WAS CREATED TO PROVIDE AN ALTERNATIVE TO THE BANKING SYSTEM George W Bush: We're in the midst of a serious financial crisis and the federal government is responding with decisive action Daniel: UNLIKE MOST CURRENCIES, BITCOINS ARE ISSUED ACCORDING TO A SET OF FIXED RULES THE IDEA WAS TO CREATE MONEY WHOSE VALUE COULDN'T BE MANIPULATED BY A CENTRAL AUTHORITY

THE GOVERNMENT, NO MATTER HOW MANY GUNS THEY DRAW, CANNOT CHANGE A MATHEMATICAL PROBLEM THEY CAN POINT THEIR GUNS AT "TWO PLUS TWO," BUT IT'S ALWAYS GONNA EQUAL FOUR Daniel: IT'S FASCINATING TO IMAGINE WHAT IT MEANS TO HAVE GLOBAL DECENTRALIZED MONEY AND THAT'S WHAT'S HAPPENING ( instrumental music playing ) ( babbles ) MY FIVE-YEAR-OLD'S BIRTHDAY

FIRST ROUND OF BURGERS IS READY SECOND ROUND IS GOING ON IN A SECOND FIRST ROUND OF BURGERS IS READY! ( people chattering ) FIRST ROUND Eliza Mross: DAN HAS ALWAYS BEEN AN IDEA GUY BITCOIN IS THE PERFECT COMBINATION OF HOW CAN I CHANGE THE WORLD AND MAKE IT BETTER, BUT HOW CAN I ALSO BE A NERD? SO MOSTLY I'VE JUST BEEN SUPPORTING HIM IN THIS CRAZINESS

Daniel: ELIZA AND I MET IN COLLEGE, AND WE'VE BEEN MARRIED FOR SEVEN YEARS WE LIVE IN PITTSBURGH, WHERE I'M FROM, AND WE HAVE THREE BOYS, I'VE SPENT MOST OF MY CAREER AS A DATABASE ADMINISTRATOR BUT FOR THE PAST TWO YEARS, I'VE BEEN CONSUMED WITH BITCOIN BITCOINS COME INTO EXISTENCE THROUGH A PROCESS CALLED MINING I BUILD COMPUTERS TO MINE FOR BITCOINS

I'M GLAD THAT IT'S FINALLY GETTING A LITTLE BIT COOLER OUT MY WIFE WON'T BE AS ANGRY THAT THE BASEMENT IS SO HOT I'VE STILL GOT A BUNCH OF MINING RIGS RUNNING RIGHT NOW ACTUALLY THEY'RE RIGHT DOWN HERE, IF YOU WANNA GO TAKE A LOOK HERE THEY ARE

SO WHAT IS BITCOIN? BITCOIN IS A REVOLUTIONARY TECHNOLOGY THAT ENABLES A NEW WAY TO SEND PAYMENTS OVER THE INTERNET – ( beeps ) – YOU CAN THINK OF IT AS AN OPEN ACCOUNTING SYSTEM WHERE THOUSANDS OF COMPUTERS ALL OVER THE WORLD WORK TOGETHER TO TRACK OWNERSHIP OF DIGITAL TOKENS CALLED BITCOINS WHEN YOU SEND SOMEONE BITCOINS, THE TRANSACTION IS BROADCAST TO THE ENTIRE NETWORK AFTER IT'S VERIFIED, IT'S RECORDED IN A PUBLIC LEDGER CALLED THE BLOCKCHAIN THE BLOCKCHAIN CONTAINS A RECORD OF EVERY BITCOIN TRANSACTION THAT HAS OCCURRED SINCE THE SYSTEM BEGAN, AND IT'S SHARED AND MAINTAINED ON THE NETWORK, SO EVERYONE KEEPS THE BOOKS, SO TO SPEAK

MOST CURRENCIES ARE ISSUED BY A CENTRAL AUTHORITY THAT CONTROLS THE MONEY SUPPLY BITCOIN IS A PEER-TO-PEER SYSTEM, SO THERE IS NO CENTRAL AUTHORITY INSTEAD BITCOINS ARE ISSUED TO USERS WHO HELP PROCESS TRANSACTIONS IN THE NETWORK THIS IS KNOWN AS BITCOIN MINING BITCOIN MINERS ARE SPECIALIZED COMPUTERS THAT DO THE WORK REQUIRED TO VERIFY AND RECORD TRANSACTIONS IN THE BLOCKCHAIN

AS A REWARD FOR THEIR WORK, THE MINERS EARN BITCOINS, AND THIS IS HOW NEW BITCOINS ARE RELEASED INTO CIRCULATION THE SYSTEM IS PROGRAMMED SO THAT ONLY 21 MILLION BITCOINS WILL EVER EXIST AND AS TIME GOES BY, THE MINING REWARD DECREASES THE RESULT IS A PREDICTABLE SUPPLY THAT'S GOVERNED BY SCARCITY, MAKING BITCOINS SOMEWHAT LIKE A DIGITAL GOLD IT'S THE FIRST CURRENCY OF THE INTERNET

AND EVERYONE IS FREE TO USE IT WITH BITCOIN, YOU CAN SEND ANY AMOUNT OF MONEY TO ANYONE ANYWHERE IN THE WORLD AS EASILY AS SENDING AN EMAIL MY BROTHER NICK IS A FILMMAKER AFTER HEARING ME TALK ABOUT BITCOIN INCESSANTLY FOR MONTHS, WE DECIDED TO START DOCUMENTING THINGS Nick: HEY, I DON'T THINK WE'LL NEED THE SMALL CAMERA

– IT CAN'T HURT – Nick: NO, I'D RATHER JUST LEAVE IT BEHIND I HAVE SO MUCH EQUIPMENT DO YOU MIND? DAMN, YOU REALLY CRAMPED IT UP, HUH? NOT THAT BAD WHAT DO YOU MEAN? – JEEZ

– DUDE, THEY'RE RIGHT THERE RIGHT IN THE BACK RIGHT THERE Daniel: I WAS CONVINCED THAT BITCOIN WAS GOING TO BE HUGE, AND I KNEW THERE WERE A LOT OF OTHERS LIKE ME OUT THERE ZIPPED MY KEYS IN MY POCKET, SO I DON'T FORGET 'EM LATER

BITCOIN WAS CREATED BY WHAT'S BELIEVED TO BE A PSEUDONYM, A GUY NAMED SATOSHI NAKAMOTO Invented in '09 by a fictitious person named Satoshi Nakamoto Daniel: ON HALLOWEEN 2008, SOMEONE USING THE NAME SATOSHI NAKAMOTO

POSTED ON A CRYPTOGRAPHY MAILING LIST THE POST CONTAINED A LINK TO A WHITE PAPER IN WHICH SATOSHI PROPOSED A NEW TYPE OF PAYMENT SYSTEM FOR THE INTERNET IT DESCRIBED A PROTOCOL THAT USED PEER-TO-PEER NETWORKING, PROOF OF WORK AND PUBLIC KEY CRYPTOGRAPHY

FOR YEARS, COMPUTER SCIENTISTS HAD BEEN EXPERIMENTING WITH THESE TECHNOLOGIES TO CREATE DIGITAL MONEY BUT SATOSHI DISCOVERED A WAY TO COMBINE THEM THAT HAD NEVER BEEN DONE BEFORE IN DOING SO, HE INVENTED BITCOIN THERE ARE NO RECORDS OF NAKAMOTO'S EXISTENCE PRIOR TO THE CREATION OF BITCOIN ON HIS PROFILE PAGE, HE CLAIMED TO BE A 34-YEAR-OLD MAN LIVING IN JAPAN

ALTHOUGH SATOSHI NAKAMOTO IS A JAPANESE NAME, HE WROTE IN PERFECT ENGLISH WHEN COMMUNICATING ONLINE AND WENT THROUGH GREAT LENGTHS TO KEEP HIS IDENTITY UNKNOWN NONETHELESS, PROGRAMMERS AND CRYPTOGRAPHERS ALL ACROSS THE WORLD RECOGNIZED THE BRILLIANCE OF SATOSHI'S DESIGN AND BEGAN COLLABORATING WITH HIM TO FURTHER DEVELOP BITCOIN IN OCTOBER OF 2009, THE FIRST EXCHANGE RATE WAS PUBLISHED LISTING THE VALUE OF 1,309 BITCOINS AT $1

BITCOINS WERE CHEAP, AND THROUGH THE FOLLOWING YEAR, THEY CONTINUED TO TRADE FOR FRACTIONS OF A CENT IN THE SPRING OF 2010, A FLORIDA MAN NAMED LASZLO DECIDED TO TRY USING HIS BITCOINS TO PURCHASE SOMETHING HE OFFERED 10,000 BITCOINS TO ANYONE WHO WOULD BUY HIM PIZZA A MAN IN LONDON ACCEPTED AND PLACED A LONG-DISTANCE PHONE CALL, ORDERING HIM TWO PIZZAS FROM PAPA JOHN'S THIS IS GENERALLY ACKNOWLEDGED AS THE FIRST BITCOIN TRANSACTION FOR A TANGIBLE GOOD

BITCOIN WAS GAINING MOMENTUM, BUT IN ORDER FOR IT TO THRIVE THE COINS NEEDED TO BE MORE WIDELY ACCESSIBLE A TOKYO-BASED EXCHANGE NAMED MT GOX WAS THE FIRST ON THE SCENE TO TAKE HOLD OF THE MARKETPLACE AND TRADING VOLUME STARTED TO PICK UP BY NOVEMBER 2010, ALREADY 4 MILLION BITCOINS HAD BEEN MINED AND THE EXCHANGE PRICE BRIEFLY SPIKED TO 50¢ PER COIN

THE MARKET AWOKE AND BITCOIN WAS STARTING TO LOOK LIKE IT MIGHT HAVE REAL POTENTIAL AS A CURRENCY His name is Julian Assange Assange and his colleagues collect confidential information and then make it public The release of 250,000 State Department documents no doubt presents a serious dilemma for this country Daniel: FOLLOWING A MASSIVE RELEASE OF SECRET U

S DIPLOMATIC CABLES, DONATIONS TO WIKILEAKS WERE BLOCKED BY BANK OF AMERICA, VISA, MASTERCARD, PAYPAL AND WESTERN UNION AN ARTICLE IN "PC WORLD" SUGGESTED THAT BITCOIN COULD BE USED AS A WORKAROUND TO SEND DONATIONS TO WIKILEAKS ONE OF SATOSHI'S LAST KNOWN POSTS WAS IN RESPONSE TO THE ARTICLE AND STATED SHORTLY AFTER THAT SATOSHI DISAPPEARED FROM THE FORUMS AND WAS NEVER HEARD FROM AGAIN TWO MONTHS LATER THE SILK ROAD ANONYMOUS MARKETPLACE WAS LAUNCHED IT FUNCTIONED AS AN ONLINE BLACK MARKET FOR DRUGS AND OTHER ILLICIT GOODS AND USED BITCOIN EXCLUSIVELY, BECAUSE IT MADE THE MONEY TRAIL NEARLY IMPOSSIBLE TO TRACE THE SILK ROAD CAUGHT THE ATTENTION OF NEW YORK SENATOR CHARLES SCHUMER WHO WAS OUTRAGED AND PUBLICLY CALLED FOR A CRACKDOWN ON THE SITE

HEROIN, OPIUM, CANNABIS, ECSTASY, – PSYCHEDELICS, STIMULANTS – ( camera clicks ) IT'S UNBELIEVABLE Daniel: THROUGHOUT ALL THIS, THE EXCHANGE PRICE CONTINUED TO CLIMB BY FEBRUARY OF 2011, BITCOIN REACHED PARITY WITH THE US

DOLLAR SPARKING AN INFLUX OF NEW USERS AND SPECULATORS BY JUNE THE PRICE HAD SOARED TO A PEAK OF $31 BEFORE IT CAME CRASHING DOWN AS THE MARKET TANKED, THE MT GOX EXCHANGE WAS HACKED, FURTHER SHAKING THE CONFIDENCE OF INVESTORS AND HAMMERING THE PRICE ALL THE WAY DOWN TO THE $2 RANGE BY OCTOBER

WHILE BITCOIN ENTHUSIASTS KEPT HOPE, SKEPTICS WERE QUICK TO SHARE THEIR HINDSIGHTS AND RANTS ON BLOGS AND IN NEWS ARTICLES MANY THOUGHT THAT THE PARTY WAS OVER AND THAT BITCOIN WAS ON ITS WAY OUT I went online and I bought one Bitcoin last night Really? It's the future I don't know

It didn't feel real No Real's gonna change Just watch TODAY I SENT A TOTAL OF

2700 BITCOINS TO BUTTERFLY LABS I PURCHASED, BASICALLY, A CUSTOM-DESIGNED BITCOIN-MINING SUPERCOMPUTER IF BITCOIN FAILS

EVERYTHING I HAVE IS WORTHLESS ( stammers ) THE BITCOINS I HAVE, THE COMPUTERS, THE MINING SYSTEM WAS ALL A WASTE OF MONEY BUT IF IT SUCCEEDS, THEN

IT WILL HAVE BEEN WORTH IT, I THINK – ( beeps ) – THE BITCOIN ECONOMY WAS A WILD WEST IN CYBERSPACE THAT WAS VERY ATTRACTIVE TO HACKERS AND SCAMMERS OVER THE YEARS, TENS OF THOUSANDS OF COINS HAD BEEN STOLEN AND 2012 PROVED NO DIFFERENT

USERS HAD TO BE CAREFUL IF SOMEBODY STEALS YOUR BITCOINS, THERE ARE NO CONSUMER PROTECTIONS SORRY, THEY'RE GONE YOU LOST YOUR BITCOINS? THEY'RE GONE AND YOU'RE NOT GOING TO GET THEM BACK BUT AFTER MONTHS OF STAGNATION ON THE EXCHANGES, THE BITCOIN PRICE WAS ON THE RISE AGAIN

THE PRICE OF BITCOIN TODAY IS AROUND $7 USD, WHICH JUST HAD A NICE LITTLE BUMP THIS WEEK BY THE END OF THE YEAR, THE BLOGGING SITE WORDPRESS ANNOUNCED IT WOULD START ACCEPTING BITCOIN PAYMENTS

AND IN EARLY 2013, THE DISCUSSION FORUM REDDIT ALSO ANNOUNCED BITCOIN SUPPORT THEY WERE THE FIRST MAJOR SITES TO INCORPORATE BITCOIN, AND THESE MILESTONES SIGNALED THE BEGINNING OF MAINSTREAM ACCEPTANCE BITCOIN IS THE MOST SUBVERSIVE TECHNOLOGY ON THE PLANET THIS IS A SYSTEM THAT IS GROWING AROUND THE ENTIRE WORLD SO IF IT WORKS, IF THIS EXPERIMENT CONTINUES TO GROW, IT DOESN'T JUST HELP A FEW OF US IN THIS STATE OR IN THE COUNTRY, BUT IT ACTUALLY HELPS EVERYONE AROUND THE WORLD

( people chattering ) Daniel: AS THE BITCOIN PRICE HOVERED AROUND IT'S PREVIOUS ALL-TIME HIGH OF $31, I VISITED A LIBERTARIAN CONFERENCE IN NEW HAMPSHIRE IT LOST 20% AND THEN IT GAINED 20% IN 20 MINUTES IT IS– THEY'RE SILLY Daniel: LIBERTARIANS ARE AMONG THE EARLIEST ADOPTERS OF BITCOIN ITS NATURE AS A CURRENCY THAT ISN'T CONTROLLED BY CENTRAL BANKS MAKES IT ATTRACTIVE TO THIS COMMUNITY

ONCE I WAS ABLE TO KIND OF GROK THE BASIC CONCEPT, IT WAS LIKE, "THIS IS THE PERFECT MONEY " Daniel: THIS IS WHAT A BITCOIN ADDRESS LOOKS LIKE THINK OF THIS LONG STRING OF CHARACTERS AS AN ACCOUNT NUMBER WHERE YOUR BITCOINS ARE STORED WHEN YOU SEND OR RECEIVE BITCOINS, THEY ARE SENT TO THESE ADDRESSES THE ADDRESSES ARE LONG AND HARD TO REMEMBER SO USING A PHONE TO SCAN A Q

R CODE IS A FAST AND EASY WAY TO READ THEM ANOTHER GOOD THING TO KNOW IS THAT BITCOINS CAN BE BROKEN DOWN TO EIGHT DECIMAL PLACES THIS MEANS THAT YOU CAN SEND FRACTIONS OF A BITCOIN SO ANY AMOUNT OF MONEY CAN BE REPRESENTED

WITH BITCOIN, EVERY TRANSACTION IS PUBLIC EVERYONE CAN SEE THE AMOUNT THAT IS BEING SENT WITHOUT NECESSARILY KNOWING THE IDENTITY OF THE SENDER THESE GUYS EVEN HAVE ONE OF THE FIRST BITCOIN ATM

s YOU JUST SCAN YOUR QR CODE ON YOUR PHONE, PUT IN THE DOLLAR BILLS AND PRESS THE BUTTON BAM

DONE PERFECT YOU NOW TRADED YOUR WORTHLESS PIECE OF PAPER FOR REAL CURRENCY IT'S LIKE, "END THE FED?" IT'S LIKE, SERIOUSLY, YOU THINK YOU'RE GONNA END THE FED? YOU'RE NOT GONNA END THE FED YOU'RE NOT GONNA CHANGE ANYTHING ABOUT THE FED

– TRANSCEND THE FED – BYPASS THE FED – RIGHT, YEAH ( chuckles ) – THAT'S WHAT YOU SHOULD DO MY CONCERN IS HOW THE GOVERNMENTS WILL REACT

THEY CAN'T KILL OR STOP BITCOIN, BUT THEY COULD IMPEDE IT AND THEY COULD GET IN THE WAY OF ITS DEVELOPMENT Daniel: A FEW WEEKS LATER ACROSS THE OCEAN, A FINANCIAL CRISIS WAS REACHING A BREAKING POINT ON THE ISLAND OF CYPRUS Cyprus is on the brink of going bust The rest of Europe has agreed to a bailout, but only if Cyprus raids people's bank accounts for quick hard cash Woman: People tried to get money out of the cash machines but electronic transfers have been stopped

– Never did I think that they would – ( people chanting ) in a completely unprecedented manner resort to stealing money from people's bank accounts Daniel: THE CYPRIOTS HAD PLACED THEIR TRUST IN THE BANKING SYSTEM AND IT HAD FAILED THEM AS NEWS OF THE CRISIS SPREAD AROUND THE WORLD, BITCOIN BELIEVERS WERE QUICK TO POINT IT OUT AS AN EXAMPLE OF WHY A CURRENCY FREE FROM GOVERNMENT CONTROL WAS NEEDED There's actually Bitcoin ATMs apparently being set up in Cyprus

Man: ALL OF A SUDDEN, BITCOIN LOOKS LIKE AN ATTRACTIVE PROSPECT Daniel: WHILE THIS WAS HAPPENING IN CYPRUS, REGULATORS AT THE US TREASURY WEIGHED IN ON BITCOIN THE FINANCIAL CRIMES ENFORCEMENT NETWORK, KNOWN AS FINCEN, ISSUED ITS FIRST REGULATORY GUIDANCE ON VIRTUAL CURRENCIES

THE GUIDANCE IMPLIED THAT BITCOIN, IN AND OF ITSELF, WAS NOT ILLEGAL IT WAS THE PERFECT STORM THE SITUATION IN CYPRUS SUGGESTED THAT BITCOIN COULD FUNCTION AS A FINANCIAL SAFE HAVEN AND THE APPROVING NOD OF US

REGULATORS WAS A GREEN LIGHT FOR INVESTORS THE MARKET AGREED AND THE EXCHANGE PRICE CONTINUED TO CLIMB ( beeps ) IT'S MOVING FROM THE SUPER SUPER-EARLY-ADOPTER PHASE TO POSSIBLY THE EARLY-ADOPTER PHASE Daniel: BITCOIN WAS GETTING INTERNATIONAL EXPOSURE AND PEOPLE WERE STARTING TO PAY ATTENTION THIS IS ACTUALLY A LIVE, UPDATED MAP OF THE GLOBE AND THE LINES REPRESENT BITCOIN CLIENTS

BASICALLY WHERE THE BITCOIN SOFTWARE IS RUNNING AND THE LENGTH OF THE LINE DETERMINES HOW LONG IT'S BEEN ONLINE OR HOW ACTIVE IT'S BEEN AND EVERY TIME I LOOK AT THIS, I SWEAR IT GETS MORE AND MORE SATURATED YOU CAN ALMOST SEE AN OUTLINE OF THE US

NOW SOUTH AMERICA– YOU'RE STARTING TO GET IT BUT THE BIG NEWS, IN MY OPINION, IS THIS– CHINA YOU USED TO SEE ONE, TWO, THREE, MAYBE AND THIS IS ALL WITHIN THE LAST THREE WEEKS OR SO

THAT'S THE MOST I'VE EVER SEEN IN CHINA LOOK DOWN HERE INDONESIA, SINGAPORE, AUSTRALIA, NEW ZEALAND THE FOLLOWING WEEK IT SNOWED IN PITTSBURG I WAS EAGERLY AWAITING THE DELIVERY OF TWO AVALON ASICS, STATE OF THE ART COMPUTERS WITH CHIPS SPECIFICALLY DESIGNED FOR MINING BITCOINS

YIFU GUO IS AT THE FOREFRONT OF THE NEW GENERATION OF HARDWARE, AND IS THE FIRST TO BRING THEM TO MARKET EVERYBODY, INCLUDING MYSELF, HAD SEVERELY UNDERESTIMATED THE MINING MARKET AND HOW BIG IT IS Daniel: WHEN BITCOIN BEGAN, A STANDARD LAPTOP WAS POWERFUL ENOUGH TO MINE HUNDREDS OF BITCOINS IN A MATTER OF DAYS THE TECHNOLOGY EVOLVED RAPIDLY OVER THE PAST COUPLE OF YEARS A LOT OF PEOPLE ARE GETTING INTO IT OR STILL TRYING TO CATCH UP

Daniel: I WAS ON VACATION WITH MY FAMILY WHEN THE NEW MINERS WERE SCHEDULED TO ARRIVE THE PRICE OF BITCOIN HAD ROCKETED TO $77 SO I ASKED SOME FRIENDS TO WAIT AT MY HOUSE TO GET THEM RUNNING AS SOON AS POSSIBLE Mancini: ALL RIGHT! ( laughs ) – I HOPE THIS IS GOOD I HOPE IT'S WORTHWHILE – OH, DEFINITELY

THESE ARE NEW COMPUTER PARTS HERE – EXCELLENT, EXCELLENT –

FRESH IN FROM CHINA – ( laughs ) – ALL RIGHT, IT'S NOT OFFICIAL UNTIL YOU SIGN THERE WE GO

Nick: YEAH, WE'LL SEE MAYBE DOWN THE ROAD YOU GUYS WILL START ACCEPTING BITCOIN ONE DAY, I BET – THAT'S COOL – JUST A MATTER OF TIME Driver: GOOD LUCK TO YOU GUYS

ALL RIGHT Mancini: I NOTIFIED DAN AND HE HAS A LITTLE RESPONSE HERE Welcome to the financial renaissance 192168

1140 255255255

0 19216811

THAT'S THE DEFAULT GATEWAY My first pull is gonna be stratumozcin, port 3333 PORT 80, BUT I CAN DO 3333

And when everything's all said and done, for at least a little while, it should be pulling in 10 to 12 coins a day That's gonna change though, after another week it's gonna get dropped down to, like, eight, – just because the difficulty's just going through the roof – YEAH Everybody's firing these things up, so it's always a race to stay ahead and try to be the first guy with the hardware, you know? Oh, I'm getting pings

Whoo! Mancini: YUP, WE'RE KICKING WE ARE ACCEPTING SHARES IT IS LIVE We've got the Merlot! ( both laugh ) ( mumbles ) HEY, THAT LOOKS LIKE JOHAN Say, "I'm going to college 'cause my dad mines Bitcoins

" Dad going Bitcoins ( laughs ) Nick: SO, BIG DAY TODAY, HUH? BIG DAY LOOK AT THAT 104 CURRENT BITCOIN PRICE

BROKE 100 TODAY IT IS APRIL FOOL'S DAY THE PRICE RISING SO INSANELY HIGH IS KIND OF A LITTLE BIT UNPRECEDENTED, SO– I MEAN, IT'S BOUND TO POP A LITTLE BIT MAYBE I DON'T KNOW

MAYBE IT'LL BE AT 225 IN A WEEK AND A HALF, SO WHO KNOWS? BITCOIN STYLES– COULD GO UP, COULD GO DOWN Daniel: AS THE PRICE PASSED 100, WE TOOK A TRIP TO VISIT GAVIN ANDRESEN HE IS KNOWN TO HAVE WORKED CLOSELY WITH SATOSHI DURING BITCOIN'S EARLY DAYS HERE'S THE TRAIN TRACKS, AND HE DID SAY THERE WOULD BE TRAIN TRACKS MAYBE PASSING THROUGH HERE WE GO

THIS IS GAVIN'S HOUSE GAVIN IS ONE OF THE LAST PEOPLE TO COMMUNICATE WITH SATOSHI BEFORE HE DISAPPEARED MORNING THIS IS MY BROTHER NICK – AND HIS WIFE ASHLEY – NICE TO MEET YOU

– Ashley: HI, NICE TO MEET YOU – NICE TO MEET YOU – Daniel: FOUND THE PLACE OKAY, SO– – GOOD WE'RE VERY EXCITED TO BE HERE COME IN

THIS IS MY HUMBLE HOUSE – ( door closes ) – THAT'S WHERE I WORK THIS IS WHERE I LIVE – BEAUTIFUL HOME – WELL, THANKS

Nick: A LITTLE HIGHER, PLEASE RIGHT THERE GREAT – GOT IT – ( Daniel chuckles ) HOW DID YOU FIRST GET INTO BITCOIN? TELL US A LITTLE BIT OF THE STORY OF HOW YOU GOT INVOLVED

I HAD BEEN WORKING AT UMASS AS A STAFF PROGRAMMER IN THE COMPUTER SCIENCE DEPARTMENT RESEARCH GROUP MY WIFE'S A PROFESSOR AT UMASS I ACTUALLY QUIT THAT JOB BEFORE GOING ON A SIX-MONTH SABBATICAL IN AUSTRALIA I JUST HAPPENED TO READ A LITTLE BLURB ONLINE IN SOMEBODY'S BLOG THAT MENTIONED THIS BITCOIN PROJECT, WHICH IS AN OPEN-SOURCE ATTEMPT TO DO MONEY AND IT CAUGHT MY INTEREST

I BASICALLY JUST SPENT A FEW DAYS READ EVERYTHING I COULD ABOUT IT LOOKED AT THE SOURCE CODE, DOWNLOADED THE SOURCE CODE, THOUGHT ABOUT IT AND I REALLY COULDN'T CONVINCE MYSELF THAT IT WOULD NOT WORK IT SEEMED LIKE SATOSHI HAD THOUGHT OF EVERYTHING SINCE THEN I'VE JUST BEEN SUCKED DOWN THE RABBIT HOLE Daniel: BITCOIN IS OPEN-SOURCE SOFTWARE WITH OPEN-SOURCE SOFTWARE, THE CODE IS PUBLICLY AVAILABLE ANYONE CAN LOOK AT IT AND SEE HOW IT RUNS AND THEY CAN ALSO CONTRIBUTE THEIR OWN CHANGES

PROGRAMMERS LIKE GAVIN WERE ABLE TO JOIN SATOSHI TO WORK ON BITCOIN SIMPLY BECAUSE THEY WERE INTERESTED OVER TIME, I THINK SATOSHI LEARNED TO TRUST ME HE COULD SEE THAT I DIDN'T MAKE VERY MANY STUPID MISTAKES I NEVER HAD ANY PERSONAL CONNECTION WITH SATOSHI IT WAS ALWAYS PURELY BUSINESS

AND I THINK THAT'S BECAUSE HE WAS SO WORRIED ABOUT PEOPLE FINDING OUT HIS IDENTITY I DON'T KNOW WHY MY LAST EMAIL TO HIM WAS TELLING HIM THAT I HAD AGREED TO GO VISIT THE FOLKS AT THE CIA

, SO ( laughs ) WHETHER THAT HAD SOMETHING TO DO WITH HIM DECIDING TO CUT OFF COMMUNICATION WITH ME ENTIRELY– HE HAD BEEN PULLING AWAY BEFORE THEN, BUT THE CI

A INVITED ME TO COME TALK AT THE CIA AND I AGREED TO DO THAT

Daniel: KNOWING IT WOULD SURELY SPARK CONSPIRACY THEORIES, GAVIN POSTED AN ANNOUNCEMENT ON THE BITCOIN TALK DISCUSSION FORUM TO HEAD OFF ANY RUMORS HAVING TAKEN ON THE LEAD DEVELOPER POSITION SINCE SATOSHI'S DISAPPEARANCE, GAVIN FOUND HIMSELF FACING AN INCREASING NUMBER OF RESPONSIBILITIES AND PUBLIC SCRUTINY DO YOUR NEIGHBORS KNOW THAT YOU'RE KIND OF AT THE CENTER OF ONE OF THE MOST DISRUPTIVE TECHNOLOGIES? I THINK– I THINK THEY KNOW THAT I DO THIS WACKY BITCOIN PROJECT I DON'T THINK THEY KNOW QUITE HOW BIG IT IS YET RIGHT NOW, BITCOIN'S A BILLION-DOLLAR PROJECT

WHEN I STARTED IT WAS THIS TINY LITTLE EXPERIMENT AND AS IT GETS BIGGER, THE PRESSURE TO NOT SCREW UP JUST GETS BIGGER AND BIGGER Daniel: TWO WEEKS LATER THE PRICE SOARED PAST 150 AND SOME BITCOINERS WOKE UP TO FIND OUT THEY WERE BITCOIN MILLIONAIRES 23-YEAR-OLD CHARLIE SHREM IS THE C

EO OF A COMPANY CALLED BITINSTANT BITINSTANT WAS ONE OF THE FIRST STARTUPS IN THE BITCOIN SPACE IN BITCOIN'S INFANCY, PEOPLE HAD TO JUMP THROUGH SEVERAL HOOPS TO BUY THEM

ONE OF THE ONLY WAYS WAS THROUGH THE MT GOX EXCHANGE, BUT THIS PROCESS REQUIRED TRANSFERRING MONEY THROUGH SEVERAL INTERMEDIARIES AND COULD TAKE WEEKS CHARLIE LAUNCHED BITINSTANT TO STREAMLINE THIS PROCESS AND TO HELP PEOPLE BUY BITCOINS QUICKLY – Man: YEAH, THAT'S GOOD

THAT'S GREAT – ( camera beeping ) – THAT'S PRETTY NICE – YOU GO LIKE THAT YEAH, SURE Daniel: TODAY CHARLIE IS BEING PHOTOGRAPHED FOR AN ARTICLE IN "BUSINESSWEEK

" Man: ONE OF THE IDEAS THEY HAD WAS THAT YOU'RE GOING– THROWING STUFF UP IN THE AIR AND THEY WERE GONNA ADD BITCOINS IN LATER ON – GOING LIKE THAT? – YEAH Shrem: THIS BITCOIN THING CAN ACTUALLY CHANGE THE WORLD BUT FOR THIS THING TO SUCCEED, WE HAVE TO FIGURE OUT A WAY TO GET MORE MONEY IN AND OUT OF THE ECOSYSTEM LOOK OUT THE WINDOW A BIT

TOTALLY– YEAH THEN YOU CAN LOOK– YEAH, THAT'S GOOD AND NOT SHOW THAT I'M SUPER STRESSED OUT RIGHT NOW AND WE HAVE THOUSANDS OF ORDERS THAT ARE BEING PROCESSED AND I'M BUGGING OUT, TRYING TO GET THE NEW SITE LAUNCHED – NO, DON'T LOOK LIKE THAT – IT'S CRAZY

I'M TRYING NOT TO, BUT IT'S REALLY HARD Shrem: THINGS HAVE BEEN INSANE ( mouse clicking ) I HAVEN'T SLEPT IN DAYS THE PRICE IS JUST RISING, SO A LOT OF PEOPLE ARE PUTTING MONEY INTO IT Daniel: NORMALLY, CHARLIE CAN GET BITCOINS TO HIS CUSTOMERS IN ABOUT AN HOUR

BUT WITH THE RECENT FLOOD OF PEOPLE TRYING TO PURCHASE BITCOINS, BITINSTANT CAN'T FILL THEIR ORDERS FAST ENOUGH WHEN I PULLED UP OUR CUSTOMER SERVICE INTERFACE, WE HAVE CLOSE TO 2,000 OPEN TICKETS AND THAT'S JUST FROM SATURDAY TO THIS MORNING NOBODY WAS READY FOR THIS KIND OF VOLUME, SO WE'RE TRYING TO CATCH UP WITH THE VOLUME AND KEEP EVERYBODY HAPPY Man on phone: Can you just sort of describe quickly what the last week or so has been like for you guys? THE LAST WEEK OR SO SAW OUR SUPPORT STAFF GO FROM TWO PEOPLE TO FIVE PEOPLE

WHEN SOMEONE OFFERS YOU A SEAT ON THE ROCKET, YOU DON'T ASK WHERE THE SEAT IS YOU JUST GET ON THE ROCKET FURTHER, OUR VOLUME HAS BASICALLY TRIPLED IN THE PAST TWO WEEKS, GOING FROM A FEW HUNDRED TRANSACTIONS A DAY TO NOW TWO, THREE THOUSAND TRANSACTIONS A DAY – Nick: YOU JUST CAME ONBOARD HERE, RIGHT? – YEAH, I DID ACTUALLY, TODAY IS KINDA MY FIRST DAY

– OH REALLY? – YEAH HOW DOES IT FEEL TO BE A PART OF ALL THIS MADNESS? UM, WELL, MADNESS, YEAH IT'S OVERWHELMING AND WHAT DO YOU DO FOR BITINSTANT? I'M THE CF

O ( chuckles ) Man on phone: Can you give me a daily estimate of how much money you're moving through your system? UM, IT'S IN THE– IN THE SIX FIGURES EVERY DAY All right Well, thanks, Charlie – I really appreciate it

– THANK YOU I DON'T KNOW HOW THE GOVERNMENT WILL REACT TO BITCOIN, BUT I SPEND THOUSANDS OF DOLLARS ON LAWYERS EVERY DAY JUST TO MAKE SURE THAT I'M NOT GONNA GO TO JAIL IT'S SUPER TERRIFYING I MEAN, I DON'T WANNA GO TO JAIL ( stammers ) I DON'T WANNA BECOME A MARTYR EITHER

( people chattering ) Daniel: BITCOIN WAS THE TALK OF THE TOWN CHARLIE WAS IN THE LIMELIGHT AND COULD BARELY KEEP UP WITH MEDIA REQUESTS WITHIN HOURS, THE PRICE PASSED $200 Shrem: FIRST DAY OF SPRING, FIRST DAY BITCOIN IS OVER 200 THE START OF A NEW ERA

Nick: HI NICE TO MEET YOU I'M THE NICE WARM LOVING MOM THAT MAKES HIM LIVE AT HOME 'CAUSE WE CAN'T– WE CAN'T PART FROM HIM YET ( laughter ) Mother: WE LOVE HIM TOO MUCH

THIS IS WHERE IT ALL STARTED AND THIS IS WHERE IT STILL GOES DOWN I'VE BEEN COLLECTING MONEY FROM ALL OVER THE WORLD AND IT'S JUST SOMETHING I DID WAY BEFORE BITCOIN I'VE BEEN DOING IT SINCE I WAS A KID SO IT'S FUNNY THAT I'M COLLECTING ALL THIS

FIAT THAT'S NOT WORTH ANYTHING AND THEN ALL OF A SUDDEN I GET INTO THIS BITCOIN THING I REALIZED DURING HIGH SCHOOL THAT I COULD NEVER WORK FOR ANYONE I MADE UP A TERM– PSYCHOLOGICALLY UNEMPLOYABLE

I STARTED BITINSTANT WHILE I WAS STILL IN MY SENIOR YEAR OF COLLEGE BITCOIN CURRENTLY IS THE LARGEST SOCIAL- ECONOMIC EXPERIMENT EVER CONDUCTED IN THE HISTORY OF THE WORLD 2013, POSSIBLY 2014, WILL BE THE TWO YEARS THAT REALLY MAKE OR BREAK BITCOIN BITCOIN IS THE FIRST PRODUCT THAT'S DIGITAL, BUT IT'S ALSO SCARCE I GOT SOME GOOD NEWS LAST NIGHT THAT PART OF OUR LICENSING DEALS THAT WE'VE BEEN TRYING TO DO FOR THE PAST FEW MONTHS ARE FINALLY, HOPEFULLY, COMING THROUGH

WE GOT APPROVED TO BE LICENSED IN 30 OF THE 48 STATES IN MONEY TRANSMISSION I'VE BEEN WORKING VERY HARD ON TRYING TO BE COMPLIANT IN THE LEGAL REALM AND WITH FINCEN'S ANNOUNCEMENT, SETTING UP A WAY FOR BITCOIN COMPANIES TO LEGALLY EXIST, THAT REALLY CHANGES THE WHOLE GAME OF BITCOIN AND FOR US, IT HELPED US GET THAT LAST PUSH THAT WE NEEDED FROM ALL THE BANKS AND THE REGULATORS TO FINALLY, HOPEFULLY, GET THAT LICENSING THAT WE NEED Daniel: TODAY, CHARLIE'S MEETING WITH A REALTOR TO TALK ABOUT NEW OFFICE SPACE HI, CHARLIE, NICE TO MEET YOU

– HI, I'M MITCH WALDMAN HOW ARE YOU? – A PLEASURE – GOT A MINUTE? – I HAVE 10 MINUTES FOR YOU WE'RE– WE'RE A COMPANY WITH NO BOSS, ESSENTIALLY EVERYONE HAS THEIR RESPONSIBILITIES

IT'S JUST ONE BIG EXECUTIVE BOARD – IT'S JUST ONE BIG EXECUTIVE BOARD – OKAY IF I DON'T DO MY JOB, THESE GUYS ARE ALL GONNA YELL AT ME – SO THAT'S HOW WE DO IT, BUT WE GET THINGS DONE

– Waldman: ALL RIGHT WE'RE OUTGROWING THIS SPACE, AS YOU CAN SEE HERE – THAT'S A GOOD PROBLEM TO HAVE – Shrem: YES ( sighs ) NOW RACHEL SAID THERE WAS A GREAT CONCERN – ABOUT SECURITY IN THIS SPACE

– Shrem: YEAH WE'RE REGULATED, SO WE CAN'T SHARE AN OFFICE – WITH ANOTHER COMPANY IF THEY HAVE ACCESS TO US – I GET THAT OUR ASSET IS OUR SOFTWARE OUR SOFTWARE IS PROCESSING HUNDREDS OF THOUSANDS OF DOLLARS A DAY INSTANTLY

REALLY QUICKLY AND THAT'S ON-SITE HERE? OR IS IT IN THE CLOUD? NO, THIS IS IN THE CLOUD IT'S ALL IN THE CLOUD, BUT WE MONITOR– WE HAVE TO MONITOR EVERYTHING FROM HERE – RIGHT – AND DEBUG, FIX, TAKE DOWN, UPLOAD MORE– – PUT UP MORE WORKERS

– WE DEAL WITH HIGH-VOLUME DATA-ORIENTED STUFF EVERY DAY VERY VERY SENSITIVE CUSTOMER DATA Waldman: IF THERE WERE NOT A DOORMAN, AT THE VERY LEAST THE SPACE WOULD BE DESIGNED IN SUCH A MANNER THAT THERE'D BE A LOCKED RECEPTION AREA IF WE WANT TO PURSUE A GUARD AT SOME POINT, WE COULD HAVE THEM IN THAT AREA – ( Waldman speaks ) – I ABSOLUTELY THINK – IT WILL BE AT SOME POINT

IT'S JUST A MATTER OF TIME – REALLY? THE POTENTIAL FOR THEFT IS HUGE IT'S LIKE OPERATING A BANK, ESSENTIALLY Shrem: THAT'S PRETTY MUCH IT – GOTCHA

– IT'S BASIC STUFF YUP YUP ALL RIGHT ANY OTHER WORDS FOR ME? – OKAY – ARE YOU WILLING TO HANDLE THE TASK? – SIGN ME UP, CAPTAIN

– ( laughs ) Daniel: THAT NIGHT, THE PRICE GOT AS HIGH AS $266 EVERY MAJOR NEWS OUTLET HAD TAKEN NOTICE BITCOIN FEVER WAS AT AN ALL-TIME HIGH It is getting a lot of attention People are fascinated by anything that makes new highs every day for weeks on end, which Bitcoin has done

In terms of the total number of the people using the currency, I'm not sure, but you can say that there's a huge amount of fluctuation in the volume of trading Daniel: AND THEN THE PRICE CRASHED BITCOIN LOST MORE THAN HALF OF ITS VALUE IN SIX HOURS From craze to crash It's the talk of many people in the blogosphere, and it's certainly suffering some growing pains

The value of the virtual currency Bitcoin has plunged It's been a crazy day today I haven't slept in like 40 hours YOUR ORDER PROCESSED I DON'T UNDERSTAND WHY WE'RE STILL HAVING THIS CONVERSATION

WE REFUNDED YOUR ORDER WE SENT YOU EXTRA BITCOINS Man on phone: I don't care, man When it comes to my money, I don't fuck around Shrem: I KNOW, MAN

YOU NEED YOUR STUFF I HEAR YA, I HEAR YA IT PROCESSED YOUR BITCOINS ARE THERE, MAN Nick: SO, CHARLIE, WHAT'S BEEN GOING ON TODAY? – CRAZY DAY, HUH? – YEAH, MT

GOX– THEIR WHOLE SYSTEM PRETTY MUCH FAILED AND THEIR WHOLE TRADING ENGINE IS BROKEN PRETTY MUCH CAUSED– ALMOST– US TO SHUT DOWN FOR THE DAY FURTHER, THE BITCOIN PRICE HAS JUST BEEN WILDLY SWINGING UP AND DOWN IT WAS DOWN $100 TODAY IT'S GAINING BACK UP, BUT MOSTLY BECAUSE PEOPLE CAN'T BUY AND SELL AND THEY CAN'T WITHDRAW AND THEY CAN'T DEPOSIT 'CAUSE THE WHOLE THING IS JUST– IT'S JUST A FRITZ

SO WHAT WE'RE TRYING TO DO IS FIGURE OUT A WAY TO MITIGATE ORDERS SOMEWHERE ELSE FOR NOW Daniel: WITH MT GOX STUCK IN A NOSEDIVE, THE RIPPLE EFFECT IS CREATING CHAOS IN THE BITCOIN MARKETS ( man mutters ) Shrem: I'M TRYING TO FIGURE OUT WHY OUR ORDERS AREN'T GOING THROUGH RACHEL, AM I ALLOWED TO TAKE ANOTHER ADVIL IF I TOOK ONE AN HOUR AGO? THEY'VE BEEN HAVING PROBLEMS ORDERING ANYTHING OFF OF GOX

YEAH, I'M GETTING A LOT OF CUSTOMERS EMAILING, SAYING "IT SAYS 'EXECUTED,' BUT IT'S NOT SHOWING IN THE BLOCKCHAIN" Shrem: DUDE, GOX SUSPENDED TRADING – REALLY? – YEAH "ORDERS PLACED SUSPENDED UNTIL 2100" WHAT TIME– WHAT'S 2100? WHAT? THAT'S 9:00 P

M OH MY GOD ( sighs ) ( people chattering ) IF YOU BOUGHT AT 150 AND THEN YOU'RE AT 260, AND THEN YOU WATCH IT DIP DOWN BACK TO 150, DO YOU PANIC SOME? YEAH, ABSOLUTELY I DON'T KNOW WHAT A BITCOIN IS I JUST BOUGHT IT ( exasperated sigh ) FUCK YOU SEE BUY ORDERS, PEOPLE BUYING AND SELLING AT SUCH A WIDE RANGE

IT DOESN'T MAKE ANY SENSE Shrem: THE API IS JUST CONSTANTLY FAILING? IS THAT WHAT'S GOING ON? OR ARE WE'RE NOT GETTING ANY ORDERS

( bird chirping ) Daniel: DON'T CARE ABOUT THE PRICE SPECULATORS CAN PLAY MUSICAL CHAIRS ALL DAY LONG FOR ALL I CARE I'M-I'M– I'M LONG I WAS FOCUSED ON EXPANDING MY MINING OPERATION THE ONLY PEOPLE THAT ARE GONNA BE SHAKEN OUT BY THIS DROP ARE PEOPLE THAT ARE NEW TO BITCOIN

HERE'S THE AVALONS, SPINNING AWAY, MINING AWAY AND IF EVERYTHING GOES AS PLANNED, WE'LL HAVE 18 MORE OF THESE GUYS IN A COUPLE OF WEEKS BITCOIN IS A COMPLICATED THING YOU HAVE TO SPEND SOME TIME LOOKING INTO IT AND UNDERSTANDING IT BEFORE YOU REALLY CARE NOW THERE'S DROVES OF PEOPLE THAT– YOU KNOW, ARE GIVING IT MORE THAN JUST THAT GLANCE, BECAUSE THE PRICE HAS GONE SO HIGH

AND THEY HAVE DOLLAR SIGNS IN THEIR EYES LIKE UNCLE SCROOGE IT'S SO MUCH MORE THAN THAT, AND I THINK THAT'S WHY THE PEOPLE WHO ARE MINING AND THE PEOPLE WHO BELIEVE IN IT ARE JUST KIND OF HOLDING STRONG WHEN TRADING RESUMED AT MT GOX, THE PRICE FELL EVEN FURTHER, TO AROUND $70 71 ON B

TC-E YEAH, BITCOIN– IT'S VOLATILE IT'S GONNA BE A LONG TIME UNTIL WE HAVE STABILITY

THAT'S THE NATURE OF THE BEAST PRICE DISCOVERY CAN BE VIOLENT AND VOLATILE THERE'S GONNA BE A LOT OF PEOPLE THAT COME AND GO, AND PEOPLE THAT SCREAM WOLF BUT AT THE END OF THE DAY, THE ONLY THING THAT REALLY KIND OF STINKS RIGHT NOW IS THAT EVERYBODY IS TRADING ON ONE PLATFORM THAT ISN'T DOING THE GREATEST JOB, SO OVER TIME, HOPEFULLY WE'LL SEE SOME MORE EXCHANGES POP UP AND GET SOME MORE OPTIONS IN PEOPLE WANNA KEEP USING BITCOIN, I'M SURE THE INFRASTRUCTURE WILL COME ( bird chirping ) IT'S JUST GOTTEN RIDICULOUSLY BUSY I GET AN EMAIL EVERY TWO SECONDS NOW – AND PRETTY MUCH MORE EMAIL THAN I– – ( lock buzzes ) –THAN I CAN KEEP UP WITH

Daniel: JERED KENNA IS THE CEO OF TRADEHILL THE FIRST U

S-BASED BITCOIN EXCHANGE TO COMPETE WITH MT GOX HE'S ALSO ON THE LIST OF BITCOIN MILLIONAIRES – ( barks ) – THIS IS FINNEGAN RIGHT HERE

GUARD DOG HEY, FINNEGAN ( mimics growl ) Daniel: JERED RUNS TRADEHILL OUT OF A 41-BEDROOM RESIDENTIAL HOTEL CALLED 20 MISSION THAT HE ALSO OWNS ( whirring ) WE MOSTLY RENT OUT ROOMS TO TECH PEOPLE, STARTUP PEOPLE THERE'S A LOT OF BITCOINERS

I ACTUALLY ACCEPT RENT IN BITCOIN, WHICH IS GREAT, BECAUSE WE HAVE A LOT OF INTERNATIONAL PEOPLE ( acoustic guitar playing ) – ♪ BITCOIN! ♪ – ( laughs ) ♪ CAME TO US FROM THE CRYPTOGRAM ♪ ♪ IT CAME OUT OF THIN AIR ♪ ♪ IT SAVED US FROM THOSE NASTY DOLLARS ♪ ♪ AND WON AND YEN ♪ ♪ BITCOIN ♪ – THAT'S ALL I GOT I'M DONE – ( mutters ) ( laughter ) DIGITAL CURRENCY IS GONNA HAPPEN

I MEAN, IT'S– IT ALREADY IS HAPPENING, AND IT WILL BE THE FUTURE, WHETHER THAT'S NOW, 10 YEARS FROM NOW, A HUNDRED YEARS FROM NOW WE'RE GOING TO BE USING DIGITAL CURRENCIES THAT DON'T DEPEND ON FIAT GOVERNMENT Daniel: JERED ORIGINALLY LAUNCHED TRADEHILL ABOUT TWO YEARS AGO, BUT RAN INTO PROBLEMS WITH A PAYMENT PROCESSOR AND WAS FORCED TO SHUT DOWN RECENTLY HE MET RYAN SINGER AND TOGETHER THEY ARE RELAUNCHING THE EXCHANGE THE BUSINESS WE'RE IN IS HELPING PEOPLE SPECULATE, RIGHT? MARKETS ARE PRICE DISCOVERY MECHANISMS

THAT'S WHAT THEY'RE FOR PEOPLE– THEY BUY, THEY SELL, THERE'S THE BID, THERE'S THE ASK AND THE PRICE MOVES AND WHEN IT LEVELS OUT, THEN THAT'S WHAT THE MARKET PRICE IS I CAN'T EVEN COUNT THE AMOUNT OF PEOPLE THAT HAVE SAID, "BITCOIN'S NOT BACKED BY ANYTHING AT LEAST DOLLARS ARE BACKED BY GOLD

" I'VE REALIZED THAT A LOT OF PEOPLE BELIEVE THAT MY GRANDFATHER, HE GOT ME INTO INVESTING WHEN I WAS A KID I WAS FIVE YEARS OLD I COULD EXPLAIN A P/E RATIO, AND WHAT A BID AND AN ASK WAS, AND THE DIFFERENCE BETWEEN A LIMIT ORDER AND A MARKET ORDER AND ALL THAT STUFF, SO FOR ME, I SAW THIS AS A WAY THAT THE AVERAGE PERSON COULD ACTUALLY TAKE CONTROL OF THEIR FINANCES I JUST GREW UP PRETTY NERDY

I DON'T KNOW THEN LIKE AT 15 YEARS OLD, I DECIDED I DIDN'T WANT TO BE A NERD ANYMORE, WHICH WAS A MISTAKE 'CAUSE

'CAUSE NOW I REALIZE IT'S PRETTY AWESOME IN 1999 I JOINED THE MARINES I WAS ORIGINALLY WITH AN ENGINEERING UNIT

2005, I WENT OVER TO AFGHANISTAN I WAS MOSTLY WORKING WITH THE AFGHAN NATIONAL ARMY IT CHANGED ME A LOT AS A PERSON I'VE ALWAYS BEEN INTERESTED IN ECONOMICS AND FINANCE AND TECHNOLOGY AND CRYPTOGRAPHY I WAS IN A CRYPTOGRAPHY FORUM AND SOMEBODY I'D NEVER MET– WHO WAS ANONYMOUSLY IN THIS FORUM THAT I WAS CHATTING WITH– SENT ME 10,000 BITCOINS JUST AS A WAY TO TEST THE SYSTEM OUT AND SEE HOW IT WORKED, AND I GOT 'EM

I'M LIKE, "THAT'S COOL, BUT WHAT CAN I DO WITH THEM?" AND HE SAID, "WELL, NOTHING YET, BUT IF PEOPLE BELIEVE IT HAS VALUE, IT WILL" AT THE TIME, THERE WAS REALLY ONLY ONE BITCOIN EXCHANGE IT WAS MT

GOX I SAID, "WE NEED AN ALTERNATIVE WHO CARES IF THE TECHNOLOGY IS DECENTRALIZED AND THE METHOD OF TRANSFER IS DECENTRALIZED AND THE PEOPLE ARE DECENTRALIZED IF ALL THE TRADES ARE IN THE SAME LOCATION?" I THOUGHT THAT BUILDING ANOTHER EXCHANGE TO GIVE MORE PEOPLE ACCESS TO BITCOIN WOULD BE A KEY PART OF BITCOIN'S GROWTH THE DAY WE LAUNCHED, WE GOT A QUARTER-MILLION DOLLARS IN FROM USER DEPOSITS AND WE SAID, "OH SHIT, THIS IS– THIS IS REAL

YEAH HEY WE'RE ALL FANS OF "THE BIG LEBOWSKI," SO WE'RE GONNA HAVE A "BIG LEBOWSKI" PARTY NICE! IT'S A VERY EXCITING DAY 30 GALLONS OF WHITE RUSSIAN AND HALLWAY BOWLING – ( man shouts ) – YEAH! Kenna: WE WORK HARD, BUT WE PARTY HARD TOO OKAY

OKAY, I'M GOOD – Woman: ALL RIGHT – I'M GOOD I'M NOT DEAD – ( rock music playing ) – ( people chattering ) YEAH, I'M THE FIRST ONE IN THE HOUSE

THAT OPENED A TRADEHILL ACCOUNT Woman: WHAT HAPPENED? IN THE SAME DAY THEY WENT DOWN TO 90– $65 OR SOMETHING, OR $90 A BITCOIN I STOPPED SMILING

( laughs ) Kenna: TRADEHILL, ROUND TWO, WE OPTIMIZED FOR SUCCESS WE LAUNCHED EXPECTING TO HAVE TO DO HUNDREDS OF THOUSANDS OF TRANSACTIONS A SECOND RIGHT NOW WE'VE GOT ABOUT 15 PEOPLE IN ADDITION TO THAT, WE'VE GOT ABOUT EIGHT ATTORNEYS EXTERNALLY A LOT OF PEOPLE ARE DEPOSITING DOLLARS A LOT OF PEOPLE ARE DEPOSITING BITCOIN

WE'RE GETTING MORE TRADING WE'RE PUSHING THAT FROM A BUSINESS PERSPECTIVE ALSO, WE'RE TALKING TO PEOPLE WHO WANT TO DO MORE AUTOMATED TRADING ON OUR PLATFORM GET ROBOTS TRADING AGAINST EACH OTHER WE'VE STRESS TESTED THIS AND WE CAN HANDLE ABOUT 500 TIMES AS MUCH VOLUME AS MT

GOX WAS SEEING SO WE'LL SEE WHAT HAPPENS HERE THE INTEREST IN US IS PRETTY CRAZY JUST THE NEWS WITH BITCOIN HAS REALLY KIND OF VALIDATED EVERYTHING NOW PEOPLE ARE LIKE, "OH, YOU'RE NOT THIS CRAZY PERSON TALKING ABOUT SOME DIGITAL MADE-UP CURRENCY

" IT'S LIKE, "OH, I'VE READ ABOUT IT IN 'THE WALL STREET JOURNAL' AND 'THE NEW YORK TIMES' IT'S REAL" Kenna: WE HAD AN INVESTOR COME IN AND HE SAID, "HEY, I REALLY APPRECIATE YOUR SCRAPPY NATURE AND HOW YOU'RE HUSTLING, BUT I THINK IT'S TIME FOR YOU GUYS TO SPEND 30 GRAND A MONTH ON RENT WHEN YOU HAVE A BILLIONAIRE CLIENT AND THEY WANT TO COME CHECK OUT YOUR OFFICE BEFORE THEY SEND YOU A MULTI-MILLION DOLLAR WIRE, ASKING THEM TO WALK PAST PAWN SHOPS – IS NOT ALWAYS THE RIGHT FEEL – ( laughter ) SO WE'RE LEAVING THE MISSION

WE'RE DRIVING INTO SOMA RIGHT NOW WE'RE GONNA GO TAKE A LOOK AT WHAT MAY BE OUR NEW OFFICE SPACE PRETTY PRESTIGIOUS ADDRESS– ONE MARKET RIGHT NOW WE'RE TRYING TO FORGE THIS PATH, AND WE'RE TRYING TO COMPLY WITH EXISTING LAWS AND ANTICIPATE FUTURE LAWS, WHICH IS EXTREMELY EXPENSIVE AND EXTREMELY DIFFICULT – IS THERE PARKING HERE? – Man: YES OKAY, IS THAT INCLUDED WITH– ( chuckles ) OF COURSE

– RIGHT, WHAT DOES THAT– HOW MUCH DOES– – ( laughs ) HOW MUCH DOES THAT COST? THAT'S NOT TERRIBLE WHOA THAT'S PRETTY SEXY TWITTER WAS HERE FOR OVER A YEAR – YEAH

– AMAZON COMES AND GO EVERY SINGLE YEAR – OH, FANTASTIC – I HAVE MACY'S, I HAVE JC PENNEY

ALL THE BIG ONES, THEY COME OVER THEY ARE PART OF THE CLUB Kenna: SOUNDS GOOD WE'LL BE HERE TOMORROW – PICKING IT UP

– THANK YOU FOR THE BUSINESS – THANK YOU – I APPRECIATE IT THANKS SO MUCH – WE MOVE IN TOMORROW

– Nick: JUST LIKE– – JUST LIKE THAT, HUH? – JUST LIKE THAT – THAT'S HOW WE ROLL – Nick: IT'S PRETTY SURPRISING THAT THAT DEAL JUST HAPPENED SO QUICKLY WHAT WAS IT? YOU JUST LIKED THE SPACE AND DECIDED, "HEY, THERE'S NO POINT IN WAITING"? WE LIKE THE SPACE, WE LIKE THE ADDRESS WE JUST DON'T HAVE THE TIME TO SPEND EITHER

WE'VE GOT ALL KINDS OF IMPORTANT STUFF WE'RE WORKING ON AND IF WE SPEND A WEEK TRYING TO FIND AN OFFICE, AND HE AND I PUT 20 HOURS INTO IT OR 50 HOURS INTO IT, IT'S A HUGE WASTE OF TIME I THOUGHT THEY'D BE IN MULTIPLE BAGS RATHER THAN ONE BIG ONE, BUT HEY I BELIEVE THAT BITCOIN WILL DO TO THE BANKING INDUSTRY WHAT EMAIL DID TO THE POSTAL SERVICE

IT DIDN'T MAKE IT IRRELEVANT, WHAT IT'S FORCED THE POST OFFICE TO DO IS CONCENTRATE ON THEIR STRENGTHS AND LESS SO ON THEIR WEAKNESSES Daniel: MIKE CALDWELL IS THE CREATOR OF PHYSICAL BITCOINS, KNOWN AS CASASCIUS COINS THEY'RE OFTEN FEATURED IN MAINSTREAM MEDIA COVERAGE OF BITCOIN THEY'RE A NOVELTY ITEM, COLLECTABLES THAT BASICALLY ACT AS PHYSICAL CARRIERS FOR BITCOINS BUT THEY DO SOMETHING VERY IMPORTANT

THEY GIVE BITCOIN A FACE COME ON IN SORRY, THE KIDS ARE SLEEPING, SO I'M JUST BEING QUIET SO WE DON'T– YOU KNOW Daniel: EACH COIN HAS ITS OWN BITCOIN ADDRESS AND THE PRIVATE KEY REQUIRED TO SPEND IT IS HIDDEN UNDERNEATH THE HOLOGRAM

THIS IS WHERE YOU MAKE THE PHYSICAL BITCOIN YEAH IT'S A RANDOM SMATTERING OF THINGS, BUT I'M PRETTY CAREFUL ABOUT THE WAY I MANAGE– YOU KNOW, THE– BASICALLY, THIS IS THE CREDENTIALS THIS IS THE HOLOGRAM AND THE PRIVATE KEYS I'M PRETTY CAREFUL ABOUT THOSE AND DON'T KEEP THEM HERE

I NORMALLY DO THEM ON THIS MIRROR 'CAUSE THAT HELPS ME GET THE FRONTS AND BACKS RIGHT THERE'S SO MANY THINGS THAT CRYPTOGRAPHY CAN DO FOR US, THAT IF THE WORLD JUST KNEW, SO MANY SOCIAL PROBLEMS COULD BE SOLVED CRYPTOGRAPHY CAN BRING FAIRNESS TO ELECTIONS IT'S TOO DIFFICULT FOR PEOPLE TO UNDERSTAND AND SOMEONE NEEDS TO BRIDGE THE GAP Daniel: RIGHT NOW WE'RE USING BITCOIN TO SEND MONEY

BUT MANY BELIEVE IT WILL REVOLUTIONIZE MUCH MORE THE TECHNOLOGY BEHIND BITCOIN CAN BE USED TO BUILD DECENTRALIZED SYSTEMS WITH RULES THAT CAN'T BE CHEATED NOW SEE, THIS IS MY WIFE AND MY SPACE – THIS IS, YOU KNOW– – AWESOME IT IS WHAT IT IS

THE MORE TIME GOES BY, THE MORE LEGITIMATE BITCOIN GETS AND THE MORE PROUD I AM TO BE ASSOCIATED WITH IT NOW WHAT DOES YOUR WIFE DO? SHE DOES CRAFTS SHE'S A LOT LIKE ME WE JUST SIT AROUND AND MAKE THINGS ALL DAY IT'S JUST OUR OBSESSION

NO, I'M NOT A DRUG DEALER NO, I'M NOT A CRIMINAL NO, I'M NOT A TERRORIST I BELIEVE IN THE RULE OF LAW I BELIEVE IN STRUCTURE THAT BUILDS SOCIETY

I BELIEVE IN FAMILIES I BELIEVE IN CORPORATIONS I BELIEVE IN ALL THE ESSENTIAL ELEMENTS THAT A CIVILIZED SOCIETY WITH LAW AND ORDER NEED TO BE ABLE TO FUNCTION FOCAL LENGTH MATTERS ( whirring ) CRYPTOGRAPHY IS THE BASIS FOR US BEING ABLE TO IMPLEMENT THE VALUES WE SAY WE BELIEVE IN

Caldwell: THIS IDEA WILL NEVER DIE, THE TECHNOLOGY THAT BITCOIN BROUGHT TO THE FOREFRONT THE GENIE IS OUT OF THE BOTTLE Daniel: SINCE THE CRASH, THE BITCOIN PRICE HAS BEEN HOVERING AROUND $100 BITCOINS SEEM TO HAVE WEATHERED THE STORM, BUT THERE'S STILL MUCH CONTROVERSY SURROUNDING THE CURRENCY THE SAME CRYPTOGRAPHY THAT INSURES A USER'S PRIVACY ALSO ALLOWS IT TO BE USED ANONYMOUSLY

Steve: MY FATHER DECIDED TO RETIRE AND HE HAD AN OLD FAILING PRINT SHOP I BASICALLY TOOK IT OVER AND I CONVERTED IT INTO AN INTERNET PLACE WE'RE THE ONLY PLACE IN LA THAT SUPPORTS BITCOIN RIGHT NOW

THIS IS MY LINUX SYSTEM HERE IT'S A SYSTEM THAT ALSO MINES FOR BITCOINS MAKES ABOUT A DOLLAR A DAY I JUST DO IT FOR FUN I WAS REALLY REALLY INTO THE INTERNET, LITERALLY IN 1990, 1991, 1992, AND I HAD THE HARDEST TIME DESCRIBING WHAT THE INTERNET WAS TO PEOPLE

I WOULD TELL PEOPLE, "WELL, IT'S LIKE THIS NETWORK OF COMPUTERS AND THE NETWORK OF COMPUTERS CAN TALK WITH OTHER NETWORKS OF COMPUTERS AND THEN YOU COULD EXCHANGE INFORMATION" AND PEOPLE WOULD HAVE NO IDEA WHAT IT WAS – ( beeps ) – WHEN PEOPLE ASK ME WHAT BITCOIN IS I HAVE THE HARDEST TIME DESCRIBING WHAT IT IS AND I'D SURMISE IT AS, "IT'S BASICALLY MONEY

IT'S BASICALLY AN ANONYMOUS PAYPAL IT'S ONE OF THOSE THINGS THAT YOU HAVE TO USE BEFORE YOU UNDERSTAND POLITICALLY, I'M NOT A VERY BIG FAN OF EITHER THE BANKS OR FEDERAL RESERVE, AND BITCOIN ALLOWS ME TO GET AROUND THAT ONE OF THE PROGRAMS WE SUPPORT IS A PROTOCOL CALLED "TOR" AND BASICALLY WHAT TOR DOES IS IT ALLOWS YOU TO COMMUNICATE TO A WEBSITE ANONYMOUSLY

TOR IS A PROGRAM THAT ALLOWS YOU TO GET ON THE SILK ROAD AND THIS IS SILK ROAD BASICALLY, ANY DRUG YOU WANT IS AVAILABLE THERE'S A LOT OF WEED THERE'S A LOT OF COCAINE

THERE'S A LOT OF ECSTASY BUT THERE'S ALSO UNUSUAL DRUGS, LIKE IF YOU WANT SOME SORT OF ANABOLIC STEROID, YOU CAN TYPE "STEROID" YOU'LL GET ALL THE DIFFERENT TYPES OF STEROIDS THAT ARE AVAILABLE SILK ROAD ITSELF IS NOT SELLING THE DRUGS THIS IS BASICALLY A MATCHMAKER BETWEEN BUYER AND SELLER

BOTH THE BUYER AND SELLER DON'T KNOW EACH OTHER BOTH THE BUYER AND SELLER ARE ANONYMOUS IT GOES ON THIS WEB OF TRUST IF YOU WANT TO, LET'S SAY, BUY THIS TESTOSTERONE, YOU'D CLICK ON THIS HE HAS 99

3 POSITIVE FEEDBACK FROM MORE THAN 300 TRANSACTIONS SO EVEN THOUGH THE CONTRACTS AREN'T ENFORCEABLE BY LAW, THE REPUTATION SYSTEM MAKES IT SO THAT THE SYSTEM WORKS PRETTY WELL OH, THERE'S A FIREWORKS SECTION NOW I DIDN'T KNOW THAT FLORIDA I

D, 188 BITCOINS, WHICH IS AROUND $150, SOMETHING LIKE THAT A FORGED AUTO INSURANCE CARD, FORGED PASSPORT THERE IS OVER 9,000 ENTRIES FOR DRUGS

THAT'S A LOT I WOULD SAY THERE'S AROUND MAYBE FIVE CUSTOMERS THAT KNOW ABOUT IT AND USE IT IT'S A VERY SMALL PERCENTAGE OF THE PEOPLE THAT COME IN BUT THE PEOPLE WHO DO KNOW ABOUT IT, SPECIFICALLY COME HERE TO USE IT ( rock music playing ) WHAT THE CUSTOMERS DO WITH THE COMPUTERS IS PRETTY MUCH THEIR BUSINESS

ANOTHER DAY IN THE OFFICE YOU GONNA DO DRUG DEALING OF ANY SORT, SILK ROAD IS THE PLACE TO GO HOW MANY PEOPLE ARE SELLING CANNABIS RIGHT NOW? IT LOOKS LIKE 2,011 PEOPLE ARE SELLING CANNABIS THEY CALL ME MR BITCOIN

I PROBABLY BEEN DEALING DRUGS SINCE I WAS LIKE 17 RIGHT NOW I'M 26 I THINK OF IT AS A GLOBAL THING WHEN I'M ON THE COMPUTER I'M DOING BUSINESS WITH THE WORLD LET'S SEE, THEY HAVE BLUE DREAM, SOUR DIESEL, PINEAPPLE THAI, PURPLE KUSH, GIRL SCOUT COOKIES

PURPLE PAYS WHEN I FIRST HEARD ABOUT IT, I WAS LAUGHING ABOUT IT IT TOOK ME A WEEK TO JUST EVEN THINK ABOUT THIS FOR REAL "I CAN REALLY MAKE MONEY OFF THE INTERNET? SELLING THIS TYPE OF STUFF ON THE INTERNET? YOU SURE ABOUT THAT?" THIS SOMETHING I PROBABLY MAY BUY RIGHT HERE THEY HAVE LOOKS LIKE SOME GOOD KUSH

AND SOME OF THESE THINGS ONLY TAKE A DAY TO GET HERE WITH NO HARASSMENT FROM NOBODY INSTEAD OF JUST BEING ON THE STREETS ONCE YOU GET THE HANG OF IT, IT'S ACTUALLY KINDA FUN JUST LOOKING THROUGH DIFFERENT THINGS "MR BITCOIN" I'M RUNNING WITH IT

I LIKE THE NAME YOU KNOW WHAT I MEAN? I'M NOT GONNA LIE I GET BOOTY OFF THIS I KINDA LIKE TALKING ABOUT THIS STUFF WITH GIRLS GIRLS LIKE THAT SHIT HOT

( laughs ) "OH, YOU'RE STREET, AND YOU GOT A LITTLE NERD KNOWLEDGE? THIS IS GREAT" I HAVE A LOT OF BITCOINS SAVED UP ALREADY MY BUSINESS IS DOING GOOD IT'S A FUN WAY OF DOING HUSTLING THESE DAYS THE FUTURE BRUNG A DIFFERENT WAY TO HUSTLE AND I LIKE IT

Daniel: WITH SO MANY PEOPLE USING BITCOIN IN SO MANY DIFFERENT WAYS, IT'S BECOMING APPARENT THAT IT CAN'T BE IGNORED – LET ME SEE YOUR DRIVER'S LICENSE – OH SURE THIS STAYS AT THE DESK UNTIL YOU LEAVE THE BUILDING Daniel: TODAY I'M VISITING FINCEN, A BUREAU OF THE U

S DEPARTMENT OF THE TREASURY DESPITE HAVING RELEASED GUIDANCE ON VIRTUAL CURRENCIES, THERE'S STILL A LOT OF UNCERTAINTY SURROUNDING THEIR OUTLOOK ON THE FUTURE OF BITCOIN REGULATION STRAIGHT AHEAD AND IN THE BIG FISHBOWL-LOOKING– OKAY, GREAT ( beeping ) I'M NOT GONNA SAY WE'RE GONNA HAVE EVERY ANSWER FOR YOU TODAY, BUT I MEAN

– ( snapping fingers ) – Ashley: OH YEAH ( laughs ) Daniel: JENNIFER SHASKY CALVERY CAME ONBOARD AS FINCEN'S DIRECTOR LAST YEAR DURING HER CAREER, SHE SPENT 15 YEARS AT THE DEPARTMENT OF JUSTICE WHERE SHE SPECIALIZED IN FIGHTING MONEY LAUNDERING AND ORGANIZED CRIME

VIRTUAL CURRENCIES HAVE BEEN ON MY RADAR FOR A WHILE, EVEN PRIOR TO COMING TO THIS POSITION, BECAUSE OF, UNFORTUNATELY, THE ABUSE OF SOME OF THEM BITCOIN, ON THE OTHER HAND, IS ONE THAT REALLY DIDN'T COME ON MY RADAR PROBABLY UNTIL I ARRIVED AT FINCEN DEPENDING ON WHO YOU SPEAK TO, THE ISSUANCE OF OUR GUIDANCE WAS EITHER THE BEST THING THAT EVER HAPPENED TO BITCOIN OR THE WORST THING THAT EVER HAPPENED TO BITCOIN SOME ACCUSING US OF TRYING TO KILL BITCOIN AND OTHERS SAYING THAT IT SOMEHOW LEGITIMIZED IT OF COURSE, NEITHER OF THOSE THINGS I THINK IS PROBABLY TRUE

AND CERTAINLY NEITHER OF THOSE THINGS WAS OUR INTENT ONE OF THE CLEAR LINES IS THAT IF YOU'RE A CONSUMER WHO'S USING BITCOINS TO BUY GOODS AND SERVICES, THE GUIDANCE DOESN'T PERTAIN TO YOU WE'RE FOCUSED MORE ON THE PLACES WHERE WE THINK WE HAVE RISKS TO THE US FINANCIAL SYSTEM FROM MONEY LAUNDERING AND TERRORIST FINANCING

AND I THINK THAT MIGHT BE KIND OF– A LOT OF THE BITCOIN COMMUNITY HAS A LITTLE BIT OF A FEAR THAT BITCOIN MAY BE CHARACTERIZED IN A WAY SO AS TO TIE IT TO SOME BAD ACTOR RUINING IT FOR EVERYONE, WHEN A LOT OF PEOPLE THAT ARE INTERESTED IN BITCOIN, INCLUDING MYSELF, SEE IT AS JUST THIS TECHNOLOGY THAT WE DON'T– REALLY DON'T WANNA SEE IT FALLING INTO THE WRONG CATEGORIZATION WITH ALL THE POTENTIAL THAT'S THERE SURE SO THAT INNOVATION AROUND BITCOIN AND THE VIRTUAL ECONOMY IS REALLY ONE OF THE MORE INTERESTING ASPECTS, I THINK, OF THIS STORY– THE IDEA THAT IT CAN BE USED TO POTENTIALLY SERVE THE UNBANKED OUT THERE, JUST TO PROVIDE SOME REALLY NEW SERVICES THAT ARE CONVENIENT FOR CONSUMERS THE FLIP SIDE OF IT THOUGH IS THAT TO BE A PART OF THE FINANCIAL SYSTEM– THE US

FINANCIAL SYSTEM, THE GLOBAL FINANCIAL SYSTEM– ALSO COMES WITH SOME RESPONSIBILITIES AND THOSE RESPONSIBILITIES INCLUDE NOT ALLOWING YOUR INSTITUTION TO BE USED BY CRIMINALS AND BY TERRORISTS Daniel: THERE'S ALWAYS BEEN A CONCERN THAT THE GOVERNMENT MIGHT TRY TO STAMP OUT BITCOIN BUT PERHAPS THEY SEE THE RISK OF BEING LEFT BEHIND IN MAY 2013, THE BIGGEST GATHERING TO-DATE OF BITCOIN ENTHUSIASTS AND ENTREPRENEURS HAPPENED IN SAN JOSE, CALIFORNIA

Lindsay Holland: WE'RE AT BITCOIN 2013 IT'S THE INAUGURAL CONFERENCE OF THE BITCOIN FOUNDATION Roger Ver: BITCOIN IS WORLDWIDE AND THE VAST MAJORITY OF PEOPLE HAVEN'T EVEN HEARD OF BITCOIN YET IT'S MORE POWERFUL THAN EVERY COMPUTER ON THE TOP-500 LIST COMBINED IT'S AN AWFULLY BIG WORLD, AN AWFUL LOT OF THINGS COULD HAPPEN

REALLY, WE'VE BEEN ON A ROLLER-COASTER RIDE AND I EXPECT, AT LEAST FOR THE NEXT FEW YEARS, WE'RE GONNA REMAIN ON A ROLLER-COASTER RIDE I HAPPEN TO ENJOY ROLLER COASTERS – I THINK THEY'RE FUN – ( applause ) Daniel: JUST A FEW WEEKS EARLIER CAMERON AND TYLER WINKLEVOSS, KNOWN FOR THEIR INVOLVEMENT IN FACEBOOK, ANNOUNCE THAT THEY OWN A 1% STAKE OF ALL BITCOINS IN EXISTENCE WORTH AROUND $11 MILLION

– HOW'S IT GOING? HOW ARE YOU? – NICE TO MEET YOU Daniel: THEY ALSO MADE A $15 MILLION INVESTMENT IN CHARLIE'S COMPANY, BITINSTANT WE STARTED LOOKING SERIOUSLY AT IT AT THE END OF LAST SUMMER AND STARTED PURCHASING AROUND THAT TIME I THINK A LIGHT BULB JUST WENT OFF AND WE SAID, "WOW

THE IMPLICATION OF THIS COULD BE ENORMOUS Tyler: IF EVERYONE IN THE WORLD COULD HAVE A BITCOIN ADDRESS, EVERYONE IN THE WORLD COULD BE BANKED FAIRLY QUICKLY AND WHEN YOU CONSIDER THAT, IT'S A VERY POWERFUL IDEA AND BITCOIN CAN MAKE THAT HAPPEN WE'RE GOING ALL OVER THE WORLD

WE'RE GOING TO THE UK WE'RE GOING TO AUSTRALIA WE'RE GOING TO– WE'RE ALREADY IN RUSSIA WE'RE GOING TO SOUTH AMERICA

WE'RE ALREADY IN BRAZIL NOW YOU CAN BUY BITCOIN AT ANY OF OUR LOCATIONS Daniel: IT'S FUN TO THINK THAT SATOSHI MIGHT BE HERE TOO I ALWAYS WONDER IF SOMEBODY IS– IF SOMEONE HERE SOMEWHERE IS – YES I WAS PLANNING– – STANDING IN THE CORNER GOING– ( both laugh ) WHAT WOULD HE DO? WHAT TALKS WOULD HE BE ATTENDING, YOU KNOW? Trace Mayer: WE'RE SEEING THE BITCOIN PLAYERS IN THE MARKET MEETING WITH THE VENTURE CAPITALISTS AND THEY'RE ALL BEGINNING TO POSTURE AND THAT'S VERY EXCITING, BECAUSE IT MEANS THAT THERE'S GONNA BE A LOT MORE INFRASTRUCTURE BUILT OUT, AND LOT MORE MONEY FLOWING INTO THE SPACE, AND IT'S REALLY GONNA BE A BIG BULL MARKET FOR BITCOIN Daniel: ONE OF THE COMPANIES BEST KNOWN FOR MAKING BITCOIN ACCESSIBLE FOR COMMERCE IS ATLANTA-BASED BITPAY THEY ARE PIONEERS IN BITCOIN AND PROVIDE A SERVICE THAT ENABLES MERCHANTS TO ACCEPT BITCOIN PAYMENTS WITHOUT DEALING WITH ITS COMPLEXITIES WE'VE GROWN ABOUT A FACTOR OF 10 SINCE THE BEGINNING OF THE YEAR WE WERE DOING ABOUT HALF A MILLION DOLLARS A MONTH

– YEAH – AROUND THE TURN OF THE YEAR, AND NOW WE'RE DOING ABOUT $5 MILLION A MONTH THIS IS PEOPLE USING BITCOINS TO BUY REAL GOODS AND SERVICES THEY'RE NOT DAY TRADING THEY'RE NOT EXCHANGING

THEY'RE ACTUALLY BUYING THINGS I'm confident that Bitcoin is the most important invention in the entire history of the world since the internet Daniel: ROGER VER IS AN INVESTOR IN SEVERAL EARLY BITCOIN COMPANIES, INCLUDING BITPAY HIS PASSION AND ENTHUSIASM HAS EARNED HIM THE NICKNAME "BITCOIN JESUS" Ver: IT IS GOING TO CHANGE EVERYTHING

AND ALL OF YOU HERE IN THIS ROOM YOU'RE AT THE VERY VERY FOREFRONT OF THAT ( cheers, applause ) Daniel: ROGER LIVES IN TOKYO BUT TRAVELS THE EARTH, SPREADING THE GOOD WORD OF BITCOIN Ver: THE LAST COUPLE OF DAYS WE'VE BEEN SETTING UP A BUSINESS PER DAY TO ACCEPT BITCOIN HERE IN THE BAY AREA TODAY'S BUSINESS IS GOING TO BE THIS SUPER KYO-PO KOREAN SUPERMARKET SO FOR YOU– YOU ACCEPT CREDIT CARDS RIGHT NOW? – RIGHT

– THE CREDIT CARD COMPANIES ARE CHARGING YOU 2% OR 3%? – RIGHT – FOR BITCOIN, YOU CAN DO THE SAME THING, BUT THEY'LL ONLY CHARGE YOU 1% AND YOU'LL STILL GET DOLLARS IN YOUR BANK ACCOUNT IF YOU WANT, YOU CAN CHOOSE TO SPLIT SOME OF THE PAYMENTS THAT YOU RECEIVE INTO BITCOINS AND THEN SOME INTO DOLLARS IN WHATEVER RATIO YOU WANT, SO YOU CAN KEEP 99% IN DOLLARS AND 1% IN BITCOIN OR 99% IN BITCOIN AND 1% IN DOLLARS – OKAY – HOWEVER YOU WANT

YOU CAN DECIDE THAT Daniel: ROGER IS DESCRIBING THE SERVICE PROVIDED BY BITPAY THEY TAKE THE VOLATILITY OF BITCOIN'S PRICE OUT OF THE EQUATION FOR MERCHANTS BY IMMEDIATELY CONVERTING BITCOINS TO DOLLARS AT THE TIME OF SALE SO RIGHT NOW WE HAVE IT SET TO 100% DOLLARS, SO ANYBODY THAT PAYS HERE WITH BITCOIN, THEY'LL DEPOSIT THE MONEY INTO YOUR BANK ACCOUNT THE VERY NEXT DAY WITH ONLY A 1% FEE AND I GUARANTEE YOU OVER THE NEXT COUPLE OF WEEKS YOU'LL HAVE LOTS OF COMPUTER NERDS THAT LOVE BITCOINS WILL BE COMING IN HERE SPECIFICALLY TO SHOP AT YOUR SUPERMARKET, SO THAT THEY CAN PAY WITH BITCOIN

THE CREDIT CARD COMPANIES, JUST FOR PROCESSING THE PAYMENT, THEY TAKE ANYWHERE FROM 15% TO OVER 3% AND THEN ON CERTAIN CARDS THERE'S EVEN A PER-TRANSACTION FEE, LIKE 20¢ PER TRANSACTION PLUS THE PERCENTAGE OF THE TRANSACTION

$11,000, $12,000 A MONTH ON THE AVERAGE THAT THEY JUST TAKE RIGHT OUT OF OUR ACCOUNT I HONESTLY THINK THAT THERE'S A REALLY GOOD CHANCE THAT BITCOINS WILL BE MORE THAN $1,000 BY THE END OF THE YEAR, BECAUSE EVERYBODY WHO HEARS ABOUT– "WAIT, I CAN SEND MONEY TO AND FROM ANYONE I WANT?" IT'S IMPOSSIBLE FOR ANYONE TO FREEZE YOUR ACCOUNT, IT'S IMPOSSIBLE FOR ANYONE TO BLOCK YOU FROM SENDING OR RECEIVING THESE BITCOINS

EUROS, SO YOU CAN SEE ALL THESE DIFFERENT CURRENCY EXCHANGES AROUND THE WORLD THAT EXCHANGE TO AND FROM BITCOINS YOU CAN SEE THERE'S MAYBE BETWEEN 50 AND 100 EXCHANGES NOW

WHEN I FIRST HEARD ABOUT BITCOIN AND STARTED TELLING EVERYBODY ABOUT IT, IF YOU LOOKED AT THAT SAME PAGE, THERE WERE LESS THAN 10 AND THERE'S NO CENTRAL OFFICE THAT THEY COULD RAID OR ANYTHING LIKE THAT? THERE'S NO CENTRAL– IT'S AMAZING THERE'S NO CENTRAL OFFICE, THERE'S NO CENTRAL PLACE THEY COULD GO TO AND SAY, "TAKE STEVE'S BITCOINS," OR, "GIVE STEVE'S BITCOINS TO KEVIN" DO THIS OR DO THAT SO WHO'S THE OWNER OF BITCOINS? – EVERYBODY THAT OWNS BITCOINS? – YEAH YEAH

JUST LIKE WHO'S THE OWNER OF GOLD? IT'S WHOEVER OWNS SOME GOLD SHORT OF SHUTTING DOWN THE ENTIRE INTERNET IN THE ENTIRE WORLD, THERE'S NO WAY TO STOP BITCOIN AND HIT "REQUEST PAYMENT" AND THAT'S THE QR

CODE FOR YOUR BITCOIN ADDRESS SO I'M GONNA SCAN THAT SO NOW I HAVE YOUR BITCOIN ADDRESS ON MY PHONE

I THINK THIS IS $2, SO I'M GOING TO SEND YOU $2 WORTH OF BITCOINS THERE IT IS YOU JUST RECEIVED THAT MANY BITCOINS FROM ME, DIRECTLY WITH NO FEE AND IF YOU HIT THE LITTLE GREEN SQUARE IT'LL SHOW YOU THE EQUIVALENT AMOUNT IN US DOLLARS

SO YOU JUST RECEIVED $2 WORTH OF BITCOINS DIRECTLY FROM MY PHONE TO YOUR PHONE AND YOU CAN SEND MONEY JUST LIKE THAT ANYWHERE IN THE WORLD YOU COULD'VE TOLD ME YOUR BITCOIN ADDRESS BY EMAIL OR POSTED ON FACEBOOK OR TWITTER OR ANYWHERE SO I COULD PRINT THIS AND HAVE IT AT THE REGISTER YEAH

YUP, AND YOU CAN CHECK RIGHT ON YOUR PHONE ANY TIME THAT YOU RECEIVED THE PAYMENT – ( laughs ) – OKAY THANK YOU, STEVE – Steve: ALL RIGHT THANKS

– THANK YOU FOR THE TEA ( chatting ) Daniel: ONE OF THE NEWEST STANDOUTS IN THE BITCOIN SPACE IS A SAN FRANCISCO COMPANY NAMED COINBASE THEY OPERATE A DIGITAL WALLET SERVICE THAT MAKES IT SIMPLE TO BUY, USE AND ACCEPT BITCOIN Brian Armstrong: I WOULD NOT BE SURPRISED AT ALL IF GOOGLE, SQUARE, PAYPAL– EVERYBODY– IS LOOKING AT ADDING BITCOIN IN ONE OR TWO YEARS BY THEN WE NEED TO HAVE 50 MILLION WALLETS

IF WE CAN MAKE THIS EASY TO USE, IT'S GONNA BE HUGE Fred Ehrsam: MY INVOLVEMENT IN BITCOIN IS NOT POLITICALLY MOTIVATED – YEAH, DUDE – Ehrsam: PEOPLE ARE REALIZING LARGE CAPITAL GAINS WHEN PROFESSIONAL INVESTORS ENTER THE REALM, THE STAKES DEFINITELY CHANGE

WE RAISED $5 MILLION FROM UNION SQUARE VENTURES FRED WILSON LED THE ROUND THERE I THINK BITCOIN IS STILL ACTUALLY A LITTLE BIT UNDER THE RADAR I THINK IT'S MOVED PAST THE STAGE WHERE PEOPLE DISMISS IT, BUT I DON'T THINK THAT IT'S TOTALLY GONE MAINSTREAM EITHER I THINK WE'RE IN THAT MIDDLE STAGE RIGHT NOW

Daniel: AT THE END OF THE CONFERENCE, JERED FROM TRADEHILL THREW A PARTY TO CELEBRATE HOW FAR THINGS HAD COME – YOU GUYS ARE HOT RIGHT NOW – ( chattering ) – YUP – CONGRATULATIONS ON THE RAISE – THANK YOU

– IT'S GOOD MONEY, MAN – SWELL DO – YEAH – I MEAN– – HOPEFULLY IT'S AN ADVANCEMENT FOR THE COMMUNITY I AM COMPLETELY PRO-COMPLIANCE

I THINK IF YOU DON'T WANT TO ATTACH YOUR IDENTITY TO THIS, – JUST CAN'T WORK WITH YOU – YEAH, SO I THOUGHT I JUST NEED TO– I MEAN THE LIBERTARIAN SIDE OF ME IS LIKE, "EHH YEAH, WHATEVER," BUT LIKE, FROM A BUSINESS PERSPECTIVE, IF PEOPLE DON'T PLAY BY THE RULES, – YOU'RE NOT GONNA LAST – YEAH, I COMPLETELY AGREE – YOU'RE GONNA JUST SHUT DOWN OR YOU'RE GONNA GO TO JAIL

– YEAH Daniel: NOTICEABLY ABSENT FROM THE CONFERENCE WERE REPRESENTATIVES OF BITCOIN'S BIGGEST EXCHANGE, MT GOX JUST DAYS EARLIER THE DEPARTMENT OF HOMELAND SECURITY SEIZED MORE THAN $5 MILLION FROM THEIR US

ACCOUNTS THE SEIZURE WARRANT STATED THAT MT GOX HAD FAILED TO REGISTER AS A MONEY TRANSMITTER, PUTTING THEM IN VIOLATION OF THE NEW FINCEN GUIDELINES ( people chattering ) I'M TRAVELING TO TOKYO TO MEET MARK KARPELES, MT GOX'S RECLUSIVE C

EO NO BITCOINS ON HERE NOT YET THAT WILL MAKE THIS COMPLETELY UNNECESSARY

BUT FOR NOW IT SEEMS KIND OF PRIMITIVE THAT WE'RE EXCHANGING PAPER FOR PAPER – ( clicking ) – ( coins clinking ) – Nick: AND LOSING – AND LOSING VALUE SOMEONE'S TAKING A CUT SOMEONE'S TAKING A LITTLE PERCENT

MARK AND HIS BUSINESS PARTNER GONZAGUE ARE FRENCH BUT THEY OPERATE MT GOX FROM OFFICES IN JAPAN ORIGINALLY MT GOX WAS AN EXCHANGE FOR TRADING CARDS USED IN A GAME CALLED "MAGIC: THE GATHERING" M

TGOX STOOD FOR "MAGIC: THE GATHERING ONLINE EXCHANGE

" IN 2011 MARK'S COMPANY TIBANNE BOUGHT MT GOX, AND HIS FOCUS HAS BEEN BITCOIN EVER SINCE ONE OF THE CONDITIONS OF MY VISIT IS TO REFRAIN FROM ANY DISCUSSION ABOUT THE DHS

SEIZURE, DUE TO THE ONGOING INVESTIGATION WE'VE ARRIVED AT MT GOX THIS IS MT GOX RIGHT HERE

THERE'S NO BIG SIGN OR ANYTHING, NO– NO– IT DOESN'T LOOK LIKE A CRAZY COMMERCIAL ESTABLISHMENT DESPITE THEIR LEGAL PROBLEMS MT GOX STILL HANDLES MORE VOLUME THAN ANY OTHER EXCHANGE AND IS PROCESSING AROUND $6 MILLION WORTH OF BITCOIN TRADES EVERY DAY WE HAD, LAST YEAR, AN AVERAGE OF 10,000 NEW CUSTOMERS A MONTH JANUARY, IT WAS 20,000

THEN 30,000, 60,000, 150,000 WITH WHAT'S GOING ON, WE GO DOWN, BUT WE ARE REACHING 100,000 NEW CUSTOMERS – FOR MAY – THAT'S AMAZING – IN A MONTH? – IN A MONTH – WOW

– SO IT WAS LIKE THIS ZIP, BUP! BUT STILL, AFTER WHAT HAPPENED I THOUGHT THAT A LOT OF PEOPLE WILL GO AWAY OR DON'T CREATE A NEW ACCOUNT BUT STILL, 100,000 NEW CUSTOMERS IT'S

WOW AND HERE WE'VE GOT THE OFFICE ( laughs ) Daniel: MT

GOX EMPLOYS 18 PEOPLE NOT ONLY IS MARK THE CEO, HE'S ALSO THE CF

O, THE LEAD DEVELOPER AND PERFORMS ALL TECHNICAL OPERATIONS TO KEEP THE EXCHANGE RUNNING ( Daniel speaks ) – C++ – C++ IS THAT YOUR MAIN– IS THAT YOUR MAIN – PROGRAMMING LANGUAGE? – NO

I'VE GOT A LOT OF MAIN PROGRAMMING LANGUAGES YEAH? WHAT'S YOUR FAVORITE PROGRAMMING LANGUAGE? REALLY DEPEND ON WHAT I NEED TO DO I CREATE A GOOD SOMETHING REALLY QUICK AND I DON'T CARE ABOUT PERFORMANCE, I USE PHP

IF I CARE A LITTLE BIT ABOUT PERFORMANCE, I WILL USE C++ WITH QT AVAILABLE AND IF I CARE A LOT ABOUT PERFORMANCE, I WILL USE AXUM WHEN WE GO IN, CAMERAS DOWN FIRST, – UNTIL WE GET TO YOUR SERVERS AND THEN BACK UP

– EXACTLY OKAY GETTING READY TO GO INTO THE MT GOX DATA CENTER LOCATION OKAY, CAMERAS DOWN

WE WERE ALLOWED TO SNAP A FEW PHOTOGRAPHS ( Karpeles speaking ) ( speaking Japanese ) ( man speaking Japanese ) Daniel: IF MT GOX'S NEW TRADING ENGINE CAN REALLY SUPPORT 100 MILLION ORDERS PER SECOND, IT SHOULD BE ABLE TO SCALE WITH THE DEMANDS OF PROFESSIONAL TRADERS BUT WITH COMPLEX LEGAL PROBLEMS AND INCREASING COMPETITION, MARK'S ATTENTION IS PULLED IN MANY DIRECTIONS DO YOU WORK SEVEN DAYS A WEEK, TYPICALLY? – Karpeles: YUP – IT SEEMS THAT YOU DO THE MAJORITY OF ALL THE HEAVY LIFTING

– ( laughs ) LITERALLY – Karpeles: YEAH YOU NEED TO REMOVE YOUR SHOES IN THE ENTRANCE ( grunts ) Daniel: MARK IS A TALENTED MAN IN ONE OF THE WORLD'S BIGGEST CITIES BUT MAYBE HE SHOULD STICK TO COMPUTER KEYBOARDS ( classical music playing ) ( scoffs ) OKAY, I MESSED IT UP – ( chuckles ) AWESOME – ( Nick claps ) YAY

YEAH Erik Voorhees WE ARE HERE IN NORTHERN NEW HAMPSHIRE FOR THE PORCUPINE FREEDOM FESTIVAL AND THIS IS AN EVENT PUT ON EACH YEAR BY THE FREE STATE PROJECT BASICALLY IT'S JUST A BUNCH OF CRAZY ANARCHO-CAPITALISTS, LIBERTARIAN TYPES IN THE WOODS, WITH FREEDOM AND FAMILIES

PRETTY MUCH ALL OF THE VENDORS ACCEPT BITCOIN – ( people chattering ) – AHH! IT TASTES MUCH BETTER WHEN BOUGHT WITH BITCOIN THANKS, GUYS SOUPS, SALADS AND SMOOTHIES ( chuckles ) I WOULD SAY ONE-THIRD OF OUR SALES HAVE BEEN IN BITCOIN

IT'S 20 BUCKS SO YOU'RE GONNA PAY IN BITCOIN? – UH, YEAH – ALL RIGHT LAST YEAR WAS OUR FIRST YEAR ACCEPTING IT WE DID MAYBE 18 TRANSACTIONS, 20 TRANSACTIONS AT THE MOST AND NOW WE'RE UP TO CLOSE TO 120

– ( sizzling ) – ( folk music playing ) Daniel: THIS COMMUNITY IS REALLY ONE OF THE LARGEST GROUPS OF PEOPLE IN THE US, I THINK, THAT IS TRULY ADOPTING BITCOIN AND USING IT AS A CURRENCY, BECAUSE OF WHAT IT STANDS FOR AND BECAUSE OF WHAT IT ENABLES ( people chatter ) THE WORLD IS SERIOUSLY CHANGING NOW AND IT IS CHANGING IN A VERY INTERESTING, VERY RADICAL, DECENTRALIZED, AND, IN MY OPINION, POSITIVE DIRECTION SHOOT

HERE IT IS "PRICE BREAKS THE ALL-TIME HIGH" Daniel: VITALIK IS ONLY 19 YEARS OLD, BUT HE HAS A PROFOUND UNDERSTANDING OF THE COMPLEXITIES OF BITCOIN AND A GIFT FOR EXPLAINING THEM AS LEAD WRITER FOR "BITCOIN MAGAZINE," HE'S BEEN TRAVELING THE WORLD, COVERING BITCOIN FOR THE PAST YEAR I'M A BIG FAN OF THE DECENTRALIZATION CONCEPT, IN PRINCIPLE

YOU KNOW, HAVE LOTS– LOTS OF DIFFERENT SOCIETIES OPERATING ACCORDING TO WHATEVER PEOPLE'S OWN BELIEFS ARE BITCOIN HAS UNIQUE PROPERTIES THAT NO OTHER SYSTEM IN THE WORLD HAS HAD BEFORE IT REALLY SEEMS LIKE THE ONLY PRACTICAL WAY FORWARD AS YOU MOVE AWAY FROM CASH INTO YOUR DEBIT CARDS AND YOUR CREDIT CARDS, YOU ESSENTIALLY ARE GIVING UP A CERTAIN DEGREE OF YOUR PRIVACY WITHOUT EVEN REALLY KNOWING IT IT'S IMPORTANT TO UNDERSTAND THAT BITCOIN IS NOT AUTOMATICALLY, PERFECTLY ANONYMOUS

BUT WHAT IT DOES IS IT ENABLES YOU TO BE ANONYMOUS IF YOU WISH TO Daniel: ERIK VOORHEES IS THE FOUNDER AND PART OWNER OF A HUGELY POPULAR BITCOIN GAMBLING SITE CALLED SATOSHI DICE SATOSHI DICE IS THE FIRST OF A NEW BREED OF PROVABLY FAIR BETTING GAMES THAT USE BITCOIN SINCE ALL BETS ARE PUBLIC, ANYONE CAN VERIFY THE ODDS AND PAYOUTS AT ITS PEAK, SATOSHI DICE WAS RESPONSIBLE FOR MORE BITCOIN TRANSACTIONS THAN ALL OTHER USES OF BITCOIN COMBINED

IT PLAYED AN IMPORTANT ROLE IN BITCOIN'S DEVELOPMENT AS ONE OF THE FIRST APPLICATIONS TO REALLY TEST WHAT THE BITCOIN NETWORK COULD HANDLE RECENTLY ERIK MOVED HIS ENTIRE OPERATIONS OUT OF THE US AND INTO PANAMA HE STARTED A COMPANY CALLED COINAPULT THAT LETS YOU SEND BITCOIN VIA S

MS AND EMAIL Voorhees: I THINK MOST PEOPLE, AT LEAST IN AMERICA, BELIEVE THAT WHEN THEY PUT $1,000 INTO THEIR BANK, THE BANK IS HOLDING $1,000 IN ITS VAULT FOR THEM AND THEY DON'T REALIZE THAT 99% OF ALL THE DOLLARS ARE DIGITAL

THE FACT THAT WE HAVE THESE TOKENS CALLED PAPER CASH IS THE EXCEPTION TO THE RULE PEOPLE SEE THE CASH AND THEY THINK THAT THAT'S WHAT THE MONEY IS, BUT IT'S ALL DIGITAL AND IT'S BEEN THAT WAY FOR DECADES YOU GUYS MOVED YOUR BUSINESS TO PANAMA WHAT WAS THE PRIMARY DRIVER IN THAT? Voorhees: IF YOU'RE A US

COMPANY, YOU HAVE TO FOLLOW THE ARCANE US REGULATIONS FOR ALL OF YOUR CUSTOMERS AROUND THE WORLD SO IF YOU DO BUSINESS WITH SOME RURAL FARMER IN AFRICA, YOU'RE GONNA NEED TO GET HIS SOCIAL SECURITY NUMBER, YOU'RE GONNA NEED TO GET ALL THIS INFORMATION THAT WASHINGTON TELLS YOU IS IMPORTANT WE DID NOT WANT TO HAVE TO APPLY THE U

S FINANCIAL REGULATORY SCHEME TO CUSTOMERS IN SUB-SAHARAN AFRICA I DON'T THINK THE DEVELOPED WORLD'S GONNA BE WHERE BITCOIN REALLY TAKES OFF, LONG-TERM, BECAUSE OUR BANKING SYSTEM'S WORKED DECENTLY WELL MANY PEOPLE AROUND THE WORLD DON'T HAVE ANY BANK ACCOUNTS WHATSOEVER ULTIMATELY, THOSE ARE THE TYPES OF PEOPLE WHO WILL FIND THE MOST VALUE OUT OF BITCOIN

Daniel: ONE MONTH LATER ERIK ANNOUNCED HE HAD SOLD SATOSHI DICE TO AN ANONYMOUS INVESTOR THE PRICE? 126,315 BITCOINS, WORTH AROUND $115 MILLION MOST OF THE NEW OFFICES IN THIS CITY ARE IN THIS CONDITION, ALL STILL WHAT'S CALLED "GRAY" NOT READY, NO INTERNET, NO ELECTRICITY– NOTHING

BUT WE ACTUALLY GOT ONE THAT WAS FINISHED, SO WE MOVED IN AND WE ARE SUPER EXCITED ABOUT IT YOU CAN SEE ALL THE SKYSCRAPERS OF NEW BANKS AND EVERYTHING GETTING BUILT UP HERE THIS IS THE FINANCIAL CENTER FOR CENTRAL AMERICA SO IT WAS FITTING THAT WE ESTABLISH OURSELVES HERE AS WELL STILL SETTING UP THE OFFICE

WE'VE BEEN HERE FOR TWO WEEKS WE'RE GETTING WALLS PUT IN WE'VE GOT FURNITURE Voorhees: THIS IS THE BRAINS OF THE OPERATION – THIS IS MR

IRA – HOWDY HE CAN PROGRAM ANYTHING, AND YOU CAN SEE ALL THESE BOOKS HE'S READING WHAT HAVE WE GOT HERE? WE'VE GOT "CRYPTANALYSIS" WE'VE GOT "EVERYDAY CRYPTOGRAPHY," "INTRODUCTION TO MATHEMATICAL CRYPTOGRAPHY

" I READ ALL OF THESE, OF COURSE, WHEN I WAS MUCH YOUNGER, BUT IRA'S TRYING TO CATCH UP WITH ME THE BITCOIN PHENOMENON IS TRYING TO TAKE CONTROL OF MONEY AWAY FROM THE STATE AND RETURN IT TO INDIVIDUALS IT'S TRYING TO SEPARATE MONEY AND STATE IN THE SAME WAY AND FOR THE SAME REASONS THAT IT WAS IMPORTANT TO SEPARATE CHURCH AND STATE THERE'S A WONDERFUL QUOTE FROM ONE OF THE ROTHSCHILDS– "GIVE ME CONTROL OF A NATION'S MONEY AND I CARE NOT WHO MAKES ITS LAWS" SO I'M TRYING TO PLAY MY PART IN THAT NARRATIVE

Daniel: OUTSIDE OF THE UNITED STATES, BILLIONS OF PEOPLE DON'T HAVE ACCESS TO BASIC BANKING SERVICES BITCOIN CAN LEVEL THE PLAYING FIELD AND HELP BRING DEVELOPING NATIONS INTO THE GLOBAL ECONOMY ( chattering ) CHEERS, CHEERS Voorhees: EVENTUALLY PEOPLE ARE GOING TO USE A CURRENCY THAT IS AS FREE AS THE INTERNET BECAUSE PEOPLE WILL SEEK OUT FREEDOM WHEREVER THEY CAN AND JUST AS THE GOVERNMENT CAN'T STOP THE INTERNET AND THE FREEDOM OF SPEECH, IT CAN'T STOP BITCOIN AND THE FREEDOM OF MONEY

SO WE'RE JUST GONNA HAVE TO SEE HOW HARD THEY TRY TO DO IT IT'S SCARY BUT IT'S EXCITING, BECAUSE AT THE OTHER END FREEDOM TYPICALLY WINS WE JUST HAVE SEE HOW LONG IT TAKES TO GET THERE ( shouts ) Daniel: AS SUMMER ROLLED ON, THE BITCOIN INDUSTRY CONTINUED TO FLOURISH IT'S HARD TO REMEMBER THE DAYS WHERE I WAS RUNNING THIS THING OUT OF MY BASEMENT AND WITH ONE OR TWO PEOPLE

BITINSTANT WAS JUST A DOMAIN NAME Daniel: CHARLIE AND BITINSTANT MOVED INTO THEIR NEW OFFICES I ALWAYS WONDER IF SATOSHI KNEW THAT HE WAS GONNA BUILD SOMETHING THAT WOULD FOSTER COMPANIES LIKE THIS, WHERE WE'RE ACTUALLY LIKE A COMPANY WITH JOBS BASED ON SOMETHING THAT SOMEONE WE DON'T KNOW WROTE A PAPER ON IT'S KIND OF CREEPY IF YOU THINK ABOUT IT I WONDER IF HE'S WATCHING US RIGHT NOW OR SOMETHING Daniel: IN SAN FRANCISCO, JERED AND TRADEHILL HAD MOVED INTO THEIR NEW SPACE AS WELL

IT SOUNDS FUNNY IT'S NOT A $100-MILLION MARKET ANYMORE IT'S GROWN BEYOND THAT MORE PROFESSIONAL PEOPLE ARE IN THE SPACE AND THEY'RE EXPECTING TO DEAL WITH OTHER PROFESSIONALS Daniel: BUT JUST AS THINGS WERE RAMPING UP, REGULATORS STARTED TAKING A CLOSER LOOK AT BITCOIN

Some bad news for Bitcoin, or is it? Its days of glory could be ending At least two dozen companies have been subpoenaed by New York's Department of Financial Services Can't be a good thing Daniel: BITINSTANT, BITPAY, COINBASE AND WINKLEVOSS CAPITAL WERE ALL ISSUED SUBPOENAS We want to make sure that as this enterprise grows and if it does become a place where a lot of people are engaging in financial transactions that we have sufficient protections in place

Daniel: WITH INCREASED PRESSURE IN BANKING COMPLIANCE ISSUES, BITINSTANT WAS FORCED TO SUSPEND SERVICES JERED FACED SIMILAR BATTLES DUE TO A LACK OF REGULATION, MANY BANKS DECIDED TO CUT TIES WITH BITCOIN COMPANIES WITHOUT A US

BANK ACCOUNT TRADEHILL CAN'T OPERATE, AND JERED WAS FORCED TO PULL THE PLUG REGULATION TYPICALLY EVOLVES MUCH MORE SLOWLY THAN INNOVATION AND REGULATIONS CANNOT KEEP PACE WITH THE PACE OF INNOVATION Singer: EXPLAINING BITCOIN TO A BANK FEELS LIKE EXPLAINING Amazoncom TO BARNES & NOBLE

Daniel: UNTIL LAWMAKERS CATCH UP, STARTUPS LIKE TRADEHILL AND BITINSTANT ARE LEFT OUT ON A LIMB BANKS DO NOT WANT TO BANK BITCOIN COMPANIES WHEN YOU HAVE REGULATION, YOU CAN COMPLY WITH IT WHEN YOU DON'T HAVE ANY REGULATION, THEY'RE NOT EXACTLY SURE AND IF THE BANKS AREN'T SURE, THEY JUST DEFAULT TO "NO

" NEW REGULATION TAKES AT LEAST ONE YEAR TO DEVELOP PROPOSE AND ADOPT AND IN MANY CASES, IT CAN TAKE MUCH LONGER THAN THAT Shrem: I WON'T LET THIS GO I WILL FIGHT TILL THE END FOR BITCOIN WHETHER I HAVE TO WORK ON THE STREET OR SELL LEMONADE, BITCOIN'S GONNA SUCCEED ONE WAY OR ANOTHER AND I'M GONNA BE A PART OF IT

Daniel: OVER THE PAST SEVERAL MONTHS THE BITCOIN MINING LANDSCAPE HAS CHANGED SIGNIFICANTLY ( machines humming ) ( whirs ) Daniel: WHEN I STARTED, BITCOIN MINING WAS A HOBBY FOR GEEKS NOW IT'S BIG BUSINESS IN ORDER TO CONTINUE MINING AND CONTINUE PLAYING IN THE GAME AND BE COMPETITIVE AND BE PROFITABLE, I WOULD HAVE TO SPEND HUNDREDS OF THOUSANDS OF DOLLARS ON GEAR THE 18 MINERS I ORDERED FROM AVALON NEVER ARRIVED AND THE UNITS FROM BUTTERFLY LABS TOOK OVER A YEAR TO SHIP

BY THE TIME I GOT THEM, BITCOIN MINING WAS SO COMPETITIVE, THAT I WOULD NEVER BE ABLE TO MINE BACK ALL THE COINS I USED TO BUY THEM SEE THAT COMPUTER? THAT COMPUTER MAKES BITCOINS AND THIS IS ALL THE OTHER COMPUTERS THAT ARE MAKING BITCOINS TOO, AND IT GOES STRAIGHT UP IN A LINE UP IN THE AIR AND THAT'S 'CAUSE THERE'S A LOT PEOPLE THAT ARE MAKING BITCOINS WITH COMPUTERS LIKE THAT AS MY NEW UNITS ARE ARRIVING, I'M SELLING THEM FOR BITCOINS TO TRY TO RECOUP WHAT I CAN

IF YOU DON'T MIND GRABBING THOSE OTHER CABLES, – I'M NOT COMING BACK UP – Nick: OKAY Daniel: I'M TAKING A PRETTY BIG HIT BUT OVERALL THE MINING EXPERIENCE HAS STILL BEEN WORTH IT MY MINING DAYS MAY BE OVER, BUT I'M STILL VERY INVOLVED WITH BITCOIN WITH BITCOIN, IT'S A MONEY SYSTEM WHERE IT'S BACKED BY MATH IT'S BACK BY THE LAWS OF MATHEMATICS AND BY THE RULES OF THE PROTOCOL I KEEP THINKING THAT THERE'S GOTTA BE AN EASIER WAY TO JUST SET UP A SECONDARY PROTOCOL TO TRADE PRIVATE KEYS

EVERY TIME I LOG ON, I SEE ANOTHER DOT ON CHINA AND I'M LIKE, THIS IS WHY RIGHT NOW THE PRICE HAS GONE UP Daniel: THE PRICE IS NEARING 150 AGAIN MANY ATTRIBUTE IT TO THE EXPLOSION OF BITCOIN'S POPULARITY IN CHINA WHAT'S HAPPENED RECENTLY IS CHINESE PEOPLE HAVE REALLY COME AND ADOPTED BITCOIN AS A CULTURE, AS A NATION CHINESE PEOPLE ARE KEEN TO LEARN ABOUT THINGS THAT ARE ON THE INTERNET, THINGS THAT INVOLVE MATH AND SCIENCE

WE THINK THAT CHINA CAN REALLY CONTRIBUTE IN THIS SPACE AND HELP BRING BITCOIN TO THE MAINSTREAM Daniel: GERMANY'S ANOTHER PART OF THE WORLD WHERE BITCOIN HAS FOUND A HOME Woman: IT'S STARTING TO GET NORMAL IF ONE PERSON A DAY COMES IN AND BUYS A COFFEE WITH BITCOINS PEOPLE ARE LOOKING FOR A NEW WAY OF PAYING– NOT THROUGH BANKS, NOT WITH EUROS, NOT WITH DOLLARS SOMETHING NEW

Daniel: THE GERMAN MINISTRY OF FINANCE EVEN BECAME THE FIRST GOVERNING BODY TO OFFICIALLY CLASSIFY BITCOIN AS "PRIVATE MONEY" I BELIEVE IF WE WANT TO GET SOME JUSTICE BACK INTO OUR SOCIETY, WE SHOULD REDUCE THE IMPORTANCE OF THE BANKS BITCOIN IS BANKING WITHOUT BANKS, SO HERE WE GO The FBI today shut down what it's calling the most sophisticated internet site in the business of selling hard drugs, including heroin, cocaine and LSD Daniel: IN THE SCI-FI SECTION OF A SAN FRANCISCO PUBLIC LIBRARY, UNDERCOVER AGENTS SURPRISED A YOUNG MAN QUIETLY WORKING ON HIS LAPTOP

THEY ARRESTED A 29-YEAR-OLD SOFTWARE ENGINEER NAMED ROSS ALBRECHT AND ACCUSED HIM OF BEING THE MASTERMIND BEHIND THE SILK ROAD PEOPLE HAVE ALWAYS TIED THE SILK ROAD TO IT MEDIA HAS ALWAYS TIED THE SILK ROAD TO IT, AS IF SILK ROAD IS BITCOIN, BUT IT'S NOT THIS MAY BE A SIGN THAT BITCOIN IS GROWING UP IT'S FUNNY

MY FRIEND JUST IM'd ME AND SAID, "SILK ROAD GOT RAIDED AND THE GOVERNMENT SEIZED $36 MILLION IN BITCOIN IS THERE A WAY TO INVALIDATE BITCOINS?" ( chuckles ) I REPLIED, "NO

" – ( Daniel speaking ) – ( keyboard clicking ) PEOPLE ARE STARTING TO FINALLY REALIZE THAT BITCOIN HAS NOTHING TO DO WITH HOW PEOPLE USE IT IT'S JUST MONEY IT'S LIKE GOLD OF COURSE, NOT EVERYONE THINKS BITCOIN IS THE WAY OF THE FUTURE James Angel: BITCOIN WILL NOT BE ABLE TO SURVIVE OR THRIVE WITHOUT BECOMING LEGITIMATE

I DON'T SEE IT HAVING A SERIOUS PLACE IN OUR FINANCIAL SYSTEM THERE ARE REALLY GOOD REASONS WHY WE HAVE CENTRAL BANKS THAT HAVE THE POWER TO PUT OUT FINANCIAL FIRES BY PRINTING MONEY I'M WORRIED ABOUT THE TECHNOLOGY AS DARTH VADER ONCE SAID, "DON'T PUT ALL YOUR FAITH IN TECHNOLOGY" I THINK 10 YEARS FROM NOW, WE'LL LOOK BACK ON THIS AND JUST KIND OF CHUCKLE AT THE BITCOIN FAD

"OH YEAH, I REMEMBER BITCOIN OH YEAH, I REMEMBER THAT" Man: IT'S FINANCIAL FREEDOM COME ON, BRO THIS IS THE NEW WORLD, BRO

Daniel: OTHERS ARE MORE OPTIMISTIC I THINK WITHIN 10 YEARS, YOU'RE GONNA HAVE A LOT OF PEOPLE USING BITCOIN, BUT THEY'RE NOT GONNA REALIZE THAT THEY'RE USING IT, BECAUSE IT'S GONNA BE A PROTOCOL THAT'S IMBEDDED UNDERNEATH WHATEVER FINANCIAL SERVICE THEY'RE USING TODAY AND BY BITCOIN BEING OPEN-SOURCE IT'S WHAT CAN ALLOW ALL THESE DIFFERENT MOBILE WALLETS AND ALL THESE FINANCIAL TECHNOLOGIES TO ALL TALK TO EACH OTHER, ESPECIALLY AROUND THE WORLD Voorhees: WHOEVER THE HELL SATOSHI WAS, HE SHOULD GO DOWN IN HISTORY AS ONE OF THE GREATEST PEOPLE OR GROUPS OF PEOPLE THAT EVER EXISTED THIS IS A TECHNOLOGY THAT MANKIND HAS NEEDED FOR THOUSANDS OF YEARS

PEOPLE HAVE BEEN DEALING WITH MONETARY SHENANIGANS SINCE THE ROMAN EMPIRE CLIPPING GOLD COINS AND FINALLY PEOPLE CAN ESCAPE IT I'M CAUTIOUS TO TRY TO PREDICT THE FUTURE WE DON'T REALLY KNOW I TEND TO BE A TECHNOLOGICAL OPTIMIST

I SEE THE DEMOCRATIZATION OF TECHNOLOGY AS BEING A REALLY POSITIVE THING AND I THINK THAT'S A REALLY POWERFUL FORCE THAT IS REALLY ONLY JUST BEGINNING NOT BAD OH! ( grunts, breathing hard ) ( laughs ) ( sighs ) RECENTLY, AS THE PRICE HAS BEEN FLOATING AROUND 200 AGAIN, I HAVE A LOT OF FRIENDS THAT HAVE ASKED ME, "ARE YOU GONNA CASH OUT SOME OF YOUR BITCOINS NOW? THE PRICE IS REALLY HIGH YOU SHOULD GET SOME DOLLARS OUT OF IT

" I KIND OF TELL 'EM, "NO, DON'T YOU SEE IT?" I'VE MET SO MANY INTERESTING PEOPLE AND THERE SEEMS TO BE ONE THING THAT KIND OF BINDS A LOT OF THEM TOGETHER, AND THAT IS THAT THEY'RE WILLING TO FACE OPPOSITION AND FOLLOW THROUGH ON THE IDEAS THAT THEY BELIEVE IN THE PEOPLE WHO TRY THE CRAZY IDEAS OFTEN FAIL AND THEN EVERYBODY LIKES TO POINT THEIR FINGERS AND LAUGH AND SAY, "THAT WAS SUCH A STUPID IDEA" BUT ONCE IN A WHILE IT WORKS OUT I THINK BITCOIN IS PROVING TO BE ONE OF THOSE THINGS The decision to bring virtual currency within the scope of our regulatory framework should be viewed as a positive development for this sector

I'm here to testify, because I believe that digital currency represents one of the most important technical and economic innovations of our time We are enthusiastic about the potential of virtual currencies and the digital economy for social good This latest generation of technology which we're talking about today takes things to a whole new level There's a bit of a shared responsibility here in trying to figure out how to make this work It is a little strange that Bitcoin— we don't know who the creator is and so that often conjures up the idea that there's some risk here that we have not– You don't think it was Al Gore, do you? ( laughter ) If you think a little broadly, this could, again, have huge huge implications

( chimes ) Daniel: 2013 WAS THE YEAR BITCOIN FIRST ENTERED THE MAINSTREAM AND 2014 GOT OFF TO A DRAMATIC START JUST AS WE WERE WRAPPING THINGS UP ON OUR FILM, CHARLIE SHREM WAS ARRESTED AFTER RETURNING FROM A BITCOIN CONFERENCE IN AMSTERDAM HE COULD BE FACING UP TO 30 YEARS IN PRISON ON CHARGES RELATED TO HIS ACTIVITIES AT BITINSTANT IN JF

K, YOU WALK RIGHT OFF THE PLANE, AND YOU GO STRAIGHT TO CUSTOMS ABOUT THREE AGENTS IN FRONT OF ME AND THEN FOUR AGENTS BEHIND ME SAID, "MR SHREM, PLEASE COME WITH US" THEY TOOK ME TO AN INTERROGATING ROOM, TOLD ME THAT I'M BEING ARRESTED ON FEDERAL CRIMES OF MONEY LAUNDERING, RUNNING AN UNLICENSED MONEY TRANSMISSION BUSINESS AND FAILING TO FILE SUSPICIOUS-ACTIVITY REPORTS

Daniel: THE INDICTMENT ALLEGED THAT CHARLIE HAD SOLD BITCOINS TO A RESELLER THAT OPERATED ON THE SILK ROAD WHAT SUCKS IS THE HOUSE ARREST I HAVE TO PRETTY MUCH BE HERE ALL THE TIME, EVERY DAY I CAN'T EVEN GO OUTSIDE UNLESS I'M GOING TO MY LAWYER'S OFFICE, WHICH IS ONCE OR TWICE A WEEK I PRETTY MUCH LOST MY FREEDOM, LOST EVERYTHING THAT I'VE BUILT OVER THE PAST YEAR

Daniel: CHARLIE'S ARREST WASN'T THE ONLY BAD NEWS THAT ROCKED THE COMMUNITY IN THE NEW YEAR FOR MONTHS THERE HAD BEEN RUMORS THAT MT GOX HAD BECOME INSOLVENT AND IN FEBRUARY THE SITE WENT OFFLINE – ( man speaks ) – ( Karpeles speaks ) DO YOU STILL HAVE EVERYONE'S BITCOINS? I'M NOT TOUCHING YOU

I HAVEN'T TOUCHED YOU DO YOU STILL HAVE EVERYONE'S BITCOINS? ( Karpeles speaks ) ( cameras clicking ) Daniel: THE RUMORS TURNED OUT TO BE TRUE ( speaking Japanese ) Daniel: MT GOX HAD REPORTEDLY BEEN HACKED AND NEARLY HALF A BILLION DOLLARS WORTH OF BITCOIN WERE MISSING MARK WAS FORCED TO STEP DOWN AS C

EO AND MT GOX WENT INTO BANKRUPTCY A national magazine claims to have identified the mysterious founder of the worldwide digital currency called Bitcoin

Tonight he is speaking out, but he says he has nothing whatsoever to do with Bitcoin Man: WHY DID YOU CREATE BITCOIN, SIR? OKAY ( laughs ) Man #2: SIR, CAN WE ASK YOU ABOUT BITCOIN? – NO NO NO NO NO – WHY WERE YOU INVOLVED IN BITCOIN? OKAY, I'M NOT INVOLVED IN BITCOIN, OKAY? – WHO'S INVOLVED IN IT? – WAIT A MINUTE I WANT A FREE LUNCH FIRST

I'M GONNA GO WITH THIS GUY I WANT A BIG ONE ( laughs ) YEAH OH, OKAY YEAH, THIS WILL BE GOOD

– OH JEEZ – WE HAVE SOME WATER HEY, WHERE'S YOURS? Daniel: "NEWSWEEK" CLAIMED THE CREATOR OF BITCOIN HAD NOT USED A PSEUDONYM THEY CONNECTED THE DOTS TO A 64-YEAR-OLD JAPANESE MAN LIVING IN LOS ANGELES NAMED DORIAN PRENTICE SATOSHI NAKAMOTO NAKAMOTO IMMEDIATELY DENIED THE ALLEGATIONS AND SAID HE'D TELL HIS STORY TO THE FIRST REPORTER WHO AGREED TO BUY HIM LUNCH THE MAIN REASON I'M HERE IS TO CLEAR MY NAME, THAT I HAVE NOTHING – TO DO WITH BITCOIN – YUPNOTHING TO DO WITH DEVELOPING I WAS JUST AN ENGINEER DOING SOMETHING ELSE Daniel: AS THE MEDIA FRENZY ESCALATED, "NEWSWEEK'S" CLAIMS STARTED TO UNRAVEL HOLES IN THE STORY LED MANY TO BELIEVE IT WAS NOTHING MORE THAN SENSATIONAL JOURNALISM THERE WAS NO CONCLUSIVE EVIDENCE TYING DORIAN TO BITCOIN

AMIDST THE UNCERTAINTY, ON THAT SAME DAY A COMMENT SUDDENLY APPEARED ON SATOSHI'S LONG-DORMANT PROFILE PAGE WHICH READ MAYBE WE'LL NEVER KNOW WHO CREATED BITCOIN BUT THE TRUTH IS IT DOESN'T REALLY MATTER

BITCOIN BELONGS TO EVERYONE AND THE FUTURE IS OURS TO BUILD ( electronica music playing ) PUT $100,000 ON MARKET ORDERS RIGHT NOW – WHY? – LET'S DO IT LET'S DO IT

COME ON – COME ON – WHY? WHAT'S GONNA HAPPEN? BUY 100K WORTH OF BITCOINS RIGHT NOW – WHY? – DO IT – I DON'T WANNA DO IT

– DO IT YOU OWE ME $100,000 DO IT I'LL SEND YOU $100,000 IN BITCOINS NO, YOU BUY IT

BUT 100K RIGHT NOW DUDE, I CAN'T I NEED THE FLOATING GOX FOR VOLUME CLOSING BELL FOR SATOSHI SQUARE! ALL RIGHT, DOES THIS LOOK RIGHT? 1-N-P-W? YUP YUP, OKAY

AND I OWE YOU 02? – UH 0

18 – 018 THIS IS FOR BITCOIN T-SHIRT I GOT 'EM

A PLEASURE, SIR GREAT DOING BUSINESS WITH YOU – GONNA WEAR YOUR SHIRT PROUDLY – DO IT THAT'S ONE THING THAT'S INTERESTING ABOUT BITCOIN

IT'S LIKE, HOW DO YOU DECLARE LOSSES? YOU POINT TO TWO TRANSACTIONS THAT HAPPENED ON THE INTERNET AND YOU TELL THE IRS THAT YOU OWNED THAT? "OH, I USED TO OWN THAT AND I LOST THE PRIVATE KEY" AND THEN IF YOU REALLY DO LOSE IT, HOW DO YOU WRITE IT OFF FOR TAXES? OH, THAT'S GONNA BE INTERESTING

( thunder crashes ) WE LOVE BITCOIN OKAY, GUYS, WE'RE GONNA PLAY A SPECIAL VERSION OF HOPSCOTCH CALLED "BITCOIN BLOCKCHAIN HOPSCOTCH" OH, YOU LOST ALL YOUR BITCOINS! ( sighs ) Daniel: WHO IS SATOSHI NAKAMOTO? ( chuckles ) I'D RATHER NOT TELL YOU, – BUT YEAH – OH, DO YOU KNOW? UH, MAYBE NOT, MAYBE OH ( chuckles ) YOU KNOW, I HAVE A BITCOIN AND A HALF MYSELF NOW WHICH I THINK PROBABLY IN 10 YEARS MEANS I'LL BE REALLY RICH

Voorhees: WHEN YOU THINK ABOUT IT HARD ENOUGH ON A GLOBAL SCALE, THIS IS A NET GAIN FOR HUMANITY