[audience applauds] Right, finally, we have Torsten Hoffmann, who's the producer of the Cryptopia Film [audience applauds] Thanks, Peter
Torsten: Five years ago, I made a film about the history of money, banking, and Bitcoin Buckle up, we said, it's gonna be a bumpy ride And now, some of the big brains and big egos who championed cryptocurrency claim they're building a crypto-utopia Magical things will happen Torsten: With something called blockchain technology, and it just might change your life
And they really could compete with, if not 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 lots of criminals and scammers But basically looking at it now, you lied to us
Forget all the hype We'll explore the true potential of this new invention See who's already using it Making it really easy and simple for people to own a piece of a solar farm or wind farm [soft music] Torsten: And go deep into a secret bunker that holds billions in Bitcoin
Christoph: We cannot talk too much about it because it's pretty secret what is down there, right [soft music] And if Bitcoin succeeds, it'll be at least $1 million per coin Torsten: We'll learn lessons from the past and meet those building the future But there 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
Torsten: Control it Next year, people are going to start seeing that we have hundreds of patents and everything changes Torsten: Or change the world with it Welcome to ground zero in the battle for the future of the Internet: Web 30
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 clue That's just bullshit
If you don't support free speech, you don't support Bitcoin You're an enemy of Bitcoin Tim Draper: This is bigger than the internet, the Iron Age, the Renaissance, the Industrial Revolution This affects the entire world [electronic music] 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
Cryptocurrencies, everything you don't understand about money combine with everything you don't understand about computers Torsten: Okay, let's start slowly with the basics of money and its creation Narrator: The total value of all the world's money is about $120 trillion What you probably didn't know is that each new dollar is created by governments and banks as debt, which needs to be paid back by someone in the future with interest That's why there isn't enough money in the world to repay all that debt
And there never will be Oh, and almost all of the world's money is already digital, just entries in the 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 [electronic music] 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 Ver 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 may 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 gonna 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, this science fiction money idea that I'd 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, I stayed up all night that night reading about it Stayed up all night the next night reading about it Torsten: He went deep down that rabbit hole to the point of physical exhaustion So I called up a friend of mine, said please help me, I'm so sick
Can you bring me to the hospital? Torsten: Yeah, Roger got bit bad by the Bitcoin bug Cause it's truly one of the most exciting inventions ever in the entire history of human kind Torsten: But how does it work? When my friends ask me to explain, well I often start with this analogy Narrator: Imagine a bank vault where you have a safety deposit box Your 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, 021 Bitcoins 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 [electronic music] Torsten: 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 a mobile wallet was some guy in Berlin who built it in order to buy his beer with his phone instead of his computer [speaking in foreign language] Narrator: Credit cards are an old technology, and actually pretty complex
And you 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 of transactions per year [upbeat music] Torsten: Early Bitcoin adopters, like Room 77, avoided paying credit card fees
But Joerg's real beef was with the bankers who collect them [upbeat music] Torsten: 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 Gluwein 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 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 5:00 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 with 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 and address
You scan it, then swipe to use your key, and approve the transaction Narrator: 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 authorised to arrange the most recent transactions into a structured block, and is rewarded in Bitcoins for this work All the data contained inside each block is represented by a check sum
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 check sums of the previous block match the beginning of the new one, which are baked together forever It's impossible to tanker with the data inside the block without changing the check sums and breaking the chain
[soft music] Torsten: 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 Awarded 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 here Bitcoins and eventually was able to divorce him because she was able to control her money when she earned the Bitcoins
Torsten: In my first film, the early adopters 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 Torsten: 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 a small payment in this case if you want to trade in things the Government doesn't want you to trade in
Torsten: That's David's polite way of saying illegal stuff In 2011, most of my partner colleagues were saying three things So there are the drugs, pornography and sales [soft music] Torsten: The Silk Road was a black market on the dark web where the 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 Seems like a pretty straight forward case of law enforcement doing their job, but in crypto, not everybody sees it that way [soft music] 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 law breakers in a bad sense
They are criminal law breakers in a good sense the same way that Harriet Tubman or Rosa Parks, or you know, Thomas Jefferson, or George Washington were Torsten: 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 Kathryn Haun, 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, one agent that was doing this But from looking at the movements on the blockchain itself, she realised that there were two people Torsten: The prosecutor could see those Bitcoins being moved And when the dirty cops tried to sell them for dollars, they got busted
[soft music] But what makes Bitcoins worth stealing? Why do they have value at all? Narrator: 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 synchronised 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 [soft music] 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
Hmm, and 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 [slow suspenseful music] I grew up in Patagonia in the southern part of Argentina My parents are sheep ranchers there
And I remember growing up in my childhood, I saw my parents loose everything three times First because of a huge devaluation, then because of hyperinflation, and the last time because the Government confiscated all our 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 [soft music] [muffled speech] We think of finance We think of banking
We think of money In terms of the experience and perspective of Western European or 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 restrictive or banned cryptocurrency status [soft music] 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 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 Bolivar propped up The government actually provided 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
Torsten: 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" Torsten: Dimon runs JP Morgan Chase, one of the largest banks in the world that moves $6 trillion every single day Oh, you 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 find it kind of funny the idea that you thought you could close Bitcoin
But 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 that 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 Torsten: 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 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, 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 and says very little about cryptocurrency Torsten: 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 Torsten: 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's family had their money stolen by their own government? Well, maybe that's why he built the Fort Knox of Bitcoin security, Xapo Most of our seven million customers are in emerging markets In countries where there is problems with the currency, we have explosions in activity like Venezuela right now or Turkey And we develop this system of vault 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 Torsten: I just had to see it for myself even though it took months for us to get cleared for a tour
[soft music] We were met by Christoph Oschwald, a former military commander who runs the place, and a representative from Xapo 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 Torsten: 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 Torsten: Rumour has it that 10% of all Bitcoins are stored here and in their four other secret locations
[soft music] Unfortunately, I can't confirm any of those numbers From the mountain, we are getting a lot of benefits, right? Earthquake proof, flooding proof, but on the other side, you're facing a lot of additional costs Torsten: Like maintaining seven independent backup power supplies The labyrinth of tunnels deep into the mountain is interrupted by nuclear grade doors [soft music] – Good? – Yeah
It's a level of security applied to all of the data Christoph protects here, not just for Xapo We cannot talk too much about it because it's pretty secret what is down there Are we allowed to film there? No Torsten: 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 the finger print scan and the fingerprint scanner also makes sure that you are alive so that you didn't cut someone's finger and you're just using it to open the gate
So you must have a pulse Don't touch the racks Torsten: These aren't Xapo's actual servers, but if you've ever wondered what cryptocurrency thieves dream about, it's sitting somewhere down here unplugged from the Internet There is absolutely no way, zero way to attack the data on the cold storage site Torsten: But here's my question, why do I need the cold offline servers to be inside a mountain? Why can't it be in my basement? While the server is in the basement, it still can be stolen, right? So this is like money
It is data, yes, it's bits and bytes, but it is money at the end, and a lot of money This is why this data centre here is more a bank than a data centre [soft music] Torsten: Okay, 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 Mervyn? He used to be a senior executive at Deutsche Bank His colleagues once said Bitcoin was for law breakers and troublemakers He now runs $100 million crypto fund out of Malta Our research shows that the crypto markets are gonna probably be worth about $87 trillion in 2027
– Which is 50x from today – Exactly Torsten: 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 hatch that will take them away from risk, an insurance against 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 bit under $200 billion today All the gold in the world is worth eight 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 Do you think this is a currency? A currency that's really gonna work eventually? Well, 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 social useful function Torsten: This film isn't investment advice, but it strikes me that most of these TV shows just want to stir 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 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 gonna be more than 100% of your net worth, so with a non-material exposure, you change your life
Now what you would spend on a romantic weekend with your wife, say sorry, we're not gonna do that this weekend I'm gonna just buy Bitcoin Consider it spent It disappears, and check in seven years I either give you bad advice, and cost you a weekend, or I want a grandkid called Wencito
[laughs] But what you fail to mention is that the currency, the micro transaction 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 costs me $12,000 in today's money That is a deflationary effect As long as Bitcoin keeps doing sudden increases in prices, that's gonna stop retail use in its tracks With Bitcoin, you can send $1 or $1 million worth of value anywhere in the world You can do it for free
Torsten: But basically, looking at it now, you lied 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? That's a direct intentional result of Bitcoin Core's policies of intentionally making it slow, expensive and unreliable Torsten: And Roger blames this guy for Bitcoin not becoming a mainstream global currency There are no shortage of conspiracy theories Marker Blockstream was founded in 2014
The original co-founders are a lot of core developers Torsten: Those are the software coders who continue building Bitcoin after Satoshi vanished Roger thinks those guys sabotaged the scaling of the network so Blockstream could promote its own software solutions Sampson 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 also to go out to the whole network And it has to be stored for eternity Torsten: The argument, more independent miners will continue running Bitcoin and ensure decentralisation if the blockchain is kept small In his view, this decentralisation is what makes Bitcoin valuable, a store of value! So holding Bitcoin is also a use case And that store money hypothesis, I cannot get my head around
It's the most, like, 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 Torsten: 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
[soft music] The solution is easy, just increase the size of the blocks from one to two, four, 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 Torsten: But you know, Satoshi's white paper isn't the Bible It's not a religion
Stuff changes, we evolve, we might find out new things So why this fixation on that white paper 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 Torsten: 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
Torsten: Okay?! 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 Torsten: 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 entire Bitcoin project into something that wasn't usable as peer to peer cash When he gave his talk, I kinda knew that that whole debate slash panel, I kind of expected it to go off the rails, but 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 Torsten: And remember that list of promises that 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 Torsten: 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 sympathise with him and his frustration with being censored They're literally censoring the words of the creator of Bitcoin Ultimately, it's just a forum that these guys set up to talk about Bitcoin, and they can do whatever they want with it, right? Torsten: When I first started covering this space, everyone was united in their struggle against the establishment Now the industry has grown so much that they are competing parties, propaganda machines, conspiracy theories
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 Torsten: Roger owns Bitcoincom 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 in causing people to buy Bitcoin Cash when they actually want to buy Bitcoin Torsten: So Bitcoin core fans say Roger is hijacking the brand name, and Bitcoin Cash supports 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
They have had influence 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 anyways
Torsten: 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 Like 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 crytopia, a revolutionary internet We'll get there, I promise But first, we need to go from Bitcoins 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 became Bitcoin and Litecoin was actually pretty trivial And what does that mean in time? I would say like four, four or five hours Litecoin was positioned as silver to Bitcoin's gold And it's 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 at the highest point I didn't know it was gonna be the highest point Everyone thought it was gonna keep going up In hindsight, it was good timing, selling it at that high But I'm still focused full-time on Litecoin adoption, and working on Litecoin, Litecoin development
So it's not like I sold it 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 kinda like difference between the 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 alt-coins Some of the early adopters, like Charlie, made fortunes Soon, there were hundreds of coins made by cryptographers, copycats, and con-men 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? [dog barks] Back in 2014, I met the kid who knew how to do it Hi, I'm Vitalik Buterin, co-founder of Bitcoin Magazine, founder of Ethereum, and just general Bitcoin and crypto currency advocate Torsten: 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 of Bitcoin because he had gone to Bitcoin Core developers and tried to build Ethereum on top of Bitcoin
Torsten: And they basically said nope, not interested So he built a separate blockchain called Ethereum, with its own currency called Ether A comparison might be Bitcoin is like a spreadsheet, and Ethereum is like a spreadsheet with macros Torsten: 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 programme 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 a contract
It's a dumb program And once you understand that all it is a dumb program, that clarifies a lot of stuff And the word contract there is in the meaning of finance Narrator: Most financial arrangements are pretty simple and clear cut A bet with Charlie, your home loan, and 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 decentralise 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 at 100,000 decentralised computers because it is so sensitive And in reality, 99% of all of these contracts, they don't need this kind of censorship resistance Torsten: You know, in two years-time when people will see this film, or in four years-time, I think will be an interesting historic moment
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 1,000 to 2,000 Ether for one Bitcoin And that's how we're gonna raise all the money Torsten: It worked Vitalik figured out a way to fun the Ethereum project
And it made his investors very rich [soft music] This new model for fundraising soon had a name, and initial coin offering, or ICO IPOs and ICOs sound similar, but they have, 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 can actually prove to the public investors that this is a valuable company that's worth investing in, 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 Torsten: And this is the guy who opened the floodgates
He created a standard called ERC-20, enabling you or me or anyone to create an ICO So on the one hand, you have these smart contracts, these little programmes 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 Torsten: Smart contracts can interact within the entire Ethereum network and the ERC-20 standard allow the creation of tokens The goal here is like, ultimately, I'd like to see eight year olds building their own financial systems
Torsten: Yeah, but what if some of these eight year olds are also scammers? So let's say I'm trying to do a 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 Torsten: It was a mad gold rush People realised wow, if, if I can just pull up, pull together a project and a white paper, I can raise money Like a lot of money [soft music] 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 two or three percent I would say actually most ICOs were not scams
I would say about two to five percent of the thousands of ICOs that are happening are actually legit Torsten: And the rest is? Pretty scammy, or just not gonna work Can you define for me what a shitcoin is? [laughs] 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 shitcoin In my point of view, I think a coin that is kind of a scam is a shitcoin So people create coins just to get rich from it, print a lot of tokens out of thin air, trying to pump the price up and make a lot of money from it
And it's not really providing a lot of value to the world Torsten: 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 Narrator: There will only every be 21 million Bitcoins, and it's 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 Torsten: Okay, maybe I was a bit too harsh on ICOs democratising start up 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 end all of cryptocurrency
Other blockchains, ICOs, smart contracts, that's all a waste of time There is no such thing as blockchains, that revolutionise the healthcare industry, and the automotive production Of course there is
– Huh? – Of course there is What you're saying is a maximalist point of view You are speaking about from a perspective of, 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, right
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 like every increasing level of diversity in number of blockchains So I think the idea that here's like one blockchain, gonna be one blockchain and it's gonna 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 motto in 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 Torsten: 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
[soft music] 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 centralised blockchains, maintained and controlled by corporations A famous example, the Walmart supply chain trial, which they're working with IBM That's a completely centralised
They use a blockchain derived product Hyperledger, but all the nodes reside on the IBM cloud, and they're all administered by Walmart, and the supplier is used because Walmart told them to It's a centralised database system! But they marketed it Blockchain So that means one, they wouldn't have got a New York Times headline if they just said database Torsten: 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 two billion users Such a system might be more efficient than a public blockchain, but there's a downside Some Governments banned it within weeks [group chatter] Right now, the ways, pieces of paper, that's being shifted around, that doesn't make any sense That infrastructure needs to be replaced
Torsten: Why occupy Wall Street when we can build a new one on the blockchain instead? In the future of decentralised finance, stock certificate, corporate bonds, insurance policies, property deeds, mortgages, all can be turned into crypto tokens and made tradable 24/7 [electronic music] [electronic buzzing] What's much 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, 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 Binance Coin, that's actually much bigger of an opportunity because it represents something totally new My name is Dr
Jemma Green, and I'm a co-founder and the chairman of PowerLedger And we use the blockchain to enable electricity trading, energy asset financing, and carbon markets Torsten: This award winning Australian company wants to take us to a carbon-free economy faster Jemma has identified a problem Apartment buildings, often the buildings are tenanted
An it means that if there is solar panels, the owner of the apartment isn't really incentivize 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 Torsten: Using PowerLedger, the tenant pays the owner, not the power company for their electricity And if the tenant isn't at home, the unused energy will be sold to a neighbour, lowering their power bill and making a profit for the owner So it actually crates the mechanism to justify investing 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 [soft music] 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, you know, 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 cashflow 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 [electronic music] Cryptocurrencies, digital tokens, public blockchains, private blockchains, where is the killer app? Well, adoption of new technology often follows old trends My name is Marc Ventresca
I'm here at Oxford, the University of Oxford on the faculty I'm an economics sociologist by training, interested in how large-scale infrastructure changes So great so see you after nine years I know Torsten: Marc teaches a class on innovation and system building
He tells me what must align for a new technology to become fruitful All technologies start out as interesting ideas Some of them begin to develop into innovations and we know that arc from invention to innovation takes a lot of time, takes a lot of work Some of those innovations eventually become commercially viable Torsten: 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 Torsten: 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 a 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 Torsten: 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 tried 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 economist would call a shakeout They would say you go from 300 or 400 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 [soft music] Torsten: It took 50 years for cars to go from curious invention to finally tuned, mass market product 50 years to change the world as we knew it GPS: Your destination is on the left Torsten: But our story isn't about cars or roads
I want to learn about dominate 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 centres around North America to warn against Soviet bombers And they were waiting for WW3
Torsten: The US military and some American universities asked this guy to create a new kind of network to connect their separate networks And 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 they didn't think it was gonna lead anywhere And you know, we pretty much had free running room Torsten: Yes, that's the man who co-invented TCP/IP about 50 years ago
That's their 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 TCP/IP didn't just win by default
It won through attrition by basically being better, simpler, easier to deploy – than the other proposals – Torsten: More scalable 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 decentralised network and turn it into this sterile, closed corporate system where they can charge by the minute and be in control
Torsten: 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 Torsten: 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 [electronic music] 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 Torsten: Still, few understood the potential of this new tech
From people who thought it would just be the world's greatest library, to some of the early cypherpunks, who are the direct forefathers of crypto, and certainly blockchain-type ideas, who thought much as today, that it would create kind of a Commons that was outside of the direct control and normal laws of Governments Torsten: That's ironic because the US 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 paedophiles, 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
But we see our technologies that become shaped by commercial interests, by political an regulatory infrastructure, by actors who are acting for many reasons, right? Where do you want me? Torsten: Remember Bob? The big telecoms wanted his thoughts on a little idea they were kicking around They had a meeting where they 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 [scoffs] I remember asking them well, why don't you buy the world economy, then you can own everything
Why don't you buy the weather, then you can control that too Torsten: As the Internet's momentum and hype grew, investors threw money at entrepreneurs and shady characters [soft music] The joke in the Dotcom era was that you put a dotcom behind your company even if it had nothing to do with the Internet And the venture capitalist just throw money at you Torsten: 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
[soft music] 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 Of the overwhelming majority
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 a World Wide Web Welcome to the Splinternet No, it's not just in China Narrator: 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 services, Al Jazeera and the BBC Meanwhile, in India, the entire web was turned off 100 times last year [soft music] Torsten: 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 shit fuckery, 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 funnelled through us, compromising not just Aussies, but all of you fuckers too You're welcome! [soft music] 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, uncensorable technology Can the blockchain also enable global free speech? [soft music] Narrator: In some places, it already does
One Chinese student tried to report a sexual assault, and was silenced by her college But she knew that she can attach a message into the metadata of an Ethereum transaction So she spent 15 cents and now her letter outlining her story and the threats she received is on the public Ethereum blockchain where it will remain unchangeable forever Torsten: The early cryptopioneers wanted to democratised money Finance 2
0, if you will But now, the believers in the blockchains have their eyes on a bigger prize: They want to decentralise everything Web 30 Facebook without the propaganda
Twitter without the terms of service Reddit without the censorship Online identity without the hacks 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 Torsten: 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
[electronic music] What most people in the crypto space are probably most excited about is this notion that we can create these kinds of user-owned decentralised 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 centre 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 owned their own computers, and their data and information And then we saw cloud computing where we're dependent on these large companies running services for us And we're about to embark on this major shift in computing called decentralised computing where users are getting back in control [soft music] And they really could some day compete with, if not take down some of the big tech giants, like the Facebooks and the Googles and the Amazons that we know
Torsten: That's a tall, tall order It is, it is, but I mean who would've thought at the beginning of the Internet that Wikipedia would beat out Encarta Torsten: These Web3 promises sound good, but my professional network is on Linkedln 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 behaviour, and Ocean Protocol is the answer to freeing up the data and giving the power back to individuals Torsten: 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
Torsten: 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 is 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 you know, I take it kind of personally because I was born in South Africa during apartheid, you know, a child of Indian immigrants And we were not allowed to vote Torsten: Vinny tells me that in the United States alone there are 14,000 different paper forms of birth certificate issued by local authorities There are mistakes on them and even identity theft starting from birth All your information is already out there
You know, there's five hacks a day happening, so how do you prove that you are who you say you are? [soft music] Torsten: 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 Civic's identitycom, or Microsoft's lon say they can give us control of our identity and protect it Currently, we are having our reputation, our history with different systems and different companies, like Facebook and Twitter
With the blockchain, the core of important information sits on that trusted system which we control and we can take from wherever we want to go to something else Torsten: Meanwhile, Vitalik has inspired thousands of software developers to build is vision of decentralised 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 "the Decentralised Autonomous Organisation" 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
Torsten: The problem? Some sloppy code left their safety deposit box wide open, and somebody just helped themselves It allowed them to pilfer $50 million from this smart contract And that's why when I say it's not even clear whether or not it was a hack, you know, this smart contract allowed them to do that You know, what happened was the majority of the community did decide to roll back the blockchain and to pretend like the DAO never happened Torsten: 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 it's original owners breaking the first rule of cryptocurrency, never alter the blockchain Immutability last only as long as the big boys haven't lost money Torsten: Just like Bitcoin, Ethereum also experienced scaling problems When a decentralised app called Crypto Kitties, I'm not kidding, went viral, and the kitties bred like rabbits in it's 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 shakeout will sure be interesting to watch It's never easy to admit that, that you've been fooled Maybe I've been fooled Maybe? Torsten: 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 peoples' ideas, an without drawing a little controversy around the way
Torsten: But the majority of industry says Craig is crazy or a conman So Craig, kindly join us on stage Torsten: And that giving him screen time is irresponsible And I'll say this quite frankly because I've got more money than your country Torsten: But I was in the area and just couldn't resist
[doorbell rings] 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 super villain for us because everybody kind of doesn't believe you, hates you What do you say to your critics? Do I start with a muahuahua? 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
Silkroad 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
Torsten: Okay 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 1,085 (patents) And right at the moment, I'm on white paper 1,074 Torsten: For each white paper, he claims to file about 11 patents The first 163 will be very shortly public
Next year, people are gonna start seeing that we have hundreds of patents, and everything changes We file PCT and keep them secret as long as we can There's a huge philosophical disagreement between myself and Craig So I think patents are Government granted monopoly Torsten: 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 says are very, are 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 behaviours of bankers, scamming the market, centralising wealth in a few hands Torsten: Hmm, 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 Torsten: So guys like you will build a better future and we can trust you guys better than the bankers? You don't have to trust us
That's the beauty We're building a trustless, decentralised 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 Torsten: 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? Yeah, 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 gonna look to a leader, you know, 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
[electronic music] With Satoshi being gone from Bitcoin, Bitcoin is really a very decentralised network and currency He was intelligent enough to know that a system without a father was gonna 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 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 And 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 decentralised 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 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 it's infrastructure was built, became 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 Torsten: 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 their days a little brighter, their chores a little lighter, and their lives a little richer ♪ Dude's got suits ♪ ♪ Dude's got a tie and a big smile ♪ ♪ And he's pitching me some blockchain ♪ ♪ Supply chains are broken ♪ ♪ Do we need his token ♪ ♪ There's a pain in my brain ♪ ♪ And I'm going insane ♪ ♪ I don't want no blockchain ♪ ♪ That one plays chess at his desk ♪ ♪ Poses for the press ♪ ♪ The price of his coin just tripled ♪ ♪ I just stare into the Ether, take a breather ♪ ♪ 'Cause I don't wanna cause a Ripple ♪ ♪ Don't wanna cause a Ripple ♪ ♪ I won't trust him with my money ♪ ♪ Will never trust him with my life ♪ ♪ Well I have been told ♪ ♪ That my life is controlled ♪ ♪ But Bitcoin ain't Gold ♪ [rock music] ♪ That guy speaks code ♪ ♪ Runs a full node ♪ ♪ Talks Bretton Woods ♪ ♪ Of illicit goods ♪ ♪ This is a weapon of math destruction ♪ ♪ This is a weapon of math destruction ♪ ♪ This is a weapon of math destruction ♪ ♪ That lady's quick on her feet ♪ ♪ Lit in her a tweets ♪ ♪ Says she takes On the haters ♪ ♪ And 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 trust them ♪ ♪ With my money ♪ ♪ I don't trust them With my life ♪ ♪ Bitcoin is gold ♪
