CAN BITCOIN BE TRUSTED? Crypto-Currency Dilemma | Absolute Documentaries

CAN BITCOIN BE TRUSTED? Crypto-Currency Dilemma | Absolute Documentaries

[Music]
you’re seeing a replica of the Apollo
capsule because Bitcoin literally went
to the moon since we did our first film
Bitcoin the end of money as we know it
that was in
20145 and our film also went ballistic
it was pirated on bit torrent on YouTube
and of course also legally licensed on
many TV channels since then we also did
another film called cryptopia Bitcoin
blockchains and the future of the
internet about the whole industry that
was evolving slly in
201819 many have requested an updated
and upgraded version of the end of money
that’s why we’re here let’s Jump Right
In and I’ll be right
back look closely what do we all have in
common no matter what corner of the
world you live in you need food Water
Shelter and
money half of every transaction action
involves money in exchange for goods or
services stocks a loaf of bread illegal
drugs you got to pay for it we spend
much of our Lives chasing money to make
a living and accomplish our dreams but
it’s also an instrument of Destruction
some might say evil driving criminals to
lie steal and even murder the existing
banking system extracts enormous value
from society and it is parasitic in
nature money is a catalyst for the worst
and the best of human endeavor before
civilization we created
currency fuel for
Wars the path to power champion and
enemy of
innovation money is so integral to our
society and our global economy that its
true nature remains a mystery to most
this is the story of money perhaps the
end of money as we know it no matter how
fat your bank account or how thin your
wallet to us it’s all Cold Hard Cash
there are some who want to kill it get
rid of it burn your dollars your Euros
your Yen and transform every penny you
have into ones and zeros digital
currency entrust it to the web and
computers spread across the planet magic
internet money it’s called
cryptocurrency Bitcoin invented in
secret it was a gift to the world it’s
not just a currency but it’s actually
programmable money a potential curse on
bankers and there’s nothing that the the
big Banks or politicians can do to stop
it breaking every government’s grip on
money
supply what the internet did for
information Bitcoin is doing for
money could it be the new gold mhm no
you have to really stretch your uh
imagination to infer what the intrinsic
value of Bitcoin is Regulators the
Federal Reserve the banking system least
understand this is a thing that they
have to take seriously this is going to
change the economic culture Bitcoin
could be a microeconomic meracle worker
and it could be a macroeconomic wrecking
bll is Bitcoin the currency of the
future a godsend for criminals or a
recipe for financial disaster
Master if you trust your money just as
it is we have a little story to
share this documentary was originally
voiced by John Barrett of the Bitcoins
and gravy podcast so when you see me or
hear me I’m updating the script giving
you better context or fixing stuff that
we got wrong okay on with the
show Once upon a time there was a big
party with everyone standing around the
punch bow
drunk politicians credited the strong
economy to their wise decisions
businesses jumped into new profitable
markets ignoring risk in fact the
experts said there was no
risk then troubling Market data from
minor countries spooked the markets
rumors spread more bad news rattled
housing prices at the heart of the
financial World a major bank went
insolvent investors and businesses made
a run on the other Banks demanding their
cash deposits the largest financial
institutions in the center of the modern
world were frozen assets were seized
Banks foreclosed a credit crunch
threatened the entire world
economy and then finally the government
stepped in the largest bank bailout ever
Swift action by the head of state had
saved the day remember
that no you don’t it happened 2,000
years
ago Rome 33 ad ground zero for the first
recorded liquidity crisis and government
bailout in
history the largest Empire the world had
ever seen was brought to its knees by a
banking disaster Emperor Tiberius used
money from the national treasury to bail
out the country’s troubled Banks and
companies history may not repeat itself
but it certainly rhymes
badly people in power and their money
have always been at the very center of
it the story of money is as old as
civilization
itself when we lived in small tribes
keeping track of debt was easy easy you
owed somebody a load of firewood a
neighbor owed you a piece of meat
credits and debits were kept in your
head a mental
Ledger currency is a language that
allows us to express transactional value
between people it’s a technology that’s
older than uh the wheel it’s as old as
fire when humans wanted to trade outside
their tribe or Village they needed
something everyone could agree had value
something SC
ailable enter commodity
monies there were many kinds but each
had to embody the same five
characteristics a commodity money is
relatively scarce easily recognizable
can be cut into smaller pieces you can
substitute one piece for another of
equal value and you can carry it around
without too much trouble in ancient Rome
it was salt the Aztecs used cacao beans
it was whale teeth on Fiji Yak dong in
Tibet shells in Africa and
China grains metal Ivory rare stones
leather fish if it had the five
characteristics of commodity money
someone probably used it as
currency and then you ask what value do
these currencies have if you go into a
primary school you’ll see children
exchanging rubber bands and tagoi and
Pokemon cards and baseball cards and
sweets and candy and any other form of
currency people invent currency when
they have no other currency and now
they’re going to invent digital
currencies but Commodities that aren’t
durable are a lousy store of value a bad
cacao crop or a huge new salt Discovery
can throw your currency and economy into
turmoil a more stable system was
needed about 2500 years ago the first
metal coins were minted in China and in
what is now
turkey these coins shared the same five
characteristics with commodity money but
were also very
durable in some cases coins are the only
thing left of entire
civilizations money does not originate
with governments money arises naturally
as markets are begin to develop and as
people with a division of labor realized
that if I have eggs and you have a cow
we may need some medium of Exchange in
order for you to buy my eggs or for me
to buy your cow coins were an objective
and Universal unit of account and they
allowed people to buy and sell Goods
over vast regions the market economy was
born coins worked but only if people
trusted that the king or Emperor who
issued them wasn’t cheating on the metal
content using coins also meant that that
an authority now controlled the supply
of your currency money and political
power were inextricably linked
centralized yeah so I wish we made this
point a little bit clearer you see the
main issue here is once somebody is in
control of that money supply that
introduces the potential for corrupting
the system it doesn’t matter whether
they wear a crown or a
suit minting coins in a steady and
predictable manner allowed economic
growth grow and stability the woou coin
in China retained its value for 500
years in Constantinople the soliders
lasted for 700 years but in those times
coins didn’t have the the mil this sort
of miled edge they were flat and uh what
used to happen was as coins were passing
from people to people people would cut
little bits off and in fact in some of
the taxation that the Kings would do
would actually be take 1/8 of the coin
off taxes built castles and financed
military campaigns expensive Hobbies
soon Royal mints were substituting
cheaper medals for silver and gold this
is called debasement and Europe’s Kings
made a habit of it the currency of
France was debased every 20 months for
200
years if no one can trust the gold or
silver content of your coins how can you
trade with other countries
countries International Merchants found
a solution they recognized that one
person’s debt has value it can be traded
or
transferred when those IUS came from
reputable sources they could be used as
a form of money paper money this money
was not based on hard Commodities or
metal but instead on someone’s promise
to pay Merchant families like the
mediche in 15th Century Florida acted as
Clearing Houses for these IUS it worked
like this an English Trader ordered a
shipment of Italian cloth from the
mediche for 100 gold coins his promise
to pay the mediche was put on paper
meanwhile the mediche owed 100 gold
coins to another trading partner for
delivery of wine from France the parties
didn’t go to the expense of transporting
an exchanging gold coins instead the
paper was transferred everyone agreed
that the paper had value 100 gold coins
but only because everyone trusted the
medage as solvent middlemen they had
created a paper money
machine within a few Generations they
Rose from low crime to High Finance
their great wealth helped fuel the
Italian Renaissance and elevated the
family to levels of enormous political
power the power to marry into royal
families and get elected as popes the ti
binding money to power politics and
influence now ran through church and
state Merchants had proven that creating
paper currency could be wildly
profitable goldsmiths wanted in on the
action imagine it like this if the gold
smith had seen over a period of time
that some of the coins he was storing
for people were gathering dust the
people who own them don’t need them
right now so what if I go and L them out
into the community and I charged them
interest on this loan so he starts out
lending from these gold coins and then
later he realizes actually people don’t
even want the gold coins they just want
the piece of paper that says the the
gold coins are in the bank and with the
Goldsmith so I can now make a loan with
these pieces of paper and whatever I
write on a piece of paper as long as
people trust me they’ll trust the paper
and effectively the the goldsmiths and
the early day Bankers they had literally
acquired the power to print money more
and more private paper money from
merchants and Banks circulated and began
to rival the Crown’s coins the power
inherent in controlling and issuing
money began slipping away from the
rulers they couldn’t tax or debase this
new kind of money but they had bigger
Ambitions than ever with trading posts
colonies and Empires that now stretched
across the
globe for centuries European countries
would take turns building massive fleets
and Waging War on each other to rule the
[Applause]
world government wanted to take the
people’s money in order to finance its
Wars that’s essentially the history of
money money and warfare go
together war is expensive one year’s
income taxes simply Aren’t Enough kings
and queens had to borrow money against
future taxes they needed a
groundbreaking Financial Innovation
government bonds the loans came from
Rich Merchant families and goldsmiths
who by now had become powerful
financiers and bankers sovereign debt
and deficit spending had been
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born
in
1694 the bank of England was established
to fund a war against France England’s
Central Bank was privately owned and
granted the Monopoly to issue Bank notes
paper that could be redeemed for an
equal amount of gold from the government
coffers the Central Bank soon also
managed the entire debt of the crown
money has been a tool of sovereignty for
centuries being able to issue currency
uh gave you the power but it also gave
the value to that monetary Supply by
backing it with a force of state with
essentially the DAT of
State when the US won independence from
Britain the first article of the new
constitution gave congress the exclusive
right to coin
money this currency’s value was tied to
gold in government vaults from 1781
until the Panic of 1907 the financial
system of the US was an economic petri
dish brief central banks State Banks
private Banks private currency
government currency depressions strong
growth recessions regular boom and bus
Cycles the long-term as far as capital
is concerned people want predictability
people want stability from the back of
that they can plan that it’s very hard
to plan in the long term with such a
level of
volatility in 1913 bankers and politic
Ians decided that it was in the
country’s best interest and theirs to
have a permanent Central Bank they
created the Federal Reserve among its
jobs expand or contract the supply of a
single National currency the Federal
Reserve Note the dollar was tied to gold
and strategic control of it would avoid
Booms that lead to
busts at least that was the
plan then came
1929
the Great Depression would have a
profound effect on monetary
policy
worldwide I shall ask the Congress for
the one remaining instrument to meet the
crisis
fraud executive power soon the FED had
printed nearly all the money it legally
could to pump life back into the economy
it needed gold to fire fire up the mint
so in 1933 President Roosevelt issued a
controversial executive order forcing
all US citizens to sell their gold to
the Federal Reserve at a fixed price or
go to
[Music]
prison after World War II America became
the global superpower and with it the US
dollar emerged as the most important
Reserve currency in the
world
[Music]
other countries pegged their currency to
the dollar which could still be redeemed
for gold in fact the US owned more than
half of the world’s gold
reserves in the next few decades more
dollars flowed to foreign countries
governments began debasing their coins
with cheaper metals and printing more of
their own currency than they had in Gold
the bond between precious metals and
paper currency was
cracking this is a
1966. piece it was the last coin uh in
regular circulation in Australia to
contain silver and it contains 80%
silver so in
1966 this was 50 nowadays it’s $8
roughly in silver Alone by 1966 foreign
Nations had had enough of the US
collecting gold and printing cash and
they had more value in dollars than the
US had bullion in its vaults they
demanded gold in return for their paper
dollars arguments about the value of the
dollar versus their currency ensued in
1971 President Nixon settled the matter
he severed United States currency from
the gold standard I have directed
secretary Connelly to suspend
temporarily the convertibility of the
dollar into gold or other Reserve assets
except in amounts and and conditions
determined to be in the interest of
monetary stability and in the best
interest of the United States never
again could anyone legally demand US
government gold in exchange for paper
dollars for better or worse the dollar
was now backed solely by the full faith
and credit of the United States
government the wealthiest Nation the
world had ever known would bet its
future on a single word
trust 19 71 really was a watershed
moment when the world’s Reserve currency
and with it most of the world lost its
tether to Gold that was a really big
deal people have this mythology of money
that is based on very little fact uh and
one of the nice things about Bitcoin is
that it forces people to start to ask
questions about the fundamentals of
money a Bitcoin is an attempt uh to
adopt the advanced computerized system
that we have the internet to
resurrecting what money used to be all
[Music]
about I think our dollar policies our
monetary policies our fiscal policies
have absolutely created a nation of
debtors not just personal debt not just
corporate debt but government debt I me
you have to look at those all together
as one big thing what is the wealth of
the nation well the wealth of the nation
is a gigantic hole of money that we owe
to the rest of the world that is never
going to be paid back today the United
States pays more than $400 billion in
interest to its creditors every year
hold on hold on sorry for interrupting
again John that was back in 2015 when
the total debt of the United States
government was around $18 trillion today
it’s more like $29 trillion and and
growing by the day let’s just hope
interest rates stay
low when a government spends more money
than it collects in taxes it simply
borrows more or it creates more at one
time every piece of paper money was
backed by gold remember for every $20
bill there was $20 worth of gold in a
government Vault not
anymore today governments create
currency by first creating bonds or
treasury
bills these bonds are sold in the market
generating funds for the government that
issued
them large Banks buy us bonds to flip
them selling them to the Federal Reserve
at a profit this is the magic money
machine you see the FED is America’s
Central Bank but it doesn’t have any
money no cash on its balance
sheets when a bank buys a bond and takes
it to the Federal Reserve the FED simply
says thank you you Mr Banker here’s the
principal and some profit new money
isn’t exchanged it simply appears on the
bank’s accounts
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magic the FED also sets the bar for how
much interest you pay for a car home or
business loan the Federal Reserve has
been given the impossible task of trying
to run the credit and monetary system as
though we are the Soviet Union um it’s
the central planner for the for the key
aspect of capitalism which is how money
and credit is
allocated the Federal Reserve on balance
uh does not help the economy on balance
it hurts the economy and it’s bound to
make mistakes even with the best of
intentions the FED is also supposed to
boost employment with low interest rates
encouraging people and businesses to buy
more goods and
services government’s getting involved
in money
is a good thing and it’s also a bad
thing it’s a good thing because money is
the arteries of the economy the blood
supply of the economy markets are
subject to bouts of euphoria and despair
and it makes sense for governments to
back currency and manipulate it moving
the money supply up and down is the most
powerful way to date that boom and bust
cycle manipulating the supply of money
has shortterm and long-term
[Music]
consequences central banks aim to create
new money carefully strategically and
very very slowly releasing more money
into the economy causes prices to rise
ideally by 2% every year that’s supposed
to Foster economic
growth but 2% inflation means the buying
power of one cash dollar in your pocket
today will be 98 cents next year and
less nearly every year to
come so what does that
mean if you earned a dollar in 19 13 you
could buy 16 loaves of
bread today a dollar barely buys you
one okay time for another update the
official statistics say it’s about $150
these days but that depends on where you
live where you shop and which numbers
you
trust that’s not a quaint notion of how
cheap things used to be it’s proof that
the value of your cash is slowly
withering
away that that $1 invested at 2% in 1913
would now be worth
$724 more than 600% return versus a near
total
loss the US dollar has gone from being
worth $1 to now being worth about 4
cents uh so that’s you know 96% of its
original value and it’s a direct result
of government
control well these numbers would look
way worse now with all these new TR ions
floating in the system you see the
officials will deny that inflation is
happening and then maybe they will fudge
the numbers then they will say it’s just
temporary but ultimately what it means
is that the money in your bank account
is worth a little bit less every single
day and the thing is we haven’t even
gotten to the crazy part of our
financial
system governments don’t create money
from thin air all alone you play a key
role in the magic money
machine
it’s not really the central banks that
are the problem I they’re part of the
problem but the real problem is that
we’ve given the P to create money to the
same banks that caused the financial
crisis we put our paychecks and savings
into a bank account and draw from it as
we need it the banks are custodians of
our money right wrong it is now the
property of the bank on their balance
sheets they can do just about anything
they want with it for example create new
money here’s how your bank account shows
$100 but the bank only holds three and
Loans 97 to Bob to buy
something in the bank’s computers you
still have $100 in your account but Bob
now has $97 of new virtual money in his
account just digits on a computer screen
screen there’s no cash no gold or
anything else backing up the new numbers
in Bob’s account just his promise to pay
it
back this is new money created as
debt when those $97 are spent say in a
shop the shop owner deposits into
another bank and it is Lent out again
and again and again and each of these
people have numbers in their accounts
showing that they own this money so your
original $100 has multiplied now there
are over
$3,300 in the system this process of
loaning out far more money than a bank
actually has as cash on hand is called
fractional Reserve
banking in the UK 97% of the money that
exists is just numbers in the computer
system and those numbers are created by
the
Banks Banks earn Untold billions in
interest every year by creating and
lending virtual money money what’s more
Banks don’t even need your deposit to
create new money if they consider
someone credit worthy for a loan they
can put new magic money into his or her
account and start charging interest so
reporters talk about Bitcoin as so it’s
a as though it’s the first digital
currency but actually we use digital
currency every time you make a a
transaction through internet banking or
through your your bank card actually
it’s not even just digital currency it’s
digital currency that is created by the
banks essentially have nothing in other
words all new money is debt in paychecks
bank accounts
401ks that loan to Bob credit card debt
your home loan All Began life as virtual
money created by the Banks the entire
system is based on trust trust in the
bank solvency trust in the debtor’s
ability to repay their debt if all Bank
customers demanded just 3% of of their
deposits right now in cash this run on
the banks would reveal the
truth almost none of that paper currency
you think is in your bank account
exists it never
did this seems pretty shaky but believe
it or not as long as there’s trust in
the system it actually works and without
our trust
well
[Music]
selling subprime loans and betting they
will fail may not be sacred but it is
lucrative as much as one quarter of our
best and brightest are being lured by
the siren Call of the money
machine instead of science engineering
or medicine they chose a career playing
with betting with other people’s money
to get rich quick very rich and
sometimes they take
shortcuts getting on a
[Music]
n us down they makes
world my ancestors in Greece talked
about the corrupting influence of power
and nothing has changed in these 3,000
years when you give control over massive
amounts of money to a few individuals
they will take advantage of that control
oh oh oh Banks today are factoring in
fines and money laundering and all the
rules that they break into their cost of
doing business JP Morgan is today coming
out and saying that Bitcoin is uh not a
legitimate way of doing business Banks
today are tied into a system that is
completely rigged to basically Harvest
money from the entire global economy and
pump it into the hands of very few get
consumed
[Music]
by the existing banking system is cozy
it’s captured The Regulators it extracts
enormous value from society without
delivering anything in return and it is
parasitic in
nature the banks play a very pivotal
role in an economy you look at any
successful economy it has successful
Banks there’s a very close correlation
with banking profits and the economy as
a whole in medieval Europe a banker who
couldn’t rep paid depositors was hanged
today that same Banker would get bailed
out paid bonuses and enjoy some tax
benefits
[Music]
too today’s Financial innovators package
Assets in ever more complex ways slicing
dicing securitizing always using someone
else’s money they sell debt transfer
risks leverage bets that’s what they
call
Innovation history teaches that the most
revolutionary and disruptive innovation
nearly always comes from The Fringe not
from corporate cubicles true innovators
see the world differently they see the
big picture creating new products and
entire systems that lead to new
Industries Steve Jobs called them the
square cogs in round
holes it’s unsurprising that new
Innovations always come from a niche
group of early adopters because it is
inherently very hard for many people to
realize the benefits of new
technologies a radical new idea is often
met with skepticism ridicule even
hostility from those who stand to lose
the most from its success case in point
the
automobile in the late 19th century Carl
Ben and others built the first cars
Contraptions that could threaten the
stage coach and railroad Industries
these self-propelled vehicles or road
trains would certainly scare horses
injure people and damage roads cars the
railroad baron said were just too
dangerous and to protect us they used
their power to pass along in
1865 it required every automobile in
England to observe a 4 mph speed limit
and to be operated by a crew of three a
driver an engineer and a
flagman this heroic flagman walked in
front of the car to warn fellow citizens
of the coming danger the railroad
tycoons the lawmakers The self-appointed
Gatekeepers used regulation to stifle
Innovation but they didn’t invent the
flagman he’s been around for a long
time for centuries very few could read
books were copied by hand the people in
control political and religious leaders
wanted to keep it that way and they
greeted Johan gutenberg’s printing press
with Licensing Laws publishing bans
taxes in some parts of the world
printing was a crime punishable by death
after all they were just protected us
from dangerous
ideas before the printing press there
were an estimated 30,000 books in all of
Europe 50 years later there were 10
million as gutenberg’s invention
flourished the Dark Ages withered
progress couldn’t be stopped but the
flagman never stops trying his Masters
set him loose on each of these
Innovations because they threatened
someone’s profits someone’s
control
but remember this is a story about money
what if a technological innovation
allowed anyone in the world to be their
own bank to create a currency free from
taxes and banking
fees the US Constitution forbids
citizens from printing or minting their
own currency competing with or
undercutting Reliance on the US
dollar in 1998 Bernard Von knous decided
to test the resolve of the federal
government the liberty dollar was
available in Gold Silver Platinum and
copper it was available in three forms
both in specii in other words gold and
silver in paper as Warehouse receipts
and in digital form on obviously the
government didn’t like it they arrested
me uh and convicted me of counterfeiting
fraud and conspiracy and I’m currently
awaiting 22 years sentence in federal
[Music]
prison ultimately the feds didn’t lock
him up and throw away the key not house
got away with 6 months home arrest and
probation at a hackers convention in
Netherland there was a young hacker
there who used the Alias of Satoshi
Nakamoto and he talked to a friend of
mine and he identified the liberty
dollar and me as inspiring him to create
a new currency this is actually the only
recorded eyewitness account secondhand
of someone meeting Satoshi in person and
that was in 2005 quite extraordinary but
personally I’m not even sure I believe
it and I’m not really that interested I
much more interested why Satoshi created
bitcoin
anonymously Bernard Von not House’s
arrest for creating private money may
also have inspired bitcoin’s inventor to
keep a lower profile publishing The
Invention under an
alias and Vanishing part of me is
interested to know like who Satoshi is
maybe that’s part of the Mystique of the
story it’s completely irrelevant to the
functioning of Bitcoin because we have
the
the the code to read uh but it would be
kind of fun to
know who is
Archimedes who is
ukl we don’t know we don’t know if ukl
was one person or multiple people and
you know what it doesn’t matter ukan
geometry Works whether I know who uid
was or not whether uclid was a moral and
good person or whether he was a corrupt
plutocrat and a
bastard Science and Mathematics have
essential truth that stands alone
irrespective of its inventur and
irrespective of their
motives well Bitcoin is a system based
on mathematical truths and these
mathematical truths stand alone we can
read the source code in Bitcoin and
understand it and it will be true
whether Satoshi Nakamoto is a man a
woman a collection of individuals a
government agency or aliens from the
future you see it actually wouldn’t have
worked any other way think about it if a
Silicon Valley funded startup or a
government or some Professor would have
founded it it would have never worked
because remember who the early adopters
of Bitcoin were Cipher punks crypto
Anarchist Libertarians and yeah drug
dealers too so this antifragile nature
actually was built in from the very
start and remember this is also helpful
because a Quai religious movement is
forming around Bitcoin the maximalist
and that’s really helpful if you have an
anonymous founder with some Mystique
around
it Bitcoin is an open-source software
protocol like much of the code
supporting the internet and
email open source means anyone everyone
can use the protocol no one person or
company can control it every change to
the software is public open and
transparent the code was first developed
by
Satoshi then there were dozens now
hundreds of programmers constantly
collaborating to improve bitcoin’s
features and
security so what makes Bitcoin a
breakthrough it tackles an ancient human
dilemma and solves a computer science
problem
any shared information or data can be
flawed
corrupted anything can be
faked how do we know that what we’re
receiving can be
trusted in our traditional mindset it’s
very important to know who is behind
this currency because their reputation
is significant in knowing that our funds
and the true wealth is actually safe in
finance we rely on trusted third parties
like Banks credit card companies
remittance Services they keep track of
money as it moves from one account to
another and they charge us handsomely
for it we trust that their digital
ledgers of credits and debits
balance a financial system that cuts out
these middlemen could be faster cheaper
and more
secure but Bitcoin is digital music and
movies are easily pirated copied stolen
how can a digital currency retain value
if anyone can make a million copies the
answer is at the core of satoshi’s
invention a Bitcoin is not a file on a
computer it’s an entry in the publicly
distributed database called the
blockchain just as the medi kept a
ledger of credits and debits today’s
Banks record each transaction as a plus
and minus in their ledgers now we call
them
databases bank accounts are replaced by
a digital wallet that you alone control
bitcoin’s Ledger is the block chain a
record of every Bitcoin in existence and
every Bitcoin transaction ever made it
always balances because no Bitcoin ever
leaves
it when a Bitcoin is sent from one
digital wallet to another what they are
really sending is control over that part
of the database code that is a unique
key for the new owner as the network
processes transactions it constantly
synchronizes the one Ledger across the
global Network each computer or Bitcoin
minor has a complete and identical
copy and because the blockchain is
public it cannot be controlled by any
one person or computer owners of the
Bitcoin mining computers are rewarded
with new Bitcoins for processing
transactions and keeping the network
secure in other words the Bitcoin
Network replaces Banks and
bankers today the combined computing
power of This Global Network is greater
than the 500 biggest supercomputers
combined times
10,000 hold on hold on hold on that fact
always fascinated me 10,000 times the
top 500 supercomputers put together
that’s crazy but today that number would
be closer to 5 million
unbelievable now critics have always
said there’s one thing that worries them
about Bitcoin it is controlled by China
because because most of the computing
power is in China well that used to be
true but recently China actually banned
Bitcoin mining what happened was that
half of the network power the hash power
dropped but those miners put the
hardware back to other countries to the
US to Canada to Kazakhstan as a result
the Bitcoin network is even stronger
even more globally distributed than it
was before now why did China ban Bitcoin
obviously it’s a risk is a threat to a
fiat currency we we understand that now
but the other is the Environmental
debate sure the Bitcoin Network consumes
a lot of energy a lot of it is fossil
fuels um so the concern is correct but
if you look a little bit deeper into the
statistics and lazy journalists never do
this Bitcoin miners moved to wherever
the energy is cheapest and that is in
most countries of the world already
sustainable energy that’s why Bitcoin is
actually driving fossil fuels out and
increasing sustainable
energy it’s almost concern trolling from
the media it’s like we are very
concerned about the energy impact of
Bitcoin oh you should really check out
the energy impact of capitalism or even
better the energy impact of War do you
know who the largest consumer of energy
in the United States is the military
right and the largest consumer of oil
also and the biggest polluter in the
world is is the military
so pardon me if I don’t take that
concern so
seriously central banks create money to
boost the economy and try to pull it
back out before inflation heats up but
no one knows how much Magic Money Global
banks are creating to boost their
profits with questionable loans Bitcoin
is completely the opposite it’s totally
transparent you know exactly how many
exists the the computer code behind
Bitcoin has a built-in brake pedal
cutting the creation of Bitcoins in half
every 4 years this ensures a transparent
controlled scarcity and ultimately
limits the total number of Bitcoins to
21 million no lobbyist no politician no
Banker can create more or change the
mathematical rules dictating their
creation advancing accountability uh and
that’s things I think is most exciting
about Bitcoin and the technology behind
it is not so much that it will supplant
the dollar or that it will supplant
government itself but that all of a
sudden there’s a competitor to
government and that government itself
now needs to look over its shoulder more
than it
did in 2014 the Believers of Bitcoin
thought and dreamed about replacing the
dollar but clearly that hasn’t happened
and in my view it will never happen just
like the internet gave us tweets and
blogs and ebooks but it didn’t replace
books or book
stores remember a commodity money is
relatively scarce easily recognizable
can be cut into smaller pieces you can
substitute one piece for another of
equal value and you can carry it around
without too much
trouble let’s talk about these five
characteristics one more time to drive
the point home right so Bitcoin clearly
is scar in fact some would argue it’s
the scarcest financial asset in the
world right the inflation rate that
Bitcoin mining has has slowed down so it
gets scarer and scarer every four years
it is divisible we can divide it by 100
million times it’s transportable I can
send it to anyone on the planet um
doesn’t matter which country you’re in
the verifiability is interesting I can
verify my Bitcoin immediately in a split
second but a fake dollar bill a fake
gold coin I’m not so sure I could spot
that back to you John this digital
currency has the five key
characteristics of money but is it a
store of value
is it stable or will it diminish over
time like a commodity rendered useless
or a crop that
fails so this was really the big
question of the first seven eight years
of Bitcoin can it be a store of value
Bitcoin has been the best performing
financial asset of the last decade no
doubt about it but it has been volatile
let’s be honest so how I like to think
about it is short-term versus long-term
volatility right over the long run Fiat
currencies lose value you buy inflation
every couple of years you lose you lose
you lose we’ve seen the statistics
Bitcoin however increases in value over
the long run but on the short term well
it can lose 10% maybe even 50% over a
short period of time you have to be
prepared for
that you could not miss the point more
effectively than by thinking of Bitcoin
as a currency and payment Network that
will make shopping easier for the first
world Bitcoin is about everything else
everywhere
else there are 2.5 billion people
without a bank
account with Bitcoin a mobile phone with
an internet connection is now a bank
with access to the global
Marketplace what happens when Bitcoin
services and infrastructure and Bitcoin
wallets and payment processes start
going into these countries these people
will be able to gain benefits from trade
where they could not previously these
people will be able to send money home
uh International remittance which is one
of the major pain points of the current
Financial
System 7 years later Stefan has become a
major voice as a Bitcoin only educator
and podcaster so good to see you after
so many years um so um just reflecting
back on what you said um told us uh in
20145 um what’s your quick take on that
one well I think to be honest I came out
out pretty well from that right because
I was just basically saying it’s going
to enable more and more people to
transact around the world where
currently they’re not able to now could
we have known back then that the message
of day-to-day transactions all happening
on chain that didn’t really pan out that
said lightning Network now has become uh
has grown and come to a level now where
it can be used for day-to-day
commer I probably could not have
foreseen how quickly nation state
adoption would have happened obviously
El Salvador being the big example there
of a country adopting Bitcoin as legal
tender which is obviously a huge step so
we were thinking of building
Bitcoin
City this small Central American country
has even announced a new form of
government Bond it will hold half of the
funds in Bitcoins and use the other half
to build
infrastructure they have also started to
mine Bitcoins with geothermal energy
from an actual volcano people can
potentially invest into El Salvador and
be funding the Bitcoin city project the
interesting part is it has I believe
it’s a 6.25% coupon and on top of that
there will be a Bitcoin dividend
[Music]
also
[Music]
we actually built this world that we
live in over the last 2 or 300 years
we’ve made some mistakes we’ve leared to
make things
better the idea that there’s some magic
key that if you just sort of stop doing
a few things that there’ll be this
perfect order that will settle is a
very childish ideological delusion in my
opinion but that is not to say that
Bitcoin isn’t an exciting thing it’s a
terrifically exciting thing but we have
to try and engage with it with working
Minds not with magical thinking people
are suggesting that it’s going to be
another world currency arriving the
dollar or the Euro or the Yen I think
that’s not going to happen I prefer to
trust the banks or the central
government compared to the Bitcoin is
because someone’s accountable whereas
with the Bitcoin it’s completely
deregulated there’s no central control
there’s no one held accountable it is a
free float it’s purely demand and Supply
driven Mr Williams so clearly this is
not a currency currencies don’t behave
like this but what this is is a
high-risk speculative
commodity so for the entrepreneurs the
bankers the governments and everyone
else studying and watching Bitcoin all I
have to say is that there will probably
be a lot of volatility in an upward
trajectory and to buckle
up oh boy so what’s your first reaction
to this one oh my God I feel like I look
like a child um it’s been uh seven years
I think since I said that um we actually
just celebrated our 10th year
anniversary so for any company that’s a
really big milestone in cryptocurrency
world uh that makes us uh the ogs and
and uh kind of an original firm um so we
have a lot of things to celebrate so not
only have we survived and helped build
this economy up um but the things I’m
most proud of is that our users have
performed over a trillion dollars worth
of onchain transactions we’ve had over
80 million people test and use
blockchain.com Wallets on iOS Android
and web and we really built out a robust
business we’ve also built out a full
institutional offering though so now we
do custody we do lending we have a
venture fund and we’re also working with
protocol projects to do all kinds of new
exciting things like get distribution
into the retail base and much more so uh
we’re starting to look a little bit more
ironically like uh a JP Morgan in some
ways um but with the intent of building
out a crypto Services firm for the next
10 years and the digitization of
financial services has blended with
crypto and um now it is going to run
rampant through all these institutions
um and without a doubt not only are they
going to start offering crypto uh you
know services to all their clients um
but every single Financial Service
provider will have to have a crypto
offering or a crypto um service within
the next decade bitcoiners all over the
world have kickstarted a cultural
movement and the most hardcore
supporters are the so-called maximalists
on social media you’ve probably seen
their laser eyes hoddle and stacking
sets memes sets stands for satoshis or
tiny fractions of
Bitcoin it’s more about this idea of
reflecting and realizing that Bitcoin is
going to be the money of the world the
general I do is you want to be
accumulating SATs whether you’re mining
the coins earning them or buying them
because we see this like we’re playing
out this game of hyperbitcoinization and
so in 10 or 15 years or we don’t know
when the music the music is going to
stop and when the Music Stops you want
to be holding a chair I’m fascinated by
the whole Bitcoin maximalism like
cultural movement if you will so the
origin of the term Bitcoin maximalist
was actually an epithet it was an insult
a put down term by vitalic essentially
he was trying to get interest drum up
interest into his altcoin for me the
real competition for Bitcoin is not
against altcoins it’s actually against
gold and the US dollar 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 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 the net worth and if I am right
it’s going to be more than 100% of your
net worth so with a non-material
exposure you change your life no what
you would spend with your on a romantic
weekend with your wife say sorry we’re
not going to do that this weekend I’m
going to just buy Bitcoin consider it
spent it disappear check in seven years
I either gave you bad advice and cost
you a weekend or I want a grand kid
called
[Laughter]
wo
the digital age has fundamentally
changed the world we have embraced
digitized music film medical records
Communications the
internet the free exchange of
information and currency can fuel
revolutions help in a disaster but our
money is Shackled to the 20th century
manipulated by governments and
Banks the champions of Bitcoin ask us to
imagine payments without a middleman
Investments without a broker loans
without a bank insurance without an
underwriter charity without a trustee
escrow without an agent betting without
a bookie recordkeeping without an
accountant Global secure nearly instant
and free is it fantasy or the future of
money and
[Music]
commerce we started this journey in the
moon
capsule will Bitcoin continue to go to
the Moon my personal theory is that no
one will compete against Bitcoin as a
store of value I think we are seeing the
beginning of the end of Fiat money we
also seeing the birth of digital gold we
are seeing the rise of Bitcoin that’s my
prediction but you might disagree let’s
see and speak in 7
years
I love Bitcoins I’m really into Bitcoin
well satosi Nakamoto that’s a name I
love to say and with don’t know much
about him but he came to save the day if
you don’t know what a Bitcoin is Right
usually the way people describe it is uh
digital cash money for the
[Music]
internet people like oh I love my bank
I’m like really you ask a bank it you
know what two plus two he’s like well I
can tell you but there’s a
fee down the road it will will be told
about the death of old Mount GX about
Traders trading alter coins and miners
mining blocks now Bitcoin is a new
technology I like to say it’s banking
lights all all of the convenience none
of the
evil Bitcoin as you’re going into the
old blockchain oh Bitcoin I know you’re
going to rain going to
rain you know when I go online and I buy
like I don’t know a pair of socks if I
pay with a credit card I’m just buying
socks right if I buy those socks with
Bitcoin it’s a
revolution I am sticking it to the
[Music]
may there’s always people who not ready
to get into the new technology you know
like when the internet came out there
was people going nah I don’t think this
is going to be
popular and then email came out people
like nah this isn’t going to catch on
and now Bitcoin comes out people like I
don’t think I’m like aren’t you sick of
being
wrong get on this train you
[Music]
[Applause]
know
that

Delve into the controversial realm of Bitcoin: Is it a currency beyond government debts? A shield against inflation, or a weapon of money launderers? This documentary charts the evolution of money, from ancient bartering to the corridors of central banks and the hustle of Wall Street trading floors.

From: Bitcoin: Digital Gold?

Content licensing from Sideways Film Ltd to Little Dot Studios.

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