The Joe Rogan Experience - Joe Rogan Experience #844 - Andreas Antonopoulos

00:00:05.000 All you creeps that are controlling money all throughout the world, your time is slowly closing in.

00:00:12.000 Am I right?

00:00:14.000 Yep.

00:00:19.000 Andreas Antonopoulos, author, published author of The Internet of Money.

00:00:25.000 You've been on the show many times before, but you've never been on the show two days after a book fresh off the presses.

00:00:31.000 Tell a story about how this book got delivered to you today, because it's kind of hilarious.

00:00:35.000 Yeah, so nobody knew about this.

00:00:37.000 This is my announcement.

00:00:38.000 This is my second book.

00:00:39.000 First book was Mastering Bitcoin, was for techies.

00:00:42.000 The Internet of Money is for everybody else, and it's a collection of my talks.

00:00:47.000 And I was having the first copy delivered to my hotel this morning in order to bring it to the show and give it to you.

00:00:53.000 And it was a day late.

00:00:56.000 It was supposed to be delivered yesterday.

00:00:57.000 And I'm waiting and I'm refreshing the tracking number site.

00:01:01.000 And then you said, you know, we can push it back by half hour because you're running a bit late.

00:01:06.000 And in that half hour, the book got delivered.

00:01:09.000 It literally was printed September 5th.

00:01:11.000 This is the first copy I've touched.

00:01:14.000 And it's yours.

00:01:15.000 Perfect.

00:01:16.000 I've got it, folks.

00:01:20.000 Issue 0001. Now, why do they do that?

00:01:24.000 Not just one.

00:01:24.000 Why don't they just make it one?

00:01:25.000 Why does everybody have to do a one?

00:01:28.000 Well, I'm not printing 10,000 issues, so...

00:01:31.000 Well, they never go...

00:01:32.000 It's never like 0000001. Do they ever do that?

00:01:39.000 Mm-hmm.

00:01:40.000 I saw a pair of shoes once recently with that.

00:01:42.000 It was like 1 out of 12. Why are you in one of my ears only?

00:01:44.000 I don't know.

00:01:45.000 What the hell's going on there?

00:01:47.000 I can't have you in my left ear.

00:01:48.000 It's like you're like the voice of good or the voice of bad.

00:01:52.000 Oh yeah?

00:01:53.000 Yeah, I got it too, so it's on your end.

00:01:55.000 Yeah, that's too weird.

00:01:57.000 We can't have that.

00:01:58.000 Try it again.

00:02:00.000 Check, check. 1.00

00:02:01.000 Nope, you fucking weirdo. 1.00

00:02:03.000 You're coming in my left ear only. 1.00

00:02:05.000 Probably through the rest of America too, right?

00:02:07.000 Yeah.

00:02:07.000 Yeah, they can't have that.

00:02:09.000 People are at the gym going, what the fuck? 1.00

00:02:11.000 Jamie's in my left ear! 0.99

00:02:13.000 So this is a collection of all your talks.

00:02:15.000 What has changed in the world of Bitcoin since the last time we spoke?

00:02:19.000 We've spoken.

00:02:19.000 We hung out in Vegas, which was great.

00:02:21.000 I had a great time with you.

00:02:23.000 But what has changed in the world of Bitcoin since the last time?

00:02:28.000 Well, it's been about a year and a half, almost.

00:02:31.000 And so much, so much happening in the meantime.

00:02:35.000 We had a pretty slow 2015. 2016 picked up again.

00:02:41.000 2015 still coming off a slow and gradual drop in the price.

00:02:45.000 People were very reluctant and skeptical.

00:02:49.000 The media was constantly bashing Bitcoin.

00:02:51.000 And then...

00:02:53.000 At the same time, we saw this really interesting phenomenon where the banks started getting interested in this thing.

00:02:59.000 But not Bitcoin itself.

00:03:01.000 No.

00:03:02.000 The blockchain.

00:03:03.000 The technology behind Bitcoin.

00:03:06.000 Which is rather amusing.

00:03:08.000 I look at that a bit as if the Horse Buggy Association of America is going, Oh, we like this automobile thing you've designed, but we have a very big investment in hay and horses and stables and veterinarians.

00:03:21.000 So we're going to use the technology behind the automobile, the pneumatic tire.

00:03:26.000 And we're going to revolutionize horse buggies.

00:03:28.000 But in all fairness, I think what you're saying is hilarious, but in all fairness, it is a weird thing to invest in, like to go all in on Bitcoin.

00:03:39.000 I mean, I know you do it, but you also make all of your money this way, and this is, you know, you're a proselytizing person when it comes to Bitcoin, right?

00:03:48.000 For good reason.

00:03:50.000 For the average person, say, who's saved up actual cash money their whole life, and is involved in this established system of money, to throw all their money into Bitcoin.

00:04:00.000 That would be insane.

00:04:01.000 You watch the money fluctuate, it goes up and it goes down.

00:04:04.000 I'm glad you said that, that it would be insane.

00:04:06.000 No, that would be a terrible idea.

00:04:08.000 Right, but don't you think that that's probably why the media bashes it and why banks are just looking at it going, hmm.

00:04:15.000 Like, people see that there's a growing number of people that are using it for transactions.

00:04:19.000 There's Bitcoin ATMs now, and people are using it to purchase things.

00:04:24.000 There's several companies that accept Bitcoin for products, for actual real physical products.

00:04:30.000 Yeah, but I mean, it's not an investment.

00:04:32.000 It shouldn't be treated as an investment.

00:04:34.000 I mean, I don't even mean like as an investment.

00:04:37.000 I mean as like a primary source of money, if you decided to take all of your money, not as an investment, but just say, I'm only going to live off of Bitcoin.

00:04:49.000 I'm going to spend Bitcoin.

00:04:50.000 Like your money's going to go up and down.

00:04:52.000 Yeah, that's going to be really hard, especially if you're...

00:04:56.000 If you're accustomed to privileged banking, like if you have the kind of banking that we have in this country, if you actually have access to that, and you have a nice visa debit card, and you don't pay account fees, and your money doesn't get confiscated by a dictator too often,

00:05:14.000 And, you know, you can earn your money and interact with other people, then why would you use Bitcoin?

00:05:19.000 The simple answer is that's not really the use case.

00:05:22.000 But there are lots of people around the world who simply don't have access to that.

00:05:26.000 And for them, you know, in many cases, Bitcoin is the stable currency.

00:05:33.000 Ask an Argentinian, a Venezuelan, a Brazilian, a Cypriot, a Greek, and the list goes on and on and on, whether they're worried about volatility in Bitcoin.

00:05:44.000 And in many cases, if they've heard of it, if they've used it, that's the stable currency.

00:05:49.000 Their national currency is far, far worse.

00:05:53.000 Did you say Brazil?

00:05:54.000 Yeah, Brazil has had massive devaluation in the last year.

00:05:58.000 How much devaluation?

00:05:59.000 Because I know that they have experienced some sort of a really radical economic downturn, which is really interesting because a few years ago, when we first started going into Brazil, their economy was booming.

00:06:09.000 Right.

00:06:09.000 I'm saying the UFC. Yeah, they're in a currency crisis right now.

00:06:13.000 Massive currency crisis.

00:06:14.000 What's going on?

00:06:15.000 Well, apart from the political crisis that's going on, and I won't speak for that because I'm not a Brazilian, but you know, they've had impeachment proceedings.

00:06:21.000 They just impeached their president.

00:06:24.000 There's been a lot of economic difficulty with the country, and I think their currency has devalued almost 30% in the last year, 20 or 30%, some staggering amount.

00:06:34.000 Currencies don't move like that.

00:06:36.000 Mainstream national currencies that have very large economies behind them simply don't move like that.

00:06:42.000 We've seen it happen only a couple of times.

00:06:44.000 We've seen it happen in Greece and Cyprus during the economic crisis.

00:06:48.000 We saw it happen in Britain.

00:06:50.000 During Brexit, and we've seen it in places like Brazil, Venezuela, Argentina, and places like that.

00:06:56.000 How much of a percentage did Britain lose during Brexit?

00:07:02.000 Almost 20% in a day.

00:07:04.000 Wow.

00:07:05.000 And three things responded to that in the opposite direction.

00:07:09.000 Gold, the Japanese Yen, and Bitcoin.

00:07:13.000 Heading in the exact opposite direction.

00:07:15.000 Bitcoin climbed 20% that day almost.

00:07:18.000 Really?

00:07:18.000 So, did Britain rebound?

00:07:21.000 It did a bit, but it's still in historic lows, multi-decade lows.

00:07:26.000 So they took a really big hit.

00:07:29.000 And what we've seen again and again is at times of crisis, we see this pattern repeating where people use Bitcoin as a safe haven investment to get money out of national currencies, especially Bitcoin.

00:07:42.000 Where there are very strict currency capital controls.

00:07:46.000 So one of the reasons we've seen Bitcoin, probably one of the reasons we've seen a lot of activity with Bitcoin in China is because of currency controls.

00:07:54.000 Every time the yuan, the Chinese currency, devalues against the dollar, and it's done so I think four times in the last year, Every time there's a massive uptick in Bitcoin buying in China.

00:08:07.000 So people are parking the money in Bitcoin or using it to convert it to other currencies and get money out of the country.

00:08:14.000 So what is the biggest fluctuation that Bitcoin has had?

00:08:19.000 Well, it depends whether you look at it on a monetary basis or on a percentage basis.

00:08:24.000 If you look at the movements now, it can go up 30, 40, even 100 bucks in a day.

00:08:30.000 Which seems like a lot.

00:08:33.000 But as a percentage, the biggest fluctuations it had were in 2010 and 2011. When it rose from under $1 to over $30 and then back down to under $1 in a period of a couple of months.

00:08:48.000 Now for people who don't understand what this means, when you're saying $100 or $1 or $30, what is that in relationship to?

00:08:56.000 One Bitcoin.

00:08:57.000 One Bitcoin equals $30.

00:08:59.000 It did in 2011. And what does it equal right now?

00:09:02.000 $617.

00:09:04.000 $617?

00:09:05.000 Mm-hmm.

00:09:05.000 Jesus.

00:09:06.000 It was about $230 at the beginning of this year, so it's seen a massive ramp up and a renewal of interest.

00:09:14.000 Okay, so massive ramp up, but what's the fluctuation?

00:09:17.000 So if it's at $616, is that what you said?

00:09:20.000 Yeah, it's tripled since the beginning of the year almost.

00:09:22.000 Is it possible that it could drop to like $200 tomorrow?

00:09:25.000 Yes. 0.86

00:09:26.000 See, that scares the shit out of people. 0.96

00:09:28.000 Yes. 0.63

00:09:29.000 And which is why, you know...

00:09:31.000 But here's the truth.

00:09:33.000 Over the 70 years that it's existed, the volatility as a percentage has been going down every single year.

00:09:42.000 So as the economy gets bigger...

00:09:44.000 The bigger it is, the more stable it is.

00:09:46.000 It doesn't get buffeted around, right?

00:09:49.000 It's just like a very large boat doesn't get pushed around by the waves.

00:09:54.000 Bitcoin is like a zodiac next to the US dollar's Titanic.

00:09:59.000 And the little zodiac is bouncing up and down on the waves a lot, right?

00:10:03.000 And it might be uncomfortable at times.

00:10:05.000 Of course, if you're heading to an iceberg, you want to be in the thing that can actually turn on a dime.

00:10:12.000 That's a good way to look at it.

00:10:13.000 I don't know if it's a fair analogy, but it's a good way to look at it.

00:10:16.000 It's volatile.

00:10:16.000 And that's part of the fact that a 10 to 12 billion dollar economy stretched across the entire globe is a small economy as a currency.

00:10:26.000 Now, in the interest of making this a standalone podcast, so people are not going to go back and listen to all the other podcasts that we've done, explain very briefly, if you could, what is Bitcoin and how does it work?

00:10:37.000 I'm glad I have this opportunity to do it again, because every time we have a new audience...

00:10:41.000 So, Bitcoin is internet money.

00:10:43.000 It's a system of money that exists on the internet, was created on the internet, and it allows you to send and receive value...

00:10:51.000 The same way you can send and receive an email anywhere in the world, instantaneously, without intermediaries.

00:10:58.000 And that's kind of what you see at first glance.

00:11:02.000 Behind that, it's a whole platform.

00:11:04.000 It is, as the title of the book says, the internet of money.

00:11:08.000 It is...

00:11:09.000 It is a set of protocols that allow you to basically exchange value with other people.

00:11:15.000 But you can do a lot more with it than just that.

00:11:18.000 Most people will use it as a currency.

00:11:20.000 It's basically money that you can transmit from your smartphone to somebody else's smartphone directly, just like cash, but electronic.

00:11:30.000 And the thing about it that's unique is that it's not owned by any corporation, any bank, or any government.

00:11:37.000 Just like the web isn't owned by anyone or email isn't owned by anyone.

00:11:43.000 And there's lots of companies that can send and receive email.

00:11:46.000 There's lots of companies that can set up websites.

00:11:48.000 There's a lot of companies that can set up applications that use Bitcoin.

00:11:53.000 And I should say that when you set it up for me, the first time you did it, a bunch of people donated Bitcoin.

00:11:59.000 So what I did was, I said whatever people donated, I would match, I would double it, and then we would donate it to Fight for the Forgotten, to build wells in the Congo.

00:12:09.000 And we built...

00:12:11.000 I don't remember how many Justin Rens said, but it was...

00:12:16.000 I don't even remember how much money, but it was many thousands of dollars that people donated, and then I doubled it, and then we sent it over to the Congo.

00:12:24.000 The Bitcoin community is very generous, is my point.

00:12:27.000 That is true.

00:12:29.000 And part of that generosity comes from the fact that a lot of the people in this community are very excited about this technology and want to share it with others.

00:12:38.000 They want to tell other people about this technology.

00:12:41.000 It's really quite interesting what happens when you create a form of money that is truly global.

00:12:47.000 We really don't have forms of money that are truly global.

00:12:51.000 Even with your very advanced banking system and your access to all of the technology that you have in the American banking system, if you try to send money to some countries, it's almost impossible to do.

00:13:02.000 I experience this every time I get paid in Bitcoin.

00:13:05.000 I'll go into a conference in Europe.

00:13:07.000 And I'll do one conference with the banking industry and one conference with the Bitcoin community and the little Bitcoin conference is going to be free to attend and I don't make any money but they sometimes cover some of my expenses.

00:13:21.000 And I'll send an invoice.

00:13:24.000 And the banking industry conference will send me a wire transfer.

00:13:28.000 It takes, on average, four weeks for me to get it, with several calls to find out where it went, what's going on, why did it get lost.

00:13:37.000 And it takes me on average 15 minutes to get paid in Bitcoin, no matter which country I'm being paid in.

00:13:42.000 This is a cynic in me.

00:13:43.000 Is this because when they take the money, and they're transferring it, and they're moving it around, and now it's sitting in banks.

00:13:50.000 When banks have money, if they have your money, even if it's just for a few weeks, they have the opportunity to use that money to make more money.

00:13:57.000 Are they doing that?

00:14:00.000 It certainly doesn't hurt to keep it a bit longer.

00:14:05.000 They're doing it primarily because the system has a series of intermediaries, and each of those intermediaries represent a risk.

00:14:13.000 If one of those intermediaries says, I have the money for Mr. Antonopoulos' wire, and you give that money to Antonopoulos, but the intermediary doesn't give it to you, You're out of money, right?

00:14:24.000 So there's risk.

00:14:25.000 With every intermediary you put in, there's risk.

00:14:28.000 And that's called counterparty risk.

00:14:30.000 Because of the way the banking system is with perhaps five, six, seven intermediaries in a single transfer, that creates a lot of cumulative risk.

00:14:40.000 And they protect with that risk by slowing things down.

00:14:44.000 And that risk doesn't exist in Bitcoin because it's from one party directly to another.

00:14:49.000 No counterparties.

00:14:50.000 That's one of the core principles.

00:14:52.000 The funny thing, I had this conversation with my bank.

00:14:55.000 I had done this conference in Germany, Frankfurt, at the headquarters of the Bundesbank.

00:15:03.000 Now, for those of your viewers or listeners who don't know, the Bundesbank is the Federal Bank of Germany.

00:15:10.000 And they probably consider the United States Federal Reserve to be a mediocre creditor compared to the Bundesbank.

00:15:19.000 This is like the best credit rating on the planet, right?

00:15:25.000 And I'm going to speak at a conference there, and they're paying me for my expenses.

00:15:30.000 They send a wire transfer, and I call my bank, and after four weeks, they finally find it and tell me, we've received your bank wire transfer.

00:15:39.000 We're going to hold it.

00:15:41.000 Because of the risk profile.

00:15:43.000 I don't understand.

00:15:45.000 Well, you haven't been paid by this particular payer before, so we're going to put a hold on it.

00:15:50.000 I said, you do know this is the Bundesbank.

00:15:54.000 You are holding, and they held it for two weeks.

00:15:58.000 You are holding for two weeks because of the credit risk of the Federal Bank of Germany, the most credit-worthy institution.

00:16:05.000 I'm not trying to receive money from Somalia.

00:16:09.000 This isn't even something weird.

00:16:12.000 And if even they can't pay me in the age of the internet instantaneously, there is something wrong.

00:16:21.000 With this banking system and there is because I got paid for the Bitcoin conference who was doing in the same town Instantaneously, but there's also concern on their their end about fraud, right?

00:16:34.000 I mean isn't but there's fraud with Bitcoin as well I mean wasn't there that issue with those guys that were investigating the dark web it turned out that the agents were stealing Bitcoin and To the tune of hundreds of thousands of dollars.

00:16:47.000 Wasn't that the case?

00:16:48.000 Yes, absolutely.

00:16:51.000 So, the difference is a difference between systemic fraud and individual cases of fraud.

00:17:00.000 In Bitcoin, as in the traditional banking system, if a bank or an organization concentrates a lot of money, then you can go in and steal it.

00:17:09.000 You basically rob the Bitcoin bank, just like people rob the normal bank.

00:17:14.000 And how would they do that?

00:17:15.000 Just hack into it somehow or another?

00:17:16.000 Yeah.

00:17:16.000 Yep, they hack in and they do it.

00:17:18.000 And this has happened many, many times.

00:17:20.000 And this is a problem with Bitcoin banks as opposed to person-to-person exchanges.

00:17:25.000 Correct.

00:17:26.000 Because the whole point of Bitcoin is that you don't need to put your money in the custody of someone else.

00:17:30.000 Right.

00:17:33.000 Instead you use Bitcoin as it is intended where everybody keeps control of their own money Then in order to hack all of those people you either have to hack the Bitcoin protocol itself Has not happened in seven years and the way it's structured is impossible to do or you have to hack each individual account holder and you can hack individual account holders Depending on their level of security and sophistication,

00:17:57.000 but to get very large amounts, you have to wait for them to give their money to someone else.

00:18:04.000 What was that exchange, the Bitcoin bank, that started off as like a fantasy website?

00:18:11.000 What was that again?

00:18:13.000 This was MT Gox in Japan.

00:18:17.000 The Magic the Gathering Online, which you see in the early days of Bitcoin, there were no exchanges.

00:18:23.000 So you've got to think back, like, do you remember on the web?

00:18:26.000 In the early days when even the largest, most sophisticated corporations had a page with a single logo and a grey background and some flashing lights that said under construction, like in 1994. That's where we are in Bitcoin still.

00:18:41.000 There were no well-run exchanges at the time.

00:18:47.000 It was very difficult to buy and sell Bitcoin.

00:18:49.000 And so this guy in Japan had a site that could trade these Magic the Gathering Online cards.

00:18:57.000 And he converted the site to trade cryptocurrencies.

00:19:04.000 Turns out it's a lot easier to hack in and steal cryptocurrencies than it is to steal the cards.

00:19:10.000 Whatever happened with that?

00:19:12.000 Because the story was like hundreds of thousands of dollars in bitcoins just vanished.

00:19:17.000 Hundreds of millions of dollars.

00:19:19.000 Hundreds of millions.

00:19:19.000 They didn't vanish.

00:19:20.000 Oh boy.

00:19:20.000 They didn't vanish.

00:19:21.000 Someone stole it.

00:19:22.000 They got stolen.

00:19:23.000 They got cycled through the economy and they're back in the economy now.

00:19:28.000 They're just not with the same owners.

00:19:30.000 No one knows who?

00:19:31.000 No one knows who.

00:19:32.000 That seems bizarre.

00:19:34.000 Like, if you rob a bank, like, they can put a trace on the bills, and they can figure it out eventually, and most people get caught, right?

00:19:41.000 Yeah, not really.

00:19:42.000 I mean...

00:19:43.000 No, if you do wire fraud, perhaps.

00:19:46.000 But in many cases with cash, Bitcoin is like cash.

00:19:50.000 It is equally untraceable.

00:19:51.000 It's very difficult to actually catch.

00:19:53.000 I think recently I was reading about the FBI closing the D.B. Cooper case.

00:20:00.000 It's the guy who robbed the bank, got into 717 aircraft, opened the rear staircase and jumped out to the parachute over the Midwest and was never seen again.

00:20:12.000 Yeah, they think that guy died though.

00:20:15.000 Well, that would be a convenient explanation for the failure of the FBI to catch him.

00:20:20.000 Yeah, it would be convenient.

00:20:22.000 But also, didn't he like drop into the woods?

00:20:25.000 I don't know the details.

00:20:27.000 They never found him, body, or money ever again.

00:20:31.000 But that can happen pretty easy. 0.98

00:20:33.000 I would be more likely or more apt to believe that if someone dropped in the woods out of a parachute with some fucking haphazard gear and... 0.99

00:20:43.000 Leapt out of the back of a plane, they probably died. 0.99

00:20:46.000 Probably got eaten by bears or something.

00:20:48.000 Yes, or found by a local woodsman in the cabin who's like, some dude fell out of the sky with a satchel full of money.

00:20:58.000 Thump.

00:20:59.000 My money.

00:21:00.000 I need a new chainsaw.

00:21:02.000 Yeah.

00:21:02.000 Yeah, but when you're stealing money from a bank, can't they trace the serial numbers?

00:21:08.000 Like, if you steal cash, like if you go, you know, this is a robbery, stick them up, and you point a gun at the teller, and they fill up the bag with currency, and you run out the door, don't they have, like, a trace on that money, like, where they can, if you spend that cash?

00:21:23.000 Not really.

00:21:23.000 No, not really.

00:21:24.000 And they can't because they have all kinds of...

00:21:27.000 I mean, yes, if they had a batch of sequentially numbered, clean money.

00:21:32.000 Yeah, but that's not how most banks work.

00:21:34.000 What the money they have on hand is the stuff that came deposited in the last week by various people.

00:21:40.000 Cash businesses like delis and grocery stores and things like that.

00:21:44.000 And they have no idea what the numbers on those bills are and they don't trace it.

00:21:48.000 It's simply considered part of the risk of business.

00:21:52.000 And...

00:21:52.000 What is this?

00:21:53.000 A boy...

00:21:53.000 They found D.B. Cooper's money before.

00:21:56.000 Oh, shit. 0.99

00:21:57.000 Based off a serial number. 1.00

00:21:57.000 Look at this. 1.00

00:21:59.000 Out of the left side of my ears.

00:22:00.000 I know, I know.

00:22:01.000 It's a bad cable.

00:22:02.000 I have to reset this machine.

00:22:03.000 Okay.

00:22:04.000 No sign of D.B. Cooper ever emerged.

00:22:06.000 Investigators doubt he survived and never been able to determine his true identity.

00:22:09.000 But a boy digging on the Columbia River Beach in 1980 found three bundles of weathered $20 bills.

00:22:16.000 Cooper's cash, according to the serial numbers. 1.00

00:22:18.000 That guy's dead as fuck. 1.00

00:22:20.000 They found his money. 1.00

00:22:22.000 Some of his money.

00:22:24.000 What, he left some of it?

00:22:25.000 He's being sneaky.

00:22:26.000 I'm going to pretend I'm dead.

00:22:28.000 I'm just going to leave some of this here.

00:22:29.000 No, they only found, like, a very small...

00:22:31.000 I don't think they recovered more than a tiny fraction of it.

00:22:34.000 Oh.

00:22:34.000 Yeah.

00:22:34.000 Okay.

00:22:35.000 But I don't know.

00:22:35.000 I mean, I don't remember the details.

00:22:36.000 Didn't he only steal, like, 200 grand, though?

00:22:38.000 I think it was only, like, $200,000 or something.

00:22:40.000 Yeah, and in those days, you could pay the national debt with that kind of money.

00:22:43.000 What year was it?

00:22:44.000 Like, 60s?

00:22:45.000 1971. 71?

00:22:47.000 That was a lot of money in those days.

00:22:48.000 That D.B. Cooper store is an interesting story.

00:22:52.000 People love a story like that where people don't get caught.

00:22:56.000 Yeah, the mystery of the unknown.

00:22:58.000 Well, the Mt.

00:22:59.000 Gox thing, the exchange, is kind of a mystery, too.

00:23:01.000 It's a hundred million dollar, many hundreds of millions of dollar mystery.

00:23:05.000 Inside story of Mt.

00:23:07.000 Gox, Bitcoin's $460 million disaster.

00:23:11.000 $460 million.

00:23:11.000 Look at that guy there, leading him around.

00:23:13.000 That's Mark Karpelis, who is now out on parole, I believe, or pending trial.

00:23:21.000 That guy's out?

00:23:23.000 $460 million and he's out?

00:23:25.000 Yeah, of course.

00:23:26.000 Well, is he responsible? 0.98

00:23:28.000 Just because he's retarded? 0.99

00:23:31.000 You know, that's one of the things we don't know, and maybe we'll never know how much of that responsibility, whether it was deliberate, whether it was an inside job, whether it was simply incompetence.

00:23:43.000 Certainly there was enormous amounts of incompetence.

00:23:45.000 Enormous.

00:23:46.000 That's clear.

00:23:46.000 And when you listen to him talk, I've heard him in speeches when he's discussing the issue, you're like, wait a minute.

00:23:53.000 That guy?

00:23:54.000 Yes, exactly.

00:23:56.000 But have you heard Bernie Madoff talk?

00:23:58.000 That's true, yeah.

00:23:59.000 Right?

00:23:59.000 I mean, the thing is, even the most...

00:24:01.000 And the interesting thing is that just up to the day before Bernie Madoff was indicted, he was the top trusted name on Wall Street.

00:24:10.000 He had the most stellar credit rating.

00:24:12.000 He was the head of the credit rating agency for those types of funds that he was rated under.

00:24:19.000 Yeah. 0.99

00:24:21.000 And the next day he's a crook. 0.74

00:24:22.000 So you can see these things happen throughout human history.

00:24:27.000 Changing the form of money you use doesn't change that.

00:24:31.000 But if you change the architecture of money and you make it less necessary and less useful to concentrate the money in the hands of third parties, that has an impact.

00:24:43.000 So that's one of the issues with something like Mt.

00:24:46.000 Gox or any banking system other than the Bitcoin system.

00:24:50.000 Yes.

00:24:51.000 I mean, the problem is the counterparty risk.

00:24:53.000 If you give your money to other people, the entire reason we have oversight in banking is because of the simple truth that if you give your money to other people, eventually they'll try to steal it.

00:25:04.000 That's it.

00:25:05.000 And the only reason they don't...

00:25:08.000 Someone in the bank is going to have a tremendous need, a tremendous gambling problem, an addiction, something, right?

00:25:16.000 Or just...

00:25:17.000 Have a lack of empathy and socialization and just be, you know, crooked.

00:25:24.000 But they don't even have to be crooked.

00:25:26.000 They can make a mistake in trading and try to cover it up with customer money.

00:25:30.000 They can have a debt.

00:25:32.000 Their parent may require an expensive surgery that they can't afford.

00:25:37.000 There's lots of reasons why people commit financial fraud.

00:25:40.000 And not all of it is because they're just greedy evil.

00:25:45.000 But the bottom line is that all of the oversight system we have in banking, which, by the way, fails again and again and again and again to protect regular people from these thefts, all of these systems we have exist for that one reason.

00:25:59.000 So the answer is not, build better systems to watch the people who hold your money.

00:26:04.000 The answer that Bitcoin gives is, don't let others hold your money.

00:26:09.000 Hold your own money.

00:26:10.000 And then you don't have this problem.

00:26:12.000 There was a recent investigative report about a firm in Georgia, I want to say it's Atlanta, that has a ridiculously high rate of success with investments, and they interviewed the guy who runs it and,

00:26:29.000 you know, his...

00:26:30.000 The reasons for why they're so wildly successful and they make so much more money than anybody else were very suspect.

00:26:37.000 And they're closing in on this guy like, what's going on over here?

00:26:40.000 And they think that not only is the Bernie Madoff model not just Bernie Madoff, but they think that it's common and that there's a lot of people that might be supplementing legitimate investments with a pyramid scheme.

00:26:55.000 And that it's been a standard operational model for a lot of these firms because they've been able to pull it off.

00:27:01.000 What we've seen again and again throughout history in the area of finance is that when there's a recession, when there's a drop in income and profitability for everyone, that event is actually really good for capitalism.

00:27:18.000 What it does is it washes out the frauds, it washes out the failures, it washes out the unprofitable businesses.

00:27:25.000 It's a great cleansing event.

00:27:28.000 Because the tide recedes and suddenly you see who's not wearing swimming trunks.

00:27:35.000 We knew there was something fishy going on under the water, but...

00:27:40.000 That's a good way of looking at it.

00:27:41.000 When that happens in Wall Street, all of those companies that were simply reinvesting the recent gains to pay the people who were withdrawing their money or the retirees they're supporting in their pension fund, etc., suddenly they can't do that anymore.

00:27:57.000 They're washed out of the business.

00:27:59.000 Badly performing businesses, unprofitables, all of these things get washed out.

00:28:05.000 We haven't been doing this in this country for the last three decades.

00:28:09.000 Instead, what happens is every time there is a recession, the Fed steps in, or the government steps in.

00:28:17.000 Basically, they pump water to raise the tide again, as much as possible.

00:28:22.000 That means that a lot of the crooks float from recession to recession without getting...

00:28:28.000 Worse, it encourages that kind of behavior.

00:28:32.000 And so you get all of these businesses whose only ability to make profits is when the interest rate is zero, and there's $20 billion a month being injected by the Fed, and their business model is take that and lend it to consumers for $29.99 APR,

00:28:50.000 right?

00:28:51.000 Or do payday loans, or subprime loans, or subprime auto, student loans, mortgages, etc., etc.

00:28:58.000 You need a cleansing event to wash out the fraud.

00:29:03.000 I like the example of a forest fire.

00:29:06.000 If you suppress all of the small fires, eventually you build up a lot of undergrowth in the forest.

00:29:13.000 A small fire doesn't kill the trees.

00:29:15.000 It just cleans out the undergrowth.

00:29:17.000 You keep putting out the fires, which we've seen since the 70s here in the States.

00:29:22.000 You let all of the undergrowth grow up.

00:29:24.000 Then when a fire comes through, it's not just a little forest fire.

00:29:28.000 It's a raging inferno.

00:29:29.000 Now you can't put it out, and it burns the trees and destroys the soil.

00:29:35.000 Sterilizes the top foot of soil.

00:29:36.000 We've seen this happen, right?

00:29:38.000 And so this is now happening in terms of...

00:29:42.000 Our economy, which is that all of this bubble creation doesn't get washed out in a recession.

00:29:51.000 More stimulus, more funding.

00:29:53.000 The Federal Reserve pumps more money into the economy.

00:29:55.000 Trillions of dollars since 2008. And all of the stimulus, where does it go?

00:30:00.000 It goes into inflating not one bubble.

00:30:03.000 We had real estate, but now we have real estate and subprime auto.

00:30:08.000 And student loans and bonds and stocks and currencies all inflating at the same time.

00:30:18.000 Is it possible to do a controlled burn for the economy?

00:30:21.000 That's what they're doing in some places where they want to deal with the issue that you're talking about, how they stop forest fires.

00:30:29.000 That's theoretically part of the mandate of the Federal Reserve, which most people don't realize is a private corporation owned by the banks and not a government agency.

00:30:37.000 Yeah, that's a tricky name.

00:30:38.000 The Federal Reserve, because it has nothing to do with that.

00:30:41.000 Yeah, yeah. 0.66

00:30:42.000 It's kind of gross.

00:30:44.000 Yeah, in fact, I can't name, say, my publishing company for the book, the Federal Publisher.

00:30:51.000 They won't allow me to put the word Federal in the name of my company, as they shouldn't, right?

00:30:58.000 But in order to create an organization like that, you need an act of Congress.

00:31:02.000 In fact, actually what you need is an act of Congress passed in the middle of the night on a recess, which is exactly how they passed the Federal Reserve Act in 1913. That was a long-ass time ago.

00:31:12.000 Yep. 0.96

00:31:13.000 It's so ridiculous to keep that name. 0.76

00:31:14.000 But there is federal ammunition, I should just say that.

00:31:17.000 You could buy bullets from a company called Federal Ammunition.

00:31:19.000 It has nothing to do with the federal government.

00:31:21.000 Interesting.

00:31:21.000 It's just a good company to buy bullets from.

00:31:25.000 It just seems like the controlled burn idea, how would you apply that to the economy?

00:31:34.000 I mean, if what we're talking about- You raise the interest rates.

00:31:37.000 You raise them.

00:31:38.000 Yep.

00:31:39.000 Which drains the swamp.

00:31:57.000 That's an extremely unpopular idea though, right?

00:31:59.000 So how do you get that across?

00:32:01.000 Well, it's an unpopular idea because it benefits savers instead of debtors, right?

00:32:10.000 So if you have savings, it's a great idea.

00:32:13.000 I remember a time when I could get a certificate of deposit for my savings in the bank, and I could get 3% a year.

00:32:19.000 3% a year, right?

00:32:21.000 I can't get 0.3% now.

00:32:25.000 Savers get wiped out.

00:32:26.000 If you're a retiree who's got all of their money in savings right now, the return you're getting on those savings isn't enough to cover your cost of living.

00:32:34.000 Your money basically is shrinking.

00:32:37.000 That's a tax on savers that benefits debtors, especially very large debtors like the federal government.

00:32:45.000 Yeah, it's such a complicated system that for the average person that's working all day and, you know, you get home, you have hobbies and family and things that you want to do, it's very difficult to get a grip on exactly how money works.

00:32:59.000 Yes, it is.

00:33:00.000 It's one of the things I found through my experiences doing these talks that I do.

00:33:04.000 And I talk about that in the book too.

00:33:07.000 The whole point of this particular book, The Internet of Money, is why Bitcoin?

00:33:11.000 And I talk about the philosophy behind money, the topics of money that most people don't understand.

00:33:18.000 And what's really astonishing is that...

00:33:22.000 Here I am and I'm talking about the greatest experiment in money started in 2008-2009 and this great experiment is completely unprecedented in the history of money and I'm not talking about Bitcoin I'm talking about 22 central banks simultaneously taking their interest rate to zero and pumping the largest amount of money ever created into the world economy trying to stop it from collapsing And that has created the largest bubble in history.

00:33:52.000 And the weird thing is that most people are not even aware that they're living in a time when we are doing this completely unprecedented, untested, no one knows where it goes, huge monetary experiments in which two billion people are hostage as part of it,

00:34:08.000 at least, right?

00:34:10.000 And nobody knows where this is going to go, but most economists, mainstream economists, say this doesn't end well.

00:34:18.000 What does that mean though?

00:34:20.000 And then we have the other little monetary experiment, which is, hey, money on the internet with a controlled issuance.

00:34:27.000 Only a certain amount of the money is created.

00:34:30.000 It's controlled by a mathematical formula.

00:34:32.000 You can't make more.

00:34:33.000 And as a result, it's got a stable supply.

00:34:37.000 It's sound money.

00:34:38.000 And it cannot be manipulated by governments or banks.

00:34:42.000 Well, it's so confusing for anyone as it is when you get into the issue of what is money and where is money coming from?

00:34:49.000 And how does the Federal Reserve, how does the government, how does anybody create more money?

00:34:54.000 How do you print more money?

00:34:55.000 And if you are printing more money, where is it coming from and what is it?

00:34:59.000 Debt.

00:35:00.000 Right, but what is it?

00:35:02.000 It used to be gold.

00:35:04.000 It used to be the gold standard.

00:35:06.000 It used to be, if you had a dollar, it was a dollar's worth of gold.

00:35:08.000 It was a note that was worth a dollar's worth of gold.

00:35:11.000 Yes.

00:35:11.000 That made sense.

00:35:13.000 And that stopped, well, it first stopped in 1936, I believe, Bretton Woods Agreement, and then it stopped completely in 1971 when Nixon closed the gold window.

00:35:23.000 He basically said, if anyone comes to your bank and gives you one silver dollar or one gold dollar and says, I want my silver, You say no.

00:35:32.000 And basically defaulted on the backing of US dollars by gold.

00:35:36.000 I met this really wacky guy a long time ago that was...

00:35:40.000 He was coming around the Comedy Store.

00:35:42.000 He was this really odd guy for a bunch of reasons.

00:35:47.000 But one of the things is he carried a gun everywhere he went and he believed in...

00:36:03.000 I think?

00:36:12.000 And he was trying to explain to me that this is legal and that, you know, they're supposed to accept these.

00:36:18.000 And it was very weird stuff.

00:36:20.000 It was very, very odd.

00:36:21.000 He was very annoying, too.

00:36:23.000 He was one of those guys that, like, talked to you.

00:36:25.000 He kept touching you.

00:36:26.000 He would talk to you and, like, hold you and, like, grab your arm and hold you and, like, touch you. 1.00

00:36:32.000 Alright, fucker. 1.00

00:36:33.000 You're a control freak. 1.00

00:36:35.000 At least it's like a weird control freak.

00:36:37.000 You know, if someone's saying something to you and they are holding on to you while they're saying that to you, unless you're in love with them, you know, like, it creates a very strange moment.

00:36:45.000 Yeah.

00:36:45.000 Like, why are you holding me?

00:36:47.000 Can I get loose here?

00:36:48.000 What if I have to run away real quick?

00:36:49.000 Do I have to break this grip?

00:36:51.000 But this guy used to carry these coins around with him. 1.00

00:36:54.000 Like in a fucking sack. 0.99

00:36:55.000 He likes to touch his money. 1.00

00:36:57.000 Coins of Elvis off commercials and shit like that? 0.99

00:36:59.000 No, man. 0.99

00:36:59.000 They were like some weird fucking coin with like an American Eagle on them and Liberty coins or something. 0.99

00:37:05.000 Yeah, they're not weird. 0.98

00:37:07.000 They're minted in the US, full silver coins. 0.99

00:37:09.000 Let me tell you right now, they're weird as fuck. 0.97

00:37:11.000 They're weird if you try to use them to buy a coffee. 0.99

00:37:14.000 Although a lot of people buy these and gold coins and small gold bars as investments.

00:37:20.000 They keep them in a safe, right?

00:37:22.000 And the idea is if there is a significant crash in the currency, then these have holding value, right?

00:37:32.000 It's perfectly sane to say if you have some money put aside in savings, don't put it all in stocks.

00:37:39.000 Maybe diversify, put a bit in precious metals, maybe put a bit in digital currencies, maybe put a bit in commodities and other things.

00:37:46.000 That's kind of reasonable investing.

00:37:49.000 Here's the thing.

00:37:50.000 A lot of the people who have these kinds of attitudes come from families and from cultures.

00:37:55.000 Where there has been a time in the past two generations where you leave in the middle of the night with all of your belongings in a pillowcase And with people with guns and dogs after you trying to murder you.

00:38:08.000 And this happens today in Syria, right?

00:38:13.000 It happens one generation ago to my parents' generation in Greece with the Nazis.

00:38:21.000 It happens to the Russian people.

00:38:24.000 It happens to people all over the world.

00:38:26.000 And when that happens...

00:38:28.000 And it's really close when it happens a generation before, right?

00:38:32.000 Your parents tell you the stories.

00:38:34.000 It's a different feeling.

00:38:35.000 It hasn't happened to most Americans in at least two or three generations.

00:38:41.000 But when that happens, what do you put in the pillowcase?

00:38:44.000 And I'll tell you something.

00:38:46.000 The pieces of paper are worthless.

00:38:49.000 When that happens and that's why some people do want to have physical coin.

00:38:53.000 Now one of the things we've noticed now is that digital currencies may start to serve a role.

00:39:01.000 The fact is that you can memorize 12 English words and carry your entire Bitcoin wallet in your head.

00:39:09.000 And if you do that...

00:39:11.000 12 English words?

00:39:13.000 What are those words?

00:39:14.000 Rebel Silcian? 1.00

00:39:15.000 Party on?

00:39:16.000 Yeah, so you can generate a Bitcoin wallet and then make a backup of it.

00:39:21.000 And for convenience, some of the inventors in the space developed a system where you can backup any Bitcoin wallet Even if it has millions and billions of transactions and assets in it, you can back it up to between 12 and 24 English words that are generated automatically by the program.

00:39:39.000 So it could be like that speech in Pulp Fiction where Samuel Jackson pulls a gun on that kid?

00:39:44.000 That could be your password.

00:39:46.000 Yes.

00:39:48.000 You don't pick the words, though.

00:39:50.000 Oh.

00:39:50.000 You don't pick the words.

00:39:51.000 You're going to get a series of words, and they're going to be, you know, asparagus, forest, attorney, whatever. 1.00

00:39:59.000 What if it's all, like, I like dicks, please shit on my head? 0.99

00:40:03.000 Yeah, no sentences and no words like that. 0.99

00:40:08.000 But think about the power of being able to transport an unlimited amount of money simply by memorizing 12 words that can't be confiscated from you when you're a refugee. 0.91

00:40:16.000 It's amazing.

00:40:17.000 I mean, look, the whole idea behind it is incredibly fascinating to me.

00:40:22.000 And I've been a fan of it since the time I met you.

00:40:25.000 And before that, I was reasonably interested in it.

00:40:28.000 But of course, having you illuminate it in such...

00:40:31.000 A great way really made it much more much more enticing much more interesting and I've always been curious from that point on as to where it's gonna go and I just don't I don't know Yeah.

00:41:06.000 And fragile.

00:41:07.000 And I think that's the thing that most people are missing.

00:41:10.000 It looks giant, imposing.

00:41:12.000 It's been there for a century.

00:41:15.000 That is not a sign of strength.

00:41:18.000 Did you find that...

00:41:20.000 Is there a company in Atlanta that has this massive return on your investment that's being investigated?

00:41:29.000 I was looking it up and I'm not sure if I found the right guy and I didn't want to call him out, so I'll look again.

00:41:33.000 But there's got to be a bunch of those people out there that are doing that, right?

00:41:38.000 Yeah, absolutely.

00:41:39.000 There's a lot of...

00:41:41.000 A system like that, which is very opaque, which most people don't understand, is the kind of system you want to corrupt, because that's where you can make the most money without anybody noticing.

00:41:52.000 And of course, you know, financial crime is not really prosecuted in this country.

00:41:57.000 In 2008, giant crisis, millions of homeowners kicked out of their homes, illegal foreclosures, robo-signing mills, blah, blah, blah, blah.

00:42:08.000 Bernie Madaf, who stole from the rich.

00:42:10.000 Pretty much everybody else scot-free.

00:42:14.000 It is pretty interesting.

00:42:15.000 It's almost like he was just a scapegoat. 0.99

00:42:17.000 Well, he was obviously a crook. 1.00

00:42:19.000 He was obviously a crook. 1.00

00:42:21.000 And a sociopath or something. 1.00

00:42:23.000 Surrounded by...

00:42:25.000 Hundreds and hundreds and hundreds of crooks in the same scale and giant investment banks that are just as corrupt and We don't see that right you you can get you can get Pulled over for a busted taillights and thrown in jail in plenty of the states in this country for six months for having an herb in your car and At the same time,

00:42:49.000 you can put a million people out of their homes through straight-up fraud with mountains of evidence and emails and things like that, and they're untouchable.

00:42:58.000 That system...

00:42:59.000 The problem isn't the fact that there is fraud.

00:43:03.000 The problem is that the system itself is fragile because of that.

00:43:07.000 And if it was just them going out of business when the fragile system has problems, when it has hiccups as it did in 2008, that's fine.

00:43:18.000 But it's not just them going out of business.

00:43:20.000 It's a generation of kids who leave college with nothing waiting for them but a job.

00:43:27.000 And coming into a generation where their parents could get by with one income in a household and now Three jobs each in a household of two, and you can't afford to buy a car,

00:43:42.000 let alone a house, right?

00:43:44.000 So we're part of the new sharing economy.

00:43:46.000 What is the sharing economy?

00:43:47.000 It's the I can't own anything because I can't afford anything economy.

00:43:51.000 So that whole generation is now suffering because of that fragility of the system, and the fragility hasn't gone away.

00:44:00.000 But I don't want to dwell too much on the negative, right?

00:44:06.000 The thing that I find positive and interesting about Bitcoin is that it serves a global society.

00:44:13.000 It is truly global, transnational money.

00:44:17.000 There's plenty of places in the world that have it worse than the US. There are some places that have it better financially.

00:44:22.000 But it really is quite an incredible concept to be able to have this money that can operate on a global basis.

00:44:30.000 With that, the opportunities to buy and sell and trade and invest and borrow internationally.

00:44:40.000 The fact that what we did with the fundraising here, to fundraise for those wells, We don't know if that was just people in the US donating.

00:44:51.000 It wasn't.

00:44:52.000 I can guarantee you there were people from all over the world donating.

00:44:56.000 That's almost impossible to do with traditional payment systems.

00:45:00.000 You could have then sent that money directly to where the wells were being built.

00:45:04.000 Again, anywhere in the world.

00:45:07.000 That's really exciting to me.

00:45:11.000 People are uncomfortable with Bitcoin because it represents changing one of the fundamental ancient technologies of civilization, money.

00:45:21.000 We've only changed that technology four or five times in the history of human civilization.

00:45:27.000 We've gone from bare-bones barter systems to systems of precious metals and other nice objects, feathers,

00:45:42.000 shells, etc., to exclusively precious metals, to precious metals stamped with the faces of kings.

00:45:49.000 At some point around the 15th century, you start seeing certificates of deposit for precious metals being exchanged, paper notes.

00:46:00.000 I have a deposit of gold there.

00:46:02.000 I'm not gonna move the gold from my deposit to your deposit I'll just give you the piece of paper that says you're now the owner and paper money is introduced and and then plastic in the 1950s diners club Travelers checks and the first credit cards and if you think any of these transitions were smooth None of them were smooth.

00:46:23.000 You go to someone who's been using precious metals for 10 generations and you say, hey, this piece of paper is money.

00:46:29.000 They're like, mm-mm.

00:46:31.000 Give me something shiny that I can bite.

00:46:35.000 That's money.

00:46:36.000 This paper, I don't know who you are.

00:46:39.000 Go away.

00:46:40.000 How long has that transitioned?

00:46:42.000 400 years.

00:46:45.000 Right?

00:46:45.000 Until broad acceptance of paper money.

00:46:47.000 400 years with huge resistance.

00:46:50.000 It took almost 40 years for credit cards to go mainstream.

00:46:54.000 With Bitcoin, we're gonna do it probably in less than 20. You think so?

00:46:59.000 I think so.

00:46:59.000 But it's been almost 10. It's been seven.

00:47:01.000 Seven?

00:47:02.000 Yeah, and it's accelerating very much.

00:47:04.000 I think in some countries you're going to see Either Bitcoin or a cryptocurrency, very similar or based on Bitcoin, be used commonly as a national currency.

00:47:15.000 We're not looking to displace national currencies.

00:47:18.000 We're looking to supplement them.

00:47:20.000 I think the idea being that people will get comfortable using multiple currencies, just like many places they are.

00:47:27.000 If you're operating between the border of Kenya and Tanzania, for example.

00:47:34.000 You're probably going to use four different currencies.

00:47:37.000 Kenyan money, Tanzania, US dollars and Euros.

00:47:40.000 Easily.

00:47:41.000 Possibly also South African Rand.

00:47:43.000 So you've got four or five currencies.

00:47:45.000 You can stop a four-year-old in the street and ask them what the exchange rate is and they'll tell you.

00:47:51.000 Because they trade for their parents in merchant stalls along the border.

00:47:56.000 And they have people coming with all kinds of different currencies.

00:47:59.000 It's not that difficult to assume that there's digital currencies in that future, either there or in a major modern metropolis where people are using Bitcoin to transact online, to buy things, virtual things, music,

00:48:14.000 video, things like that, where you want to make very, very small payments, where credit cards are not suitable.

00:48:21.000 And use Bitcoin as well as their normal currencies.

00:48:24.000 What is the progress that makes you so optimistic?

00:48:27.000 If you could point to any one thing or several things that make you optimistic about Bitcoin's future?

00:48:33.000 Well, I think watching it as a computer scientist, as a technologist, I look at this and I see innovation that is accelerating.

00:48:43.000 And I see much of the early vision opening up.

00:48:47.000 The possibility of doing things They're so far outside what we could do with traditional money that it often blows my mind.

00:48:58.000 For example, a technology that's being introduced into Bitcoin now is called payment channels.

00:49:04.000 What it allows you to do is to do a very high volume of very small transactions at a very rapid rate.

00:49:14.000 Let's say you're...

00:49:16.000 You want to watch a video, and you want to pay the owner of that video to send it to you.

00:49:22.000 How about paying by the second?

00:49:24.000 You set up an account, and you pay by every second of video.

00:49:30.000 Maybe every fifth of a second.

00:49:32.000 200 milliseconds of video at a time.

00:49:35.000 You're paying a fraction that is a thousandth of a penny.

00:49:40.000 And you keep watching video and paying a thousandth of a penny for every fifth of a second on this drip, metered basis.

00:49:47.000 Well, you're not doing it.

00:49:48.000 Your computer software is doing it.

00:49:51.000 Communicating with our computer software.

00:49:52.000 And now you can do this really incredible thing.

00:49:56.000 You can pay for content, what it's actually worth.

00:50:00.000 Whereas the threshold for payments on a credit card is two to three dollars.

00:50:03.000 Unless you're Apple and you're doing billions in which case you can take it down to 99 cents.

00:50:07.000 That's about the lowest you can go.

00:50:09.000 So meaning watching like something on YouTube or some similar video streaming device you would have to pay, service rather, you'd have to pay but you would pay a very miniscule amount.

00:50:20.000 Yes.

00:50:21.000 What are you talking about?

00:50:22.000 A couple of cents?

00:50:24.000 Like to watch a video?

00:50:24.000 No, I literally mean a thousandth, a five hundredth of a cent.

00:50:29.000 To watch a video.

00:50:30.000 Well, it depends how long the video is.

00:50:31.000 Right.

00:50:31.000 But you could, yeah, it could be a scale.

00:50:33.000 You could pay a penny.

00:50:34.000 Yeah.

00:50:35.000 You could pay a penny or half a penny or a tenth of a penny to watch a video.

00:50:39.000 But what, how would that work for the people that are providing content?

00:50:43.000 Like, Well, you see, the thing is, they operate at a scale.

00:50:46.000 I have 30,000 views on one of my videos, right?

00:50:52.000 So, YouTube pays me 30 bucks for that if I put ads in front.

00:50:57.000 If I was getting a penny from each of my customers, because these are hour-long videos, maybe I'm going to charge more, maybe I'm going to charge 25 cents.

00:51:08.000 You know, 30,000 views, 25 cents.

00:51:10.000 Somebody do the math, please.

00:51:12.000 I'm not good at doing improv math.

00:51:14.000 7 grand?

00:51:16.000 No, it's like 70 bucks.

00:51:18.000 70 dollars?

00:51:19.000 Uh, 30,000.

00:51:21.000 I don't know.

00:51:22.000 25 cents is a quarter of a dollar.

00:51:24.000 No, it's 7,000.

00:51:25.000 You're right.

00:51:26.000 Yeah. 0.96

00:51:27.000 It's a rare time where I'm writing a math fucking quick question like that. 0.90

00:51:31.000 So, maybe I'm going to charge less. 0.86

00:51:34.000 But in any case, I can beat what YouTube gives me in terms of ad revenue with each customer paying a fraction of a penny.

00:51:45.000 And here's the real question.

00:51:47.000 But I get this content for free right now, Andreas.

00:51:50.000 Why would I pay a fraction of a penny?

00:51:52.000 You don't get it for free.

00:51:54.000 You're paying.

00:51:55.000 No, you're paying in micro-violations of your privacy.

00:52:01.000 If the product costs less than $2 or $3...

00:52:04.000 Jamie's making a stink face.

00:52:06.000 I was agreeing with you, but that was a weird way to word it.

00:52:09.000 Go get another cord.

00:52:10.000 If the payment is worth less than $2 or $3...

00:52:15.000 Which means they can't collect it with a credit card.

00:52:18.000 What they're doing is they're selling your data to advertisers.

00:52:21.000 They're selling your identity, your demographics, your data to advertisers.

00:52:26.000 So you're having to give up things.

00:52:29.000 Right.

00:52:29.000 Give them up at that moment.

00:52:31.000 You've given them up previously when you registered for the thing and verified your email and then verified your age and your gender and provided all of this demographic information, which they then parcel up and give to the advertisers.

00:52:47.000 But you're still paying for the content.

00:52:49.000 You're paying by the fact that you can no longer Engage with the web without it being filtered to what they think you want and who they think you are, right?

00:53:01.000 So you're getting this highly filtered pigeon-holed view of content and they do that using your information to present what they think you would like to watch based on what they've sold to the advertisers.

00:53:13.000 You're no longer a customer.

00:53:15.000 You're the product.

00:53:16.000 The customer is the advertising agency.

00:53:19.000 Whereas if you sell content directly You re-establish the relationship of who is the creator and who is the customer, the consumer of this content, and you cut out the two middlemen.

00:53:31.000 Yeah, but you're cutting out advertising?

00:53:33.000 Good luck.

00:53:34.000 And also, the other thing is, people don't want to pay.

00:53:38.000 Even if it's a fraction of a penny, they just don't want to pay.

00:53:41.000 I disagree.

00:53:42.000 Do you think if people...

00:53:42.000 There's a lot of dopes that watch YouTube all day.

00:53:44.000 Like, they sit in front of their computer, they slack-jaw from morning to night, and they just watch YouTube videos.

00:53:50.000 If they just calculated those fractions of a penny all day, that would be dollars and dollars every day, which would mean hundreds of dollars every few months.

00:53:58.000 Well, you've got to think about this as a broader economy, because a lot of these people could also earn a bit by making a good comment, which actually ends up covering some of their cost of viewing.

00:54:12.000 So you've got to think about...

00:54:13.000 Whoa, you can earn from comments?

00:54:15.000 Yeah, that's where it gets really interesting.

00:54:16.000 Is this blockchain, all this that you're talking about?

00:54:18.000 No, you could do this with Bitcoin.

00:54:19.000 You could do this with blockchain.

00:54:21.000 What is the difference between blockchain and Bitcoin?

00:54:23.000 Sorry to hijack this.

00:54:24.000 No, no problem.

00:54:26.000 So, blockchain is one of the technologies used in Bitcoin.

00:54:29.000 It's a distributed database where all of the transactions are linked together using cryptographic proofs.

00:54:36.000 Bitcoin is one implementation of a blockchain.

00:54:39.000 And blockchain has now been used as a marketing term that means very little.

00:54:43.000 It's kind of like Web 2.0.

00:54:45.000 We don't really know what it is.

00:54:47.000 Right.

00:54:48.000 Do we have 3.0 yet?

00:54:49.000 Yeah, which is blockchain.

00:54:52.000 Oh, okay.

00:54:54.000 That's ironic, isn't it?

00:54:56.000 It is.

00:54:56.000 Yeah, and it's nebulous.

00:54:59.000 But the point is that you can do more than just currency.

00:55:04.000 Earlier we were talking a bit about trolling on Twitter and other platforms like that before we started the live broadcast.

00:55:11.000 Well, think about what a troll is doing.

00:55:13.000 What they're doing is they're stealing attention.

00:55:15.000 They're taking attention without contributing anything back to the community.

00:55:19.000 There's an interesting and fairly effective market solution to this, which is instead of assigning someone to do oversight and decide who is and who isn't a troll and censor them, you basically allow people to contribute Again,

00:55:35.000 a miniscule fraction for the comments they like.

00:55:39.000 They up arrow, like, thumbs up, but with each one of those likes and thumbs up, you attach a ten-thousandth of a penny with it.

00:55:46.000 You know, irrelevant.

00:55:48.000 Small, tiny money.

00:55:51.000 And then the people who write comments that are broadly appreciated, that add value to the community, earn a tiny bit of money.

00:55:58.000 Not really anything serious.

00:56:00.000 But if they try to comment, they have to spend a bit of that credit that they've earned, that reputation that they've earned.

00:56:06.000 And if they're not a troll, it all comes out equal in the wash.

00:56:11.000 They don't end up spending anything.

00:56:13.000 They don't end up earning anything.

00:56:14.000 It's just participation in the community.

00:56:15.000 But if they're a troll, it suddenly starts getting interesting because now it gets expensive to steal the attention of the community.

00:56:22.000 Because the less you have positive feedback, the more expensive it gets for you to post until eventually you're priced out.

00:56:29.000 But that also can kind of enforce or encourage confirmation bias. 0.98

00:56:35.000 Because if you go to a website that's just completely ridiculous, and it's a message board filled with morons, and you argue with them, it could cost you. 1.00

00:56:46.000 To argue with morons, because they're going to downvote you. 1.00

00:56:48.000 Yeah, yeah, it could. 1.00

00:56:50.000 But you just choose to not comment. 0.99

00:56:52.000 But you've got to think about this, again, across a broader economy, with a broader set of forums, in which, in some, you are valued experts, in others, you're the idiot who's arguing against the conventional wisdom. 1.00

00:57:04.000 Yeah. 0.98

00:57:04.000 And, you know, you can actually balance these things out. 0.98

00:57:08.000 Well, if you go to a flat-earth forum and argue with those people, it costs you money.

00:57:13.000 Yes, I had an argument with someone about chemtrails.

00:57:16.000 How'd that go?

00:57:17.000 It went very interestingly.

00:57:20.000 I wasn't expecting them to change their mind.

00:57:24.000 And they really wanted to hear my opinion.

00:57:27.000 And it was really interesting because we started the conversation and I said, okay, first, I'm a pilot.

00:57:34.000 I have a pilot's license.

00:57:36.000 I fly small planes.

00:57:38.000 That puts you at an extreme advantage in this conversation.

00:57:42.000 Well, you'd think...

00:57:44.000 You would think that.

00:57:46.000 And it's not appeal to authority.

00:57:49.000 It's saying, those nozzles that you're pointing at, I know what those are.

00:57:55.000 I have to walk around the plane before I take off and make sure all of them are correctly attached in the place they should be doing the thing they should be doing.

00:58:04.000 Otherwise, I don't survive the flight.

00:58:07.000 So you are part of the Chemtrail Sprayers Association of America.

00:58:12.000 Is that what you're saying?

00:58:12.000 Yes, so that was pretty much the conclusion we reached.

00:58:15.000 What are those nozzles? 0.76

00:58:17.000 Actually, the ones pointing forward are called pitot tubes, and they're used to measure the velocity of the aircraft through the air by a pressure differential.

00:58:28.000 And the ones pointing backwards are usually to break up vortices.

00:58:33.000 These are little swirly currents of airs that come off the wing that cause turbulence.

00:58:37.000 And you want to break those up so they don't swirl.

00:58:41.000 By the way, the trails are clouds.

00:58:45.000 How long have you been a shill?

00:58:46.000 The water vapor.

00:58:47.000 For the U.S. government.

00:58:47.000 Indeed.

00:58:48.000 Of course I'm a shill.

00:58:49.000 I'm a shill for all of the things I'm interested in.

00:58:52.000 Shut it off, Jamie.

00:58:53.000 Yeah, I've had these conversations with so many people.

00:58:55.000 It's so frustrating.

00:58:57.000 You can present mountains of evidence.

00:58:58.000 If someone really, really doesn't want to believe, they really will not...

00:59:04.000 Well, there's also, I mean, it's been going on forever.

00:59:09.000 I mean, if you go back to the 1940s, there's pictures, black and white photos from World War I, or World War II, rather, where you can see planes leaving behind these enormous contrails. 0.99

00:59:20.000 So it's a stupid argument. 0.99

00:59:21.000 I mean, it really is. 1.00

00:59:22.000 I mean, we've known for a long time that depending upon how much moisture is in the atmosphere, when planes pass through it, they will create clouds.

00:59:30.000 And it's just real simple.

00:59:32.000 It changes the temperature of the air and it creates clouds.

00:59:34.000 And it's usually on hazy days.

00:59:36.000 Not only that, but NASA has a website where you can go to it and it will accurately predict contrails.

00:59:43.000 Look at that.

00:59:44.000 Those are from propeller engines in the 1940s.

00:59:48.000 And what's happening is the propeller is compressing the air, and when it compresses the air, the change in pressure changes the dew point.

00:59:55.000 And the dew point is what determines whether the air moisture condenses into a visible vapor, into droplets that are clouds.

01:00:05.000 And so by pushing a thing through the air, you're pressing on the air.

01:00:11.000 And when you press on the air, that causes condensation to form, and that condensation...

01:00:16.000 Follows you in a circular cloud behind the plane.

01:00:19.000 Yeah.

01:00:19.000 And this happens at any plane, propeller plane.

01:00:22.000 I've done it in a four-seater Cessna that's smaller than a Fiat sedan, right?

01:00:28.000 And on a wet day, you can see little trails coming off the tips of the wings.

01:00:36.000 And I'm pretty sure I didn't put any spray nozzles there or flip the switch.

01:00:41.000 I didn't.

01:00:41.000 I saw the switch.

01:00:42.000 It said chemtrail them, and I didn't flip it.

01:00:45.000 I didn't.

01:00:46.000 You know how much liquid you would have to have in your plane in order to spray these enormous jets across the sky?

01:00:53.000 I mean, it would be insane.

01:00:55.000 It would be insane.

01:00:56.000 I mean, if the entire plane was filled up...

01:00:59.000 I mean, filled.

01:01:00.000 And you would have so much liquid that it would be visible from the ground, floating in space.

01:01:05.000 And then you talk to people...

01:01:06.000 You know, I did that television show on SyFy called Joe Rogan Questions Everything.

01:01:10.000 And one of the things that I questioned was chemtrail.

01:01:13.000 So I talked to a bunch of chemtrail...

01:01:15.000 Air quote experts and one of these guys had this study that he had done on water and This standing water study was proving that the spraying in the air was making aluminum It was putting aluminum in the water and the water supply and so he had this water tested and so I He showed me the test.

01:01:39.000 I'm going over the test.

01:01:40.000 I go.

01:01:40.000 Well, it says sludge and And he goes, well, it was water.

01:01:44.000 I gave them water.

01:01:45.000 I go, okay.

01:01:45.000 But it says sludge.

01:01:47.000 Like, the laboratory that you sent this stuff to says sludge.

01:01:51.000 And he was like, well, what is exactly sludge?

01:01:55.000 What's the definition?

01:01:55.000 I'm like, well, let's Google it.

01:01:57.000 So we Googled sludge.

01:01:58.000 And what sludge is is water mixed with dirt.

01:02:01.000 So I said, okay, so your water mixed with dirt contains aluminum.

01:02:06.000 Do you know how much aluminum there is in dirt?

01:02:10.000 Because it's the exact amount that they tested when they tested the water that you had with dirt.

01:02:17.000 So what happened is, your dirt tested positive for being dirt.

01:02:22.000 And you're using that as proof that the government is spraying the skies above everybody's head. 0.89

01:02:29.000 And you want to talk about like a piss-poor If it's a cost-ineffective shitbag program that does absolutely nothing, chemtrails would be it. 0.81

01:02:39.000 Because it's not doing anything. 0.89

01:02:41.000 Like, no one's getting sick.

01:02:42.000 There's no, like, rise in illnesses.

01:02:45.000 There's no, like, mind control going on.

01:02:47.000 There's nothing.

01:02:48.000 Nothing's happening.

01:02:48.000 There is no mind control going on.

01:02:50.000 There is no mind control going on.

01:02:53.000 There is no mind control going on. 1.00

01:02:54.000 I mean, it's the dumbest fucking thing. 0.99

01:02:56.000 Wouldn't it be easier to just put it in your municipal water supply? 1.00

01:02:59.000 Yeah, well, there's arguments that are doing that, too.

01:03:01.000 Well, of course, of course.

01:03:03.000 They move it with the planes to the municipal water supply.

01:03:07.000 Yes, they're spraying, it drops, it falls in the water supply, and then you drink it.

01:03:11.000 Something like that.

01:03:11.000 Anyway, yes.

01:03:12.000 They're spraying themselves, too, by the way, but they're immune to it because they're lizards.

01:03:16.000 You know, they're down here, too.

01:03:17.000 So you spray the sky indiscriminately.

01:03:19.000 I mean, I guarantee you some Illuminati's are getting sprayed.

01:03:22.000 I'm gonna get some hate mail for this, I know it.

01:03:24.000 Well, yeah, for sure.

01:03:25.000 We're getting it right now. 0.99

01:03:26.000 People are wiping the Cheetos off their greasy little fat fucking fingers right now and hammering at the keyboards, ready to call us shills. 1.00

01:03:33.000 It's the dumbest... 1.00

01:03:35.000 There's a guy who runs... 1.00

01:03:39.000 What is the website?

01:03:41.000 Metabunk?

01:03:42.000 Metabunk.com?

01:03:44.000 What is his name?

01:03:45.000 Mick?

01:03:46.000 Anyway, he calls it the training wheels for conspiracy theorists because it's above your head.

01:03:52.000 You're seeing it all the time.

01:03:54.000 You're like, what is going on up there?

01:03:55.000 Why does that look like a cloud?

01:03:57.000 Like, what is that?

01:03:58.000 And you start thinking, man, the government's doing something secretly.

01:04:02.000 Yes, Mick West.

01:04:03.000 Thank you.

01:04:04.000 Oh, Metabunk debunked.

01:04:05.000 Look, Mick West is a shill.

01:04:07.000 He's a shill. 0.99

01:04:08.000 Debunk, debunk, debunk.

01:04:09.000 Debunk, debunk, debunk.

01:04:11.000 He got death threats and hate mail when he came on that TV show with me.

01:04:15.000 Woo! 0.99

01:04:16.000 Yeah.

01:04:17.000 No, this is the guy.

01:04:18.000 Yeah.

01:04:18.000 This is...

01:04:19.000 How does this hedge fund manager make so much money?

01:04:21.000 Look at him.

01:04:22.000 Just look at him, sweating.

01:04:25.000 Look at his...

01:04:26.000 Look at this.

01:04:28.000 Annual returns of 13%, 24%, or even 91% since 2013. He doesn't tell anybody how it's done either.

01:04:35.000 He says it's just a computer program, and you have to pay for a decade up front, and if you leave, he gets half the principal.

01:04:40.000 Oh, gee, I wonder how it works. 1.00

01:04:43.000 Jesus fucking Christ, you crook. 1.00

01:04:45.000 Clients... 1.00

01:04:46.000 Hold on a second.

01:04:47.000 Clients aren't sure how it's done, and Joseph A. Meyer Jr., the man behind the obscure hedge fund, Al Arjun LP, is keeping his cards close.

01:04:57.000 Oh, Jesus Christ.

01:04:59.000 Invest most of his clients' money in safe treasury bonds. 0.98

01:05:03.000 Yeah, it's safe as fuck if you can't take your money out for ten years. 0.62

01:05:06.000 You know everybody in there can't take their money out for ten years. 0.98

01:05:08.000 That's insanity.

01:05:10.000 That's insane.

01:05:11.000 That kind of...

01:05:12.000 I mean, you don't know this guy, but look at that.

01:05:15.000 What's that?

01:05:16.000 What is that?

01:05:17.000 I don't know.

01:05:18.000 I mean...

01:05:18.000 If you had to guess.

01:05:21.000 If you had a guess, I'm going to give you two options.

01:05:24.000 Legit or scam.

01:05:26.000 Yes.

01:05:29.000 I don't know.

01:05:30.000 I would say it is most likely a Ponzi scheme.

01:05:33.000 Which is...

01:05:36.000 Something people throw around a lot.

01:05:39.000 But here's the interesting thing is, why do these schemes happen?

01:05:42.000 Look at his offer.

01:05:44.000 He offers an extraordinary guarantee.

01:05:47.000 With Arjun, you never lose money.

01:05:49.000 First of all, what kind of name is that?

01:05:50.000 I think that's actually part of the definition of an investment fraud is guaranteed returns.

01:05:56.000 So if you make a guarantee like that, it's usually one of the triggers that gets people investigated.

01:06:03.000 Well, he doesn't, but you never lose money.

01:06:06.000 This is a great investment.

01:06:07.000 It's a fantastic investment.

01:06:09.000 You should get involved.

01:06:09.000 Yeah, absolutely.

01:06:10.000 Maybe put some Bitcoin in that and just solidify it.

01:06:13.000 Yeah.

01:06:14.000 Okay, I'm gonna do the opposite.

01:06:16.000 If you invest your money in Bitcoin, you will lose money.

01:06:19.000 Whoa! 0.71

01:06:19.000 You will. 0.71

01:06:20.000 You will gain money.

01:06:22.000 You will lose money.

01:06:23.000 You will gain money.

01:06:23.000 You will lose...

01:06:24.000 We don't know.

01:06:25.000 That's...

01:06:25.000 No one is...

01:06:27.000 And I want to be really careful about this because many people go out and they push These things as investments.

01:06:36.000 And you can have a lot of volatility.

01:06:38.000 And sometimes when you have a lot of volatility, some people get lucky and they make a lot of money.

01:06:42.000 And some people are great at picking their moment and they make some money.

01:06:46.000 They bail out.

01:06:47.000 They make a ton of money.

01:06:48.000 Like right now, we're at $600.

01:06:49.000 If you bought it back when it was like, what was it?

01:06:51.000 The lowest point?

01:06:54.000 The lowest, lowest point?

01:06:55.000 Lowest, lowest.

01:06:56.000 About a thousandth of a dollar.

01:06:58.000 Oh! 0.60

01:07:00.000 Thousands of a dollar to two to six hundred you says now? 0.57

01:07:03.000 Yeah, you could yeah, so I mean If you put in like a fucking big pile of money, yes five grand and if you took it out the wrong moment You would lose all of it and this is why this isn't this isn't a speculative Instruments people can speculate in it I'm sorry to interrupt you,

01:07:23.000 but isn't the well kind of poisoned, the financial well, with speculative investing?

01:07:29.000 Like what people are doing, it seems like it shouldn't be legal. 0.69

01:07:33.000 And what's really fucked up about it is that they're doing it with algorithms and they're gambling.

01:07:39.000 And they're buying and selling within a fraction of a second. 0.95

01:07:44.000 And they're doing it to the point where...

01:07:46.000 There was a Radiolab podcast where they talked about how investment firms...

01:07:50.000 Did you see that one?

01:07:51.000 Or listen to that one?

01:07:52.000 I have heard that one, yeah.

01:07:53.000 Where investment firms moved their servers closer to the exchange so that they could get in their...

01:08:01.000 Their orders and their exchanges quicker.

01:08:04.000 Yes, Mahwah, New Jersey, where the data center is...

01:08:07.000 None of the stock trading happens in Manhattan.

01:08:09.000 It happens across the water in New Jersey.

01:08:12.000 There's a data center there where probably the largest amount of money moves ever.

01:08:17.000 And they have measured runs of fiber, meaning that in order to be fair, the fiber optic cable between the servers that do the trading and every one of the racks that are in the room are measured to be the equal length.

01:08:30.000 So that the speed of light limitation across a room of 100 feet does not advantage one customer over another.

01:08:38.000 Isn't that incredible?

01:08:40.000 We're talking microseconds, right?

01:08:43.000 Yeah, well people have been forced, because of this, to move their offices from the middle of the country, where they were, To right there, or rent space, where their servers are right there.

01:08:56.000 It's so bizarre, because a lot of this stuff is actually done with computers.

01:09:00.000 So these computers are operating on an algorithm, the algorithms recognize patterns, they start these exchanges, and they buy and sell, and buy and sell, and buy and sell, and do all of this within fractions of a second.

01:09:11.000 Yeah, over the last decade, most trading floors have seen 90% of their traders disappear.

01:09:16.000 So there are empty rooms.

01:09:17.000 You can see photos of it online where it shows before and after photos of very big banks like UBS and JPMorgan, Goldman Sachs, companies like that.

01:09:26.000 And you see their trading floor and it is empty because a lot of that has now moved to algorithmic trading.

01:09:33.000 So strange.

01:09:34.000 What a weird, weird way to invest and buy it.

01:09:37.000 Oh, thank you.

01:09:38.000 Look at that.

01:09:39.000 Oh my god, that's incredible.

01:09:40.000 That's the before and after.

01:09:41.000 And it's not because they're making less money, right?

01:09:43.000 That's incredible.

01:09:44.000 This is not a downturn.

01:09:45.000 During this time, they've actually made more money.

01:09:48.000 But there's something about those stock exchange videos that were in movies, you know, buy, buy, sell, sell, and they've got their hands up, and they're, I want two of these and five of these, and they're holding up pieces of paper.

01:09:59.000 That is so daunting.

01:10:01.000 All that stuff is so confusing. 0.90

01:10:03.000 To a person on the outside looking at that and trying to figure out what the fuck those people are doing, it seems exciting and chaotic and vibrant, but so confusing. 0.90

01:10:14.000 Right. 0.75

01:10:15.000 But that is the American economy right now, essentially.

01:10:19.000 It's based on confidence.

01:10:20.000 That's all that's happening.

01:10:22.000 Yeah.

01:10:23.000 So...

01:10:25.000 Should we talk about a slightly different topic?

01:10:28.000 Sure, whatever you want.

01:10:29.000 I want to tell you about some of the new developments that are happening in Bitcoin, which I find interesting.

01:10:34.000 And I'm not going to show, because this is not really about a company or a specific product, but I want to talk about one of the things that has me excited, which is what happens when you combine technology that looks very much like peer-to-peer Napster or BitTorrent.

01:10:54.000 with a merchant service like eBay and you create this hybrid technology which is a completely peer-to-peer store service called OpenBazaar This is basically a system where you run on your computer some software,

01:11:13.000 and you can open a store to deliver either physical goods or virtual goods, have them listed, have them found by others, and then all of the payments are done in Bitcoin.

01:11:27.000 By decentralizing the payment system, we can also decentralize the store system completely.

01:11:37.000 Completely borderless, multinational, open and peer-to-peer open-source software merchant system running on top of Bitcoin.

01:11:49.000 Which I just find fascinating.

01:11:52.000 The ability for anyone to open a store, especially in countries where you don't have eBay, right?

01:11:57.000 And be able to sell goods and services...

01:12:01.000 Anywhere in the world and receive payment in Bitcoin.

01:12:04.000 And is this operational right now?

01:12:06.000 Yep.

01:12:06.000 And I'm selling that book on OpenBazaar.

01:12:10.000 So how does one access OpenBazaar to the Luddite?

01:12:15.000 They run software...

01:12:18.000 No fees, no restrictions.

01:12:20.000 And they download the software, run it on their computer, fund the Bitcoin wallet, which sits on their computer.

01:12:26.000 They don't have to give their money to anyone.

01:12:28.000 There's no intermediaries.

01:12:30.000 And you buy directly from the store, and the person running the store is running the same software.

01:12:35.000 Well, let's see what some of the things that they have available.

01:12:37.000 We went to openbazaar.org.

01:12:39.000 I have to download the program, so I'm going to find another way to look at it.

01:12:42.000 Okay.

01:12:42.000 Yeah, if you go to DuoSearch, it's a search engine on top.

01:12:48.000 D-U-O-S-E-A-R dot C-H. So DuoSearch is...

01:12:55.000 So because this is an open protocol, and because all of the listings are in a peer-to-peer network, you can just go online, run a search engine, and create a search engine that searches the store.

01:13:06.000 Wow.

01:13:06.000 It's a third party that just has a search engine for searching the store.

01:13:10.000 So you can...

01:13:12.000 You can search online there and tell it what you're looking for and find something from t-shirts to...

01:13:19.000 Gary Johnson memorabilia.

01:13:20.000 Yes, you can find my book.

01:13:21.000 Okay, but that's not what I want to show.

01:13:23.000 Look, you can buy a flip phone.

01:13:25.000 Go back there.

01:13:26.000 You can get a phone for Ari.

01:13:27.000 What's going on there?

01:13:29.000 A lot of these dorks are going to flip phones now. 0.84

01:13:32.000 20 bucks. 0.86

01:13:32.000 20 bucks for a cryocera... 0.86

01:13:35.000 Oh, that's an LG. LG 44...

01:13:39.000 It's a goddamn bargain. 0.99

01:13:40.000 Have you ever thought about going flip phone? 1.00

01:13:43.000 Me?

01:13:44.000 Yeah.

01:13:44.000 No.

01:13:47.000 I'm in the opposite category.

01:13:48.000 I haven't actually received a phone call on my phone probably in three years.

01:13:52.000 Really?

01:13:53.000 I don't have a phone.

01:13:54.000 I have a portable computer, which also has a phone function on it that I keep switched off.

01:14:00.000 You keep it off?

01:14:01.000 Pretty much, yeah.

01:14:02.000 It doesn't ring, ever.

01:14:03.000 It doesn't ring, but people can text you.

01:14:06.000 But people text you.

01:14:08.000 Yes, but that actually gets redirected to my email.

01:14:11.000 So I don't do text.

01:14:12.000 I do it through either Hangouts or email.

01:14:14.000 So when I send you a text, it doesn't really go to you as a text?

01:14:17.000 No, it comes through to Google Hangouts.

01:14:20.000 You are one of the weirdest guys I've ever met.

01:14:21.000 I know. 0.83

01:14:22.000 I use it as a portable computer.

01:14:23.000 It's my communicator device.

01:14:25.000 The phone function is irrelevant to me.

01:14:28.000 Well, don't you ever want to talk to people?

01:14:29.000 Don't you go, hey man, how you doing?

01:14:32.000 I do video talks most of the time.

01:14:34.000 I know, I'm weird.

01:14:35.000 Okay.

01:14:36.000 When I talk to people, it's on some video.

01:14:37.000 Well, they're selling CBD oil.

01:14:39.000 Ooh.

01:14:40.000 CBD oil.

01:14:41.000 Organic, pure, raw, natural CBD. See?

01:14:43.000 You have to go there. 0.99

01:14:43.000 And that is where the goddamn government's going to come in and close this whole thing down. 0.99

01:14:47.000 What are you guys doing? 1.00

01:14:49.000 Mitigating pain, you pieces of shit. 1.00

01:14:51.000 We're going to come in with dogs and bite you. 1.00

01:14:55.000 Yeah, they're probably actually only selling that within a jurisdiction where it's legal.

01:15:02.000 Because they can sell it within that jurisdiction, from that jurisdiction, and it's perfectly legal to sell.

01:15:06.000 Colorado.

01:15:08.000 It's growing and getting in size. 0.95

01:15:10.000 It's funny, we're talking about how weird you are.

01:15:12.000 He showed up, Andreas has an Apple laptop, and I was like, how dare you walk in here with an Apple product?

01:15:18.000 I expect you to have some Linux box.

01:15:20.000 Of course, he's running Linux on his Apple computer.

01:15:25.000 Which is just hilarious.

01:15:26.000 Well, I'm also running Linux.

01:15:27.000 I'm running a bunch of things.

01:15:28.000 But yeah, it's a beautiful piece of hardware.

01:15:30.000 I like it.

01:15:31.000 That doesn't mean I like everything else the company does.

01:15:34.000 Well, you just don't like the restrictive aspects of it, right?

01:15:36.000 Uh-huh.

01:15:36.000 Yep.

01:15:37.000 Yeah, you're all Android, right?

01:15:38.000 Yes, I am on my side.

01:15:40.000 What are you using now?

01:15:42.000 I have a Nexus 5. Oh, that's okay.

01:15:45.000 So those are the newest and the latest greatest of the Google phones.

01:15:49.000 So it runs the pure Google or did you...

01:15:51.000 Yeah, it's no carrier branding.

01:15:53.000 I own the phone.

01:15:56.000 It's not a lease.

01:15:59.000 Well, the newest, latest and greatest Android phones are at the very least commensurate with the newest and latest and greatest iPhones.

01:16:08.000 I think the average person, the slight differences in hardware really are irrelevant at this point.

01:16:15.000 What does matter, however, is what you can and can't do with the software and how much of your life it controls and how much privacy you have with the software that you run on these devices.

01:16:27.000 As you may have noticed, I'm all about control and privacy.

01:16:31.000 Being able to control my money, control my devices, control my privacy...

01:16:37.000 I think that should be a principle that we should all celebrate.

01:16:41.000 It's fundamental freedom, and we're gradually losing it.

01:16:45.000 Well, I'm a big fan of options as well, so I'm happy that Android's come along and created options.

01:16:52.000 Right.

01:16:52.000 Because for a long time it was like, yeah, it's an option, but it sucks.

01:16:56.000 Right. 0.93

01:16:57.000 And now it's not just...

01:16:59.000 I mean, the Galaxy S7, have you ever messed with that?

01:17:02.000 The Samsung Galaxy S7? I've seen it, yeah.

01:17:05.000 It's a phenomenal phone.

01:17:06.000 Yeah.

01:17:06.000 I mean, it is easily as good as an iPhone.

01:17:08.000 It's an amazing phone.

01:17:09.000 And throw it into a Gear VR headset and you get fully immersive VR that is mind-blowing.

01:17:16.000 Yeah.

01:17:17.000 I actually have a little headset that I can put this phone into, into VR. That stuff's good, but it's not as good as the HTC Vive.

01:17:25.000 My friend Duncan, Duncan Trussell, has the Vive.

01:17:28.000 I also paid $30 for my headset.

01:17:30.000 Well, I guess you saved money.

01:17:32.000 And the Vive is, what, $1,200?

01:17:33.000 It's probably something like that.

01:17:35.000 Yeah.

01:17:36.000 Slight difference in price.

01:17:37.000 Yes, there's definitely a difference in price.

01:17:39.000 But it's very encouraging that not only is there a competitor to Apple, but it is actually equal now.

01:17:46.000 I think the more options people have like that, the better there are for everybody.

01:17:52.000 And it would be nice if there was a commensurate operating system, because there's not really.

01:17:57.000 Well, no, not really.

01:17:59.000 For geek heads like me, it's Linux, but essentially what happened is because Linux was so successful, it became Android.

01:18:07.000 Android...

01:18:08.000 It was built on top of Linux.

01:18:10.000 Essentially, at its very core, it is Linux.

01:18:13.000 Right, but why don't they make that kind of an operating system for a computer, for a laptop?

01:18:18.000 Because from what I can tell, really, laptops are gradually disappearing.

01:18:23.000 The laptop market is disappearing really, really fast.

01:18:26.000 Today, there were some announcements from Apple.

01:18:29.000 They're changing some of their operating system commitments, but they're making the...

01:18:34.000 iPhone 7?

01:18:35.000 Yeah, they're making the operating system more and more like iOS and gradually diminishing the importance of laptops because most people do pretty much everything they need to do on their smartphones nowadays.

01:18:49.000 It is...

01:18:50.000 It makes a difference.

01:18:52.000 It's nice that I can take my phone with me.

01:18:55.000 I have the larger iPhone that I use most of the time, and I also have a Samsung phone.

01:18:59.000 But the larger iPhone that I use most of the time, I can take with me, and I don't feel like I'm missing a laptop.

01:19:05.000 But if I need to work, if I need to get some stuff done, I want a laptop.

01:19:09.000 You want a full-size keyboard?

01:19:11.000 Yeah.

01:19:11.000 If I'm writing, especially, I want to be able to work.

01:19:15.000 I want to be able to also plug in headsets and listen to music while I'm working and also have power at the same time.

01:19:22.000 I'm a big fan of actual computers.

01:19:25.000 I like an actual computer at home with a detached keyboard and a real monitor.

01:19:30.000 I just think there's some benefits of those things to someone who writes in particular.

01:19:35.000 Yeah.

01:19:36.000 Do you think the great American novel is being written by thumbs right now?

01:19:41.000 Well, Stephen Wright was writing a whole book in tweets.

01:19:44.000 Yeah?

01:19:44.000 Yeah.

01:19:45.000 He was writing a novel in tweets.

01:19:47.000 Yeah, that got typed on a real keyboard.

01:19:49.000 Your book, Internet of Money, for people who are listening.

01:19:54.000 So, what else is exciting for you right now about Bitcoin?

01:19:59.000 So I think one of the things we've seen that has been quite interesting is that it has become easier and easier and easier to use and easier to get into Bitcoin and easier to use Bitcoin in your everyday life.

01:20:12.000 I remember a time when it was very very difficult to do all of those things.

01:20:17.000 Now, there are probably six or seven hundred exchanges around the world.

01:20:22.000 You talked about Mt.

01:20:24.000 Gox in Japan, the first Bitcoin exchange.

01:20:27.000 Well, really the first major Bitcoin exchange.

01:20:30.000 At the time, it was the exchange.

01:20:32.000 There were no others.

01:20:36.000 That was both a single point of failure and a weakness for Bitcoin as it proved.

01:20:41.000 But it also made it very difficult.

01:20:44.000 Now there are at least four or five major exchanges operating in the US. Very easy to access.

01:20:53.000 Access the system to connect it maybe to a bank account or a debit card, and if you want to convert dollars to Bitcoin or Bitcoin to dollars, I'm mostly on the other side.

01:21:04.000 I earn Bitcoin, and then I convert it into dollars to pay for things that I can't pay in Bitcoin.

01:21:10.000 Very easy to do that.

01:21:12.000 That's a major advancement.

01:21:13.000 That makes it much easier for people to get involved as much as they want.

01:21:19.000 They don't have to...

01:21:20.000 Earn everything they don't have to do.

01:21:22.000 There's a company called Bitwage, which allows you to take a percentage of your paycheck and have it sent to you in Bitcoin.

01:21:33.000 And it's very easy for an employer to set it up with any of their traditional payroll systems where they say, you can say just like, I'm going to put 2% of my account into a savings account and 98% into my checking account.

01:21:46.000 A lot of companies offer that.

01:21:47.000 Well, now you can say, and I also want to put 2% of my paycheck every month into this.

01:21:53.000 And to the employer, it looks like...

01:21:56.000 A routing number and account number, but on the other end it gets converted into Bitcoin and sent to your Bitcoin wallet.

01:22:02.000 So you can very easily incorporate this as part of your everyday life now.

01:22:08.000 Here's another thing.

01:22:08.000 I'm gonna try and show this in a way that doesn't cause me a big problem with my finances, but...

01:22:14.000 How would it cause you a big problem if someone sees something?

01:22:17.000 I'm not going to show the credit card number.

01:22:18.000 Oh, I see.

01:22:20.000 He's super crypto.

01:22:23.000 That is a Bitcoin credit card.

01:22:25.000 It's a Bitcoin debit card.

01:22:27.000 And basically it operates...

01:22:30.000 One of the exchanges in the U.S. offers this.

01:22:33.000 And there's actually two or three in the US that now offer this kind of service.

01:22:38.000 Now, what's behind this is a Bitcoin wallet.

01:22:41.000 So I don't have dollars in this.

01:22:43.000 I have Bitcoin in this.

01:22:45.000 But when I went to the coffee shop where I got this coffee earlier today...

01:22:50.000 I swipe this and...

01:22:53.000 Did they look at you sideways?

01:22:55.000 No.

01:22:55.000 I mean, they can't tell.

01:22:56.000 They see a Visa card.

01:22:58.000 It says Visa on the front.

01:22:59.000 Right.

01:22:59.000 It says debit Visa.

01:23:00.000 It doesn't say Bitcoin anywhere.

01:23:02.000 And so I make a payment and I get a little message on my phone that says, we've debited 0.0002 Bitcoin from your account for your purchase at the coffee shop.

01:23:14.000 So you could even tip them in Bitcoin.

01:23:16.000 Yes.

01:23:17.000 Now, here's where it gets interesting.

01:23:18.000 You know, I travel all around the world to do these talks and these conferences, so I'm constantly on the road.

01:23:23.000 And I've tried again and again with my bank account to tell them, listen, I travel.

01:23:27.000 When are you traveling, sir?

01:23:28.000 All the time.

01:23:30.000 Where are you traveling next?

01:23:31.000 Oh, 16 different countries in the next seven months.

01:23:35.000 Can you just put a note somewhere on my account that says, do not block his visa if it shows up somewhere we don't expect because this person travels.

01:23:43.000 American Express can do it.

01:23:44.000 My bank can't.

01:23:46.000 They simply can't.

01:23:47.000 They want me, 24 hours before I leave, to call them and give them a specific list of places that I'm going to be.

01:23:54.000 When I don't do that, when I try to use my card, it gets blocked until I come back to the U.S. and talk to them on the phone, answer a whole bunch of questions about whether it was really me who bought a pastry in Prague or something like that, and then I'll block it.

01:24:11.000 And what's happened repeatedly in the last few months is I'll go somewhere.

01:24:14.000 My card will get blocked because I forgot to tell them.

01:24:17.000 And then I'll pull out the Bitcoin card and it works everywhere without fail.

01:24:21.000 Because it's a prepaid, because it's a debit, everywhere without fail.

01:24:25.000 If I need to move more money into it, if I need to take money cash out of an ATM when I'm traveling, I can use this and it's so much easier.

01:24:32.000 I can simply transfer Bitcoin into that account.

01:24:36.000 And ten minutes later, I can withdraw that in cash in any currency in any country.

01:24:41.000 You say that with such glee.

01:24:43.000 It's convenience.

01:24:44.000 I know, but you're so excited about it too.

01:24:46.000 I am.

01:24:46.000 You can't hide it.

01:24:48.000 Yeah, I get excited about these things.

01:24:51.000 Because it makes it easy for me to use Bitcoin.

01:24:54.000 And yes, it's Visa, the evil empire, the banking system, etc.

01:24:59.000 But for many people who are going to experience Bitcoin as an additional currency in their life, one they use for online purchases, having the flexibility to use both, And making it easier and more transparent is how you get to mainstream adoption, especially in the developed world.

01:25:14.000 Now, how would someone get a hold of one of those cards?

01:25:16.000 How do you...

01:25:17.000 They just open an account with an exchange.

01:25:19.000 They have to do all of the Patriot Act, Bank Secrecy Act, Show Me ID... Proof of residence, et cetera, et cetera.

01:25:27.000 But in the end, they get a Visa card.

01:25:29.000 And what exchanges are available for getting Visa debit cards like that?

01:25:33.000 Can you name some?

01:25:35.000 Yeah, sure.

01:25:36.000 In the US, Coinbase, Coinbase.com, and BitPay, BitPay.com, both offer Visa debit cards.

01:25:45.000 In many countries around the world, Zappo, X-A-P-O, offer a debit card.

01:25:51.000 And there's a bunch of others.

01:25:53.000 There's a bunch of others.

01:25:54.000 Interesting.

01:25:55.000 That's interesting.

01:25:55.000 That's actually very promising, because that makes it practical.

01:25:58.000 Yes.

01:25:59.000 So that's one side.

01:26:00.000 Then a few other things that have happened in this space, certainly we have seen...

01:26:05.000 A lot of the banking industry realized that they could actually use this technology and not just fear it.

01:26:15.000 And I certainly bring this view of banks as giant caricature dinosaur evil things.

01:26:22.000 But within them, there's just normal people, right?

01:26:24.000 Swept up in the institutional inertia of this beast.

01:26:27.000 But there's people who...

01:26:30.000 Some of them get it.

01:26:31.000 They get that this is exciting and interesting and disruptive.

01:26:35.000 They want to use it within the banking system, and they're trying to work from within to get people interested in this.

01:26:42.000 We're seeing more and more of these organizations gradually try to find ways to adopt this technology, to streamline and to improve banking itself.

01:26:54.000 This is very similar to what we saw in the early 90s when the internet started happening, much more mainstream.

01:27:02.000 The phone companies at first fought it tooth and nail.

01:27:05.000 They fought the service providers, tried not to give them access to their lines, tried to kick them off and not give them DSL networks at the time.

01:27:14.000 They fought it at the FCC, they tried to control it, and eventually they all became ISPs.

01:27:23.000 So eventually jumped on the bandwagon and used it to improve their own infrastructure.

01:27:28.000 Now if you make a phone call on a regular traditional old phone, your phone call is going over the internet.

01:27:34.000 Almost 90% sure that it is.

01:27:37.000 So they wouldn't let the internet be on the phone network.

01:27:40.000 Now the entire phone network is on the internet.

01:27:42.000 It flipped.

01:27:43.000 That's called infrastructure inversion.

01:27:47.000 In the early days of the automobile, they wouldn't let automobiles in towns because they would disrupt the horse traffic, right?

01:27:55.000 And they had all kinds of weird laws, including in the UK they passed a law which required someone to run ahead of the car with a red flag called the Red Flag Act.

01:28:04.000 That did wonders for the British automobile industry, which was 20 years ahead at the time and then wasn't.

01:28:10.000 Wow.

01:28:12.000 That kind of reactionary behavior is very common in new technologies.

01:28:17.000 And then infrastructure inversion happened.

01:28:19.000 Eventually, the thing that was considered impossible, that roads would be paved to make automobile travel practical everywhere, happened.

01:28:28.000 And horses were quite happy to ride on paved roads, right?

01:28:32.000 Whereas for automobiles, it was almost impossible to use in a rotted, muddy road when you have...

01:28:40.000 Ford wheel drive vehicle trying to compete against a four hoof drive Animal.

01:28:47.000 Yeah?

01:28:48.000 And in those early days, they pointed at that and said, look, this thing is never going to work.

01:28:52.000 Automobiles are never going to happen because you don't have the infrastructure.

01:28:56.000 But if you have the need, infrastructure happens.

01:28:58.000 And we've seen that with the automobile.

01:29:01.000 We've seen that with electricity.

01:29:01.000 We've seen that with the internet.

01:29:03.000 We've seen that with all of these technologies.

01:29:05.000 And now we're going to see it again with money.

01:29:07.000 Because if you have this technology, building the banking institutions on top of this is easy.

01:29:15.000 But making Bitcoin or other cryptocurrencies, making the internet of money play by the rules of the old banking system is almost impossible.

01:29:23.000 Now, I like that expression, cryptocurrency.

01:29:28.000 Yeah.

01:29:28.000 And cryptocurrencies.

01:29:30.000 What is to stop banks from creating their own cryptocurrency?

01:29:34.000 And what is so wonderful about Bitcoin in...

01:29:42.000 That's a great question.

01:29:43.000 There's nothing to stop them.

01:29:45.000 In fact, they're already doing it.

01:29:46.000 They are?

01:29:48.000 Yes.

01:29:48.000 First of all, you've got to realize there's more than a thousand cryptocurrencies already.

01:29:52.000 A thousand?

01:29:53.000 Yes, more than a thousand cryptocurrencies.

01:29:54.000 What's the worst one?

01:29:55.000 What's the one we should avoid?

01:29:57.000 That list is almost 900 long. 0.99

01:29:59.000 Oh, 900 of them that suck. 0.99

01:30:01.000 Yeah, I mean, it's a long tail, right? 0.98

01:30:04.000 There's a couple that are interesting that offer different perspectives, but we're seeing a lot of private institutions interested in creating their own.

01:30:16.000 There's nothing stopping them from doing that, but they have to make a fundamental choice.

01:30:21.000 They can either create something that is controlled, contained, with specific outlines and borders, with controlled access, permissioned access, as they would call it.

01:30:33.000 By definition, it's not global.

01:30:35.000 It can't be global.

01:30:36.000 It has to be contained within a specific jurisdiction.

01:30:38.000 That's how they operate.

01:30:40.000 Both corporations and banks operate within specific jurisdictions.

01:30:45.000 They can do that.

01:30:48.000 But then, it has to be closed to innovation, closed to permission, and not global and transnational.

01:30:56.000 So what Bitcoin has, and not just Bitcoin, but any public, open cryptocurrency of a global nature like Bitcoin, is that you don't need to ask permission to join, you don't need to ask permission to innovate, you don't need to ask permission to create a new application.

01:31:12.000 And any application you write will instantaneously work anywhere in the world to anyone without permission.

01:31:19.000 That's the magic of Bitcoin.

01:31:21.000 And if you think about it, that's also the magic of the internet.

01:31:25.000 That's why the internet has been successful, because it allows anyone to join without permission, connect to any application or service they want, write an application and launch it globally without asking the phone company if they're allowed to do that.

01:31:37.000 There's no one to ask permission from.

01:31:42.000 To extend that analogy, they also tried to build private internets.

01:31:48.000 And they're still trying.

01:31:51.000 CompuServe, AOL, Prodigy, and the early closed networks that had their own content that you could connect to that weren't part of the intranet.

01:32:00.000 And then after that, corporate intranets.

01:32:02.000 Have you heard of the intranet term?

01:32:05.000 So when you have an internal network within a company that has stale content, crappy applications, and doesn't talk to the rest of the world, and is behind firewalls, that's an intranet!

01:32:17.000 Intra.

01:32:18.000 And they've built those.

01:32:20.000 And they sometimes serve very useful purposes, but they're not the internet.

01:32:25.000 And you can't scale them and make them secure and make them useful enough.

01:32:29.000 So essentially that would exactly be what would happen with money if local banks or national banks...

01:32:36.000 Yes, so to follow from the title, the internet of money is a very powerful expression because it really explains what this is.

01:32:45.000 This is the internet of money, which means it's open, borderless, global, and requires no permission to participate.

01:32:51.000 And people will try to create the intranet of money.

01:32:56.000 And it will have all of the limitations that the traditional banking system has.

01:33:03.000 Yes, they can come along and do that.

01:33:06.000 The nice thing is that people don't have to make a choice to use one or the other.

01:33:13.000 The only system of monopoly we have is that you have to use the national currency of the country you were born in and you live in, in order to pay the government of that country.

01:33:24.000 Other than that, you're free to use any currency you want anywhere.

01:33:28.000 Some of us are free, many of us are not.

01:33:30.000 And Bitcoin fits into that model.

01:33:32.000 It's the, if you want to use it for this particular use, use it.

01:33:37.000 Well, if you extrapolate where all this stuff is going, if you look at, I mean, if you're correct, and if over the next 20 years Bitcoin really does emerge as not just an acceptable currency worldwide, but it's right up there with everything else,

01:33:53.000 and maybe even preferred by a lot of people that are in the know or tech savvy or what have you, if that really does take place, It's gonna slowly but surely erode a lot of the major problems that we have with society today as far as this government having massive amounts of control over the economy and the banks being the ones who sort of enforce Yeah.

01:34:35.000 I mean, a lot of that is because of power.

01:34:38.000 A lot of that power is going to go away if something like cryptocurrencies emerge as being the predominant way that we use and exchange money.

01:34:50.000 That's the optimistic way to look at it.

01:34:53.000 The less optimistic way to look at it is that over the next decade, we are going to gradually move into a cashless digital money society.

01:35:04.000 We're kind of doing that now with Apple Pay.

01:35:06.000 We are doing that already.

01:35:08.000 And there are some countries that are completely cashless.

01:35:10.000 Really?

01:35:11.000 Where?

01:35:12.000 They're very close to completely cashless.

01:35:15.000 Ironically, one of the countries that has a very high degree of digital money is Kenya.

01:35:24.000 Kenya?

01:35:24.000 Because of M-Pesa, which is the mobile money they have, which has now taken over a significant percentage of the GDP. Really?

01:35:31.000 We're also seeing in Scandinavian countries now cash is less than, I think it's less than 8%.

01:35:37.000 Of the productive use of money.

01:35:40.000 So they're using credit cards, is what you're saying?

01:35:43.000 Credit, debit, mobile pay.

01:35:45.000 What is Kenya's M-Pay? 0.69

01:35:47.000 What is that?

01:35:48.000 M-Paysa is text message money.

01:35:50.000 Text message money.

01:35:52.000 Yeah, it's money you can send through SMS. It started off as basically people exchanging minutes, mobile minutes, that were transferable by SMS. And they started using it as currency, and then eventually it became officially a corresponding currency to the Kenyan Pesa.

01:36:07.000 And now it's the predominant currency?

01:36:10.000 It's, yeah, in most places, from what I understand, I haven't been to Kenya, but I've talked to a lot of Kenyans who tell me, yeah, we all use that and only that.

01:36:19.000 We don't use cash.

01:36:20.000 We don't use credit cards.

01:36:21.000 Wow.

01:36:22.000 It is kind of shocking, but here's the problem.

01:36:25.000 The problem is we are going to a digital currency society where cash will be gradually eradicated, either through non-use or...

01:36:34.000 A lot of countries and a lot of governments are trying to actively ban it.

01:36:40.000 So they're putting limits on how much you can use cash.

01:36:42.000 Say, you know, a thousand dollars, and if it's more than a thousand dollars, using cash is illegal.

01:36:49.000 When we go to the society, we have to really think about the implications.

01:36:53.000 Do we want a society in which our digital money is under complete surveillance and complete control, where if you go to the wrong protest, or if you support the wrong political campaign, or if you make a payment to the wrong person or receive money from the wrong person,

01:37:10.000 suddenly your money disappears.

01:37:12.000 It's no longer yours anymore.

01:37:13.000 It's frozen, it's seized, it's gone.

01:37:18.000 Someone has control of that.

01:37:20.000 Corporations, banks, governments, and in most cases there is no difference between corporation, bank, and government.

01:37:28.000 That's one scenario.

01:37:30.000 The other scenario is one in which individuals control their money.

01:37:34.000 It is digital money, but it's digital cash like Bitcoin, where you can pay an individual from one person to another, just like I can with cash today, without any other party getting involved.

01:37:45.000 What really strikes me as amazing is that we've gotten used to this idea so quickly, which is that we no longer pay people.

01:37:56.000 We no longer pay people directly.

01:37:59.000 The less we use cash, the more we pay people through a corporation, right?

01:38:05.000 So, from tipping your valet, to tipping your taxi driver, to tipping wherever, tipping is pretty much the last remaining part of our society where cash is used to pay from one person who is not an incorporated entity to another person who is not an incorporated entity.

01:38:24.000 Everything else you have to pay through a corporation, whether it's a bank, Whether it's Venmo, whether it's PayPal, whether it's any of those things.

01:38:33.000 And we've gradually gotten used to this environment where we can't pay another person unless there's a corporation involved.

01:38:41.000 And that's astonishing to me.

01:38:42.000 And as cash disappears, that then becomes a final fact.

01:38:47.000 That every single payment in your life will be from you to a corporation.

01:38:51.000 And that corporation takes a piece of that.

01:38:53.000 Every single thing.

01:38:54.000 And not just that.

01:38:55.000 It doesn't just take a piece.

01:38:57.000 It also controls and surveils and monitors your use.

01:39:00.000 And if you violate the terms and conditions, you are destitute.

01:39:06.000 The issue is not what we have today versus the digital currency of the future or bitcoin or whatever.

01:39:15.000 Both futures are digital currency and in both futures cash will no longer exist.

01:39:21.000 That is inevitable.

01:39:23.000 We are going down that road and now we have to choose.

01:39:27.000 Do we go to the digital cashless society of corporate control over money with the complete and total merging of corporate and state money where instead of having separation of state and money you have the merging of state and money and corporation and money where your money is branded money you have Chase dollars.

01:39:50.000 You have Goldman Sachs dollars.

01:39:53.000 You have Coca-Cola dollars, right?

01:39:55.000 You have money that is controlled by a corporation.

01:39:58.000 Or do we go down the other future, where we have money that is basically an internet protocol that is completely global, that any person can pay any person.

01:40:06.000 They meet in the streets without any corporations getting involved, just from me to you, digital cash.

01:40:12.000 And that's really the...

01:40:14.000 It's a less optimistic view because I'm fully aware of what the other future is and it's already playing out.

01:40:20.000 And it is, in my opinion, a very dangerous future.

01:40:24.000 This is so fascinating to me because it's so speculative.

01:40:27.000 And I love when you don't know what's going to happen and someone presents a bunch of different scenarios and the mind starts to wonder.

01:40:34.000 And then you also sort of plan for the future.

01:40:37.000 It becomes like something to...

01:40:41.000 It almost becomes something to look forward to or bet on.

01:40:44.000 Like, boy, I bet it's going to work like this.

01:40:47.000 Because we really don't know.

01:40:48.000 And what is the resistance that Bitcoin is facing from standard financial institutions that are in control right now?

01:40:57.000 Because there must be some form of resistance. 0.91

01:41:00.000 And is there any fuckery involved? 0.73

01:41:03.000 Like, is there any sabotaging of Bitcoin that has been suspected or proven? 0.57

01:41:10.000 I don't really know if there's any sabotaging going on.

01:41:15.000 Is there any suspected?

01:41:16.000 I'm not going to make any claims about that.

01:41:19.000 I'll do it.

01:41:19.000 Just wink at me.

01:41:20.000 Tell me what to say.

01:41:21.000 What I'm going to talk about is the progression of what happens when a giant, well-established financial institution that's been around for 50 years or 100 years is faced with a disruptor.

01:41:35.000 That they cannot tap down.

01:41:36.000 They cannot shut down, sue, buy, co-opt, eradicate, ban, legislate against.

01:41:44.000 What happens then is what I call the five stages of grief.

01:41:49.000 First, we start with denial.

01:41:53.000 We saw this play out exactly like this with the banking industry.

01:41:57.000 The first reaction was denial.

01:41:59.000 Bitcoin can't possibly work.

01:42:01.000 It's not real money.

01:42:02.000 It doesn't really exist.

01:42:04.000 It has no value.

01:42:05.000 It will never survive.

01:42:07.000 Fast forward five years.

01:42:09.000 You keep making that argument.

01:42:10.000 It becomes less and less credible because it's not real money, yet...

01:42:15.000 The big metal bird that brought me to Los Angeles today was paid with not money.

01:42:24.000 You can claim it's not money all day long and I've been living on it for three years, which kind of undermines the argument.

01:42:32.000 If I earn it and I spend it and people give me rides and big metal birds, it's money.

01:42:39.000 So that isn't working.

01:42:41.000 It's gonna go away on its own. 0.92

01:42:42.000 It's gonna die.

01:42:43.000 It's gonna lose all its value.

01:42:45.000 Every time it dumps in value, they cheer.

01:42:47.000 It's like, finally, Bitcoin is dead.

01:42:49.000 They write another obituary.

01:42:50.000 We publish them on bitcoinobituaries.com to make fun of them later.

01:42:54.000 It now has 110 obituaries, I think, published every time they say it will die, which is every two months.

01:43:00.000 Again, denial only works for a while.

01:43:03.000 Then they go into anger.

01:43:05.000 It's the money of terrorists, criminals, pedophiles, pornographers and the unsavory elements of this world. 0.99

01:43:11.000 Pedophiles. 0.96

01:43:13.000 That's always the the one they pull out, right?

01:43:15.000 Oh, they love to use that one.

01:43:17.000 Yeah.

01:43:17.000 If they find one, they can find one pedophile who uses Bitcoin.

01:43:21.000 Pedophile currency.

01:43:23.000 Yeah, exactly.

01:43:24.000 Dirty trick.

01:43:25.000 It is a bit of a, it is a bit of a dirty trick.

01:43:29.000 And they've tried to do this again and again and again.

01:43:33.000 They did it with the internet, right?

01:43:34.000 The internet, when it first came out, you heard this media narrative, it sells papers.

01:43:42.000 It didn't sell clicks at the time, because they were doing it about the internet, but it sells papers, which is the idea that the internet is a haven of crooks and fraudsters and terrorists and pedophiles and pornographers.

01:43:53.000 Great.

01:43:55.000 Yes, criminals use advanced technology.

01:43:57.000 Criminal use the most advanced technology they can get their hands on, because they're in a very highly competitive, high-margin, high-risk...

01:44:05.000 Business and of course they're going to take the criminals wear shoes to run away from bank heists criminals drive cars to get away from Bank robberies.

01:44:14.000 They use cell phones to coordinate with each other They drink water so as not to die of dehydration.

01:44:19.000 We're not going to ban all of those things, right?

01:44:22.000 And so you have that anger And they tried that for a while.

01:44:30.000 Every time they try that, you just turn around and say, oh, well, you know, actually, the biggest money launderers of drugs in the world are HSBC, the Hong Kong Shanghai Banking Consortium.

01:44:44.000 Inconvenient fact.

01:44:45.000 Is that really the biggest money launderers in the world?

01:44:48.000 Yes, they were caught money laundering $700 billion for the Sinaloa cartel over a period of 10 years, during which 19,000 people died in Mexico as a direct result of that.

01:45:00.000 And they got a fine, and no one went to jail.

01:45:04.000 So there are inconvenient facts like that.

01:45:07.000 Every time they say Bitcoin funds terrorism, you say...

01:45:11.000 I see them driving Toyotas and Humvees.

01:45:16.000 That's a bit incongruent.

01:45:18.000 They're driving around in the vehicles we left behind.

01:45:23.000 They got a lot of their funding from pallets of money that we left behind.

01:45:28.000 They're getting paid in dollars for oil that they're selling to our closest allies.

01:45:34.000 We shouldn't really mention Saudi Arabia.

01:45:37.000 So these are the inconvenient truths, right?

01:45:40.000 So you don't talk about these in polite company, or at least you do.

01:45:44.000 Like, that's what I said when I was invited to speak in front of the Senate in Canada, and they started asking me about terrorism, and I said, actually, mostly funded by our allies.

01:45:53.000 What did they say when you did that?

01:45:55.000 That was the end of that train of thought.

01:45:56.000 They stopped you?

01:45:58.000 No, no.

01:45:59.000 It was live.

01:46:00.000 Public TV. But what went down?

01:46:03.000 No, we moved on to talk about more realistic and interesting things and a much more positive view of what this thing is.

01:46:08.000 So they tried to discredit Bitcoin by attaching it to terrorism, and you informed them of the facts of where terrorists are actually funded from.

01:46:16.000 Yes, in a very public forum on live TV, which was very difficult to continue that line of conversation.

01:46:23.000 So that's...

01:46:25.000 Anger.

01:46:26.000 Is there resistance in Canada like there is in the United States?

01:46:28.000 No, actually, they've been very, very positive.

01:46:31.000 Very positive towards cryptocurrencies in general.

01:46:37.000 Interesting.

01:46:38.000 And there's a lot of development going on.

01:46:40.000 There isn't that much resistance in the United States really.

01:46:43.000 The banks are shutting down bank accounts in some cases.

01:46:46.000 We've seen that in the United Kingdom too.

01:46:49.000 What is the, right now, what's the percentage of people that are using Bitcoin on a regular basis?

01:46:56.000 It's very difficult to say.

01:46:59.000 Primarily because there's no clear association between one person and one Bitcoin address.

01:47:06.000 There is no account, right?

01:47:08.000 To use Bitcoin, all you have to do is download an application on your phone.

01:47:12.000 You don't have to register anything.

01:47:14.000 And so as a result, it's just like, how many IP addresses are in use?

01:47:18.000 Does that tell you anything about how many people are using the internet?

01:47:20.000 You can't really tell.

01:47:22.000 That's a good thing.

01:47:24.000 It's because of its nature.

01:47:26.000 I would say we're probably looking at about 2 to 4 million users.

01:47:31.000 That's very interesting.

01:47:33.000 Based on activity levels, based on logins to websites, some of the published results, it's very hard to say for sure exactly how many.

01:47:42.000 Mostly concentrated in the U.S. at the moment.

01:47:44.000 So it's plus or minus 1%.

01:47:46.000 Somewhere in the range of 1%.

01:47:50.000 Of the United States population.

01:47:51.000 Oh, no, this is globally.

01:47:52.000 Oh, globally.

01:47:53.000 I'm sorry.

01:47:54.000 Globally, maybe 2 to 4 million people.

01:47:56.000 But you said most of them are in the United States?

01:47:57.000 Most of them are in the United States.

01:47:59.000 Many of them are also in China.

01:48:00.000 So if there's 4 million, it is possible that's 1% of America?

01:48:04.000 Maybe.

01:48:05.000 Maybe less?

01:48:05.000 Yes.

01:48:06.000 Maybe half a percent?

01:48:07.000 Yeah, something like that.

01:48:08.000 That's interesting.

01:48:09.000 That's a lot.

01:48:10.000 But what is happening is it's doubling every year in terms of transaction volume, transaction amounts, number of everything is doubling every year.

01:48:18.000 And that's the kind of characteristic curve you see in disruptive technologies being adopted.

01:48:24.000 And that's a very promising curve.

01:48:25.000 What is the tipping point?

01:48:27.000 What needs to happen?

01:48:28.000 Is there anything that needs to happen for widespread adoption?

01:48:33.000 You've got to need it.

01:48:35.000 It's got to be ready and it's got to be easy to use and so right now It's not easy to use.

01:48:43.000 It's not ready for mouse adoption and In many parts of the developed world we don't really need it so in order to make it Something we need, either what we already have has to not work so well.

01:48:58.000 This is what's happening in the developing world, where you have banking crisis which drives people into a safe haven.

01:49:04.000 Or you invent applications that couldn't be done before.

01:49:08.000 A self-driving car that you pay by the mile automatically as you're driving along.

01:49:17.000 A micropayment industry for paying for content directly.

01:49:21.000 The Internet of Things, where devices can buy services online automatically.

01:49:28.000 Things that you can't do with credit cards.

01:49:30.000 I think if you start seeing applications like that emerge, and I'm very confident they're coming because we're seeing the innovation behind them, then you can make it something that is more needed even in the developed world.

01:49:43.000 So what do you think could be done to sort of further this along or to accelerate this?

01:49:50.000 Is there anything that can be done?

01:49:54.000 As I said, I think the third ingredient is making it easier for people to use, and that's a matter of innovation and maturity, and we're doing that.

01:50:00.000 I mean, that's already happening.

01:50:01.000 Other than that, it's just a matter of time.

01:50:03.000 We just have to wait and be patient until it happens.

01:50:05.000 What could be the steps that could be taken to make something like Bitcoin easier to use?

01:50:10.000 Well, there's a lot of things to do.

01:50:12.000 User interfaces, design, security, making backup easy, providing infrastructure services, exchanges, Your paycheck, your ATM services, your debit card services,

01:50:30.000 merchant services, things like that.

01:50:32.000 One of the examples I like to use is, I got on the internet in 1989. I sent my first emails shortly thereafter, about 1990. And in order to send my first email, I had to have Unix command line skills,

01:50:47.000 a login into a Unix mainframe with access to an internet connection at an academic institution.

01:50:54.000 And then I worked very hard for about two days to get the software working, and then eventually I sent an email, and then it took a couple of days to cross the internet.

01:51:05.000 Right?

01:51:06.000 And then almost exactly 20 years later, my mom went, swipe, And did the same thing on her iPad.

01:51:15.000 When you take two days of compiling software, writing complex Unix commands, sending an email, and it takes a while to get across the internet, and then 20 years later, that's down to swipe.

01:51:27.000 When we can take Bitcoin from...

01:51:29.000 I have to install a wallet, understand what it is, the QR code of the Bitcoin address, and how do I back it up and secure it, etc., and you turn that into swipe.

01:51:40.000 But isn't there a vast difference, though, between something like email, which is not just a disruptive technology, but a completely new innovation, the ability to send things wirelessly through the air or even wired, like electronic mail, did not exist.

01:51:55.000 But mail did.

01:51:57.000 I mean, it's just a change in the medium.

01:52:00.000 Essentially, you're doing correspondence.

01:52:02.000 But it's so much easier and more convenient, whereas using a credit card right now is fairly convenient for people.

01:52:09.000 Online banking, fairly convenient.

01:52:11.000 For people who have credit cards.

01:52:20.000 Yeah.

01:52:40.000 Into that gap you can fit anyone who has access to even a rudimentary feature phone or smartphone with a very basic level of data service.

01:52:52.000 The level at which you need to have technology for someone to adopt bitcoin and immediately become in themselves a global bank in the back pocket of their pants.

01:53:06.000 Compared to the level that you would need to reach before JPMorgan Chase built a branch within their area and offered them services after going through a very careful verification of their identity and blah blah blah blah blah.

01:53:21.000 That's never gonna happen.

01:53:23.000 So we're gonna get to leapfrogging effect.

01:53:26.000 Just like in many places in Africa, the first leapfrogging event we saw that was noted upon, and people wrote books about this, is the fact that in many places in Africa landlines were never deployed.

01:53:39.000 Because the difficulty to actually extend landlines was so high that when cellphones came along, at some point it became easier to just go directly to cellphones and bypass that entire generation of technology.

01:53:54.000 We're expecting, and I certainly see it as very possible, leapfrogging in economic inclusion.

01:54:00.000 The ability for people to join the internet of money long before they ever see a bank.

01:54:06.000 The end result is it's not just about banking the unbanked.

01:54:11.000 It's about debanking all of us.

01:54:13.000 Banking is an application.

01:54:14.000 You don't need an institution.

01:54:17.000 You just need an application.

01:54:19.000 And that transition is pretty powerful.

01:54:21.000 Is there any concern that people would take people's phones and hold them at gunpoint and just steal all their Bitcoin?

01:54:27.000 If that's all you own.

01:54:29.000 If you have a wallet and that wallet is all you own.

01:54:32.000 If you're on Bitcoin 20 years from now or whatever it is.

01:54:35.000 And your entire financial portfolio exists on your phone.

01:54:39.000 And someone can come along and force you at gunpoint to transfer that over to their phone, and then they take off in the night.

01:54:44.000 Yeah.

01:54:45.000 Well, first of all, already, today, you wouldn't keep your entire financial portfolio on your phone.

01:54:51.000 I certainly don't.

01:54:52.000 There are a number of very convenient and easy-to-use devices that allow you to store your Bitcoin securely on an offline device.

01:55:02.000 I have a couple in my bag.

01:55:04.000 I might show them to you later.

01:55:05.000 You might, but you might not.

01:55:08.000 I mean, if you want, I'll show them to you now.

01:55:09.000 But you might.

01:55:09.000 Okay, let's see.

01:55:11.000 The way you said it.

01:55:13.000 It's like, what is this?

01:55:15.000 It's like teasing me.

01:55:17.000 This is for people at home that are listening to this.

01:55:20.000 You're like...

01:55:22.000 I don't know what to make of this.

01:55:24.000 I don't...

01:55:25.000 I didn't want to get wrapped up in the headphone cord and...

01:55:30.000 Whoa, what is that?

01:55:32.000 So, this is a device that a lot of people in Bitcoin are familiar with.

01:55:36.000 Can we see that?

01:55:37.000 Yeah, so this is called a Bitcoin Trezor.

01:55:40.000 It looks like one of those things those old ladies press when they fall down. 1.00

01:55:43.000 Yes.

01:55:43.000 I've fallen and I can't get up.

01:55:48.000 Yes, it's a bit different.

01:55:49.000 So this is a USB device.

01:55:51.000 I can connect it to my computer.

01:55:53.000 Can I see it?

01:55:53.000 Yes, please.

01:55:54.000 Ooh, I have all your money now.

01:55:55.000 Does that feel weird?

01:55:56.000 You don't have all my money.

01:55:58.000 You have...

01:55:58.000 Bro, I got it.

01:55:59.000 So I have a backup of that device.

01:56:03.000 And this is where what I mentioned before is this 12 to 24-word backup that I have.

01:56:08.000 Which means that if I lose that device, I can recreate it on my backup device...

01:56:15.000 Which I'm carrying here already.

01:56:16.000 You have a second one.

01:56:17.000 I have a second one.

01:56:18.000 I actually have four of these.

01:56:19.000 Oh, wow.

01:56:20.000 And you can transfer that 24-word seed to any device you want, and it will immediately have access to all of your money.

01:56:26.000 Will it render this null?

01:56:28.000 Yes.

01:56:29.000 Ah.

01:56:29.000 Well, I mean, it won't render this one null, because it can coexist on all of them, but that one has a PIN number and a passphrase that you have to put in.

01:56:37.000 You would not be able to break into that device.

01:56:39.000 I could.

01:56:40.000 Yeah.

01:56:40.000 Maybe most people can't.

01:56:42.000 I'm good at that shit, dude. 1.00

01:56:44.000 Yeah. 1.00

01:56:44.000 Excellent. 1.00

01:56:46.000 But is it possible that someone could figure out a way to crack your 24-word code?

01:56:53.000 No.

01:56:53.000 I mean, no?

01:56:54.000 No.

01:56:54.000 You say that, man.

01:56:55.000 Don't say that online.

01:56:56.000 I say that... 1.00

01:56:57.000 The fucking hackers, man, they take that shit as a challenge. 1.00

01:57:00.000 Well... 1.00

01:57:00.000 Never say you can't hack me. 1.00

01:57:02.000 Here's the thing.

01:57:03.000 Bitcoin in itself is the world's largest bug bounty.

01:57:08.000 And this is something that most people haven't realized yet.

01:57:11.000 Bug bounty?

01:57:12.000 A bug bounty is when a manufacturer of a piece of software, for example, puts out a bounty and says, I'll give you $10,000 if you find a bug in my software that someone could exploit to break my software.

01:57:25.000 Nice.

01:57:25.000 Apple does bug bounties.

01:57:26.000 Google does bug bounties.

01:57:28.000 A lot of companies do these bug bounties.

01:57:30.000 It's very wise.

01:57:31.000 And it's great, because what they do is that way they find these.

01:57:34.000 They have professional hackers, really, who go in and break the software.

01:57:38.000 And it's legal.

01:57:39.000 They do it legally, so it's nice.

01:57:41.000 Yeah.

01:57:41.000 But another way to look at this is that Bitcoin has $10 to $12 billion of market capitalization behind it.

01:57:48.000 And if you can find a way to break, say, my 24-word seed...

01:57:53.000 You have access to my money.

01:57:54.000 So my money is the bounty that's sitting behind that bug.

01:57:58.000 And this means that Bitcoin is being tested and has been tested every single day of its seven-year existence with an ever-increasing jackpot at the end of it.

01:58:09.000 Which is why you see Bitcoin exchanges, when they don't do good security, they get hacked.

01:58:15.000 And whoever hacks them gets the bounty.

01:58:18.000 But Bitcoin itself, which has the biggest bounty of them all...

01:58:22.000 Remains secure.

01:58:23.000 And the reason it remains secure is not magical.

01:58:26.000 It's about spreading out the risk in such a way that there is no single point you can put your thumb on and attack.

01:58:33.000 So anyway, this little device.

01:58:36.000 These types of devices, there are ones that have a fingerprint scanner on them that are easy to use.

01:58:42.000 They come in various form factors.

01:58:44.000 We call these hardware wallets.

01:58:47.000 What's interesting about this is that the Bitcoin keys that control my Bitcoin are created on this device.

01:58:54.000 They remain on this device and this device signs transactions.

01:58:58.000 Which means I can take it and I can plug it into this laptop and if this laptop is compromised, I don't care.

01:59:05.000 It will not be able to compromise this.

01:59:08.000 I can take this and I can plug it in You know those desktops they have in hotel lobbies where you can print your boarding pass?

01:59:17.000 Okay, consider that the cesspool of computing.

01:59:22.000 You go there, that thing has 25 different viruses fighting for dominance, right?

01:59:27.000 The moment you plug in a device, they start tearing each other apart trying to get to your device.

01:59:33.000 I can plug this in there.

01:59:35.000 And make a Bitcoin transaction and not have to worry about that because the keys stay on here.

01:59:42.000 And no one can figure out a virus for one of those?

01:59:45.000 Well, that's the thing.

01:59:46.000 This is designed specifically to have a very, very narrow, well-defined interface.

01:59:51.000 So the only thing you can send to it is a Bitcoin transaction.

01:59:55.000 It then displays that Bitcoin transaction on the screen, and I can decide, is that who I actually wanted to pay?

02:00:01.000 Yes?

02:00:01.000 Confirm.

02:00:02.000 And then I've paid them and nobody else.

02:00:03.000 Is it impossible to integrate a virus into a Bitcoin transaction?

02:00:08.000 You can encode messages in certain software?

02:00:11.000 Yes.

02:00:11.000 Wasn't that what Al Qaeda was doing?

02:00:13.000 They were sending pictures inside the actual digital image, the ones and zeros, they were encoding actual information that you could read?

02:00:22.000 You can embed data.

02:00:24.000 So you can embed a virus?

02:00:24.000 The difference is you can't execute that data because this thing will not execute the data it receives in the transaction.

02:00:31.000 It simply runs a fingerprint function on it and signs it.

02:00:36.000 So, yes.

02:00:38.000 The point of this is that...

02:00:40.000 Jamie's incredulous.

02:00:41.000 Look at him.

02:00:42.000 Yeah.

02:00:43.000 It seems like you're setting a rule that's just going to be broken in a month.

02:00:47.000 Like, yeah, I can't do it today, but next week we figured it out and now we're...

02:00:52.000 Well, you know, I've had this device now for three years.

02:00:55.000 This is one of the first editions.

02:00:58.000 I keep my Bitcoin on there and I haven't had a problem yet.

02:01:05.000 I don't put my money on exchanges.

02:01:07.000 I keep it on devices like this, which is why I haven't had my money stolen.

02:01:12.000 The point of this is not to make it more secure, although it does.

02:01:16.000 It's to make security easy for someone who's not technical.

02:01:20.000 I could create a whole elaborate system as a security expert to secure my Bitcoin.

02:01:25.000 That was never a problem.

02:01:27.000 The point of this device is that you can secure your Bitcoin, my mom can secure her Bitcoin, without really knowing how, but just simply following how this works.

02:01:36.000 So it takes security.

02:01:38.000 Packages it in a device and simplifies it dramatically.

02:01:44.000 Here's the other question you asked me.

02:01:45.000 What happens if someone...

02:01:47.000 It points a gun at you, right?

02:01:49.000 We call that the $5 wrench solution.

02:01:52.000 It's like, shall we build a 10,000 super...

02:01:54.000 It's from a cartoon by Randall Monroe on XKCD. He says, shall we build a 10,000 supercomputer to crack his encryption?

02:02:03.000 No, here's a $5 wrench.

02:02:05.000 Just beat him until he tells you what the password is.

02:02:10.000 So...

02:02:12.000 Resistance to that is difficult, but one of the things that these devices have and other systems in Bitcoin have is duress passwords.

02:02:19.000 So you can put a small amount of Bitcoin in a specific account that opens with a different password.

02:02:25.000 You shouldn't have said that.

02:02:27.000 Now people know. 1.00

02:02:28.000 You motherfucker, you gave me the duress password. 1.00

02:02:31.000 Yeah, but they don't know which one is which. 1.00

02:02:34.000 And this is a well-known technique.

02:02:36.000 And we actually recommend using that as part of...

02:02:40.000 Listen, when I go to a country where security isn't as good, right?

02:02:46.000 I carry my cash...

02:02:49.000 In a money belt or leave it back at the hotel in a safe But I also carry a bundle of notes high-value notes like the equivalent of say $50 here in the United States in my front pocket And if somebody comes at me pulls out a knife and says give me your money I will hand them my phone It's a throwaway cash I have in my front pocket,

02:03:13.000 and I will walk away from that. 0.98

02:03:15.000 Listen to this podcast, they're going to know this motherfucker has a belt, and that's where all the real loot is. 0.99

02:03:19.000 There you go. 0.99

02:03:20.000 That's it.

02:03:21.000 So, I mean, this is something a lot of people do, right?

02:03:24.000 Yeah, I'm sure.

02:03:25.000 That's why robbers are aware of it.

02:03:28.000 Yeah, but for the most part, they'll take the cash that you hand them and run away.

02:03:31.000 Probably.

02:03:32.000 Yeah.

02:03:33.000 I can't help thinking, like, although these little devices that you're storing your Bitcoin on look elegant in 2016, I can't help thinking that they're just going to be like those Gordon Gekko giant brick phones when he was walking around the beach looking like a pimp from Wall Street.

02:03:47.000 Remember that movie?

02:03:48.000 They are that.

02:03:48.000 Like, he's holding that big-ass brick up to his face.

02:03:51.000 They are that.

02:03:52.000 People will be watching this show A decade from now.

02:03:56.000 Laughing at those things.

02:03:57.000 Laughing at those things.

02:03:58.000 And that's fine because guess what?

02:03:59.000 I just found a photo yesterday.

02:04:00.000 I was looking through some of my files.

02:04:02.000 I just found a photo of me.

02:04:03.000 Yes, thank you.

02:04:06.000 Look at him. 1.00

02:04:06.000 Like a pimp with that big stupid phone. 1.00

02:04:09.000 I found a photo of me from 1991 with a leather side carrier with one of those in that holster. 1.00

02:04:21.000 One of those brick phones.

02:04:23.000 I think it was second generation Motorola.

02:04:25.000 It was about this big.

02:04:26.000 That could like ruin your hip. 0.98

02:04:28.000 Like all that weight.

02:04:29.000 Look at that.

02:04:30.000 Yeah.

02:04:31.000 I was a sophomore in college.

02:04:35.000 It's like 1991. First cell phones have just come out.

02:04:39.000 I'm in computer science.

02:04:40.000 I'm a geek.

02:04:41.000 I love gadgets.

02:04:41.000 So I go buy one of the first cell phones.

02:04:43.000 It cost me an arm and a leg.

02:04:45.000 I paid like $5 a minute to make calls on it.

02:04:48.000 Those were like $2,000, right?

02:04:50.000 Weren't they?

02:04:50.000 I think I paid something like 750 pounds sterling at the time.

02:04:55.000 It was probably about $1,000.

02:04:56.000 For a thing like this whose battery lasted an hour.

02:05:00.000 LAUGHTER The batteries are so terrible.

02:05:04.000 I've got a fantastic photo of me with a leather holster with that strap to my side, and I look so cool.

02:05:10.000 Can I see it?

02:05:11.000 No, I don't have it with me.

02:05:12.000 What do you have, a physical photo somewhere?

02:05:14.000 I actually found the physical photo.

02:05:15.000 I haven't digitized them yet.

02:05:16.000 What?

02:05:17.000 When you do, please send it my way.

02:05:19.000 I will, absolutely.

02:05:20.000 It was straight up on Instagram. 0.84

02:05:21.000 I also have poofy hair in the front, and I'm wearing a ridiculous shirt. 0.98

02:05:28.000 You were pimping. 0.87

02:05:29.000 1991. You were straight, 1991, straight pimping.

02:05:32.000 Teenager, college, yeah.

02:05:33.000 I understand.

02:05:34.000 So, yeah, it will look ridiculous.

02:05:37.000 But the point that you make so well is that we did go from Gordon Gekko...

02:05:42.000 To the Nexus 5. Right?

02:05:44.000 And we're going to do that again in the Bitcoin technology.

02:05:49.000 This isn't something that's standing still.

02:05:51.000 The amount of innovation that's happening today, even though it's not mainstream yet, is staggering.

02:05:56.000 I work in this space full-time.

02:05:58.000 All I do is read about what is new in Bitcoin, and that's a full-time job.

02:06:02.000 How many people are there like you?

02:06:04.000 Are you the only one like this?

02:06:05.000 No, no.

02:06:06.000 Absolutely not.

02:06:07.000 The only one who's this integrated?

02:06:10.000 No, absolutely not.

02:06:11.000 There's a bunch of people like you?

02:06:13.000 Yeah, there's probably about a thousand people.

02:06:15.000 Like you?

02:06:16.000 Who are doing this, yeah.

02:06:18.000 Who are living off Bitcoin, constantly investigating Bitcoin, reading about it all the time, lecturing and writing books about Bitcoin.

02:06:25.000 Well, not so many lecturing and writing books about it, or speaking at conferences, but there's 100 to 200 who are doing that, too.

02:06:32.000 Yes.

02:06:33.000 100 to 200. Yeah.

02:06:35.000 Maybe you should talk to the other 199. Maybe they make better guests.

02:06:38.000 No, you're great.

02:06:39.000 How dare you?

02:06:42.000 No, I'm not claiming any special mantle here.

02:06:45.000 There's lots of people who are very much into it, as I am.

02:06:48.000 And it is a full-time job, because so much is happening.

02:06:51.000 So yes, you're right.

02:06:52.000 These devices will seem antiquated.

02:06:54.000 What this shows, however, is that when I came on the show the first time, I think, about three years ago, I didn't yet have one of these and I used to store my Bitcoin on what was called a paper wallet which is basically where I print out the digital keys With a convoluted process to make sure my computer that's doing the printing isn't compromised because then they're compromised.

02:07:20.000 And then send the money to those digital keys and then put those in a vault, in a safe deposit box, in a safe.

02:07:26.000 And that worked great.

02:07:27.000 For two years I kept a small amount of Bitcoin safe that way.

02:07:32.000 Problem is, it took a lot of expertise to execute on that and there were many ways to get it wrong.

02:07:40.000 So we've progressed.

02:07:43.000 The way you back this up is you write down 24 English words.

02:07:46.000 How hard is that?

02:07:47.000 That it shows to you one at a time on the screen, and it tells you to write them down.

02:07:52.000 It runs with software on a website which has really three or four buttons.

02:07:55.000 It's fairly easy to use.

02:07:56.000 The device itself has two buttons.

02:07:58.000 I could probably teach my mom how to use this.

02:08:02.000 She owns Bitcoin, so that would be useful.

02:08:05.000 She owns one of these.

02:08:08.000 But, it's still not ready.

02:08:10.000 She probably only uses it when you're around.

02:08:12.000 Yeah.

02:08:12.000 No, she doesn't use it at all.

02:08:13.000 Andreas is coming over. 0.99

02:08:15.000 Get out my little goofy fucking Bitcoin thing. 0.98

02:08:18.000 Let me pretend I use this. 0.99

02:08:20.000 She wouldn't humor me that way.

02:08:22.000 No, no.

02:08:24.000 So, um...

02:08:26.000 The bottom line is that five years from now, this is going to be even simpler.

02:08:30.000 And we keep iterating and maturing the technology.

02:08:34.000 It's not standing still.

02:08:35.000 And as it gets easier and easier, more people come on board.

02:08:38.000 Not only are they able to use Bitcoin and other cryptocurrencies, but they're able to do it with security in a way that doesn't require an enormous amount of expertise.

02:08:48.000 And this is the same.

02:08:50.000 This happened with the Internet.

02:08:52.000 I remember this fantastic show you see in 1994, and they've got Good Morning America.

02:08:56.000 And there's this clip from the outtakes they're doing before they're doing this big internet story.

02:09:02.000 And they have the hosts chatting amongst themselves before they start the story.

02:09:05.000 And one of them is saying, so what is the internet?

02:09:08.000 Is that the email?

02:09:10.000 No, no, no, no.

02:09:11.000 That's just email.

02:09:12.000 So the at sign is the internet?

02:09:14.000 No, no, no, no.

02:09:15.000 The at sign is email.

02:09:16.000 It's the www that's internet.com.

02:09:20.000 And.com, that's internet.

02:09:24.000 And it's going through this process where they're trying to grasp this alien and strange-seeming technology.

02:09:32.000 And all of the terminology is weird.

02:09:36.000 Let's play this.

02:09:38.000 As I was doing that little tease.

02:09:40.000 That little mark with the A and then the ring around it.

02:09:43.000 See, that's what I said.

02:09:46.000 Katie said she thought it was about.

02:09:49.000 But I'd never heard it said.

02:09:51.000 I'd always seen the mark, but never heard it said. 0.99

02:09:53.000 And then it sounded stupid when I said it. 0.99

02:09:55.000 Violence at NBC. See, there it is. 0.99

02:10:01.000 Violence at NBC, GECOM. I mean...

02:10:05.000 What Allison should know.

02:10:06.000 What is internet anyway?

02:10:09.000 Internet is that massive computer network.

02:10:12.000 The one that's becoming really big now.

02:10:15.000 What do you mean?

02:10:16.000 What do you write to it?

02:10:18.000 Like mail?

02:10:19.000 No, a lot of people use it and communicate.

02:10:21.000 I guess they can communicate with NBC writers and producers.

02:10:23.000 Allison, can you explain what internet is?

02:10:26.000 No, she can't say anything in ten seconds or less.

02:10:29.000 Allison will be in the studio shortly.

02:10:32.000 What does it mean?

02:10:32.000 It's a giant computer network made up of...

02:10:35.000 Started from...

02:10:36.000 Oh, I thought you were going to tell us what this was.

02:10:38.000 It's like a computer billboard.

02:10:39.000 It's not in it.

02:10:41.000 It's a computer billboard, but it's nationwide.

02:10:43.000 It's several universities and everything all joined together.

02:10:46.000 Right.

02:10:47.000 And others can access it.

02:10:48.000 Right.

02:10:48.000 And it's getting bigger and bigger all the time.

02:10:50.000 It came in really handy during the quake.

02:10:52.000 A lot of people, that's how they were communicating out to tell family and loved ones they were okay because all the phone lines were down.

02:10:57.000 I was telling Katie.

02:10:57.000 But you don't need a phone line to operate internet?

02:11:01.000 No.

02:11:05.000 That's awesome!

02:11:06.000 If you show this to a millennial right now, they're like, 94, that was just before the Civil War, right?

02:11:13.000 Yeah.

02:11:14.000 Is it 1894?

02:11:16.000 Slavery was legal. 0.98

02:11:17.000 Right.

02:11:17.000 People used to eat people back then.

02:11:19.000 It's like they can't even conceive of a time when the internet was just so completely impossible to understand.

02:11:26.000 I feel very fortunate that I grew up without it and got to experience it in my 20s.

02:11:31.000 Right.

02:11:31.000 Me too.

02:11:32.000 I experienced it emerge and I was like, whoa, what is this?

02:11:36.000 But it didn't really have the same sort of impact.

02:11:39.000 You know, on my life that it has on the lives of young people today that are growing up with it.

02:11:44.000 Right. 0.98

02:11:45.000 I mean, you look at kids today, you go to a store or go to the mall or something like that, you go to a restaurant, they're fucking glued to their phone. 0.99

02:11:52.000 They're glued. 0.98

02:11:53.000 Alright, yeah, here comes the prediction.

02:11:55.000 This generation, which is growing up right now, they never know a world without internet.

02:12:02.000 They also never know a world without Bitcoin.

02:12:04.000 How dare you?

02:12:06.000 Now, 15 to 18 years from now, none of them are gonna get the driver's license.

02:12:10.000 Huh?

02:12:11.000 Because there will be no self-driving cars.

02:12:13.000 I need one.

02:12:14.000 There will be no human driving cars. 1.00

02:12:16.000 I'll move to fucking Montana where I can drive my own goddamn car. 1.00

02:12:19.000 It will be a hobby. 1.00

02:12:20.000 A hobby?

02:12:21.000 It will be a hobby and you'll pay $3,000 a month in insurance to drive your own car.

02:12:26.000 How much?

02:12:28.000 I think you'll see that's where it's gonna go.

02:12:29.000 Come on.

02:12:30.000 I don't know.

02:12:31.000 Humans behind the wheel?

02:12:32.000 Grandpa, that sounds insane.

02:12:34.000 $3,000 a month?

02:12:36.000 Didn't...

02:12:36.000 So you're gonna be telling your grandchildren, yeah, we used to drive our own cars and say, that sounds crazy.

02:12:41.000 Did hundreds of thousands of people die every year?

02:12:43.000 Yeah.

02:12:45.000 Yeah, but we live like men. 0.84

02:12:47.000 Yes. 1.00

02:12:47.000 We didn't live sucking this digital dick like all these other pussies out there. 1.00

02:12:51.000 Yeah, there you go. 1.00

02:12:53.000 But think about it this way.

02:12:55.000 Imagine a child born today that never sees cash.

02:12:59.000 Yeah, I mean, it's entirely possible.

02:13:00.000 Unless they travel to another country where they're backwards and they still use paper as money, right? 1.00

02:13:06.000 It's entirely possible.

02:13:07.000 So what seems inconceivable to us then becomes the norm, then it becomes inconceivable to live without it, right?

02:13:15.000 And then you're trying to explain, you know, so what consensus algorithm did the Federal Reserve use?

02:13:22.000 Oh, it used the 12 white dudes decide for you. 0.77

02:13:26.000 Consensus algorithm.

02:13:31.000 What is a proof-of-work algorithm?

02:13:33.000 No, no, Johnny.

02:13:34.000 It was a proof-of-war algorithm backed by oil.

02:13:37.000 I am happy you exist.

02:13:40.000 I love having you on the show.

02:13:42.000 I love talking to you.

02:13:43.000 I love the fact that you have this beautiful vision of digital currency.

02:13:47.000 And if you're correct and it all pans out, I think it's going to be amazing.

02:13:52.000 I love that you know so much about it.

02:13:55.000 I love that you come on here and educate us.

02:13:57.000 I love that every time you come on...

02:13:59.000 There really does seem to be more and more progress.

02:14:02.000 It is tangible, it's trackable, it's interesting, and it's fascinating.

02:14:06.000 And I'm all in.

02:14:08.000 I'm on Team Bitcoin.

02:14:10.000 I'm 100% committed.

02:14:11.000 I really wanted it to happen.

02:14:13.000 But it's just one of those things, man.

02:14:15.000 It's just entirely fascinating.

02:14:17.000 And until it absolutely...

02:14:20.000 Is here, like credit cards, like the car, like all the other things that you were describing that really didn't exist before and now exist almost primarily.

02:14:30.000 I mean, I think it's absolutely amazing and fascinating.

02:14:38.000 In a lot of ways, it's a solution for the control that the federal government, the Federal Reserve, the banks, and even politicians have over us today.

02:14:50.000 That control is slowly being eroded by the internet.

02:14:53.000 Not even slowly, pretty rapidly being eroded by the internet.

02:14:57.000 Whatever control politicians used to have, it's not nearly as...

02:15:03.000 It's not nearly as easy to hide.

02:15:04.000 It's so much more transparent.

02:15:06.000 It's so much easier to protest today.

02:15:09.000 It's just a different realm.

02:15:10.000 We're living in a different world.

02:15:12.000 And that world is happening incredibly rapidly.

02:15:15.000 I got on in 1994. You were on before then when it was like this really fragile, strange internet.

02:15:21.000 I mean, you were in the early days.

02:15:24.000 I'm really fascinated to see what it's going to be like 20 years from now.

02:15:27.000 And I really do hope you're right.

02:15:29.000 Well, that's one of the beautiful things about this is...

02:15:34.000 I think if you've experienced things like this before, and we're very lucky to be part of a generation where we have...

02:15:41.000 advancements in technology happening at a rate where you don't just see one or two, but you see several in a lifetime, right?

02:15:50.000 That are pretty earth-shattering in their complexity and involvement.

02:15:55.000 We've seen...

02:15:56.000 The internet, we've seen social media, we've seen the miniaturization of computers.

02:16:00.000 Now we're going to see self-driving cars and digital currencies and all of these other things in a single lifetime.

02:16:07.000 Once you've seen two or three of these, you start capturing...

02:16:11.000 The pattern is, when it starts, everybody ignores it, makes fun of it, can't possibly see how change would happen.

02:16:24.000 This happened with the automobile, it happened with electricity, it happened with credit cards.

02:16:29.000 The first time credit cards were introduced, nobody thought they were going to work. 1.00

02:16:32.000 It was a crazy, stupid experiment. 1.00

02:16:34.000 Nobody wanted to take them. 1.00

02:16:36.000 This happens with every type of technology.

02:16:39.000 It's ridiculed at first, and then gradually it matures, it gets less cumbersome to use, and if it has some fundamental properties, Utility, something it's useful for, that's different, that's new, that you can do things with it you couldn't do before,

02:16:56.000 then at some point it hits an inflection point and it becomes mainstream very, very rapidly.

02:17:01.000 And then everybody is both surprised and at the same time claims ownership and say, well, I always thought that this Bitcoin thing would succeed.

02:17:10.000 Well, let's hope we're those people.

02:17:13.000 This book is available right now, The Internet of Money.

02:17:16.000 Where can people get it other than some funky exchange in some dark web corner of the world?

02:17:22.000 Where can people get this?

02:17:23.000 Yeah, so this is available on an obscure site called Amazon.com. 1.00

02:17:27.000 That fucking one. 0.99

02:17:28.000 Yes. 1.00

02:17:28.000 It's also available. 1.00

02:17:30.000 It's going to booksellers worldwide and Amazon worldwide.

02:17:34.000 It's available on Kindle, Kindle Unlimited, Kindle Lending Library.

02:17:38.000 If you buy the print, you get the Kindle version for free.

02:17:40.000 It's available for sale for Bitcoin.

02:17:43.000 And yeah, it's out now.

02:17:46.000 It doesn't have any pictures in it.

02:17:48.000 What's up with that?

02:17:48.000 It does not have any pictures in it.

02:17:52.000 I have a giveaway for five copies of the Kindle edition and five copies of the print edition.

02:17:58.000 People don't have to purchase anything.

02:18:00.000 They sign up, they follow me on Twitter, and they have a 1 in 100 chance of winning a free book.

02:18:05.000 So if they want to try that, Jamie here has the links.

02:18:09.000 Maybe they can go in the show notes and people can try and get that giveaway.

02:18:13.000 Is there something you could say over the air?

02:18:16.000 I'll put in the info on YouTube.

02:18:18.000 Info on YouTube.

02:18:19.000 Okay.

02:18:19.000 Alright, folks.

02:18:21.000 Thank you very much, Andreas.

02:18:22.000 It's always a pleasure to talk to you.

02:18:24.000 I hope you're right.

02:18:25.000 I really do.

02:18:26.000 And the Internet of Money is available right now?

02:18:29.000 Yes.

02:18:29.000 Right now.

02:18:30.000 I have copy number one, you fucks. 1.00

02:18:33.000 Right here, in my greasy hands. 0.99

02:18:35.000 Thank you, sir.

02:18:36.000 Always a pleasure.

02:18:37.000 Thanks for having me.

The Joe Rogan Experience - September 07, 2016

Joe Rogan Experience #844 - Andreas Antonopoulos

Episode Stats

Summary

Transcript