Andreas Antonopoulos – Currency Wars and Bitcoin’s Neutrality

thank you very much for getting into a lot of presentation today I guess we always have been privileged to have Ohio's over here's your third time done your third time we're very much into it with Scott state so without further ado or handrail between thank you thank you very much okay so this is my third coin scarm first time at imperial college and this is very impressive very very formal this August institution of higher learning it's a bit different when I do coin scrum by this point in the evening I've usually had two beers and there there is no beer here so you're going to get a slightly subdued version of the coin SCORM experience but that's okay I'm really very happy to be here back in London as some of you may know I graduated from UCL Imperial was our major rival University but props to Imperial too and thank you to all the sponsors and organizers for making this happen so what I wanted to talk about today is currency wars and bitcoins neutrality in the currency wars you've probably heard me say for a while now that I believe that some of the first applications we would see in Bitcoin would relate to foreign remittances and cross-border applications such as import export and trade because these are areas where there is a mount of friction in the traditional financial system and so systems like Bitcoin which are much more flexible could could provide opportunities especially opportunities for underprivileged people around the world specifically immigrants doing for remittances where they paying extravagant amounts to transmit through traditional channels like Western Union well it turns out I was wrong not the first time and not the last time it's going to happen again but let's see why it was wrong and this is where things get interesting Bitcoin doesn't exist in a vacuum bitcoin is a currency and the system of payment that exists in a highly competitive world of international finance that accounts for trillions of dollars of payments every here in 194 countries and so while we're off in our little corner designing great applications for Bitcoin something else happened which I think will change the trajectory of adoption of Bitcoin and we're going to see some very exciting times ahead what has happened over the last two years is we're now seeing a fully fledged currency war a global currency war that started in a small way just after the financial crisis in 2008 and it started gathering speed and that currency war is going to change the trajectory of Bitcoin so something that happened outside Bitcoin is going to change how Bitcoin deploys and this currency war has billions of people as hostages being tossed around like pawns in a political game in a geopolitical game so let me throw out some names of countries and you see if you can see something in common Greece Cyprus Spain Venezuela Argentina Brazil India Turkey Pakistan the Ukraine what do these countries have in common wonderful people and great food but but also currently embroiled in either domestic or international currency wars and the people in these countries are hostage in these currency wars if you've been paying attention in the news recently you will possibly know that just in the last five weeks in India with less than four hours notice the Prime Minister Modi announced that the two largest denominations of bills the 500 rupee and the thousand rupee would no longer be legal tender and would cease to be legal tender in four hours thus removing eighty eight percent of cash in circulation in country where more than 95% of all transactions happen in cash where more than 60% of the population has no bank account and where 25% of the population has no ID with which to open a bank account in my opinion this is going to be seen in the future as a natural disaster which wasn't natural entirely man-made a disaster a humanitarian disaster which is going to unfold over the next year and is going to have a very big impact in India the immediate effect is probably going to be a loss of about two to four percent of the GDP of the country but the ripple effect as we've seen entire industries in India crawl to a halt because employers are unable to pay employees because people are unable to buy food because they are unable to pay for medical care and healthcare because they're unable to transact in any way has been an absolute disaster in the short term and will be a continuing disaster in the long term make no mistake this is an experiment that is being engaged on with 15% of humanity as experimental subjects if this experiment is successful not by the terms of how these people fare but by the terms of whether the aims of government are achieved this experiment will be repeated it will be repeated in many countries just like the experiment of bail-ins in Cyprus was exported to other countries and these experiments are accelerating there is a global war on cash going on we have reached that point in history where it is within the grasp within the vision of world governments to once and for all eradicate cash cash being the ultimate peer-to-peer transparent private form of money that allows individuals to transact locally within a community is now being eradicated in favor of digital transactions on platforms that allow for surveillance control confiscation and negative interest rates and all of these things will follow very closely once cash is no longer part of the picture that's their hope hopefully you'll joining me in ruining that dream but there is another currency war going on and this is an international currency war this is where nation is pitted against nation using its flag money it's national currency as a trade war instruments in order to tip the trade balance and erode the national debt in countries that are suffering from enormous debt loads they have no hope of ever paying back and so if you are a government and you have debt measured in the billions or trillions of dollars how do you best pay back that debt by increasing standards of living and productivity until you can grow yourself out of it or by confiscating the savings of retirees in the middle class destroying a generation of workers and having them pay through a shadow tax the debt through inflation now we know which side countries are choosing because we're seeing it play out again and again and again of course that's not how they sell it they don't say our plan to exit the debt is to destroy pensioners and the middle class and create a system of shadow taxation and confiscation to bail out the banks and bail out the government debt what they say instead is this will eradicate black money this will permanently and corruption and we will win the war on crime and everybody says hey that sounds like a great idea let's go for it this promise is almost always wrapped in popular nationalism the great scourge of the emerging 21st century is the resurgence of populist nationalism fascism is rising and just like the politicians wrap themselves in the flag they also create these associations with their national flag money to wrap their money in the veil of nationalism to wrap the policies of wealth destruction and confiscation in the veil of nationalism if you disagree with the idea that pensioners should pay for the national debt and to bail out the banks if you disagree with the idea that a whole generation of young people should find themselves permanently unemployed or underemployed or working in McJob z– then you are a traitor to the nationalist ideal of solving crime and black money and corruption you probably have some corrupt money hidden don't you that's what motivates you and that is exactly the tone of discussion that is happening right now in places like Turkey where earn a gun announced that it was everybody's duty as a Turkish citizen to sell their dollars and buy lira and gold in order to prop up the nationalist pride where Modi in India use the same exact rationale to get everyone to suffer just a little bit because the people suffering the most have no voice they are invisible especially in India and the middle class that suffers a bit can wrap itself in the flag and go for these now nationalist ideals in these currency wars there is one force that stands neutral as a safe haven as an exit strategy as an opportunity for people to say you know what you go ahead I'm going to opt out and that's fit coin bitcoin is now standing at the precipice of becoming the safe haven assets for billions of people around the world who for the first time will have the opportunity to say I see where you're going I don't believe in your nationalist I see the exit sign I'm going to go this way and leave an opt-out from these experiments and that's going to dramatically change the trajectory of Bitcoin it's going to change the technology of Bitcoin it's going to change the economics of Bitcoin because foreign remittances is something a government can get behind yes let's make it easier for our poor immigrants abroad to send money to this country wall you know kind of competing with the banks to the degree we allow them through regulation but this new proposition that some people are going to get to opt out from these crazy nationalist experiments these currency wars is not going to be taken lightly bitcoin is going to represent in many of these countries a direct affront to sovereignty and when sovereigns see a direct challenge to their rule to their decisions as arbitrary capricious and unilateral they may be as unconcerned with the consent of the governed they may be they will apply the full force that they have in order to fight that threat they will fail but it's not going to be easy when these things start happening the equilibrium between currencies changes we've already started seeing this if you want to buy Bitcoin in India today be prepared to pay more than $1,000 the premium on Bitcoin has gone as high as a 22 percent premium on the price of Bitcoin in any other market it can't easily be arbitrage Dawei because there isn't a big enough flow of Bitcoin into the country to counterbalance the mad scramble to the exits that is happening the Chinese yuan has devalued six times so far in 2016 and every time the Chinese yuan devalued bitcoins value went up by about a billion dollars as millions of Chinese went for the exit every time these this happens a premium is paid but here's the good news guess who earns that premium those who are willing to build an exit sign and adorn a little muddy road that leads out of this crazy experiment get to earn a 20% premium the exchanges the local bitcoins traders the off chain offline underground traders those willing to take the risk to face the wrath of the sovereign earn a premium and that premium goes directly to funding infrastructure developments liquidity stealthiness decentralization evasion and all of the other things that might be necessary to allow normal people to get the hell out of the currency war these experiments are going to position government's directly in opposition to Bitcoin not because if something Bitcoin did but because of something the governments have done themselves when I was growing up I really enjoy computer games and one of my favorite computer games is a game called Sim City anybody played Sim City yeah lots of people have played Sim City other things about SimCity which was really cool is that you had full and unilateral control of the economy right and one of the dials you could tweak was the income tax it was always tempting right because you could just go in there and if your budget wasn't quite balancing and if things weren't quite going as well as you wanted in the game and you couldn't build as fast as you want it and you could take the income tax from five to six percent and you can take it from six to seven percent there were consequences of course and so one of the ways you learn those consequences is when you go too far so you go from five to fifteen percent and you fill your coffers because the income tax that's flying in and you watch your population go as everybody leaves your city right those kinds of games have a name they're called God games and the reason they're so satisfying to play is because they allow you to play God over a helpless population here's the other feature you could have in a game you can build your entire city and then you could launch a tornado an earthquake a massive fire a tsunami or even a Godzilla attack on your city and guess what none of those attacks were as successful at draining your city then raising the damn income tax these Krip discourage Wars our wars on populations they are a form of civil war from the government against its own people they destroy generations it's estimated that already in the first few days in India hundreds of people died because they couldn't access money for health treatments because they had to wait in line feeble disabled elderly in line for six hours in order to withdraw $30 if they owned that much hundreds of people died in the first few days thousands of people will die just in the next few weeks as this experiment unfolds and this repeats tens of thousands of people have died in Venezuela because of currency controls because of the destruction of the monetary system this is what happens when governments decide that the way to fight a trade war is to use the very fuel of the economy the thing that people depend on in order to build a future for themselves as a weapon against another government and that weapon backfires and kills their own people they will tell you that what we are doing by encouraging people to use bitcoin is we are traitors to our nations we are criminals we are thugs we are drug dealers and terrorists don't believe me look up what the Indian government has said just in the last two weeks about people who trade gold on the black market terrorists criminals thugs I'm just a coder I'm just a talker I'm not a terrorist I'm not a thug but if I have the opportunity to build an exit from this system then I will take that opportunity because I know who the real terrorists are and there is no greater form of terrorism than creating war against your own people by disrupting the very lifeblood of an economy deliberately when there is no crisis creating a natural disaster of enormous proportions simply to fight a currency war against another country who benefits in the end the banks they get bailed in their balance sheets in India are soaring their stock prices are soaring the government enormous increases in revenue and does that stop corruption no it's fueled an absolute orgy of corruption which even in India is unprecedented just like it fueled an orgy of corruption in Cyprus and in Greece Venezuela Argentina and the Ukraine when Modi announced that the currency would not be legal tender in four hours he also announced that the banks would be closed for two days in order to prevent people from initiating a run on the banks when the banks opened two days later miraculously a significant proportion of the cash reserves they had were only in the bad notes somehow some people had access to these vaults and swapped their money while the banks were closed in the billions of dollars somehow if you've studied economics one of the fascinating aspects of economics is Gresham's law and Gresham's law states that bad money chases out good money in economy when I read this when I was studying economics as a student just as a hobby I didn't really understand Gresham's law unfortunately I had never Sene Gresham's law in action we are watching Gresham's law play out exactly as predicted in action today when an Indian person goes to an ATM when a Venezuelan manages to get money when a Zimbabwean gets hold of US Dollars what do they do with that money do they spend it hell no they don't they bury it they put it under the mattress they hide it they save it because this is the good money and it immediately exits the economy and they take every shitty note they have every Zimbabwean hundred trillion dollar bonds notes every venezuelan bolivar that's worth and is carried in wheelbarrows and weighed by the pounds because nobody has time to count it every 500 rupee note that is now worthless and they go to their employees and their dependents and their home workers and cleaners and the people who aren't privileged in the economy and they say this is the only money i'm going to pay with you with here's six months of wages in advance take it or leave it or you're fired your choice and they offload the bad money on to the people who then have to go and spend six hours in line to exchange this and to be asked questions about where they got this money by the evil tax official the caricature of the government employee and guess what they pay the government employees in for their bribes the same bad money so the bad money is the only money that's circulating and the good money has completely disappeared from the economy we'll watching Gresham's law in action and when they get bitcoin they're going to huddle they're going to bury that so deep to make sure that they have the good money saved for their children for their future and they're going to trade the bad money for Bitcoin and nowadays all money is bad money that's where we're going cash is being eradicated around the world as a scourge but they can't win that game because cash is something that we can create electronic cash self sovereign cash verifiable cash digital cash peer-to-peer cash Bitcoin remember how this is going to change the trajectory of Bitcoin deployment over the next two years it's going to be in direct opposition to this currency war and it's going to be directly funded by the currency war the currency wars are going to fund investments in infrastructure and improvements in Bitcoin in order to gradually take that small exit sign and the little rutted road behind it and over the next few years as these currency wars escalate and escalate and escalate as they will as they must as they fail and try again we're going to widen that rutted Road until eventually we are offering from every economy an eight-lane autobahn highway exit the out of their currency war for everyone to be able to take it won't be available for everyone at first it will be only the richest the most educated the privileged the ones who have access to these applications but somewhere in there they're going to take some other people with them and gradually they're going to fund the infrastructure that is going to allow more and more people to exit from these economies so remember that as this happens we're going to be called criminals for offering an exit then we're going to be called criminals for pointing at the exit then we're going to be called criminals for simply pointing out the fact that the economy is on fire and that there is an exit and in each stage of escalation of the currency wars every act you take in opposition to the observable fact that the entire economy is on fire every chance you give people an opportunity to head for the exits you will be the criminal and before long they will rewrite history they will rewrite history to say that the reason the banks are failing and the reason the economy is on fire is because you provided an exit is because bitcoin exists they will say the Bitcoin started the fire and at that point you must all repeat and remember the slogan that will be important we are not criminals we're offering an exit for everybody we didn't start the fire it was always burning since the world was starting thank [Applause] okay all right so thank you so much let's take some questions from the audience you sir so the solution will not be centralized the IMF will not serve the needs of the people of these countries their mandate is to protect the banks their mandate is to protect the national governments you've got to understand these currency wars are not an accident the fact that they hurt people are not an accident you have to ask the question the eternal question the one that goes back to the ages of the Romans we've all know who benefits that is the question to ask this is not an accident someone benefits by the billions by the trillions this is a very deliberate very well orchestrated wealth transfer plan and it transfers wealth from savers pensioners and the young to the banks and the rich this is not an accident so if you expect someone to go oh my God we're hurting people let's stop doing that then remember that not hurting the people they want to no because every time you buy it it's going to go higher and the Bitcoin valuation is 12 billion today and that's because a million Chinese exited their economy just wait and see what's going to happen over the next two years yes they trying to be having stronger relations with regulators it doesn't matter no matter what word you use what you are doing is terrorism that is what they're going to say yes that's because the British economy is not being looted from the inside out yet you can say blockchain you can say whatever and as long as you're not making an impact nobody cares but once you met start making an impact when when half a percentage of the population exits through a cryptocurrency be it Bitcoin etherium Z cash whatever nobody pays attention when 5% of the population exits suddenly your monetary policy doesn't work anymore when 10% of the population exits you're heading for a revolution and and so the at that point it doesn't matter what you call it because they will certainly call it terrorism – barking responds imagine him a country with remittance excusable remittances if this is really up so I'll repeat the question as far as I'm so the first question was what about countries adopting cryptocurrency as a whole that's not going to happen for remittances I think it's really important to look at remittances because remittances don't go away in fact what happens which is really interesting is that as you have a premium on the price of Bitcoin in a country because of a lack of liquidity that creates an enormous incentive for arbitrage here's the new slogan for remittances if you want to transfer money from the UK to India right Western Union will charge you 5% Bitcoin will now charge you – 20% [Applause] because we take it for here at 770 box and you sell it in India for a thousand right and sure they can stop one person doing it they can stop two persons doing it they're going to have to search a lot of luggage in the airports because people are going to start moving 20 percent premium paper wallets and if they start finding paper wallets people will learn how to memorize 12 word seeds and they will walk across the border with remittances I think we as Western as most of us live in a privileged world where the amount of pain we are required to undertake in order to adopt Bitcoin is limited right in Venezuela we're at the moment being engaged in Bitcoin is an offense that will put you in jail for the rest of your life right and that's if you escape with your life and already two minors have been prosecuted in Venezuela they are now smuggling and minor s nines across the border they are setting up mining factories inside Venezuela using the free electricity to mine Bitcoin and then they are using the revenue from Bitcoin to buy food on Amazon Prime pantry have that food delivered to an adjacent country and then smuggled over the border so you think it's difficult to figure out how to enter an eight-letter password if it also requires a capital letter and a symbol and all of this Bitcoin wallet is too complicated and I don't know why you people bother because I have Visa Debit go talk to Venezuelan about what they'll go through [Applause] there's a second part and the second part sorry oh right they you don't take sides bitcoin is not taking a side in these currency wars bitcoin is going to be the Switzerland even when Switzerland is no longer the Switzerland and Bitcoin will be the only Switzerland left standing because eventually you will have gold confiscations Modi has been very careful to keep repeating we won't be confiscating Gold's yesterday they announced that they're going to be doing tax audits and in those tax audits anything over a certain amount of gold even if it's hanging off the neck of the married housewife in India who are by the way the holders of the majority of gold in the world they will be confiscating until applying a 60% tax by the way what that actually means is that they're going to be doing spot checks on random victims those random victims are then going to be required to pay an enormous bribe to those very corrupt officials so they can simply walk away and corruption marches on and gets bigger and bigger you do not take a political side in this fight this is not about being promoting or anti Modi it is not about being pro Aragon or auntie Erdogan it's it's about being completely neutral Bitcoin isn't taking a political stay stands here the only political stance is taking is individuals should control their own money yes companies are composed of individuals unlike what the US Supreme Court says they are not people so companies that are made of people will have to each of the people in that company will have to find ways to take advantage of whatever technology they can get their hands on and move out but it is going to be difficult for a lot of companies in this space and not just in this space right now if you're a gold dealer if you're selling jewelry if you're dealing with foreign exchange if you're selling electronic goods or anything that can be sold and bought for value and barter in any of these economies you are already in opposition to the great nationalist plan of our esteemed leaders right and so you're in trouble companies are going to have a very difficult time one of the things I foresee is that we're going to see much more developments in decentralized forms of trading peer-to-peer trading local bitcoins bits Square and other forms like that the things that can easily go underground when things get really ugly in a country just like we see in Venezuela there is no Venezuelan coin base it's all person-to-person hand to hand right or wheelbarrow to wheelbarrow well they're going to come after the exchanges but not too hard and this is one of the other fun lessons that we've seen play out in China which is why have they not shut down the exchanges after 60 valuations ask yourself that first of all they try to close their bank accounts in the exchanges started selling vouchers and grocery stores so instead of depositing money you'd buy a voucher redeem that voucher and buy Bitcoin at the exchange they just bypass the banking system completely and use the grocery stores as cash in mechanisms which you're going to see happening in lots of other countries but why have the exchange is not being shut down the simple answer is that they can somewhat monitor the exchanges if they shut them down all of that traffic is simply going to go to exchanges outside the country that will still sell vouchers in the grocery stores of the local economy because people will smuggle in the vouchers also whereas the politburo going to exchange their money they need an exchange to the whole beauty about this is that the first people who try to get out are the people who wrote the law yes poll just one question make it pick the best one yes okay um so first I was absolutely shocked surprised and dismayed that coinbase was rated or is about to be no I'm not I mean come on whoo trading on coin based didn't know that everything they were going to do is going to be surveilled by multiple people that's part of working with the regulated exchange means and I'm a coin based customer so yes absolutely I knew this was coming and I paid my taxes right interestingly enough this story isn't over yet what we've seen so far just for those who are interested in the legal insider stuff is that the the the initial judge who had to judge who had to rule on the petition by the government to serve coinbase with a subpoena accepted that petition that doesn't mean that it's done that means now the IRS gets to file a subpoena that subpoena then we'll immediately face a motion to quash by coinbase they've already said they're going to do that and then the negotiation begins right the IRS like any organizations that involved in litigation like this on a big scale right they set a negotiating position right there opening request was give us everything since the beginning of time right and coinbase is probably going to file a motion that says how about nothing and then they're going to say well how about just these customers for a few years and then coinbase going to go back and say how about nothing plus something and then after a few months of negotiations and motions and counter motions they go to arrive at a narrowed scope so it's not over and we're going to see some interesting legal activity in this particular space but honestly if you were trading on coinbase you shouldn't be on any custodial exchange on any system that has no your customer and anti anti money laundering rules you are playing in the system and quite honestly if you live in the Western democracy where the system is not currently trying to eat you um then maybe you should be playing in the system maybe that's okay some people don't have that luxury they don't even have a coin base right and it's I think it's a bit hypocritical to blame coin base for this if anybody was thinking that way as for Trump and his pronouncements etc I think this is a fantastic opportunity for many many Americans to learn some German and the first word I can teach them is Sheldon Florida right look it up a lot of Americans are going to be looking it up schadenfreude oh yes thank you I can't pronounce it very well the joy in watching somebody else's misfortune as their hopes and dreams of draining the Swamper crushed by the reality of a completely sold-out establishment politician yes for all the horrible stuff yes so the question was banks banks also do lending and what happens if in the great stampede to the exit liquidity is drained from the capital markets we're going to discover just how fragile the banks are and this is the message banks are going to get stress test and this time bitcoin is going to be the one doing the stress testing and they will fail they will fail and that's when they're going to say that we lit the fire right but that's not the truth the system was fragile before the system was over capitalized and overexerted and over leveraged before and if it is collapsing it's collapsing because of its own profligacy and crime and corruption and lending practices bitcoin is simply an exit you can't blame the exit for the fire right well there's there's lots of underlying causes but this is a natural outcome of currency wars if you try to inflate yourself out of a crisis if you don't clean up the detritus of the previous depression and you give everybody a big fat bonus and no one goes to jail next time around banks are going to collapse and eventually banks are going to collapse at such a scale that no one can bail them out but that has nothing to do with Bitcoin this was happening anywhere and and trust me I don't want Bitcoin to play this role I won't be going to develop cool new applications and do remittances and help people do micro payments and things like that but this is the role we're going to play and and Bitcoin is being thrust into this role because of the deprived of traditional finance and the currency wars being launched in those areas this is not a role we were going to choose and you don't have a choice as to whether people use Bitcoin to do these things they have enormous need and they're going to look for whatever helps them preserve the wealth of their of their children so yes banks are going to collapse because of this but that's not our fault but the economy does not collapse as a result the economy collapse long before the banks collapsed and to think that the banks are the economy is the fundamental mistake that's gotten us into this mess in the first place the economy continues only if you sock all the cash out and assume the premise that the banks and the corporations that leverage the banks are the economy do you start making these horrible mistakes yes I did I spent the last six months telling people all around the world including in Europe Trump will win nobody believed me yes right ha ha your question is sorry oh okay so I will agree with you and to repeat the question was this was this a failure of politics was this a failure of economics and should we looking at the root causes and looking to increase innovation through Bitcoin in fundamental financial services yes when you see institutions fail usually the when you see democratic institutions fail it's because economic institutions failed because markets failed so it's a cascading system the reason that the political system in the u.s.

Failed in 2016 is because the economy failed in 2008 is because the market started failing about a decade before that right due to glass-steagall and various other things that happened so market failure least economic failure leads to institutional failure and gradually all of the basic institutions of society started roading and yes we need to build and not just economic applications Bitcoin isn't just an economic system it's also system of markets and it is providing an honest truthful market solution the reason bitcoin is being used as the exit is because it offers the real market value for your currency exchange when the other markets have been artificially shut off right so if you have you know a body of water that's that's higher and a body of water that's lower it will flow downhill right if you put a dam in the way then you're creating an artificial restriction to hold that energy up but the energy hasn't gone away now bitcoin happens to be a hydroelectric plant sitting on that dam and the more higher up the water is the higher the volume the higher the disparity in energy the more it's going to churn that engine why because it offers an honest path to the point of less energy and so it's going to do that it's a market mechanism and we're going to need also governance mechanisms right to fix some of the other institutions that have broken institutions of politics and society but right now you know you've got to realize we're facing a crisis not here in Britain but there's a global currency crisis going on in this car currency crisis is hitting nation after nation after nation if you're in crisis you don't look to you know how to improve the Opera House right you take out the garbage yes yes [Music] so what comes after the exit yes we will have a network of decentralized systems yes we're going to have to invent new solutions to scalability problems yes we're going to have to scale up Bitcoin in order to support the growth but guess where all the funding is coming from like if you want to figure out like we have a couple of exchanges in two of these distressed countries how do they exchange funds well they can't do them on the Bitcoin blockchain directly because of fees because of capacity constraints if only they have the Lightning network set up between them well today they don't have the funds to invest in a Lightning Network but if they're making 20% premium on the Bitcoin they're selling suddenly they have the funding to set up a Lightning Network to get more liquidity into their market so one of the things that happens because of the exit is that it finances the solutions the scalability and growth and applications and as people move into the Bitcoin economy you know then other smart people are going to say well they are there they have Bitcoin let's give them things to buy let's give them things to invest in let's build applications that they can use so that funds the development of the ecosystem as a whole think of this as a giant Kickstarter or Dow all right in the half welcome the answer to those questions is very different right so what percentage of your wealth should be tied up in Bitcoin a percentage our percentage that is equivalent to your understanding of how the technology works and and your ability to absorb the risk that it entails which for most people is a very small percentage right – so to your first question what percentage of my wealth is invested in Bitcoin I think using the word wealth is a bit of an exaggeration I did this job for free for two years I'm still digging out of the hole of debt that that created so not really wealth but you know my small savings that I do have are invested in Bitcoin 100% I actually have a tiny bit of debts and dollars still that I'm still trying to pay off so it's more than 100 percent in Bitcoin now and I'd like to emphasize that again that is not a recommendation to invest because I haven't invested my money in Bitcoin I've invested my career my intellectual capacity my creative energy my passion my work in Bitcoin the money is the least of the investment I've made in Bitcoin and I could lose all of it and I still have everything else you should invest as little as you're willing to lose in a very volatile market now that may mean just maybe five quid a week I think a very good piece of advice that I've I've heard for many people is you know dedicate two cups of Starbucks a week or one pack of cigarettes less take something from a negative habit and and put that into Bitcoin just to play around see how it works experience it use some wallets do some transactions and see if you like it absolutely it depends on which country you're in and I'm talking primarily for this audience if you're in Argentina any percentage of wealth you put in Bitcoin did far better than the Argentinian money every single year in the last seven years even in the worst years of Bitcoin somehow Argentina's economy was doing worse and that applies to Zimbabwe and Venezuela and a whole bunch of other places like if your country is experiencing 45% inflation right then crazy Bitcoin volatility seems like a rock solid investment two more questions all right let's see who hasn't asked the question all right right in the middle there back behind you sorry and I'll come to you next let's make a little quick in some places yes unlikely but yes [Music] that's a great question so do I think mining will be controlled in China or do I think that Bitcoin might be banned in China I think it's extremely unlikely that Bitcoin would be banned in China just because every time there's a little blip in the yuan we see like half a billion to a billion dollars flow into Bitcoin doesn't mean that that's a large amount of money for China that is nothing so it's it's like you're you're facing the imminent collapse of a giant hydroelectric dam you're not going to worry about that tiny little trickle of water in the in the side there that's Bitcoin you're worrying about the gushing out flows of the things they are worried about right now they're passing a new law to restrict mergers and acquisitions I heard this fantastic story of how Chinese companies are exiting money from the economy even though there are currency controls and it came about from a conversation with a lawyer and this lawyer had been asked by a Chinese company to participate in an arbitration hearing and and they said we want to deal do this arbitration hearing and would you be interested in participating and representing us and they said yes okay who's the other party well the other party doesn't exist yet we would like you to create the other party we would like you to represent both us in the other party and then we would like to lose an arbitration award of about five million dollars to the other party which you will set up in another country when the need is great it becomes the mother of innovation right legal innovation corruption innovation etc etc so they have much bigger problems now you will see bans in some countries in the countries where they can arbitrarily effect to ban they can't actually effect that ban in practice on the ground because where the rule of law is weak enough that a single individual without any recourse due process or opposition can simply ban a form of money then their ability to actually enforce that is probably pretty weak too because everybody below them is going to be taking bribes so just imagine for example the ruling comes down and says you can do mining in China and that goes down to the districts and then from the district's to the smaller districts to the cities to the towns and eventually some official sends a fax to the local village where they're running a mining farm off the hydro that represents 40 to 50 percent of the municipal income of the entire area and they say you must close your mind what does the local officials say we have no minds here or guys close it down for 24 hours we have eradicated money in China long live China and our great leader turn it back on right so the ability to actually effect change on the ground is mediated by layers and layers of layers of bureaucracy which are more and more corrupt than the bigger the crisis the easier they are to corrupt you got to realize that these mines are quite decentralized within China and in many cases they provide a stream of corrupt money throughout every official in the area the police works for them the mayor works for them the electricity company works for them now the electricity companies are the ones who are mining good luck shutting that down so again it's not as easy to do and the higher the need the more corruption and invention you're going to have one more one more who's got a really good one okay fine but we now have very high expectations oh no no no I'm not going to take political positions on spiritual issues I see this I see this as a very for very efficient form of technology that allows a system of proof of work to enable human beings to transact again across great distances and that's it it's as simple as that and as powerful is that at the same time thank you very much everybody [Applause]

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