Bitcoin Movie: Bit X Bit | In Bitcoin We Trust | Cryptocurrencies | Documentary | Digital Money

[David] Money,
we use it every day.
We worry about
getting more of it,
we worry about
running out of it.
But how often have you
asked yourself, what is it?
What is money? My name is David Foox. I was born in South Africa,
grew up in New Zealand,
and finally settled
in New York City.
I became an attorney, but
after years of practicing law,
I realized my heart
was elsewhere.
So I started painting,
became an artist,
and eventually found
my way into filmmaking.
I produced a documentary
called Love Child,
about video game addiction,
and in the course of meeting
people in the gaming and
technology world,
I discovered the
world of Bitcoin.
Why are banks so inefficient? Why are credit cards
so expensive to use?
And why does the world
have hundreds of different
national currencies
instead of just one?
There's a technology
called Bitcoin
that answers those questions, and it changed
the way I look at money
and the world we live in. Bitcoin is a brand new
form of digital currency.
It's similar to
traditional currency,
like the dollar or the euro, but instead of being
issued by a central bank
and printed on sheets of paper, it's completely digital. Bitcoins are created
by a simple piece
of open-source software
originally released
in 2009, that uses
a series of rules
and mathematical
algorithms to generate
digital units of money
called Bitcoins.
Right now, there is
a vast network
of computers around
the world simultaneously
running Bitcoin software,
creating new Bitcoins
and trading Bitcoins
across the network.
Each Bitcoin is unique, and
cannot be copied or destroyed.
And many Bitcoin users
believe it's better
than the money we've used
for thousands of years.
I went to lunch with a buddy,
and he was like, "Hey man, let
me tell you about this nerd money."
"Oh my God, cool."
And that's how I got into it.

And I was fascinated.
He didn't say anything about it. I pretty much went
down the deep dive and researched it myself. Within about two to four weeks, I was sold that
this was the next revolution in our world. We finally needed
a financial revolution and Bitcoin was definitely it. My name's Nolan Bushnell. I'm probably best known
for founding Atari and then Chuck E. Cheese
and automobile navigation and some of that crazy stuff. I believe that Bitcoin
has an interesting opportunity to be
the Internet currency. It's not just money,
it's not just politics, it's not just technology. Bitcoin is cash
for the Internet.

As a security professional,
I set out to try to prove it wrong
and try to debunk whatever this Satoshi
Nakamoto guy had created, sitting at the dining-room
table in my condo working away at
this Bitcoin thing. Once I fully understood
how Bitcoin worked, it hit me like a ton of bricks. This is actually
the most brilliant thing that I'd ever laid my eyes upon. First time I read about Bitcoin, I thought it was nerd money.

I laughed at it
and I walked away. Second time,
about six months later, I read
the Satoshi Nakamoto paper, it blew my mind. I got hooked. I spent months reading
everything I could
about Bitcoin, and almost
immediately after that, switched
my focus full time to this. [David] In 2008,
a person using the name
Satoshi Nakamoto released
a report on the Internet
popularly referred to
as the Bitcoin White Paper.
In it, he described
a new software protocol
of his own invention
in which a digital currency
called Bitcoin could
be generated and kept secure
by a peer-to-peer
network of computers.
According to Satoshi,
Bitcoin could be a cheaper
alternative to
the cost in bureaucracy
of existing banks
and financial institutions.
On January 2nd,
2009, Satoshi Nakamoto
released his free
open-source Bitcoin software
on the Internet,
inviting anyone to use it.
Bitcoin was created
under a pseudonym.

The person goes by
the name of Satoshi Nakamoto, but the public doesn't know who
that individual is, nor do I. We don't know if
he's just one person or multiple person. I tend to believe
it's just one person. It has been one of
the biggest mysteries raging across
the Internet and business world. Who is Satoshi Nakamoto? An Australian tech entrepreneur named Craig Wright
revealing to BBC that he created
the cryptocurrency. [David] The true identity
of Satoshi Nakamoto
has never been proven. Various journalists,
bloggers, and news outlets
have tried to identify
the person, or group of people,
who invented
Bitcoin under that name,
but so far, none of
these reports is conclusive.
I'm not Satoshi Nakamoto.

[David] The real Satoshi,
whoever he is,
may choose to
remain anonymous forever.
I mean, we all are Satoshi. And
you can never necessarily prove that I'm not Satoshi
unless you know who Satoshi is. Satoshi Nakamoto was the first
person to create Bitcoin and create the very first block,
the genesis block. Satoshi took technologies
from different parts of a computer science space
and connected them together in an amazing way. But none of
the cryptography was new. The computer science language
wasn't new, the networking
wasn't new. He just connected everything.
He solved the puzzle. [David] The earliest
adopters of Bitcoin
were attracted to it
not because of its inventor,
but because of
the innovative technology
underlying the software.
[Allen] About 1880, Thomas
Edison brought people into the
light out of gas lighting.

He didn't do it by inventing the
light bulb, he did it by
building the infrastructure. That's someone that was heralded
as a quack and a lunatic before
he figured this stuff out, and now he's changed the world. The Wright brothers, right, no one can ever fly,
that's impossible. Well, they figured it out. If you just think,
in two lifetimes, we've gone from recording sound to introducing light,
to cars, airplanes, putting the man on the moon,
computers, the Internet. Why is it so
unrealistic to think that we can't reshape the world
of finance? It's about time. [David] Bitcoin relies
on very complicated
cryptographic mathematics,
but the principles
behind it are
actually fairly simple.
First, Bitcoins have
value because they are scarce.
Only 21 million Bitcoins
will ever be in circulation.
So like gold or
diamonds, Bitcoin derives
its value from scarcity.
[explosion] Second, Bitcoins can be
transmitted digitally
over the Internet
from one individual
to another from
anywhere in the world.
It's a technology protocol.

There's no third party,
there's no intermediary. It's a relationship between
you and your money,
and no one else. Neither of us need to trust
each other and we don't have
any access to each other's data, and there's no central entity
that has access to that data. Yeah, it's like trying
to explain the Internet -in 1994
-Yeah. And the one thing
that kind of everyone gravitated to was email.

It takes a week to
deliver you a message, now I've got the ability to send a message instantaneously. The mail system worked,
this was just a lot better. An email's significantly
better than a letter. It's just quicker,
faster, easier, cheaper. Bitcoin's like email
for money versus the bank being like
the post office for money. Bitcoin is the transfer of value between people using blockchain. Bitcoin is
the money, if you will, blockchain is the log. [David] Each
transaction is recorded
onto a digital ledger
called the blockchain,
and that ledger
cannot be altered or erased.
So once a transaction
is made, it's permanent.
Each new Bitcoin user
is issued a digital
Bitcoin wallet with
a unique identifying code.
One individual can
send Bitcoins to another
individual instantly
with a click of button,
and that change of ownership
is simply recorded onto
the end of the blockchain.
In fact, every
Bitcoin transaction ever made
is on the blockchain right now. The Internet we use today is
the Internet of information.

The blockchain is
the Internet of value. You can't actually fake Bitcoin because every
Bitcoin transaction is transparent
on the blockchain. It's like a giant
Excel file that runs on the Internet
that's hosted by no one, and it's just
showing who has what. And if I am that
line item on the Excel file and it says I own $1,000, I can
transfer some of that to you
and it's updated on that public Excel file
and anyone can say, okay, does he have that money? This whole concept
of programmable trust is a huge,
huge deal for the Internet. Satoshi had solved this problem
with distributed consensus. [David] Unlike writing a check,
we don't need a bank to
verify a Bitcoin transaction,
because each Bitcoin
transaction is automatically
verified by the Bitcoin network. It's a technique
called distributed consensus.
Basically,
the network of Bitcoin computers
across the world
looks at every transaction
and comes to an agreement
of who transacted what
and when it happened.
Then that transaction
is recorded
to the end of
the blockchain ledger.
This model of organization
is a brand new thing.

It hasn't existed in
human civilization before. It's really just
a special type of database that allows you to
basically store any type of arbitrary data in
a distributed fashion. And you can
basically ensure the integrity of that data
because you have millions of computers
running around the world looking at that data
and verifying it and all agreeing by consensus
that that data is true. Everything can be
cryptographically proven to be correct,
and there's no way to shred it. [David] Bitcoin is
a new form of digital money.
It's an alternative to
government issued money,
also known as Fiat currency,
like the US dollar,
the euro, or the Chinese yuan. But Fiat currency
is far from perfect.
A long time ago
before there were banks, it was
a person-to-person exchange. As trade expanded
across towns and even oceans, physical security
of money became a really serious issue,
and so we invented banks. Banks were a technical solution to a problem of
theft and security, so we established
a network of these banks that we placed around the world.

That whole system
relied on these banks trusting each other,
and then those banks in turn trusting
individual trading partners. So if I wanted
to trade with you, I had to not only
have a bank that trusted me, you had to have
a bank that trusted me and then the banks
had to trust each other. The entire system
is built on trust. There's a lot of
waste and inefficiency that emerges from that system.

Bitcoin is essentially
returning back to our roots, which is to enable
a platform that allows individuals to be
able to transact directly with their neighbor,
except now their neighbor can be in China. Well, now shall we
see how we make money? This is our mainframe room
with presses printing various
denominations of bills. Now the result is
valuable green paper,
which people refer to as money.

[Woman] If it's
only green paper,
what makes it so valuable? We have faith in our government
and the government says
it's worth something. And so that's what
dollars are backed by. Fiat currencies in general
are inflationary. All of the proponents
of Bitcoin feel that it's inherently
better than government-backed currencies
because its monetary policy is written in code.
It cannot change.

There's 21 million Bitcoins
that will be released over time, unlike any
government-backed currency which the monetary
policy change is based on who's in power,
and the governments can create inflation as much as they want. Fiat money is great,
but we live in a digital age. You should be able
to send money from here to Japan without
an archaic system. Bitcoin was really
the first to suggest that we could do large scale
peer-to-peer commerce, economics, politics,
governance in a way that, you know, is
incentive-compatible. [Ahmed] Most people are
completely oblivious about how money is created. A lot of people
actually still think that money is backed by something,
like the Fiat money that people use
is backed by something, which is simply not true. Money hasn't been backed
by anything since the '70s. It's really like based
on a leap of faith. We are trusting
that our government will do a good job in
controlling the supply of money.

[David] Satoshi
released Bitcoin in the wake
of the US
economic crisis of 2008,
a crisis which led
to the worst recession
in nearly a century. Congress has hammered out
the most far-reaching rescue package of
America's financial system since FDR's the New Deal. They're gonna
destroy our currency, that's what's gonna happen. That crisis
taught us several things. One, the world is
incredibly interconnected in ways that we
didn't fully appreciate. Two, the world was
over-leveraged in ways that were underappreciated. And three,
central authorities are not as trustworthy as
maybe we all thought. And so Bitcoin is
in many ways a reaction to the colossal failure
by the incumbent system. I have 20,000 Republic dataries. Republic credits? Republic credits
are no good out here. I need something more real. I don't have anything else,
but credits will do fine. No, they won't. [Francis] A lot of the people
who were interested in Bitcoin were
people who were coming from either
the financial sector, or that had a lot
of financial knowledge, and they saw Bitcoin as a hedge to a global financial crisis, much like the gold bugs
see precious metals as a hedge.

[David] Satoshi's
Bitcoin protocol allows
for anyone with
enough computing power
to generate new
Bitcoins by performing
complex calculations
using Bitcoin software.
This process of creating
Bitcoins is called mining.
And some of
the first Bitcoin enthusiasts
were drawn to
the currency by the prospect
of amassing a fortune from the
comfort of their own homes.
People wanna know,
how can I trust the security of Bitcoin?
It's because of the miners. These are the guys
that are telling everybody else whether your
transaction or you sending Bitcoin is legitimate or not. And these guys can
prove that with math.

[Lisa] So that is why
Bitcoin is secure because it's using
something called elliptic curve algorithm. Over time, it will
get more and more difficult as the mathematical algorithms become more
difficult to calculate. And the way that
that network was built is through
a financial incentive. They said run
the Bitcoin software, and become a miner. You're gonna earn Bitcoin
in exchange for contributing, call it compute to the network. So I got in initially mining, and then that kinda
spun up to a whole part where I tapped out
all the power at my house. And my wife was
like, all right dude, you need to get these things
out of my place. [Charlie] My family are coal
miners. I'm from West Virginia. These guys are getting paid in
scrip, a currency that was
owned by the coal company. And my grandfather
was one of the key people
who helped disrupt that process. He was involved in an
altercation called
the Matewan Massacre, and that resulted in
11 people who were dead after a shootout
when the coal companies themselves were trying to kick
people out of their own houses.

The US dollar is effectively
a note that's pledged by
the full faith and credit of the US federal government.
The scrip currency created value
because the coal company said, well, as long as we're in
business, this will be valuable. Bitcoin itself, it's not
connected to a Fiat currency. It is not connected to
any currency in the world that is backed by
any sovereign nation. [David] In order for
Bitcoin to have value,
it had to have users,
people who were interested
in actually making
transactions with Bitcoin
instead of traditional currency. And the first group of people
who took interest
were already
using digital currency,
it just happened
to be in an economy
not quite of this world. [upbeat techno music] People playing
video games today, things like World of
Warcraft and EverQuest, and what eventually
became Second Life, I think
the people in these sort of persistent worlds
have a desire to buy and sell the digital assets
that they're creating.

And this is
before any game company in the world was doing this, or had a microtransaction
business model. [David] Virtual
world gamers were already
trading in-game
assets with each other.
It began as a barter system
and soon people
were spending real money
to buy in-game currency.
Linden Dollars, the currency
of the game Second Life,
could be bought
with real US dollars.
Magic: The Gathering
online digital cards
could be purchased
online with real money.
It's no coincidence
that the first major
Bitcoin exchange site
was an evolution of this idea.
Mt. Gox,
which originally stood for Magi:
The Gathering Online eXchange, was launched in 2010
and it soon became
the most popular site
for buying and selling
Bitcoins from around the world, and so,
Bitcoin had its first user base.
But how did it go
from gamer currency
to something people
would use on a wider scale?
It didn't take
long before word spread
in the worlds of
computing and finance
that this currency
has some unique advantages.
No one is
sitting at home thinking, oh, I wish I could
buy coffee easier.

And I don't even think if you
could buy it with Bitcoin,
I would. Why won't I just use cash or my
credit and get the points?
Why would I? So what if I said, hey, you could use
a check-like system and it would settle instantly, and nobody would forge it, and nobody
would put an extra zero on the end of your check. Then people start to think,
oh, okay, I see it. On this check,
you do a few things. One is that you write
who you're going to pay to. Bitcoin has that exact thing.

So you have
essentially a payout address, you're paying to something. You have an amount,
so you're going to fill in the amount of how
much you're gonna send. Bitcoin has an amount. And the last thing
you do is you sign it with your physical signature. And Bitcoin doesn't
use physical signatures, except Bitcoin
uses digital signatures. Whereas credit cards,
for example, you don't
give money to anyone where you're paying
with your credit card. What you're giving to people
is access to your funds. You're giving them
your credit card number, the security number,
the expiration date, and you're opening your books
and you're saying, come take
money out of my account, and don't take too much and
don't give my information
to anyone else. So Bitcoin is
the complete opposite of that. You don't have to give
any private information, you're just giving it.

So, it's really just
like cash for the Internet. You have the responsibility now
to control your money. You are your own bank,
but you have to be
responsible for that. Because my company works
in Bitcoin, we also
get paid in Bitcoin. So in my everyday life, I use it
to feed myself, to pay for
bills, I pay my employees. A lot of my life
revolves around it. There's a lot of places that
accept Bitcoin as a payment, where you can go to a bar,
pay in Bitcoin, go to a burger place,
grab lunch, eat sushi, go on a date,
all paying with Bitcoin.

[Andreas] That instinctive
experience of ease of use, of being able to
transfer money quickly anywhere in the world
with few restrictions, and then while you're
having that experience, having your deposited check
held for five business days, and finding your bank
closed at 4 p.m. on a Friday will tend to form a really
nice juxtaposition of old versus new. You start wondering,
why do banks work as if they're
still stuck in the 1950s? Why do I have to
jump through hoops
to access my own money? Why am I paying fees for someone
to hold onto my money? And why are you closed
on a Saturday
in the year of the Internet? The traditional banking system's
gotten really good at making us not really care a whole lot
about our fees. Like they hide them, or,
you know, it's just a dollar, it's just 50 cents,
you know, it's just 2%. How do you feel
about those fees? I think I'm getting ripped off.

Overdraft fees and there's a fee to keep a savings account. You're putting
yourself on a debit card or a credit card,
but they wanna charge you $5 to use your card
when you do it. It's my money and they're taking
a little bit out of it
for themselves, but they didn't really earn it.
I earned that money and
it's my hard working money and I'm paying for something for
a product, but you're gonna
take a little bit of it for yourself when it
shouldn't really go to you. That's how I feel. ATM fees, and transfer fees,
and overdraft fees, and all of these fees
that are associated with handling
your own money, right, you could do most of what you do with that bank account
with Bitcoin and do it for free.

[Eric] Bitcoin is
a purely digital cash. It's a way of
one person sending money to another person
for any purpose without any opportunity
for censorship or limitation, also without any
opportunity to become a middleman and take
a cut of that transaction. It can't be true. How can you
transfer something from A to B without having a middleman C? Once you start to
realize the power of Bitcoin, you realize why
everybody is so passionate. Think about how
many people clip a fee or grab a piece of the business, from stock transfers
to real estate, to any other thing
where you store value. I heard somebody
that tweeted out or said, hey middleman, look out,
technology is coming for you. [David] The traditional banking
system in the US is fairly
convenient and secure,
but consumers still
spend billions of dollars
annually to pay for
the massive bureaucratic system,
including billions of
dollars in overdraft fees alone.
Billions more are lost
to credit card fraud.
What if all of
these inefficiencies
could be eliminated? Credit cards
were created in 1950, and credit card
technology has hardly really been built on
or further innovated since really its inception.

Credit card companies are highly susceptible to hacks. It's costing our economy
billions of dollars
in loss today. The huge benefit is,
especially for small business, transaction fees. If you're in a restaurant, transaction fees
typically around 20 or 40 cents. That's huge for
a nickel and dime business. Restaurants,
it's a very small profit margin. So when you have 40 cents
of it or 20 cents of it as a transaction fee,
that's huge. [David] Most people don't know
that every time you go
to a store or restaurant
and use your credit card
instead of cash,
the merchant has to pay
the credit card company
a transaction fee,
usually around 2% or more.
So why is no one complaining? Because credit card
companies have lobbyists
who have helped to
enact no surcharge laws
across the United States. These laws prohibit
merchants from charging
for credit card usage,
which means the fees
remain secret and
the credit card companies
get richer and richer. I've recently ran a business and I'm thinking that we paid, depending on the transaction, we paid somewhere
between 3 and 5%.

They used to charge me
I think, uh 20 cents per swipe, plus 2.25%.
That's a hefty fee. I don't think it's fair
that they're making the restaurant pay money
on the money they're making. It's almost like a tax,
but they're not really… They shouldn't be taxing people.
They're not the government. They shouldn't be
allowed to do that. Whenever you reduce friction, all of a sudden,
new businesses respond. It just happens as
the night, the day. Things that are idiot-proof
are much more safe than things that can
be messed with by idiots. [Brock] The whole world and
pretty much every product and service
in use today is built around a centralized
architecture. Maybe you've got
a bank that has got a centralized
ledger and they own and manage and
control the ledger, and this is
a decentralized system, meaning no one owns
or controls or runs it.

You can't shut Bitcoin off. You can't shut it down. The only way to turn Bitcoin off is to shut off
the Internet forever. You think about Facebook,
you got all your pictures and you got all
your social history there, what if Facebook is shut off? What if they close their doors? If those platforms
are re-architected in a decentralized fashion, they essentially
will run forever, and therefore, you have no risk
of your data being lost. Sometimes the power
goes out in one region. If your data centers
are in that region and the power goes out, you actually lose
access to those resources. For critical resources,
like money, having some sort of
centralized infrastructure is actually
a very dangerous thing. The ability to
create resilient distributed systems can
actually solve many problems, not just with money. A great example is Uber. It's this company
which has come out of nowhere, adopted a decentralized model
and it works like crazy.

We don't actually need
third parties anymore. We'd prefer to trust
in math than trust in some third party, some company. The printing press decentralized the manufacturing of books. It was one of the main catalysts in the industrial revolution. Before, you had to
actually copy word by word, letter by letter these books,
and it took a long, long time in
the monasteries to do that. And so books were highly
expensive, highly
centralized tools, but the Gutenberg press
had largely decentralized that. We saw centralizing
of that industry with
the industrial revolution. You had the printing presses
and, you know, it centralized into newspapers, et cetera, and then
the Internet comes along and the pendulum
swings the other way, and it decentralizes again. If you asked me
back in the '90s, do you think
you're ever going to see CNN have a website,
I'd be doubtful. If you asked me,
do you think CNN will be showing
tweets on TV, I'd be doubtful. But if you asked me, do you ever
think CNN will be showing tweets
on TV instead of reporting, because the tweets are
the reporting [chuckles],
I would have laughed.

Information wants to diffuse,
it wants to spread out, it wants to
make itself available. You can see this trend
all the way back through kings and fiefdoms,
and all the way back to society prior to that. Power, once it aggregates,
it slowly dissolves. Unlike gold or silver,
you won't be able to confiscate it. You know, gold or silver,
well, I mean, we saw how that worked out for
the Incas and the Mayas. Like, they just got killed
and their gold and silver was taken and
shipped back to Europe.

But with Bitcoins,
you actually have to get the cooperation
of the individual in order to
solve the math problem to move those Bitcoins. [David] Because
Bitcoin operates independently
and without
government interference,
some of the early
champions of Bitcoin
see it not just as a currency, but as a means of
social and political change.
Bitcoin is the subversion
of the authority of currency. Bitcoin is the idea
that currency doesn't derive its value because it
has the face of a queen on it.

It doesn't derive its value
because it's printed by an organization
run by the banks,
the Federal Reserve. It doesn't derive its value
because a government says it has value. Bitcoin is just
the most recent disruptive technology following
a long line of disruptive technologies
that came before it. The steam locomotive
was a disruptive technology, and all the train tracks
that came before it, it allowed you to
move goods in a relatively short period of time
from one location
on the continent to another. The telephone is
a disruptive technology,
allowing seamless communication, instant communication
over vast distances. Radio was disruptive,
the Internet was disruptive. Bitcoin and this
digital currency paradigm is something that's largely
subversive to our man-made laws. Governments will be
the ones that have to adjust, not Bitcoin, not the technology. All disruptive really means
is that it changed society,
it changed the status quo, it changed the way
that things were being done. [David] Unlike
a credit card transaction,
it is possible to
transact in Bitcoins
without revealing
your name and identity.
People believe that you should
have privacy in your home. You know, we all have
curtains on our windows and locks on our doors
and no one thinks that that's weird or wrong.

But for some reason
when it comes to money, people assume that you
should not have privacy anymore, and that the government
should be able to look into everything you do, even without
accusing you of a crime. And that's wrong, but people
tolerate it because that's
how it's always been. Bitcoin is finally
taking privacy back for people. In the current
banking and financial system, those of us that
are just individuals, we have nearly no privacy. The banks and credit cards know
every transaction that we make. On the other hand,
you don't get to know what your bank is
doing with your money. Now obviously,
you know, some establishments may be threatened by this,
but equally, some establishments are
threatened by free speech. You know, some establishments
are threatened by the idea that people may
choose to transact the way they wish to. Because Bitcoin is anonymous and because you can
send it to anyone around the world for very cheap, people have been using it
to go onto the deep web, and they also
use it on Silk Road, and Black Market Reloaded,
and Agora Markets to buy things
like marijuana, heroin, drugs,
or even prescription drugs.

Things that they don't
have access to normally, and perhaps they want to buy
from a trusted source online. [announcer] Silk Road,
a dark website
akin to Amazon
or eBay with buyers,
sellers,
user and product reviews,
except the product in Silk
Road's case is usually drugs,
and the currency,
as with most things
on the dark web, is Bitcoin.
[guest] Every transaction's
recorded in the public log
online, but names of buyers
and sellers are never revealed. That's why some
call it the wild,
wild west for criminals. Bitcoin permitted
Silk Road to happen because Bitcoin is
a private financial system. I think things like Silk Road
are totally legitimate. Free individuals
should be able to do whatever they want
with their own body, and if that means
drinking a beer or snorting a line of coke, it's no one's business,
but the person doing it. Before Bitcoin was around, people would buy
these illegal effects with regular currency,
which is untraceable. Silk Road takes
a violent drug industry, because it's a black market, and turns it
into a civilized market where people can log on
to a website and buy a drug.

They know exactly what
they are going to get
because it's all there. There are user reviews
and seller reviews, and it's peaceful. [David] Among the
earliest users of Bitcoin
were speculative traders.
The price of a Bitcoin began
at a few pennies back in 2010,
but the cost kept
increasing and eager traders
wanted to get in
on the investment.
Early buyers were
making a fortune on the growth.
You can look at Bitcoin as an
investment, but if anything's
a speculative vehicle, it's at the top
of the risk pyramid. [David] Still,
the vast majority of Bitcoin
enthusiasts I spoke to
were not looking
to make a quick buck. They were
looking toward the future.
How could
Bitcoin technology be used
to improve our daily lives? [Brock] In the analog world
when you walk down kind of
the promenade and you see someone telling a joke or
juggling, or singing
and dancing, whatever it might be,
you got the ability to throw out
quarter and a half, right? And this is
an analog sort of behavior that human beings
have been actively participating in
for thousands of years.

But you can't do that online. The idea that I can go
to YouTube and watch a video, and if I like the content
that person has created, I can say here's nickel,
or I could pay
for a penny a minute. Or if I like, you know, this
blog post that this journalist has written, you know,
they could put in a paywall where I can
read half the article, and, you know, for 10 cents,
I unlock the rest of it. You can actually send people a nickel,
or a quarter, or a dime. Where using
traditional financial networks like a credit card and that,
because of fees and charges, it doesn't really
make sense to charge less than a few dollars
for something.

That micropayment idea is really an important one for
the entertainment field or the content creators
because when you hear a song that you really like, it's very easy to give applause. So your applause can be
25 cents or 50 cents,
or what have you. Right now we have ads, right?
So when you are experiencing
someone's creativity, you first have to watch
an advertisement before
you can do that, and that's how these people get
paid. Why can't we connect
to each other? What I would
like to do is have it so that I can send a first class
email, and it's 25 cents, and if you open it and read it,
you get the 25 cents.

Look at what happened
with the music industry, right. You had vinyl go away,
which was around for a very long time,
I think 10-plus years. And that got
pushed out by cassettes, and then CDs had a nice run. And then what happened to CDs? People didn't
wanna buy an album for $15 when they like
one song on the album. Apple comes out with iTunes. You can buy a song for 99 cents.
Brilliant, right? Deliver the content
in the way the consumer wants to use it,
and you'll see adoption.

The same way that, you know,
various small communications have enabled things
like Uber and Google Maps that we maybe
never would have seen in the early
days of the Internet, these microtransactions
where you can do much smaller
financial transactions than the existing
financial networks allow are going to create applications that we can't
even envision today. [David] One of the
most promising applications
of microtransactions
is charitable giving.
With Bitcoin,
a charity can crowdsource
its funds from
a wide array of small donors
and it can transmit those funds
to anywhere in the world
at minimal cost.
The BitGive Foundation
is a nonprofit. It's actually
the first 501(c)(3) IRS approved
nonprofit in Bitcoin. It's a Bitcoin-based foundation. And what we do is support
charities all around the world, a global mission
of public health and environmental causes. What Unsung does is
it connects restaurants, or grocers,
or catering services, or just people
who have excess food, and they can
just go into the app and put in how much food
they have available, and our volunteer drivers
can just go pick that food up and take it
directly to the homeless, or to a homeless shelter,
or a women's shelter, or anybody really
that's in need.

People on Unsung
compete against each other to like do the most good. Everyone has
a Bitcoin address on it. You can actually tip the people that are performing the best. So it's actually, you
can send them money directly. [Andreas] Currency is a form
of human expression, and people who are
laughing about that concept today, you know, will be
surprised by what comes
out of this cauldron.

I've said often,
Justin Bieber coin at this point would be worth more
than about 30 national currencies if it
launched tomorrow. I don't assign value,
you don't assign value, kings and queens
don't assign value, users do. And if they find
that currency useful, you will have a little village
in Papua New Guinea electronically
trading on their Nokia phones Justin Bieber coin, and they
will have no idea
who Justin Bieber is. They'll know
it's used to buy things and you can buy things with it.
Well, guess what? There are
villages in Africa right now who know nothing
about who Queen Elizabeth is, but they know
that the money that has her face on it works. There's really no
difference between Justin Bieber and the queen. [audience laughing] One thing about
the Bitcoin community specifically is
that they comprise largely the smartest people
in the world. [Michael] Before I got into
Bitcoin, I was a digital
forensic investigator. I conducted
cybersecurity investigations for whoever got hacked. I left a very well
paying job to take a huge risk and start my own
Bitcoin security consultancy.

[Bart] Bitcoin has passion
in abundance. I've never seen a group of
more talented engineers, mathematicians,
entrepreneurs, CEOs. Everything from
anarchists to libertarians to software developers
to economists to politicians, accountants,
lawyers, Wall Street bankers. You have a lot of
forward-looking thinkers,
a lot of people who are thinking not two years from now,
not even five years from now. They're thinking
10, 20 years from now. [upbeat techno music] [Jinglan] I started off as
a studio art major at Wellesley College.

When I first
heard about Bitcoin, I thought it was a company
doing innovative things. And as I read more, I was like, wow, I really want to understand more about how this works. It's my senior year now. I've switched
to computer science. The biggest thing
about the Bitcoin community is that it sees the potential
for massive change in a very
positive way for society over a long period of time. That core ethos
holds the Bitcoin community together in a way
that no other community I've ever seen does. I was a child actor. I was essentially
doing commercials and a few movies from
when I was nine years old until I went to
college around 18. I had some bit parts in
Addams Family Values and Casper. I've decided to scalp you. [ominous drumbeats] And burn your village
to the ground. [Indians ululating
and war whooping] It wasn't a career path for me
but it was a lot of fun
as a kid. I grew up as an actor.
It sure would be a shame
if I accidentally told my dad about
you taking me boxing.

It would be a shame if I threw
you out that window also.
[chuckles] I decided to stop
acting around 14, 15, and that's because I wanted
to be an entrepreneur. When people ask me, they're
like, oh, what do you do?
I say I have a Bitcoin company. They're like, oh, are you
the CEO of Bitcoin?
I'm like, no. I say, that's like saying are
you the CEO of the Internet? [Trace] We had this movement,
uncoordinated, decentralized people working in
their own self-interest and it's really kind of
congealed this community. Bitcoin is
definitely an industry that knows how to party,
knows how to have fun. [Trace] A lot of us
that have been around since those early days,
we don't know each other, we're friends, we like
to have fun with each other. 'Cause if you're not
having fun, why do it? [Andreas] People sometimes say
that we're the early adopters.

No, we're not
the early adopters, we're the lunatic fringe. The early adopters come later. Welcome to the lunatic fringe. [Travis] When we have
a borderless
digital money supply that doesn't recognize
geopolitical boundaries, I think there
will be a sort of social cultural
collaboration and freedom that we haven't seen before. It's just a completely
revolutionary
new financial system. [Eric] It's going to
make things more fair. It's going to enable more
peer-to-peer systems
to be built. It'll be a more
transparent economy. More incorruptible as well. If some form of
structure can take away your
property or your wealth, you're gonna be stranded. Being financially independent
and not being subject to third parties' power
is one of the most freeing things in the world. The ability to keep
property and keep wealth is a huge step in your freedom. This is something
that hasn't changed much in the last hundred years. In the Bitcoin world,
we're taking this big quantum leap
and moving ahead several orders of
magnitude and freedom.

[Justin] It removes borders
from financial transactions, very similar to how
the Internet erased borders from conversations
and from communications. [Erik] It's the future
because it's just better. It's faster and
easier to send money and store money
with Bitcoin than it is with traditional finance, without anyone getting involved, without any bank fees
or wait times or any censorship of
the transaction whatsoever. [Micah] We would've never
been able to imagine social networking
taking over our lives and changing the way
we fundamentally communicate with
another individual. And we wouldn't
have imagined how Twitter could essentially
start a whole movement of people in the Middle East.

We just would not have
imagined that the Internet was capable of
doing that, and yet it was. Freedom usually wins. I– I would say always wins
but there are too many examples of really
bad guys messing it up. [ominous music] Mt. Gox unexpectedly
shut down today, owing hundreds
of millions of pounds and prompting the sharp fall
in the value of the currency. [TV reporter] Currency community
was shaken by the shuttering of Mt. Gox. The firm froze
withdrawals in early 2014. It said there was
a bug in the software underpinning
Bitcoins that allowed hackers to pilfer them. So what's
happened today is Mt. Gox, which is the most
famous as the oldest, the original Bitcoin exchange, has disappeared
from the Internet. And that means
744,000 Bitcoins are missing, unaccounted for,
and people might have lost what they thought was
worth about 400 million dollars.

Bitcoin, it's the first time
we've had Internet money. And therefore,
you've given hackers a greater incentive than
they've ever had in history to, you know, find holes
in your security. [David] Mt. Gox had
become the most popular
platform for
buying and selling Bitcoins
and it sold over
half a billion dollars
worth of Bitcoins to
users across the globe.
The problem was that
Mt. Gox was structured
in such a way that
they held their customers'
Bitcoin wallets
and the private keys
to access them
within their central database
and didn't take
enough precautions
to safeguard those keys. So when hackers
attacked their systems,
they were able to
steal thousands of Bitcoins
valued at hundreds
of millions of dollars.
The biggest thing
you learn quickly in the exchange business,
people don't like it when you mess with their money.
You start to really
realize that when you see that picket of people outside
Japan Mt.

Gox office,
trying to kill the dude that they think ripped them off. If the owner of the company
had actually recruited
the right sort of people, put in place the right corporate
governance and managed
the business in a way it should
have been as a business
that was processing 500 million dollars a month
of transactions, it could have
easily been avoided. It was ultimately negligence
and, you know, incompetence. [David] Charlie Shrem
was one of the early
success stories
of the Bitcoin arena.
He founded
a Bitcoin exchange platform
in 2011 called BitInstant
and went on to receive
a 1.5 million dollar investment from the Winklevoss twins
in 2012.
The Winklevoss twins.
Look at them.

They're like two
genetically enhanced Ken dolls. Do you know how much
Bitcoin they're worth? BitInstant was
one of the easiest ways to get US dollar into Bitcoin, and he ran that service
for a long time. I was running this thing
out of my basement, and it was a free-for-all
company that was growing
too quickly. I was processing millions,
tens of millions of dollars, being the only
employee of the company, and I couldn't control it all. [David] By 2014, he was arrested on federal money
laundering charges.
Charlie Shrem,
24 years old, arrested today and charged with
engaging in money laundering with a user at Silk Road.

[mumbles] you
recall that Silk Road was that infamous
black market drug website often referred to as
essentially the eBay for drugs. I'm not gonna sit here
and say I didn't do something wrong. I did, I committed a crime. I took money
from people that they wanted to buy
drugs on the Internet instead of
buying on the streets, and I didn't stop them. He was a very big person in
the media about two years ago. So when I first got into it,
he was a huge deal. Uh, and then there was
sort of his downfall. And my sentencing is tomorrow.
I pled guilty to
aiding and abetting and unlicensed money
transmitting business. I hope the judge
decides to give me a non-incarceration sentence. I've definitely
suffered for my crimes. I've been under
house arrest for a year with an ankle bracelet on. I have lost my
freedom, family life, disowned from my family.

I just
completely lost everything. I am someone who was
tasked of being a guardian for Bitcoin almost
directly from Satoshi
in the really early days. He's going to be
going away for a while. I tried my hardest
to stay on the right side of the law, and I failed myself. I'm the first real,
like Bitcoin felon. None of these problems
are as big in the Bitcoin community
as they are in the traditional
banking and financial sector. The drug trade in the
United States is estimated to be 300 billion-plus
dollars per year, and yet
the Department of Justice sees as only
1.5 billion at most. Current regulation of
the banking and financial system hardly
exerts a credit card fee on the drug trade in the US. [David] In October
2013, the FBI shut down
the Silk Road website.
Its founder, Ross Ulbricht,
known under the pseudonym,
the Dread Pirate Roberts, was convicted to life in prison. Subsequent black market
websites have also been
systematically shut down
by law enforcement,
and their administrators
brought to justice.
There's been a lot
of misinformation and communication issues
around what Bitcoin really is, and the media has
created a lot of hype out of some of these scandals, from Silk Road to Mt.

Gox. Those are the controversies. It happens with
any new industry, porn, sex, drugs. Krusty, are you broke? Yeah, all it takes is
some bad luck at the ponies, worse luck in
the Bitcoin market. Hackers stole over
five million dollars in Bitcoins from a
Slovenia-based Bitcoin exchange. Man, if you're not
safe to keep your money in a Slovenian
Bitcoin exchange… [audience laughing] It was a bad thing for Bitcoin because of all
the media attention. And they were talking
that Bitcoin got hacked. They didn't say
hackers attacked. And because Bitcoin
is so new and innovative, not a lot of people
truly understand it.

We have three
major enemies to Bitcoin: banks, governments, and media,
and these are all actually
intertwined. So if we don't do anything
collectively as an industry to
combat a lot of these myths and this constant highlighting
on these two major issues, Mt. Gox, Mt. Gox,
Mt. Gox, Mt. Gox, scam, scam, scam, scam,
Silk Road, Silk Road, Silk Road. And we're
ignoring all of the amazing infrastructure being
built in this industry because none of us
are coming together to tell the world
what's going on. [David] Mt. Gox,
Silk Road and other scandals
solidified the
public view that Bitcoin
was seedy and illicit. Most banks refused to do
business with Bitcoin companies.
Pretty much everyone you talk to
here has probably had
a bank out closed on them. If you have the name
bit or coin in your name, the banking industry is
pretty much discriminating against you and
they won't service you. I think we're
really tracking very closely along with Gartner's hype cycle. There is a lot of hype very
early on in any technology.

Right now I think we're in
the trough of disillusionment. And then as soon as we emerge
from the trough of
disillusionment, the world starts
to get a little bit better. These problems
have occurred in Bitcoin because they already
occur in the traditional banking and financial system. But the difference with Bitcoin is we are finding solutions,
technological solutions, to prevent these
same kinds of failures within Bitcoin from
occurring in the future. Bitcoin is the first
opportunity we've ever had to catch the actual
big fish involved in crime. When Mt. Gox claimed
they lost all their Bitcoin, users of Mt. Gox
pooled together the knowledge that they had about
transactions from– to Mt. Gox and from Mt. Gox. They found 200,000 Bitcoins
they asserted were in– still in
the control of Mt. Gox. Only then did Mt. Gox say, oh, we actually do have control
of this 200,000 Bitcoins. There's a difference
between the protocol and a company
that uses the protocol.

It's sort of like
back in the early '90s, Hotmail got hacks, right, but we didn't lose faith
in the email protocol
underneath, right? There's nothing wrong
with the email protocol. It really is about
improving the best practices that people use
to secure Bitcoins. After the Mt. Gox failure,
so Bitcoin exchange was hacked and a lot
of money was lost, um, the concept of
multi-signature wallets became extremely popular. People started
adopting best practices, people were much
more aware of security, and as a result, the entire
system of Bitcoin was safer. Multi-signature essentially
eliminates single points of
failure and it splits the risk up
amongst multiple parties
who are signing a transaction.

It's kind of like,
you think about if you
wanna launch a nuclear missile, you got two keys that
both need to be inserted and they both need to
be turned at the same time. All these big hacks,
right, Target and Chase and all these huge
institutions that are spending millions and millions of dollars trying to secure the databases,
but the truth is, if they hold them
all in one place, you only have to hack one place. The better model is
decentralizing security. Ultimately,
Bitcoin gives us tools that allows us to create
systems that are more secure than the current
banking infrastructure. The problem is just
that not all of them have been implemented yet. I don't think we
should view Bitcoin as this big four-eyed
monster with seven arms and two eyeballs on its neck.

Keeping an open mind
is something that's been really important
throughout history in general. People are
often adverse to change and that's understandable, but I think when we hear
about scary things like Bitcoin, just remember to
take a deep breath and really thing about where
this technology is coming from. [David] For many
Bitcoin developers,
Bitcoin is not only a currency, but a platform
upon which to build new
and more complex applications. And the crucial
element underlying Bitcoin
that allows for that
innovation is the blockchain.
The technology gave us
for the first time a way to agree on a record. And Bitcoin uses that
to transfer value around, but we can use this
for all sorts of things. It doesn't just
have to be about Bitcoin. It can be anything that anybody wants to publicly store.

Think of public records,
think of the legal system, music, content,
books, licensing. There's all
these sorts of things that blockchain technology
can be used for. Anything you burn
or put on the blockchain can never be changed for any
reason, no matter the expense. [David] Blockchain
technology developers
are working on
ways to link all kinds
of data to the blockchain. Anything from
concert tickets to the deed
to your house
could be registered,
providing a permanent
and incorruptible
record of ownership. Let's say that I buy a ticket
to a Taylor Swift concert,
and for whatever reason, I can't go to the show and so
I'm gonna go sell my ticket. And I have this PDF ticket
on my computer
and I go to Craigslist. Now let's say that I sell
to four different people because I'm a bad person. So now one of those people
are gonna be able to get into the show,
and the other three will be scammed,
they won't be able to get in.

And so we have to
rely on these third party systems to kind of
be the source of truth. So instead of having
a third party organization, that's all
guaranteed by cryptography and by distributed data. My bicycle got stolen
and I had a friend who called me
and said, oh my gosh, your bike is two houses down. But I get there and I see
that is definitely my bike. And then the problem arose, how do I prove this is my bike? But with blockchain technology, we can actually tokenize
the ownership of that bicycle, and then I can
prove that I own it. And then if I sell it to you, I can transfer that token
and you can prove that you own it
and we can track it all the way down the blockchain.

If I went and bought
a Louis Vuitton bag, that Louis Vuitton bag
could come with a token that is my
certificate of authenticity. And when I go sell that
or a bottle of wine or a piece of art, when I go sell that to someone, I'm transferring
with that certificate of authenticity
essentially using a transparent system like the blockchain. [Eric] I think what will
happen is the companies that do not adopt the technology
will find themselves in stiff competition
with those who do adopt it. I like to take
Kodak as an example. They used to be
the biggest producers of handheld cameras,
film cameras, and when the digital camera
revolution came around, they
took a hard hit because of it. So I think it's gonna be the
same in the banking sector
and all industries. We'll eventually be dealing with
some kind of cryptocurrency or
some kind of crypto technology. We're trying to
release the power of the blockchain. It's blank paper. It– it's featureless. But the people
building applications can draw on it
whatever they want.

There's no boundaries,
there's no fences,
there's no rules. Banks and other large
financial institutions will increasingly
embrace blockchain technology for the exchange
of all sorts of assets, stocks, bonds,
title to traditional assets. [David] Blockchain
technology is a tool
for secure and
efficient verification,
and this could be
very useful for banks
who spend
billions on transactions
and verification each year. With Bitcoin and blockchain, we no longer
need intermediaries. Two banks can send
transaction directly from one to another. Anything that has
a middleman can be rewritten to be without a middleman
using blockchain technology. Right now we rely on
realtors when selling property from person A to person B. That transaction
can be distilled into what's called
a smart contract. Any kind of legal transaction for which you
currently need an attorney can happen on blockchain,
and it will happen within a couple
of seconds at most. [David] A smart
contract is essentially
a transaction
written in software.
It could simplify
transactions between two people,
but it can also
make a transaction
between two machines. Many developers are
working on technologies
for advancing
the Internet of things,
which is the interconnection
between machines
and objects such as
your phone and your stereo,
or your fridge and
your microwave oven.
The possibilities are limitless. I can rely on cryptography
and an open network to be able to have
two devices interact with each other in
a safe and secure way.

That is the real
future of the blockchain. The great thing
about the blockchain is at its core, in essence,
it's an anti-corruption tool. Here you have a technology
that for the first time can provide for a global,
decentralized, distributed,
cryptographically secure, verifiable and
auditable elections. [David] Each ballot
cast in an election
could be registered
to the blockchain,
recording your vote
securely and permanently.
You vote, you see
your vote in the blockchain. You know that it's been
counted and counted properly. The whole incorruptible
and transparent nature of Bitcoin means you
could integrate transparent accounting systems,
not only into governments,
but into big companies as well.

[David]
All Bitcoin transactions
are permanently traceable,
so you could
follow the money as it goes
from the taxpayer
to the government
and find out where each dollar
is actually being spent.
And with that
accounting system run
on the Bitcoin blockchain, you'd be able to trace
every cent of your taxes. People could see
Department of Roads spent $100 on 10 hammers. This could be considered
suspicious or not. The user can click,
it's not suspicious. Who it goes to,
why it goes to them, how it gets paid,
how choices are made, the very idea of democracy
improves once you have
the blockchain. We all know that
if there's one class of people that we cannot trust,
it's bureaucrats. Nobody's life,
liberty or property is safe -when congress is in session.
-[laughter] We can actually
detect why problems exist and either fix the problems or hold the parties
accountable who failed to do what they
were supposed to do. [Eric] In countries where people
own land but they don't
have a deed for it and then, you know,
their government will come
and reclaim the land from them and tell them they
don't have paperwork, there are now companies
that are developing technologies where you can
actually timestamp a deed to your land
onto the blockchain, allowing you to have
an incorruptible record,
proof of ownership.

And that is especially
interesting in developing
countries with unstable governments and unstable economies
and currencies. [David] Hyperinflation is
an economic phenomenon
in which a country's currency
rapidly loses its value
due to oversupply
in other factors.
The value of the national
currency plummets
while prices soar.
So if a citizen
simply hold their money
in cash or bank accounts, their savings
would plummet in value.
In these cases, Bitcoin
can provide a more secure way
to store or transfer wealth. What happened in Zimbabwe
was they kept printing and printing until the money got to this one hundred
trillion dollar note, and it was
still not worth enough to buy them a loaf of bread. In Buenos Aires,
every couple of years, the government just
prints money out of thin air and people are unable to
store their value in any way.

They need to have
some sort of alternative because if they keep
their money in the bank, two years later,
that money could be worth half of what it was before. [Brock] We live in a country
where we got banks, we've got pieces of
plastic in our pockets that make buying things
relatively convenient.
We've got rule of law, in theory they're there to
protect us. If something goes wrong,
we got faith in
the commercial system. And of the 200 currencies in
the world, we actually have one that we would all like more of.
But when you start looking
at the rest of the world, you'll start to understand
why Bitcoin's appealing. And so the countries
where I think Bitcoin has the greatest potential,
call it this year, would be places like
Argentina and Venezuela. Bitcoin creates
opportunity for exit. That is,
people who are dissatisfied with the monetary system
in their own countries can exit.

They can leave and use Bitcoin. Not leave physically,
but leave the intellectual space of money and value transfer. Now, they may take
more risk in doing so, but there may be
a great deal of reward. For these guys, it's
not necessarily ideological, it's just practical. They can't get their money
out of their country if there's capital controls.

Their money from
one month to another can be worth next to nothing. So for them,
it's a question of survival, it's a question of
preserving their wealth. My family came
to the US from Russia a few years before
communism and Russia fell and they basically
took what they could with them to come to America. [David] The US financial
crisis was followed closely
by a worldwide recession. In the nation of Greece,
this recession spurred
a government debt crisis,
leading to capital controls
and nationwide bank closures. [TV reporter 1]
Quietly over the past week, Greeks have
withdrawn more than one and a half billion euros.

At the ATMs,
people couldn't take out more than 60 euro per day,
and then they ran out of 10 euro bills, so it was 50 euro per day. [TV reporter 2] But I think if
you're in a neighboring state, a state that also
has a debt problem, say Portugal or Ireland, you're thinking, hey, maybe I
should diversify my investment, maybe I should stay away from
treasury or things like that and
I should consider Bitcoin. This is a sign
of the apocalypse. Give me some of that
crazy digital Internet money. The Greece crisis
where the Greek government imposed capital controls, I think was a wake-up call
for a lot of Europeans to realize that suddenly, their
bank accounts can be frozen. There is a middleman
between them and their money. The government can
just simply tell the bank that no, you can't
have access to your money. I think this was
a really great wake-up call for countries
like France, Italy, Portugal, which are
facing economic situations that are not so different
from that of Greece. And these citizens realize that, okay, this happened in Greece,
it can happen here.

It was too late for the Greeks
to get into Bitcoin because the capital controls
came in too fast, but it's not too late for us. We're seeing
what's happening in Greece. Europe and Spain
aren't far behind. And if those people
need to leave a bad situation to come to a freer world,
it will be very difficult to do unless you have
a medium of exchange to take your hard earned
capital with you, and Bitcoin, I believe
right now, is the best way for a person to do that. [David] In June, 2016,
Great Britain shocked
the world when its citizens
voted to leave the EU.
I think this will be
the most consequential thing post-war that we will
have seen potentially.

Of course,
the pound has cratered, falling to its lowest level
in over 30 years. Lots of shock on the markets. It's been absolute
carnage this morning. There's been low liquidity,
but there has been a high of
trading volumes in most assets. A lot of wealth has been
destroyed as equities
have dropped globally. And probably the most extreme
moves have been in
currency markets. [David] The value
of the British pound
crashed overnight,
and in the same period,
the value of Bitcoin climbed. With so much uncertainty
in government-backed currencies,
it's no wonder that people
are looking for alternatives.
And Great Britain
may not be alone.
What if the exit-fever
spreads to places
like the Netherlands, Finland, Hungary, Austria,
or even France?
Even in the US,
overseas currency exchange
is a daily
necessity for millions.
As a nation of immigrants,
many people send
portions of their paychecks
overseas to support
relatives in
their native countries.
These transfers
are called remittances,
and the number one company
that handles them
is Western Union,
which handles a fifth
of worldwide money transfers, sending nearly
100 billion dollars annually.
There are places
in Central Valley here in California
where fruit pickers are bussed every Friday to
a giant department store owned by the fruit company
where they get to get their paycheck
in one line, send most of their paycheck
back to Mexico in a second line,
and get soap and basics and fruits and some food
in the third line.

Right now if you wanna
send money across a border,
it can take days. It can be extremely expensive. Western Union on
average charges 10%. But the people that
actually are sending smaller amounts of money
are being charged, in some cases, 20 or 30 %. If I'm a nurse here in the US, I need to get money back
to my family in the Philippines, how do I not loose
15% in that transaction? There is no banking
infrastructure there, there's no accounts
they can sell their Bitcoins
and withdraw money to. It needs to really
happen in physical locations. Once you have
sort of Bitcoin ATMs on both sides of a border,
the savings are so significant that I can see
everyone saying, oh,
do it this way, do it this way. And I can see that
happening in a very, very short period of time. And it's not because
they care about Bitcoin or blockchain tech.

They care about saving 20 bucks. [Reeve] In today's economy,
people work from all around the world and
you want to crowdsource labor and talent and technology
from all different places around the world.
But you can't pay them. It's really challenging
to pay lots of people
in different countries today. If I want to go and do
work for clients in, say,
you know, South Africa, it's a real head scratch just
trying to figure out how on
earth are they gonna go pay me? You know, they have so many
barriers between them and me.

One of the biggest problems
right now is under-banks people who can't have access
to our financial system. [Perianne] The World Bank did
a study and they found that over 74% of
the world's population does not have access
to basic financial services. In many countries, they don't
have a lot of the traditional
infrastructure that we're used to here in
the United States, like credit
cards and basic banking. [Jim] I heard it said the other
day that it's expensive to be
poor, and it really is. Half the world's people
don't have access to formal financial services,
and that prevents them from improving their lives,
educating their children,
getting good, healthy food. [Paul] It's extremely tough
to get a bank account
in the Philippines.

Bitcoin provides
that opportunity to have a bank account
on your mobile device where countries
like these have actually pretty decently high rates
of smartphone penetration. [Brock] In a lot of these
sort of developing nations, they've got the
ability to roll out the latest and greatest
which is blockchain tech and their entire population
can be banked overnight by having
nothing more than a phone. [Andreas] There are more people
with text messaging cellphones than access to
safe drinking water. And in terms of
total manufacturing, I think more
cellphones have now been made than humans currently alive.

There are places
where the nearest bank branch is a 100 miles
upstream by canoe, and yet there's a solar
powered cellphone tower microwave uplinked
right there and people in that village have
text messaging phones, usually a Nokia 1000, like the most
popular phone in the world. Make Bitcoin
usable on those devices and we can see some
immediate applications. We're all connected
through the Internet and now Bitcoin
allows our transfer value to be connected. From here to China
to the middle of Africa, with some of you guys
just an SMS phone, you can be sending value. [David] In our
increasingly global economy,
wouldn't we benefit
from a worldwide currency?
The Economist magazine
predicted this in 1988.
So if we have a new community, that's the community
that exist on the Internet, the folks that can
participate to exchange value are only those folks with access to the traditional
banking system, and that's not the majority.

Commerce opens up once
other people can participate. And think of a company
like M-Pesa in Africa who converted a mobile system
into effectively a payment system
because of the demand side. [David] Kenyans
lacked a stable currency
or any reliable way
of transferring money
from person to person
or city to city.
What they did have was
a popular cellphone network.
So spontaneously, cellphone
users started exchanging
cellphone minutes
in place of currency.
And within a few years,
they had leapfrogged
traditional banking systems
in favor of digital currency.
You are nobody without
your mobile phone in Kenya. In fact,
nearly every single adult in the country has one. But the most
exciting development in recent years is this, M-Pesa. [announcer]
It enables a mobile phone to work like a debit card. During a transaction,
money is deducted from a prepaid account
connected to a user's phone. [Reeve] Individual users
trade in cellphone minutes
because it's not inflationary.

They don't trust their local
currency. They solved the
problem because the unbank didn't have bank accounts.
Now they can trade
cellphone minutes because it's a store of value because they
believe it has value and everyone's
willing to accept it. Bitcoin could
replace that on a global scale and open up e-commerce
market places to Africa and open up remittance. [Travis] In the next few years,
we're gonna have a couple of billion people coming online and I think
Bitcoin technology gives them the opportunity to bank this currently
under-banked population.

[David] With all
of the potential uses
for Bitcoin and
blockchain technology,
it seemed like
only a matter of time
before it would
achieve mainstream acceptance.
But after years of hype,
the mainstream public
did not adopt Bitcoin
and the headlines
made its fate clear. [dramatic music] The Hong Kong based
Bitfinex exchange has revealed it was
victim to a hacking attack. Nearly 72 million dollars
have gone missing
in a Bitcoin heist. According to Reuters,
nearly 120,000 units of the digital currency
was stolen from Bitfinex,
an exchange in Hong Kong. When the DOJ calls someone
up and says that's
an illegal currency and it's against the laws of
the United States [indistinct] if you do it again, we'll
put you in jail, it's over. There will be no real
non-controlled currency in the world.

[dramatic music] [David]
But while the world scoffed,
Bitcoin just kept on growing
and doors to the world
of mainstream business
began to open.
A busy year for Bitcoin.
VC Investments topped
one billion dollars, with NASDAQ, American Express,
Visa all investing
in Bitcoin startups. It is getting a lot of
attention. People are
fascinated by anything that makes new highs every day
for weeks on end,
which Bitcoin has done. The amount of innovation
that you're gonna see come out of this
sort of venture capitalists flowing into the industry
over the next one, two or three years is
going to be astounding.

You certainly got
some serious backing. I mean, Mark Andreessen
backing your competitor, Sir Richard Branson backing you, you get the venture capitalist that put the first
round in at Snapchat. Small bull case scenario is
a $400 billion market cap, so. -[Man] A $400 billion, with a B?
-Yes. We've got Zynga,
Dish Network, Dell, Overstock, these are all
publicly traded companies
that are accepting Bitcoin. Microsoft, Dell, Newag,
everyone takes Bitcoin. We are building and
investing in Bitcoin companies, most active
investor in the space, so we've
invested in 60 companies. We've also launched
a Bitcoin ETF-like vehicle called the Bitcoin
Investment Trust,
and it's traded publicly. Do you think this is a currency,
a currency that's really
gonna work eventually? Well, I think it is working, and there will be
other currencies like it that may be even better. But in the meantime, there's
a big industry around Bitcoin. And what we're
gonna see coming up over the next couple of years, and it's already starting, is you're gonna
see apps basically built on top of this protocol
that allow people to interact with Bitcoin better.

[Reeve] You can see why
all of the technologists and these people that
are really smart and dive into it are so excited about it. They're like, Jesus,
this really can disrupt the legacy financial system because it is that much better. No one's saying
it's gonna replace this. What's eventually gonna happen is the legacy
financial institutions are going to
replace their systems with blockchain technology. [David] Bitcoin may
not replace the dollar
in the near future, but
banks and financial institutions
have already seen
that blockchain technology
is the wave of the future. And since they
can't destroy Bitcoin,
they have to embrace it. [Reeve] And so what I see
for the near future is small companies
and all the entrepreneurs out there proving the concept, showing that it works, ensuring that it's safe, secure and easy to use, and getting through
all of the regulations.

Then the big legacy
financial institutions will start adopting it
because the concept's proven and in a decade,
they'll start utilizing it. In the long run, I truly believe
that an open financial
platform like Bitcoin will take over
most of the economy. Large banks and
financial institutions who are moving
millions if not billions of dollars around
the world every day, and they have
massive human processes that are built
around movement of money.

These systems are so inefficient that by applying
blockchain technology, we can literally save the banks, and ultimately the end customer, billions and billions of dollars in transaction fees and costs. There is this great movement in financial institutions to research
blockchain technology. So you have a lot
of great examples such as Citigroup and Barclays who have blockchain
technology incubators and they are
realizing the potential of this technology,
and that's a great step forward. The NASDAQ is
embracing Bitcoin technology. The exchange is test-driving
Bitcoin based technology in its pre-IPO private
market of about 75 companies. The NASDAQ
essentially is working on creating this kind
of decentralized system. So if it works,
which middlemen are gonna lose? Well, a lot of them. You have
governments who have started to back this
technology and who realize that as nation states,
they're competing against each other
to have these innovative businesses on their territory. And you also have
financial institutions
who are realizing, wait, we cannot out-compete this new
technology.

It's just better. So if we can't out-compete it,
we need to integrate it. We have a lot of work to do,
but I think in 25 years,
Bitcoin will be the backbone of our financial systems. [Andreas] The one
and only thing needed for Bitcoin to reach
mainstream adoption is time. Because with time, we're going
to build better interfaces, we're going to evolve the
technology, we're going to help
people understand it, we're going to make it
easier to use, easier to secure, we're going so spread it to more
devices, to more systems, we're going to build
more useful applications, and then it will be adopted. It's already being
adopted, but I expect we're gonna see that accelerate.

Right now,
there's not a real killer consumer
application for Bitcoin. It still needs to
be shown as valuable to the everyday consumer.
It's gotta be simple enough that kind of
anyone's mom could use this and not have to
understand how it works and be able to use it
safely and securely. A lot of people are
focused on the technology and how it works and
what's gonna make it better, but the average consumer
and the average user of Bitcoin in
the future probably won't know all that much.
Right now, they don't understand how credit cards
work all that well. But credit cards do work
and they do use them. They don't understand
why rectangles of paper or plastic have value,
but they use them all the same. In a not too distant future,
they'll recognize that the
payment system they're using on their phone
or some other device,
even though it's Bitcoin backed, is useful and they won't
actually really distinguish
it from all the others.

If you just look at
how behavior changes, it changes by generation. Over time,
we're gonna see people accepting digital currencies
as a mainstream form. [David] Despite
all the advancements
since Satoshi
first published his paper,
applications of Bitcoin
technology are just beginning
to take shape. Until Bitcoin,
the only thing or entity that could own and control money was a human being
or the legal fiction of organized human beings
or corporation. With Bitcoin,
a machine, a device, a software agent,
a non-human entity, can own,
manage and control Bitcoin. [David] With smart
contract technology,
we could even
allow machines to conduct
more complex operations
and transactions on their own.
A machine could
have ownership of itself, could contract
for its own resources and I guess, livelihood, and then could
contract out to produce different income streams.

[David] In the future,
a machine could
become autonomous and
conduct its own business,
such as a car that
could buy its own gas
or purchase
replacement parts for itself.
You could even
program a business
to be run entirely by software. I don't know what
happens when machines can use wallets, and
one theory is that they use that to exterminate
humankind because they haven't kept up on
the interest payments. [audience laughing] Another theory is
that you can do some really interesting things,
including, among other things, autonomous
organizations or distributed autonomous corporations. [David] This
autonomous corporation
could be programmed
to conduct transactions,
make business decisions
and generate profits
without any humans involved. In 2016,
this concept became reality
when an autonomous
corporation called the DAO
launched publicly,
and within weeks,
it received over $150
million from individual
investors around the world. One of the idea,
for example, is a charity that operates
based on a mathematical organizational charter
and disperses funds based on an algorithm
and is not controlled by anyone other than
the people who fund it.

[Ami] You have all
these computers doing all these mathematical
calculations or the purpose of verification,
which is a good thing. Why aren't we
calculating a cure for cancer? Why aren't we trying to figure
out a new source of energy? It took 20 years for Internet
to spread all around the world. It took five years for Facebook
to reach one billion of people. It took only two years for
WhatsApp to reach
one billion of people. It's going to become faster
and faster and faster
the speed of change. In ten years, we'll be living
in completely different world. Bitcoin or
blockchain tech is the most significant
invention of my lifetime and it's pretty
simple to understand. We live in a world
where a lot of people are disenfranchised
because they don't have access to basic financial services. They're denied access
to the financial system. What this technology
has done is it's democratized the global
financial system in a way where every human being
on the planet now has equal access.

I mean, this is going to
enhance and improve the lives of billions, and in
this case, the least fortunate billions of people
on the planet. [David]
The complete story of Bitcoin
and blockchain technology
is yet to be written.
We can only imagine
what the future holds.
[dramatic music].

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