1 00:00:02,900 --> 00:00:04,576 - [Voiceover] Look closely. 2 00:00:04,600 --> 00:00:06,933 What do we all have in common? 3 00:00:09,533 --> 00:00:12,033 No matter what corner of the world you live in, 4 00:00:12,500 --> 00:00:14,709 You need food, water, 5 00:00:14,733 --> 00:00:17,233 shelter and money. 6 00:00:17,600 --> 00:00:20,209 Half of every transaction involves money, 7 00:00:20,233 --> 00:00:22,709 in exchange for goods or services. 8 00:00:22,733 --> 00:00:26,609 Stocks, a loaf of bread, illegal drugs, 9 00:00:26,633 --> 00:00:28,233 You gotta pay for it. 10 00:00:28,600 --> 00:00:30,709 We spend much of our live chasing money 11 00:00:30,733 --> 00:00:31,976 to make a living, 12 00:00:32,000 --> 00:00:33,809 and accomplish our dreams. 13 00:00:33,833 --> 00:00:36,509 But it's also an instrument of destruction. 14 00:00:36,533 --> 00:00:37,942 Some might say evil. 15 00:00:37,966 --> 00:00:41,833 Driving criminals to lie, steal and even murder. 16 00:00:42,133 --> 00:00:43,576 - The existing banking system, 17 00:00:43,600 --> 00:00:46,076 extracts enormous value from society 18 00:00:46,100 --> 00:00:48,500 and it is parasitic in nature. 19 00:00:48,833 --> 00:00:51,176 - [Voiceover] Money is a catalyst for the worst 20 00:00:51,200 --> 00:00:53,900 and the best of human endeavor. 21 00:00:54,100 --> 00:00:56,109 Before civilization, 22 00:00:56,133 --> 00:00:58,200 we created currency. 23 00:00:58,733 --> 00:01:00,800 Fuel for wars. 24 00:01:02,133 --> 00:01:03,700 The path to power. 25 00:01:04,533 --> 00:01:07,233 Champion and enemy of innovation. 26 00:01:08,533 --> 00:01:10,476 Money is so integral to our society, 27 00:01:10,500 --> 00:01:12,309 and our global economy, 28 00:01:12,333 --> 00:01:15,133 that its true nature remains a mystery to most. 29 00:01:16,033 --> 00:01:18,000 This is the story of money. 30 00:01:18,200 --> 00:01:20,500 Perhaps the end of money as we know it. 31 00:01:21,433 --> 00:01:23,233 No matter how fat your bank account, 32 00:01:23,500 --> 00:01:25,076 or how thin your wallet. 33 00:01:25,100 --> 00:01:27,709 To us it's all cold, hard cash. 34 00:01:27,733 --> 00:01:29,609 There are some who want to kill it. 35 00:01:29,633 --> 00:01:30,876 Get rid of it. 36 00:01:30,900 --> 00:01:33,333 Burn your dollars, your euros, your yen, 37 00:01:33,733 --> 00:01:36,109 and transform every penny you have, 38 00:01:36,133 --> 00:01:37,909 into ones and zeros. 39 00:01:37,933 --> 00:01:40,676 Digital currency entrusted to the web 40 00:01:40,700 --> 00:01:43,476 and computers spread across the planet. 41 00:01:43,500 --> 00:01:45,033 Magic internet money. 42 00:01:45,533 --> 00:01:48,733 It's called cryptocurrency, Bitcoin. 43 00:01:49,133 --> 00:01:50,709 Invented in secret, 44 00:01:50,733 --> 00:01:52,533 it was a gift to the world. 45 00:01:52,933 --> 00:01:54,176 - It's not just a currency, 46 00:01:54,200 --> 00:01:56,376 but it's actually programmable money. 47 00:01:56,400 --> 00:01:58,209 - [Voiceover] A potential curse on bankers. 48 00:01:58,233 --> 00:01:59,642 - I mean, there's nothing 49 00:01:59,666 --> 00:02:01,706 that the big banks or politicians can do to stop it. 50 00:02:01,900 --> 00:02:03,409 - [Voiceover] Breaking every governments grip 51 00:02:03,433 --> 00:02:04,833 on money supply. 52 00:02:06,833 --> 00:02:08,900 - What the internet did for information, 53 00:02:09,133 --> 00:02:10,633 Bitcoin is doing for money. 54 00:02:12,833 --> 00:02:14,333 - Could it be the new gold? 55 00:02:15,133 --> 00:02:17,209 - No, you have to really stretch 56 00:02:17,233 --> 00:02:18,976 your imagination, 57 00:02:19,000 --> 00:02:23,033 to infer what the intrinsic value of Bitcoin is. 58 00:02:23,433 --> 00:02:25,809 - Regulators, the Federal Reserve, the banking system, 59 00:02:25,833 --> 00:02:27,509 at least understand this is a thing 60 00:02:27,533 --> 00:02:28,900 that they have to take seriously. 61 00:02:29,533 --> 00:02:31,253 - This going to change the economic culture. 62 00:02:31,933 --> 00:02:36,109 - Bitcoin could be a micro-economic miracle worker 63 00:02:36,133 --> 00:02:39,033 and it could be a macro-economic wrecking ball. 64 00:02:40,400 --> 00:02:42,900 - [Voiceover] Is Bitcoin the currency of the future, 65 00:02:43,700 --> 00:02:45,533 a Godsend for criminals, 66 00:02:46,433 --> 00:02:49,800 or a recipe for financial disaster? 67 00:02:52,400 --> 00:02:54,833 If you trust your money just as it is, 68 00:02:55,433 --> 00:02:57,333 we have a little story to share. 69 00:02:58,200 --> 00:03:01,733 (dramatic instrumental music) 70 00:03:12,033 --> 00:03:13,633 Once upon a time there was a big party, 71 00:03:14,333 --> 00:03:17,533 with everyone standing around the punch bowl, drunk. 72 00:03:20,800 --> 00:03:22,776 Politicians credited the strong economy 73 00:03:22,800 --> 00:03:24,233 to their wise decisions. 74 00:03:24,533 --> 00:03:26,876 Businesses jumped into new profitable markets, 75 00:03:26,900 --> 00:03:28,076 ignoring risk. 76 00:03:28,100 --> 00:03:30,333 If fact the experts said there was no risk. 77 00:03:33,633 --> 00:03:35,976 Then, troubling market data from minor countries, 78 00:03:36,000 --> 00:03:37,476 spooked the markets. 79 00:03:37,500 --> 00:03:38,642 Rumors spread. 80 00:03:38,666 --> 00:03:40,409 More bad news rattled housing prices, 81 00:03:40,433 --> 00:03:42,209 at the heart of the financial world. 82 00:03:42,233 --> 00:03:44,200 A major bank went insolvent. 83 00:03:44,600 --> 00:03:46,376 Investors and businesses made a run 84 00:03:46,400 --> 00:03:47,310 on the other banks, 85 00:03:47,334 --> 00:03:49,009 demanding their cash deposits. 86 00:03:49,033 --> 00:03:50,609 The largest financial institutions 87 00:03:50,633 --> 00:03:53,400 in the center of the modern world were frozen. 88 00:03:53,900 --> 00:03:54,933 Assets were seized, 89 00:03:55,433 --> 00:03:57,076 banks foreclosed. 90 00:03:57,100 --> 00:04:00,200 A credit crunch threatened the entire world economy, 91 00:04:01,800 --> 00:04:03,533 and then finally, 92 00:04:03,900 --> 00:04:05,709 the government stepped in. 93 00:04:05,733 --> 00:04:08,276 The largest bank bailout ever. 94 00:04:08,300 --> 00:04:11,976 Swift action by the head of state had saved the day. 95 00:04:12,000 --> 00:04:13,000 Remember that? 96 00:04:14,400 --> 00:04:15,533 No you don't. 97 00:04:15,833 --> 00:04:18,133 It happened 2,000 years ago. 98 00:04:19,133 --> 00:04:20,833 Rome, 33 A.D. 99 00:04:21,233 --> 00:04:24,109 Ground zero for the first recorded liquidity crisis 100 00:04:24,133 --> 00:04:26,300 and government bailout in history. 101 00:04:28,100 --> 00:04:30,576 The largest empire the world had ever seen, 102 00:04:30,600 --> 00:04:33,400 was brought to its knees by a banking disaster. 103 00:04:34,033 --> 00:04:36,909 Emperor Tiberius used money from the National Treasury, 104 00:04:36,933 --> 00:04:40,100 to bail out the country's troubled banks and companies. 105 00:04:40,900 --> 00:04:43,076 History may not repeat itself, 106 00:04:43,100 --> 00:04:46,100 but it certainly rhymes, badly. 107 00:04:47,300 --> 00:04:49,209 People in power and their money, 108 00:04:49,233 --> 00:04:52,133 have always been at the very center of it. 109 00:05:02,500 --> 00:05:04,709 (violin instrumental music) 110 00:05:04,733 --> 00:05:05,909 The story of money 111 00:05:05,933 --> 00:05:08,433 is as old as civilization itself. 112 00:05:10,700 --> 00:05:12,509 When we lived in small tribes, 113 00:05:12,533 --> 00:05:14,700 keeping track of debt was easy. 114 00:05:15,033 --> 00:05:17,309 You owed somebody a load of firewood. 115 00:05:17,333 --> 00:05:19,333 A neighbor owed you a piece of meat. 116 00:05:19,800 --> 00:05:22,000 Credits and debits were kept in your head. 117 00:05:22,333 --> 00:05:23,600 A mental ledger. 118 00:05:24,500 --> 00:05:26,276 - Currency's a language that allows us 119 00:05:26,300 --> 00:05:29,200 to express transactional value between people. 120 00:05:29,833 --> 00:05:33,309 It's technology that's older than the wheel. 121 00:05:33,333 --> 00:05:35,200 It's as old as fire. 122 00:05:36,833 --> 00:05:38,209 - [Voiceover] When humans wanted to trade 123 00:05:38,233 --> 00:05:40,009 outside their tribe or village, 124 00:05:40,033 --> 00:05:41,010 they needed something, 125 00:05:41,034 --> 00:05:43,133 everyone could agree had value. 126 00:05:43,533 --> 00:05:44,633 Something scalable. 127 00:05:45,833 --> 00:05:47,733 Enter commodity monies. 128 00:05:49,633 --> 00:05:50,410 There were many kinds, 129 00:05:50,434 --> 00:05:51,809 but each had to embody 130 00:05:51,833 --> 00:05:54,776 the same five characteristics. 131 00:05:54,800 --> 00:05:57,609 A commodity money is relatively scarce, 132 00:05:57,633 --> 00:05:59,276 easily recognizable, 133 00:05:59,300 --> 00:06:01,609 can be cut into smaller pieces. 134 00:06:01,633 --> 00:06:05,309 You can substitute one piece for another of equal value. 135 00:06:05,333 --> 00:06:08,333 And you can carry it around without too much trouble. 136 00:06:08,933 --> 00:06:11,209 In ancient Rome, it was salt. 137 00:06:11,233 --> 00:06:13,709 The Aztecs used Cacao beans. 138 00:06:13,733 --> 00:06:15,976 It was whale teeth on Fiji. 139 00:06:16,000 --> 00:06:17,876 Yak dung in Tibet. 140 00:06:17,900 --> 00:06:21,176 Shells in Africa and China. 141 00:06:21,200 --> 00:06:24,276 Grains, metal, ivory, rare stones, 142 00:06:24,300 --> 00:06:26,176 leather, fish. 143 00:06:26,200 --> 00:06:29,176 If it had the five characteristics of commodity money, 144 00:06:29,200 --> 00:06:31,533 someone probably used it as currency. 145 00:06:32,433 --> 00:06:34,009 - And then you ask, 146 00:06:34,033 --> 00:06:36,876 what value did these currencies have? 147 00:06:36,900 --> 00:06:38,209 If you go into a primary school, 148 00:06:38,233 --> 00:06:40,409 you'll see children exchanging rubber bands 149 00:06:40,433 --> 00:06:42,909 and Tamagotchi and Poke-man cards 150 00:06:42,933 --> 00:06:44,809 and baseball cards and sweets 151 00:06:44,833 --> 00:06:48,109 and candy and any other form of currency. 152 00:06:48,133 --> 00:06:49,409 People invent currency, 153 00:06:49,433 --> 00:06:51,309 when they have no other currency. 154 00:06:51,333 --> 00:06:53,733 And now they're going to invent digital currencies. 155 00:06:54,300 --> 00:06:56,209 - [Voiceover] But commodities that aren't durable, 156 00:06:56,233 --> 00:06:58,000 are a lousy store of value. 157 00:06:58,333 --> 00:06:59,509 A bad Cacao crop, 158 00:06:59,533 --> 00:07:01,609 or a huge new salt discovery, 159 00:07:01,633 --> 00:07:03,109 can throw your currency 160 00:07:03,133 --> 00:07:05,576 and economy into turmoil. 161 00:07:05,600 --> 00:07:07,833 A more stable system was needed. 162 00:07:08,600 --> 00:07:10,409 About 2,500 years ago, 163 00:07:10,433 --> 00:07:13,333 the first metal coins were minted in China, 164 00:07:14,433 --> 00:07:16,133 and in what is now Turkey. 165 00:07:17,400 --> 00:07:20,176 These coins shared the same five characteristics 166 00:07:20,200 --> 00:07:21,409 with commodity money, 167 00:07:21,433 --> 00:07:23,933 but were also very durable. 168 00:07:24,533 --> 00:07:25,477 In some cases, 169 00:07:25,501 --> 00:07:27,776 coins are the only thing left 170 00:07:27,800 --> 00:07:29,933 of entire civilizations. 171 00:07:31,500 --> 00:07:34,576 - Money does not originate with governments. 172 00:07:34,600 --> 00:07:37,709 Money arises naturally, 173 00:07:37,733 --> 00:07:40,609 as markets begin to develop. 174 00:07:40,633 --> 00:07:43,509 And as people with a division of labor realize, 175 00:07:43,533 --> 00:07:45,176 that if I have eggs, 176 00:07:45,200 --> 00:07:46,509 and you have a cow, 177 00:07:46,533 --> 00:07:48,909 we may need some medium of exchange, 178 00:07:48,933 --> 00:07:50,676 in order for you to buy my eggs, 179 00:07:50,700 --> 00:07:52,400 or for me to buy your cow. 180 00:07:53,033 --> 00:07:54,509 - [Voiceover] Coins were an objective 181 00:07:54,533 --> 00:07:56,909 and universal unit of account 182 00:07:56,933 --> 00:07:58,076 and they allowed people 183 00:07:58,100 --> 00:07:59,309 to buy and sell goods 184 00:07:59,333 --> 00:08:01,033 over vast regions. 185 00:08:01,533 --> 00:08:03,609 The market economy was born. 186 00:08:03,633 --> 00:08:05,000 Coins worked, 187 00:08:05,400 --> 00:08:06,876 but only if people trusted 188 00:08:06,900 --> 00:08:08,109 that the king or emperor, 189 00:08:08,133 --> 00:08:09,309 who issued them, 190 00:08:09,333 --> 00:08:11,633 wasn't cheating on the metal content. 191 00:08:12,133 --> 00:08:13,709 Using coins also meant, 192 00:08:13,733 --> 00:08:16,509 that an authority now controlled the supply 193 00:08:16,533 --> 00:08:18,009 of your currency. 194 00:08:18,033 --> 00:08:19,509 Money and political power, 195 00:08:19,533 --> 00:08:23,133 were inextricably linked, centralized. 196 00:08:24,333 --> 00:08:27,309 Minting coins in a steady and predictable manner, 197 00:08:27,333 --> 00:08:30,433 allowed economic growth and stability. 198 00:08:30,833 --> 00:08:32,409 The Wu Zhu coin in China, 199 00:08:32,433 --> 00:08:35,299 retained its value for 500 years. 200 00:08:35,733 --> 00:08:37,709 In Constantinople, the solidus 201 00:08:37,733 --> 00:08:40,033 lasted for 700 years. 202 00:08:40,833 --> 00:08:41,810 - But in those times, 203 00:08:41,834 --> 00:08:44,209 the coins didn't have the milled, 204 00:08:44,233 --> 00:08:45,909 this sort of milled edge. 205 00:08:45,933 --> 00:08:46,910 They were flat, 206 00:08:46,934 --> 00:08:48,409 and what used to happen, 207 00:08:48,433 --> 00:08:51,409 was as coins were passing from people to people, 208 00:08:51,433 --> 00:08:53,309 people would cut little bits off. 209 00:08:53,333 --> 00:08:54,509 And in fact, 210 00:08:54,533 --> 00:08:56,309 some of the taxation that the kings would do, 211 00:08:56,333 --> 00:08:58,109 would actually be take one eighth 212 00:08:58,133 --> 00:08:59,633 of the coin off. 213 00:09:00,233 --> 00:09:01,876 - [Voiceover] Taxes built castles, 214 00:09:01,900 --> 00:09:04,576 and financed military campaigns, 215 00:09:04,600 --> 00:09:06,376 expensive hobbies. 216 00:09:06,400 --> 00:09:09,309 Soon, royal mints were substituting cheaper metals, 217 00:09:09,333 --> 00:09:11,109 for silver and gold. 218 00:09:11,133 --> 00:09:13,309 This is called debasement. 219 00:09:13,333 --> 00:09:16,100 And Europe's kings made a habit of it. 220 00:09:16,500 --> 00:09:19,776 The currency of France was debased every 20 months, 221 00:09:19,800 --> 00:09:21,733 for 200 years. 222 00:09:22,933 --> 00:09:25,909 If no one can trust the gold or silver content 223 00:09:25,933 --> 00:09:27,109 of your coins, 224 00:09:27,133 --> 00:09:29,500 how can you trade with other countries? 225 00:09:32,033 --> 00:09:34,633 International merchants found a solution. 226 00:09:35,200 --> 00:09:37,309 They recognized that one persons debt, 227 00:09:37,333 --> 00:09:38,609 has value. 228 00:09:38,633 --> 00:09:40,700 It can be traded or transferred. 229 00:09:41,733 --> 00:09:44,476 When those IOU's came from reputable sources, 230 00:09:44,500 --> 00:09:46,733 they could be used as a form of money. 231 00:09:47,200 --> 00:09:48,400 Paper money. 232 00:09:48,733 --> 00:09:51,309 This money was not based on hard commodities, 233 00:09:51,333 --> 00:09:52,409 or metal, but instead, 234 00:09:52,433 --> 00:09:54,733 on someone's promise to pay. 235 00:09:55,400 --> 00:09:57,076 Merchant families like the Medici, 236 00:09:57,100 --> 00:09:58,909 in 15th century Florence, 237 00:09:58,933 --> 00:10:01,700 acted as clearing houses for these IOU's. 238 00:10:01,933 --> 00:10:03,500 It worked like this. 239 00:10:04,300 --> 00:10:07,076 An English trader ordered a shipment of Italian cloth, 240 00:10:07,100 --> 00:10:09,976 from the Medici for 100 gold coins. 241 00:10:10,000 --> 00:10:12,809 His promise to pay the Medici was put on paper. 242 00:10:12,833 --> 00:10:15,709 Meanwhile, the Medici owed 100 gold coins, 243 00:10:15,733 --> 00:10:17,409 to another trading partner, 244 00:10:17,433 --> 00:10:19,709 for delivery of wine from France. 245 00:10:19,733 --> 00:10:21,309 The parties didn't go to the expense 246 00:10:21,333 --> 00:10:24,476 of transporting and exchanging gold coins. 247 00:10:24,500 --> 00:10:27,509 Instead, the paper was transferred. 248 00:10:27,533 --> 00:10:29,976 Everyone agreed that the paper had value, 249 00:10:30,000 --> 00:10:32,009 100 gold coins. 250 00:10:32,033 --> 00:10:34,609 But only because the everyone trusted the Medici, 251 00:10:34,633 --> 00:10:36,476 as solvent middlemen. 252 00:10:36,500 --> 00:10:39,533 They had created a paper money machine. 253 00:10:40,600 --> 00:10:41,976 Within a few generations, 254 00:10:42,000 --> 00:10:43,809 they rose from low crime 255 00:10:43,833 --> 00:10:45,609 to high finance. 256 00:10:45,633 --> 00:10:46,776 Their great wealth, 257 00:10:46,800 --> 00:10:49,009 helped fuel the Italian renaissance 258 00:10:49,033 --> 00:10:50,409 and elevated the family 259 00:10:50,433 --> 00:10:53,209 to levels of enormous political power. 260 00:10:53,233 --> 00:10:55,509 The power to marry into royal families 261 00:10:55,533 --> 00:10:58,209 and get elected as popes. 262 00:10:58,233 --> 00:11:01,109 The ties binding money to power, politics 263 00:11:01,133 --> 00:11:05,200 and influence now ran through church and state. 264 00:11:06,333 --> 00:11:09,109 Merchants had proven that creating paper currency 265 00:11:09,133 --> 00:11:12,009 could be wildly profitable. 266 00:11:12,033 --> 00:11:14,509 Goldsmiths wanted in on the action. 267 00:11:14,533 --> 00:11:17,109 - Imagine it like this, if the goldsmith had seen 268 00:11:17,133 --> 00:11:18,609 over a period of time that some 269 00:11:18,633 --> 00:11:21,809 of the coins he is storing for people were gathering dust. 270 00:11:21,833 --> 00:11:25,109 The people who own them, don't need them right now. 271 00:11:25,133 --> 00:11:28,809 So what if I go and lend them out into the community 272 00:11:28,833 --> 00:11:31,209 and I charge them interest on this loan. 273 00:11:31,233 --> 00:11:33,576 So he starts out lending some of these gold coins 274 00:11:33,600 --> 00:11:37,109 and then later he realizes, actually people 275 00:11:37,133 --> 00:11:39,176 don't even want the gold coins they just want the piece 276 00:11:39,200 --> 00:11:42,776 of paper that says that the gold coins are in the bank 277 00:11:42,800 --> 00:11:44,209 and with the goldsmith. 278 00:11:44,233 --> 00:11:48,133 So I can now make a loan with these pieces of paper. 279 00:11:48,633 --> 00:11:50,309 And whatever I write on the piece of paper, 280 00:11:50,333 --> 00:11:53,676 as long as the people trust me, they'll trust the paper. 281 00:11:53,700 --> 00:11:57,476 And effectively the goldsmiths, the early day bankers, 282 00:11:57,500 --> 00:12:00,933 they had literally acquired the power to print money. 283 00:12:01,633 --> 00:12:03,309 - [Voiceover] More and more such private paper money 284 00:12:03,333 --> 00:12:05,676 from merchants and banks circulated 285 00:12:05,700 --> 00:12:08,233 and began to rival the crown's coins. 286 00:12:08,900 --> 00:12:10,509 The power inherent in controlling 287 00:12:10,533 --> 00:12:14,233 and issuing money began slipping away from the rulers. 288 00:12:15,000 --> 00:12:17,809 They couldn't tax or de-base this new kind of money. 289 00:12:17,833 --> 00:12:20,809 But they had bigger ambitions than ever with trading posts, 290 00:12:20,833 --> 00:12:25,033 colonies, and empires that now stretched across the globe. 291 00:12:27,800 --> 00:12:29,376 For centuries, European countries 292 00:12:29,400 --> 00:12:31,309 would take turns building massive fleets 293 00:12:31,333 --> 00:12:34,233 and waging war on each other to rule the world. 294 00:12:34,733 --> 00:12:38,133 (yelling) 295 00:12:40,333 --> 00:12:42,609 - Government wanted to take the people's money 296 00:12:42,633 --> 00:12:44,609 in order to finance its wars. 297 00:12:44,633 --> 00:12:46,909 That's essentially the history of money. 298 00:12:46,933 --> 00:12:49,233 Money and warfare go together. 299 00:12:52,300 --> 00:12:53,909 - [Voiceover] War is expensive. 300 00:12:53,933 --> 00:12:57,076 One year's income taxes simply aren't enough. 301 00:12:57,100 --> 00:13:00,700 Kings and queens had to borrow money against future taxes. 302 00:13:01,133 --> 00:13:04,276 They needed a ground breaking financial innovation, 303 00:13:04,300 --> 00:13:05,876 government bonds. 304 00:13:05,900 --> 00:13:09,609 The loans came from rich merchant families and goldsmiths, 305 00:13:09,633 --> 00:13:13,709 who by now had become powerful financiers and bankers. 306 00:13:13,733 --> 00:13:17,700 Sovereign debt and deficit spending had been born. 307 00:13:21,800 --> 00:13:25,833 (upbeat instrumental music) 308 00:13:32,633 --> 00:13:36,076 In 1694, the bank of England was established 309 00:13:36,100 --> 00:13:38,576 to fund a war against France. 310 00:13:38,600 --> 00:13:40,776 England's central bank was privately owned 311 00:13:40,800 --> 00:13:43,776 and granted the monopoly to issue banknotes, 312 00:13:43,800 --> 00:13:45,909 paper that could be redeemed for an equal amount 313 00:13:45,933 --> 00:13:48,100 of gold from the government's coffers. 314 00:13:48,633 --> 00:13:51,409 The central bank soon also managed the entire debt 315 00:13:51,433 --> 00:13:52,933 of the crown. 316 00:13:53,133 --> 00:13:56,109 - Money has been a tool of sovereignty for centuries. 317 00:13:56,133 --> 00:13:59,276 Being able to issue currency gave you the power 318 00:13:59,300 --> 00:14:02,809 but it also gave the value to that monetary supply 319 00:14:02,833 --> 00:14:05,309 by backing it with the force of state 320 00:14:05,333 --> 00:14:07,900 with essentially the debt of state. 321 00:14:09,533 --> 00:14:12,276 - [Voiceover] When the U.S. won independence from Britain, 322 00:14:12,300 --> 00:14:14,509 the first article of the new constitution 323 00:14:14,533 --> 00:14:17,800 gave congress the exclusive right to "coin money". 324 00:14:18,533 --> 00:14:22,576 This currency's value was tied to gold in government vaults. 325 00:14:22,600 --> 00:14:26,176 From 1781 until the panic of 1907, 326 00:14:26,200 --> 00:14:30,176 the financial system of the U.S. was an economic Petri dish. 327 00:14:30,200 --> 00:14:33,509 Brief central banks, state banks, private banks, 328 00:14:33,533 --> 00:14:35,709 private currency, government currency, 329 00:14:35,733 --> 00:14:38,676 depressions, strong growth, recessions, 330 00:14:38,700 --> 00:14:41,033 regular boom and bust cycles. 331 00:14:41,500 --> 00:14:43,809 - The long term, as far as capital is concerned, 332 00:14:43,833 --> 00:14:45,876 people want predictability, 333 00:14:45,900 --> 00:14:47,709 people want stability. 334 00:14:47,733 --> 00:14:49,476 From the back of that they can plan 335 00:14:49,500 --> 00:14:51,876 and it is very hard to plan in the long term 336 00:14:51,900 --> 00:14:54,300 with it such a level of volatility. 337 00:14:55,133 --> 00:14:57,909 - [Voiceover] In 1913, bankers and politicians decided 338 00:14:57,933 --> 00:15:01,009 that it was in the country's best interest, and theirs, 339 00:15:01,033 --> 00:15:03,633 to have a permanent central bank. 340 00:15:04,333 --> 00:15:06,533 They created the Federal Reserve. 341 00:15:07,033 --> 00:15:10,009 Among its jobs, expand or contract the supply 342 00:15:10,033 --> 00:15:12,309 of a single national currency, 343 00:15:12,333 --> 00:15:14,209 the Federal Reserve note. 344 00:15:14,233 --> 00:15:17,376 The dollar was tied to gold and strategic control 345 00:15:17,400 --> 00:15:19,800 of it would avoid booms that lead to busts. 346 00:15:20,933 --> 00:15:22,600 At least that was the plan. 347 00:15:23,933 --> 00:15:26,333 Then came 1929. 348 00:15:28,100 --> 00:15:31,233 (yelling) 349 00:15:32,433 --> 00:15:34,809 The great depression would have a profound effect 350 00:15:34,833 --> 00:15:38,933 on monetary policy worldwide. 351 00:15:40,133 --> 00:15:41,809 - [Roosevelt] I shall ask the Congress 352 00:15:41,833 --> 00:15:45,233 for the one remaining instrument to me the president, 353 00:15:45,933 --> 00:15:49,533 broad executive power. 354 00:15:50,233 --> 00:15:52,409 - [Voiceover] Soon, the Fed had printed nearly all the money 355 00:15:52,433 --> 00:15:55,333 it legally could to pump life back into the economy. 356 00:15:55,700 --> 00:15:58,133 It needed gold to fire up the mint. 357 00:15:58,833 --> 00:16:01,509 So in 1933, President Roosevelt issued 358 00:16:01,533 --> 00:16:03,900 a controversial executive order, 359 00:16:04,700 --> 00:16:07,109 forcing all U.S. citizens to sell their gold 360 00:16:07,133 --> 00:16:09,900 to the Federal Reserve at a fixed price, 361 00:16:10,600 --> 00:16:12,633 or go to prison. 362 00:16:13,700 --> 00:16:15,476 The Fed offered far more cash 363 00:16:15,500 --> 00:16:17,800 to foreign governments for their gold. 364 00:16:18,400 --> 00:16:20,376 Many jumped at the offer. 365 00:16:20,400 --> 00:16:21,776 Gold flowed in, 366 00:16:21,800 --> 00:16:24,033 and dollars spread across the globe. 367 00:16:32,533 --> 00:16:36,233 World War II devastated nearly every major economy, 368 00:16:36,533 --> 00:16:38,233 except the United States. 369 00:16:40,233 --> 00:16:42,976 The military and industrial juggernaut emerged 370 00:16:43,000 --> 00:16:45,933 as the global financial super power. 371 00:16:46,433 --> 00:16:48,509 The dollar had become the world's most stable 372 00:16:48,533 --> 00:16:50,233 and trusted currency. 373 00:16:52,133 --> 00:16:54,633 Other countries pegged their currency to the dollar, 374 00:16:55,133 --> 00:16:57,133 which could still be redeemed for gold. 375 00:16:57,833 --> 00:16:59,809 In fact, the U.S. owned more than half 376 00:16:59,833 --> 00:17:01,833 of the world's gold reserves. 377 00:17:03,233 --> 00:17:04,509 In the next few decades, 378 00:17:04,533 --> 00:17:06,933 more dollars flowed to foreign countries. 379 00:17:07,400 --> 00:17:09,676 Governments began debasing their coins 380 00:17:09,700 --> 00:17:11,509 with cheaper metals and printing more 381 00:17:11,533 --> 00:17:14,233 of their own currency than they had in gold. 382 00:17:14,633 --> 00:17:18,009 The bond between precious metals and paper currency 383 00:17:18,033 --> 00:17:19,533 was cracking. 384 00:17:20,533 --> 00:17:23,075 - This is a 1966 50 cent piece. 385 00:17:23,099 --> 00:17:26,776 It was the last coin in regular circulation 386 00:17:26,800 --> 00:17:28,376 in Australia to contain silver. 387 00:17:28,400 --> 00:17:30,676 It contains 80% silver, 388 00:17:30,700 --> 00:17:33,976 so in 1966, this was 50 cents. 389 00:17:34,000 --> 00:17:37,109 Nowadays it's 8 dollars, roughly, 390 00:17:37,133 --> 00:17:38,533 in silver alone. 391 00:17:38,800 --> 00:17:42,009 - [Voiceover] By 1966, foreign nations had had enough 392 00:17:42,033 --> 00:17:44,933 of the U.S. collecting gold and printing cash. 393 00:17:45,633 --> 00:17:48,109 And they had more value in dollars than the U.S. 394 00:17:48,133 --> 00:17:49,933 had bullion in its vaults. 395 00:17:50,433 --> 00:17:53,333 They demanded gold in return for their paper dollars. 396 00:17:54,133 --> 00:17:56,076 Arguments about the value of the dollar 397 00:17:56,100 --> 00:17:57,900 versus their currency ensued. 398 00:17:58,633 --> 00:18:02,033 In 1971, President Nixon settled the matter. 399 00:18:02,333 --> 00:18:05,833 He severed United States' currency from the gold standard. 400 00:18:06,233 --> 00:18:07,676 - I directed Secretary Conelly 401 00:18:07,700 --> 00:18:09,776 to suspend temporarily the convertibility 402 00:18:09,800 --> 00:18:14,009 of the dollar into gold or other reserve assets 403 00:18:14,033 --> 00:18:16,309 except in amounts and conditions determined 404 00:18:16,333 --> 00:18:18,609 to be in the interest of monetary stability 405 00:18:18,633 --> 00:18:21,433 and the best interest of the United States. 406 00:18:21,933 --> 00:18:23,909 - [Voiceover] Never again could anyone legally demand 407 00:18:23,933 --> 00:18:27,433 U.S. Government gold in exchange for paper dollars. 408 00:18:28,233 --> 00:18:31,309 For better or worse, the dollar was now backed solely 409 00:18:31,333 --> 00:18:33,509 by the full faith and credit 410 00:18:33,533 --> 00:18:35,500 of the United States Government. 411 00:18:36,200 --> 00:18:39,009 The wealthiest nation the world had ever known 412 00:18:39,033 --> 00:18:42,933 would bet its future on a single word, trust. 413 00:18:44,300 --> 00:18:46,409 - People have this mythology of money 414 00:18:46,433 --> 00:18:48,333 that is based on very little fact. 415 00:18:48,900 --> 00:18:50,809 And one of the nice things about Bitcoin 416 00:18:50,833 --> 00:18:54,109 is that it forces people to start to ask questions 417 00:18:54,133 --> 00:18:56,133 about the fundamentals of money. 418 00:18:57,133 --> 00:18:59,809 - A Bitcoin is an attempt 419 00:18:59,833 --> 00:19:02,776 to adopt the advanced computerized system 420 00:19:02,800 --> 00:19:05,509 that we have, the internet, 421 00:19:05,533 --> 00:19:09,833 to resurrecting to what money used to be all about. 422 00:19:15,533 --> 00:19:19,333 (upbeat instrumental music) 423 00:19:21,900 --> 00:19:24,209 - I think our dollar policies our monetary policies 424 00:19:24,233 --> 00:19:26,476 our fiscal policies have absolutely created 425 00:19:26,500 --> 00:19:28,276 a nation of debtors. 426 00:19:28,300 --> 00:19:30,776 Not just personal debt, not just corporate debt 427 00:19:30,800 --> 00:19:32,109 but government debt, you have to look 428 00:19:32,133 --> 00:19:34,076 at those all together as one big thing. 429 00:19:34,100 --> 00:19:35,509 What is the wealth of the nation? 430 00:19:35,533 --> 00:19:37,409 Well, the wealth of the nation is a gigantic hole 431 00:19:37,433 --> 00:19:39,476 of money that we owe to the rest of the world, 432 00:19:39,500 --> 00:19:42,333 that is never going to be paid back. 433 00:19:42,833 --> 00:19:44,576 - [Voiceover] Today the United States pays more 434 00:19:44,600 --> 00:19:47,609 than 400 billion dollars in interest 435 00:19:47,633 --> 00:19:50,333 to its creditors, every year. 436 00:19:50,833 --> 00:19:52,409 When a government spends more money 437 00:19:52,433 --> 00:19:54,409 than it collects in taxes, 438 00:19:54,433 --> 00:19:57,733 it simply borrows more or it creates more. 439 00:19:58,533 --> 00:20:00,809 At one time, every piece of paper money 440 00:20:00,833 --> 00:20:02,509 was backed by gold. 441 00:20:02,533 --> 00:20:05,109 Remember, for every 20 dollar bill, 442 00:20:05,133 --> 00:20:07,833 there was $20 worth of gold in a government vault. 443 00:20:08,533 --> 00:20:09,933 Not anymore. 444 00:20:11,533 --> 00:20:13,676 Today, governments create currency 445 00:20:13,700 --> 00:20:16,400 by first creating bonds or treasury-bills. 446 00:20:17,333 --> 00:20:19,276 These bonds are sold in the market, 447 00:20:19,300 --> 00:20:21,900 generating funds for the government that issued them. 448 00:20:24,033 --> 00:20:26,809 Large banks buy U.S. bonds to flip them, 449 00:20:26,833 --> 00:20:29,509 selling them to the Federal Reserve at a profit. 450 00:20:29,533 --> 00:20:31,333 This is the magic money machine. 451 00:20:32,233 --> 00:20:35,109 You see, the Fed is America's central bank. 452 00:20:35,133 --> 00:20:36,733 But it doesn't have any money, 453 00:20:37,233 --> 00:20:39,433 no cash on its balance sheets. 454 00:20:40,333 --> 00:20:41,809 When a bank buys a bond and takes it 455 00:20:41,833 --> 00:20:44,176 to the Federal Reserve, the Fed simply says 456 00:20:44,200 --> 00:20:45,909 "thank you Mr. Banker, 457 00:20:45,933 --> 00:20:47,509 "here's the principal and some profit." 458 00:20:47,533 --> 00:20:48,510 (ching, ching) 459 00:20:48,534 --> 00:20:50,109 New money isn't exchanged, 460 00:20:50,133 --> 00:20:52,309 it simply appears on the bank's accounts. 461 00:20:52,333 --> 00:20:53,400 Magic. 462 00:20:53,733 --> 00:20:55,476 For 100 years and counting, 463 00:20:55,500 --> 00:20:58,476 the precise mechanisms of these bond purchases 464 00:20:58,500 --> 00:21:00,666 have remained a secret. 465 00:21:02,000 --> 00:21:04,000 Here's where it gets really interesting. 466 00:21:04,600 --> 00:21:07,400 The Federal Reserve is not a Government agency. 467 00:21:09,400 --> 00:21:11,609 It's a private entity and its shareholders 468 00:21:11,633 --> 00:21:13,776 are banks which earn a dividend. 469 00:21:13,800 --> 00:21:16,509 As much as 80 billion dollars per year, total, 470 00:21:16,533 --> 00:21:18,909 are paid out to some of the very same banks 471 00:21:18,933 --> 00:21:21,633 that sell the Government debt to the Fed. 472 00:21:22,300 --> 00:21:23,300 Which banks? 473 00:21:23,833 --> 00:21:25,176 Don't even bother asking. 474 00:21:25,200 --> 00:21:26,833 That's also a secret. 475 00:21:28,733 --> 00:21:32,333 In other words, the magic money machine answers to no one. 476 00:21:33,600 --> 00:21:36,709 The Fed also sets the bar for how much interest you pay 477 00:21:36,733 --> 00:21:39,533 for a car, home, or business loan. 478 00:21:40,300 --> 00:21:43,609 - The Federal Reserve has been given the impossible task 479 00:21:43,633 --> 00:21:46,409 of trying to run the credit 480 00:21:46,433 --> 00:21:48,109 and monetary system 481 00:21:48,133 --> 00:21:50,676 as though we are the Soviet Union. 482 00:21:50,700 --> 00:21:54,509 It's the central planner for the key aspect 483 00:21:54,533 --> 00:21:57,309 of capitalism which is how money 484 00:21:57,333 --> 00:21:59,233 and credit is allocated. 485 00:21:59,933 --> 00:22:01,909 The Federal Reserve, on balance, 486 00:22:01,933 --> 00:22:03,609 does not help the economy. 487 00:22:03,633 --> 00:22:06,476 On balance, it hurts the economy. 488 00:22:06,500 --> 00:22:08,876 And it's bound to make mistakes 489 00:22:08,900 --> 00:22:11,300 even with the best of intentions. 490 00:22:11,833 --> 00:22:14,376 - [Voiceover] The Fed is also supposed to boost employment 491 00:22:14,400 --> 00:22:15,976 with low interest rates. 492 00:22:16,000 --> 00:22:18,676 Encouraging people and businesses to buy more goods 493 00:22:18,700 --> 00:22:19,900 and services. 494 00:22:20,900 --> 00:22:23,409 - Governments getting involved in money 495 00:22:23,433 --> 00:22:26,309 is a good thing, and it's also a bad thing. 496 00:22:26,333 --> 00:22:29,676 It's a good thing because money 497 00:22:29,700 --> 00:22:31,609 is the arteries of the economy, 498 00:22:31,633 --> 00:22:33,709 the blood supply of the economy. 499 00:22:33,733 --> 00:22:37,109 Markets are subject to 500 00:22:37,133 --> 00:22:39,500 bouts of euphoria and despair. 501 00:22:39,933 --> 00:22:43,209 And it makes sense for governments 502 00:22:43,233 --> 00:22:47,209 to back currency and to manipulate it. 503 00:22:47,233 --> 00:22:49,209 Moving the money supply up and down 504 00:22:49,233 --> 00:22:53,209 is the most powerful way to sedate 505 00:22:53,233 --> 00:22:56,033 that boom and bust cycle. 506 00:22:56,433 --> 00:22:58,309 - [Voiceover] Manipulating the supply of money 507 00:22:58,333 --> 00:23:02,100 has short term and long term consequences. 508 00:23:06,933 --> 00:23:10,433 (instrumental music) 509 00:23:17,433 --> 00:23:20,609 Central banks aim to create new money carefully, 510 00:23:20,633 --> 00:23:24,109 strategically and very, very slowly. 511 00:23:24,133 --> 00:23:26,409 Releasing more money into the economy 512 00:23:26,433 --> 00:23:30,609 cause prices to rise, ideally by 2% every year. 513 00:23:30,633 --> 00:23:34,109 That's supposed to foster economic growth. 514 00:23:34,133 --> 00:23:36,709 But, 2% inflation means the buying power 515 00:23:36,733 --> 00:23:40,009 of one cash dollar in your pocket today, 516 00:23:40,033 --> 00:23:42,676 will be 98 cents next year. 517 00:23:42,700 --> 00:23:45,200 And less nearly every year to come. 518 00:23:46,533 --> 00:23:49,409 - Since 1913, when the Federal Reserve took over 519 00:23:49,433 --> 00:23:51,109 the United States dollar, 520 00:23:51,133 --> 00:23:52,876 we've seen that the United States dollar has decreased 521 00:23:52,900 --> 00:23:55,476 in value 98%. 522 00:23:55,500 --> 00:23:58,009 Inflation is a far higher tax 523 00:23:58,033 --> 00:24:00,742 because on your income you pay it just once. 524 00:24:00,766 --> 00:24:03,109 If inflation is 2%, you're paying a 2% tax 525 00:24:03,133 --> 00:24:05,409 on your net worth every single year. 526 00:24:05,433 --> 00:24:07,133 Your net worth that you held in currency. 527 00:24:08,033 --> 00:24:10,133 - [Voiceover] So, what does that mean? 528 00:24:12,300 --> 00:24:14,609 If you earned a dollar in 1913, 529 00:24:14,633 --> 00:24:17,333 you could buy 16 loaves of bread. 530 00:24:18,133 --> 00:24:20,900 Today, a dollar barely buys you one. 531 00:24:21,800 --> 00:24:25,609 That's not a quaint notion of how cheap things used to be. 532 00:24:25,633 --> 00:24:27,809 It's proof that the value of your cash 533 00:24:27,833 --> 00:24:30,033 is slowly withering away. 534 00:24:31,333 --> 00:24:35,009 That one dollar invested at 2% in 1913 535 00:24:35,033 --> 00:24:38,776 would now be worth 7 dollars and 24 cents. 536 00:24:38,800 --> 00:24:43,500 More than a 600% return versus a near-total loss. 537 00:24:44,533 --> 00:24:47,476 - The U.S. dollar has gone from being worth one dollar 538 00:24:47,500 --> 00:24:51,009 to now being worth about 4 cents, 539 00:24:51,033 --> 00:24:53,809 so that's 96% of its original value. 540 00:24:53,833 --> 00:24:57,033 That's a direct result of government control. 541 00:24:57,700 --> 00:24:59,009 - [Voiceover] Governments don't create money 542 00:24:59,033 --> 00:25:01,009 from thin air all alone. 543 00:25:01,033 --> 00:25:04,533 You play a key role in the magic money machine. 544 00:25:16,133 --> 00:25:18,709 - It's not really the central banks that are the problem. 545 00:25:18,733 --> 00:25:20,142 They are part of the problem. 546 00:25:20,166 --> 00:25:21,309 But the real problem is that we've given the power 547 00:25:21,333 --> 00:25:23,809 to create money to the same banks 548 00:25:23,833 --> 00:25:25,633 that caused the financial crisis. 549 00:25:27,133 --> 00:25:29,076 - [Voiceover] We put our paychecks and savings 550 00:25:29,100 --> 00:25:31,976 into a bank account and draw from it as we need it. 551 00:25:32,000 --> 00:25:35,433 The banks are the custodians of our money, right? 552 00:25:35,833 --> 00:25:37,000 Wrong! 553 00:25:37,433 --> 00:25:39,409 It is now the property of the bank, 554 00:25:39,433 --> 00:25:41,209 on their balance sheets. 555 00:25:41,233 --> 00:25:44,109 They can do just about anything they want with it, 556 00:25:44,133 --> 00:25:46,709 for example create new money. 557 00:25:46,733 --> 00:25:50,209 Here's how, your bank account shows 100 dollars, 558 00:25:50,233 --> 00:25:53,709 but the bank only holds three and loans 97 559 00:25:53,733 --> 00:25:55,200 to Bob to buy something. 560 00:25:56,733 --> 00:25:59,876 In the bank's computers, you still have 100 dollars 561 00:25:59,900 --> 00:26:00,909 in your account. 562 00:26:00,933 --> 00:26:03,509 But Bob now has 97 dollars 563 00:26:03,533 --> 00:26:06,276 of new virtual money in his account. 564 00:26:06,300 --> 00:26:08,276 Just digits on a computer screen. 565 00:26:08,300 --> 00:26:11,009 There's no cash, no gold, or anything else 566 00:26:11,033 --> 00:26:13,509 backing up the new numbers in Bob's account. 567 00:26:13,533 --> 00:26:15,833 Just his promise to pay it back. 568 00:26:16,733 --> 00:26:19,533 This is new money created as debt. 569 00:26:22,100 --> 00:26:25,176 When those 97 dollars are spent, say in a shop, 570 00:26:25,200 --> 00:26:27,709 the shop owner deposits it into another bank 571 00:26:27,733 --> 00:26:31,109 and it is lent out again and again and again. 572 00:26:31,133 --> 00:26:33,276 And each of these people have numbers 573 00:26:33,300 --> 00:26:36,800 in their accounts showing that they own this money. 574 00:26:37,233 --> 00:26:40,109 So your original 100 dollars has multiplied, 575 00:26:40,133 --> 00:26:44,376 now there are over 3,300 dollars in the system. 576 00:26:44,400 --> 00:26:46,909 This process of loaning out far more money 577 00:26:46,933 --> 00:26:49,809 than a bank actually has, as cash on hand, 578 00:26:49,833 --> 00:26:52,800 is called fractional reserve banking. 579 00:26:53,700 --> 00:26:57,376 - In the U.K., 97% of the money that exists, 580 00:26:57,400 --> 00:26:59,776 is just numbers in the computer system. 581 00:26:59,800 --> 00:27:01,720 And those numbers have been created by the banks. 582 00:27:02,833 --> 00:27:05,109 - [Voiceover] Banks earn untold billions in interest 583 00:27:05,133 --> 00:27:08,409 every year by creating and lending virtual money. 584 00:27:08,433 --> 00:27:11,309 What's more, banks don't even need your deposit 585 00:27:11,333 --> 00:27:12,776 to create new money. 586 00:27:12,800 --> 00:27:15,709 If they consider someone credit-worthy for a loan, 587 00:27:15,733 --> 00:27:19,509 they can put new magic money into his or her account, 588 00:27:19,533 --> 00:27:21,133 and start charging interest. 589 00:27:21,700 --> 00:27:23,176 - So, reporters talk about Bitcoin 590 00:27:23,200 --> 00:27:26,476 as though it's the first digital currency. 591 00:27:26,500 --> 00:27:28,176 But actually we use digital currency 592 00:27:28,200 --> 00:27:30,809 every time you make a transaction 593 00:27:30,833 --> 00:27:33,809 through internet banking, or your bank card. 594 00:27:33,833 --> 00:27:35,576 Actually it's not only digital currency 595 00:27:35,600 --> 00:27:37,676 it's digital currency that is created by 596 00:27:37,700 --> 00:27:39,633 the banks, essentially, out of nothing. 597 00:27:40,433 --> 00:27:43,209 - [Voiceover] In other words, all new money is debt. 598 00:27:43,233 --> 00:27:45,176 This is the part of money creation 599 00:27:45,200 --> 00:27:47,776 that isn't taught in economics class. 600 00:27:47,800 --> 00:27:50,676 Money in paychecks, bank accounts, 601 00:27:50,700 --> 00:27:54,876 401ks, that loan to Bob, credit card debt, 602 00:27:54,900 --> 00:27:59,009 your homeloan, all began life as virtual money 603 00:27:59,033 --> 00:28:00,566 created by the banks. 604 00:28:00,933 --> 00:28:03,709 The entire system is based on trust. 605 00:28:03,733 --> 00:28:05,876 Trust in the bank's solvency. 606 00:28:05,900 --> 00:28:08,533 Trust in the debtor's ability to repay their debt. 607 00:28:09,600 --> 00:28:12,476 If all bank customers demanded just 3% 608 00:28:12,500 --> 00:28:15,409 of their deposits right now, in cash, 609 00:28:15,433 --> 00:28:18,600 this "run on the banks" would reveal the truth. 610 00:28:21,100 --> 00:28:23,276 Almost none that paper currency you think 611 00:28:23,300 --> 00:28:25,133 is in your bank account exists. 612 00:28:26,333 --> 00:28:27,333 It never did. 613 00:28:28,933 --> 00:28:31,909 (birds chirping) 614 00:28:31,933 --> 00:28:33,609 Remember the drunken party? 615 00:28:33,633 --> 00:28:35,876 (rock instrumental music) 616 00:28:35,900 --> 00:28:37,976 Our financial crisis had everything 617 00:28:38,000 --> 00:28:40,109 to do with virtual dollars. 618 00:28:40,133 --> 00:28:42,409 Too many people, with very little income, 619 00:28:42,433 --> 00:28:45,276 borrowed a lot of money they could never repay. 620 00:28:45,300 --> 00:28:46,876 But the banks didn't care. 621 00:28:46,900 --> 00:28:48,409 They didn't have to. 622 00:28:48,433 --> 00:28:50,776 They quickly made and sold shaky loans 623 00:28:50,800 --> 00:28:52,509 to someone else, for a profit. 624 00:28:52,533 --> 00:28:54,009 - And I got them all approved. 625 00:28:54,033 --> 00:28:54,709 - Hey! 626 00:28:54,733 --> 00:28:55,410 (laughter) 627 00:28:55,434 --> 00:28:56,876 - Apply now. 628 00:28:56,900 --> 00:28:59,109 - [Voiceover] Selling bad loans was a good business, 629 00:28:59,133 --> 00:29:02,600 until the whole thing blew up in a global financial crisis. 630 00:29:09,400 --> 00:29:13,233 The magic money machine destroyed 30 million real jobs. 631 00:29:16,533 --> 00:29:20,276 The United States alone lost 16 trillion dollars 632 00:29:20,300 --> 00:29:21,833 in household wealth. 633 00:29:22,233 --> 00:29:26,133 And the banks foreclosed on more than 1 million homes. 634 00:29:28,933 --> 00:29:33,300 (angelic instrumental music) 635 00:29:38,133 --> 00:29:41,209 Selling subprime loans and betting they will fail, 636 00:29:41,233 --> 00:29:44,333 may not be sacred, but it is lucrative. 637 00:29:45,433 --> 00:29:48,209 As much as a quarter of our best and brightest 638 00:29:48,233 --> 00:29:52,233 are being lured by the siren call of the money machine. 639 00:29:54,300 --> 00:29:56,209 Instead of science, engineering, 640 00:29:56,233 --> 00:29:59,176 or medicine, they chose a career playing with, 641 00:29:59,200 --> 00:30:02,009 betting with, other people's money 642 00:30:02,033 --> 00:30:03,776 to get rich quick. 643 00:30:03,800 --> 00:30:04,933 Very rich. 644 00:30:05,400 --> 00:30:08,400 And sometimes, they take shortcuts. 645 00:30:09,000 --> 00:30:11,709 ♪ Get by on a nickle and a dime, 646 00:30:11,733 --> 00:30:16,576 ♪ Money has a funny way of bringing us down 647 00:30:16,600 --> 00:30:21,576 ♪ They say it makes the world go round and around ♪ 648 00:30:21,600 --> 00:30:23,409 - My ancestors in Greece talked 649 00:30:23,433 --> 00:30:26,609 about the corrupting influence of power. 650 00:30:26,633 --> 00:30:30,009 And nothing has changed in these 3,000 years. 651 00:30:30,033 --> 00:30:32,709 When you give control of a massive amounts of money 652 00:30:32,733 --> 00:30:35,609 to a few individuals, they will take advantage 653 00:30:35,633 --> 00:30:36,776 of that control. 654 00:30:36,800 --> 00:30:39,133 ♪ Oh, oh, oh 655 00:30:40,000 --> 00:30:42,409 - Banks today are factoring in fines 656 00:30:42,433 --> 00:30:44,809 and money laundering and all the rules that they break 657 00:30:44,833 --> 00:30:46,509 into their cost of doing business. 658 00:30:46,533 --> 00:30:48,909 JP Morgan is today coming out and saying 659 00:30:48,933 --> 00:30:52,109 that Bitcoin is not a legitimate way of doing business. 660 00:30:52,133 --> 00:30:54,109 Banks today are tied into a system 661 00:30:54,133 --> 00:30:57,076 that is completely rigged to basically harvest money 662 00:30:57,100 --> 00:30:59,109 from the entire global economy 663 00:30:59,133 --> 00:31:01,333 and pump it into the hands of the very few. 664 00:31:01,833 --> 00:31:05,509 ♪ Don't get consumed by your greed 665 00:31:05,533 --> 00:31:07,376 ♪ La la la la la la 666 00:31:07,400 --> 00:31:10,176 - The existing banking system is cozy. 667 00:31:10,200 --> 00:31:13,609 Its captured the regulators, it extracts enormous value 668 00:31:13,633 --> 00:31:16,709 from society without delivering anything in return 669 00:31:16,733 --> 00:31:19,033 and it is parasitic in nature. 670 00:31:20,133 --> 00:31:22,509 - The banks play a very pivotal role in an economy. 671 00:31:22,533 --> 00:31:25,209 You look at any successful economy it has successful banks. 672 00:31:25,233 --> 00:31:27,576 There is a very close correlation with banking profits 673 00:31:27,600 --> 00:31:29,000 and the economy as a whole. 674 00:31:29,633 --> 00:31:31,176 - [Voiceover] In Medieval Europe, a banker 675 00:31:31,200 --> 00:31:34,309 who couldn't repay depositors was hanged. 676 00:31:34,333 --> 00:31:37,209 Today, that same banker would get bailed out, 677 00:31:37,233 --> 00:31:40,633 paid bonuses and enjoy some tax benefits, too. 678 00:31:42,133 --> 00:31:45,476 To date, no senior U.S. banking executive 679 00:31:45,500 --> 00:31:48,009 has been charged for selling the bad loans 680 00:31:48,033 --> 00:31:50,333 that fueled the great recession. 681 00:31:56,033 --> 00:31:58,209 In December 2014, 682 00:31:58,233 --> 00:32:01,209 just 6 years after the last banking crisis 683 00:32:01,233 --> 00:32:03,609 brought the world to its knees, 684 00:32:03,633 --> 00:32:06,509 a Congressman snuck a last minute provision, 685 00:32:06,533 --> 00:32:10,233 written by Citigroup into a crucial funding bill. 686 00:32:10,933 --> 00:32:13,709 The provision allows the largest U.S. banks 687 00:32:13,733 --> 00:32:17,009 to once again make risky derivatives bets 688 00:32:17,033 --> 00:32:18,733 with bank deposits. 689 00:32:20,700 --> 00:32:22,142 But no need to worry, 690 00:32:22,166 --> 00:32:26,333 if the banks implode again, lost deposits must be paid back 691 00:32:28,633 --> 00:32:30,633 by U.S. taxpayers. 692 00:32:48,133 --> 00:32:50,276 (bell rings) 693 00:32:50,300 --> 00:32:52,976 Today's financial innovators package assets 694 00:32:53,000 --> 00:32:56,909 in ever more complex ways, slicing, dicing, 695 00:32:56,933 --> 00:33:01,176 securitizing, always using someone else's money. 696 00:33:01,200 --> 00:33:05,076 They sell debt, transfer risks, leverage bets. 697 00:33:05,100 --> 00:33:07,800 That's what they call innovation. 698 00:33:08,533 --> 00:33:10,276 - When you're talking about financial innovation, 699 00:33:10,300 --> 00:33:13,476 Bitcoin certainly is a very good example 700 00:33:13,500 --> 00:33:15,276 of innovation, but there's also been 701 00:33:15,300 --> 00:33:16,809 other innovations that people, 702 00:33:16,833 --> 00:33:19,309 a bit closer to the world of finance 703 00:33:19,333 --> 00:33:22,209 would cite as good examples. 704 00:33:22,233 --> 00:33:25,109 An example of that would be the original swaps market, 705 00:33:25,133 --> 00:33:27,809 from there moving on to the credit default swap. 706 00:33:27,833 --> 00:33:31,409 It is an excellent example of financial innovation. 707 00:33:31,433 --> 00:33:33,376 But also if it's used incorrectly, 708 00:33:33,400 --> 00:33:35,733 it can create a lot of problems as we've just seen. 709 00:33:36,600 --> 00:33:39,309 - [Voiceover] History teaches that the most revolutionary 710 00:33:39,333 --> 00:33:42,476 and disruptive innovation nearly always comes 711 00:33:42,500 --> 00:33:46,009 from the fringe, not from corporate cubicles. 712 00:33:46,033 --> 00:33:48,509 True innovators see the world differently. 713 00:33:48,533 --> 00:33:50,109 They see the big picture. 714 00:33:50,133 --> 00:33:53,376 Creating new products and entire systems 715 00:33:53,400 --> 00:33:55,309 that lead to new industries. 716 00:33:55,333 --> 00:33:59,733 Steve Jobs called them the "square cogs in round holes". 717 00:34:00,566 --> 00:34:03,376 - It's unsurprising that new innovations 718 00:34:03,400 --> 00:34:06,676 always come from a niche group of early adopters 719 00:34:06,700 --> 00:34:09,809 because it is inherently very hard for many people 720 00:34:09,833 --> 00:34:12,809 to realize the benefits of new technologies. 721 00:34:12,833 --> 00:34:16,309 In 2011, most Bitcoin community people 722 00:34:16,333 --> 00:34:18,609 were either 723 00:34:18,633 --> 00:34:22,109 people from the technology space, the geeks and hackers, 724 00:34:22,133 --> 00:34:26,076 or people from the traditional financial industry. 725 00:34:26,100 --> 00:34:28,809 There are even some bankers and hedge fund traders 726 00:34:28,833 --> 00:34:30,709 using Bitcoinica at that time as well, 727 00:34:30,733 --> 00:34:32,800 which was really surprising to me. 728 00:34:34,533 --> 00:34:36,509 - [Voiceover] A radical new idea is often met 729 00:34:36,533 --> 00:34:39,709 with skepticism, ridicule, even hostility 730 00:34:39,733 --> 00:34:43,609 from those who stand to lose most from its success. 731 00:34:43,633 --> 00:34:47,733 Case in point, the automobile. 732 00:34:50,733 --> 00:34:53,175 In the late 19th century, Karl Benz 733 00:34:53,199 --> 00:34:55,409 and others built the first cars, 734 00:34:55,433 --> 00:34:58,076 contraptions that could threaten the stagecoach 735 00:34:58,100 --> 00:35:00,176 and railroad industries. 736 00:35:00,200 --> 00:35:03,376 These "self-propelled vehicles'" or road trains, 737 00:35:03,400 --> 00:35:06,209 would certainly scare horses, injure people 738 00:35:06,233 --> 00:35:07,876 and damage roads. 739 00:35:07,900 --> 00:35:12,100 Cars, the railroad barons said, were just too dangerous. 740 00:35:12,633 --> 00:35:14,909 And to protect us, they used their power 741 00:35:14,933 --> 00:35:17,909 to pass a law in 1865. 742 00:35:17,933 --> 00:35:20,709 It required every automobile in England 743 00:35:20,733 --> 00:35:23,409 to observe a four mile per hour speed limit 744 00:35:23,433 --> 00:35:26,609 and to be operated by a crew of three, 745 00:35:26,633 --> 00:35:30,709 a driver, an engineer and a flag man. 746 00:35:30,733 --> 00:35:33,609 This heroic flagman walked in front of the car 747 00:35:33,633 --> 00:35:37,176 to warn fellow citizens of the coming danger. 748 00:35:37,200 --> 00:35:39,376 The railroad tycoons, the lawmakers, 749 00:35:39,400 --> 00:35:42,709 the self-appointed gatekeepers used regulation 750 00:35:42,733 --> 00:35:44,433 to stifle innovation. 751 00:35:45,300 --> 00:35:48,009 But they didn't invent the flagman. 752 00:35:48,033 --> 00:35:50,433 He's been around for a long time. 753 00:35:52,433 --> 00:35:54,909 For centuries, very few could read. 754 00:35:54,933 --> 00:35:56,476 Books were copied by hand. 755 00:35:56,500 --> 00:35:58,909 The people in control, political 756 00:35:58,933 --> 00:36:02,109 and religious leaders, wanted to keep it that way. 757 00:36:02,133 --> 00:36:05,009 And they greeted Johann Gutenberg's printing press 758 00:36:05,033 --> 00:36:09,409 with licensing laws, publishing bans, taxes. 759 00:36:09,433 --> 00:36:12,109 In some parts of the world, printing was a crime, 760 00:36:12,133 --> 00:36:13,809 punishable by death. 761 00:36:13,833 --> 00:36:15,909 After all, they were just protecting us 762 00:36:15,933 --> 00:36:17,533 from dangerous ideas. 763 00:36:18,333 --> 00:36:20,109 Before the printing press, there were 764 00:36:20,133 --> 00:36:23,509 an estimated 30,000 books in all of Europe. 765 00:36:23,533 --> 00:36:26,333 50 years later, there were 10 million. 766 00:36:27,100 --> 00:36:29,109 As Gutenberg's invention flourished, 767 00:36:29,133 --> 00:36:30,809 the Dark Ages withered. 768 00:36:30,833 --> 00:36:33,409 Progress couldn't be stopped. 769 00:36:33,433 --> 00:36:36,376 But the flagman never stops trying. 770 00:36:36,400 --> 00:36:38,509 His masters set him loose on each 771 00:36:38,533 --> 00:36:39,776 of these innovations 772 00:36:39,800 --> 00:36:42,309 because they threatened someone's profits, 773 00:36:42,333 --> 00:36:43,933 someone's control. 774 00:36:47,600 --> 00:36:51,409 But remember, this is a story about money. 775 00:36:51,433 --> 00:36:54,709 What if a technological innovation allowed anyone 776 00:36:54,733 --> 00:36:57,876 in the world to be their own bank, 777 00:36:57,900 --> 00:37:02,433 to create a currency free from taxes and banking fees? 778 00:37:12,833 --> 00:37:15,876 The U.S. Constitution forbids citizens from printing 779 00:37:15,900 --> 00:37:18,876 or minting their own currency, competing with 780 00:37:18,900 --> 00:37:21,733 or undercutting reliance on the U.S. dollar. 781 00:37:23,700 --> 00:37:26,809 In 1998, Bernard von Nothaus decided 782 00:37:26,833 --> 00:37:29,600 to test the resolve of the federal government. 783 00:37:31,400 --> 00:37:33,276 - The Liberty Dollar was available in gold, 784 00:37:33,300 --> 00:37:35,509 silver, platinum, and copper. 785 00:37:35,533 --> 00:37:38,809 It was available in three forms, both in specie, 786 00:37:38,833 --> 00:37:40,476 in other words, gold and silver, 787 00:37:40,500 --> 00:37:45,176 in paper, as warehouse receipts and in digital form. 788 00:37:45,200 --> 00:37:47,809 Obviously, the government didn't like it. 789 00:37:47,833 --> 00:37:52,009 They arrested me and convicted me 790 00:37:52,033 --> 00:37:54,809 of counterfeiting, fraud, and conspiracy. 791 00:37:54,833 --> 00:37:58,409 And i'm currently awaiting 22 years sentence 792 00:37:58,433 --> 00:37:59,733 in federal prison. 793 00:38:01,933 --> 00:38:03,333 - [Voiceover] Lesson learned. 794 00:38:04,133 --> 00:38:07,109 - At a hacker's convention in Netherland, 795 00:38:07,133 --> 00:38:10,409 there was a young hacker there 796 00:38:10,433 --> 00:38:15,100 who used the alias of Satoshi Nakamoto, 797 00:38:15,533 --> 00:38:17,709 and he talked to a friend of mine 798 00:38:17,733 --> 00:38:21,309 and he identified the Liberty Dollar and me 799 00:38:21,333 --> 00:38:25,233 as inspiring him to create a new currency. 800 00:38:26,100 --> 00:38:27,609 - [Voiceover] Bernard von Nothaus's arrest 801 00:38:27,633 --> 00:38:29,509 for creating "private money", 802 00:38:29,533 --> 00:38:32,476 may also have inspired Bitcoin's inventor 803 00:38:32,500 --> 00:38:34,609 to keep a lower profile, 804 00:38:34,633 --> 00:38:37,233 publishing the invention under an alias 805 00:38:38,733 --> 00:38:40,166 and vanishing. 806 00:38:40,533 --> 00:38:44,776 - Part of me is interested to know who Satoshi is. 807 00:38:44,800 --> 00:38:47,876 Maybe that's part of the mystique of the story, 808 00:38:47,900 --> 00:38:50,909 it's completely irrelevant to the functioning of Bitcoin 809 00:38:50,933 --> 00:38:54,909 because we have the code to read. 810 00:38:54,933 --> 00:38:57,100 But it would be kind of fun to know. 811 00:38:59,533 --> 00:39:02,233 - Who is Archimedes? 812 00:39:03,233 --> 00:39:05,700 Who is Euclid? 813 00:39:06,600 --> 00:39:08,376 We don't know. 814 00:39:08,400 --> 00:39:12,809 We don't know if Euclid was one person or multiple people? 815 00:39:12,833 --> 00:39:13,909 And you know what? 816 00:39:13,933 --> 00:39:15,409 It doesn't matter. 817 00:39:15,433 --> 00:39:17,909 Euclidian geometry works 818 00:39:17,933 --> 00:39:20,909 whether i know who Euclid was or not. 819 00:39:20,933 --> 00:39:24,309 Whether Euclid was a moral and good person. 820 00:39:24,333 --> 00:39:28,333 Or whether he was a corrupt plutocrat and a bastard. 821 00:39:29,200 --> 00:39:33,909 Science and mathematics have essential truths 822 00:39:33,933 --> 00:39:38,309 that stands alone irrespective of its inventors 823 00:39:38,333 --> 00:39:41,133 and irrespective of their motives. 824 00:39:42,100 --> 00:39:45,509 Well, Bitcoin is a system based 825 00:39:45,533 --> 00:39:47,409 on mathematical truths. 826 00:39:47,433 --> 00:39:50,176 And these mathematical truths stand alone. 827 00:39:50,200 --> 00:39:52,276 We can read the source code in Bitcoin 828 00:39:52,300 --> 00:39:54,576 and understand it and it will be true 829 00:39:54,600 --> 00:39:58,109 whether Satoshi Nakamoto is a man, a woman, 830 00:39:58,133 --> 00:40:01,176 a collection of individuals, a government agency 831 00:40:01,200 --> 00:40:03,333 or aliens from the future. 832 00:40:05,033 --> 00:40:06,976 - [Voiceover] Bitcoin is digital currency 833 00:40:07,000 --> 00:40:09,000 and computer software. 834 00:40:09,933 --> 00:40:12,709 Capital b Bitcoin is the shared code 835 00:40:12,733 --> 00:40:15,076 that creates a global payment network, 836 00:40:15,100 --> 00:40:18,133 using computers connected to the internet. 837 00:40:18,733 --> 00:40:21,109 Bitcoins are virtual currency. 838 00:40:21,133 --> 00:40:25,633 Digital money created, stored and exchanged on that network. 839 00:40:25,933 --> 00:40:28,709 But unlike virtual dollars created by a banker, 840 00:40:28,733 --> 00:40:31,276 this new currency was created with math 841 00:40:31,300 --> 00:40:33,433 by an anonymous inventor. 842 00:40:34,233 --> 00:40:37,676 Bitcoin is an open-source software protocol, 843 00:40:37,700 --> 00:40:41,200 like much of the code supporting the internet and email. 844 00:40:41,900 --> 00:40:46,076 Open-source means anyone, everyone can use the protocol. 845 00:40:46,100 --> 00:40:49,109 No one person or company can control it. 846 00:40:49,133 --> 00:40:52,076 Every change to the software is public, 847 00:40:52,100 --> 00:40:54,433 open and transparent. 848 00:40:55,633 --> 00:40:57,900 The code was first developed by Satoshi. 849 00:40:59,033 --> 00:41:00,842 Then there were dozens, now hundreds 850 00:41:00,866 --> 00:41:03,509 of programmers constantly collaborating 851 00:41:03,533 --> 00:41:07,133 to improve Bitcoin's features and security. 852 00:41:08,800 --> 00:41:11,133 So what makes Bitcoin a breakthrough? 853 00:41:11,600 --> 00:41:13,876 It tackles an ancient human dilemma 854 00:41:13,900 --> 00:41:16,233 and solves a computer science problem. 855 00:41:17,300 --> 00:41:18,976 Any shared information, or data 856 00:41:19,000 --> 00:41:21,133 can be flawed, corrupted. 857 00:41:22,500 --> 00:41:24,533 Anything can be faked. 858 00:41:26,900 --> 00:41:30,500 How do we know that what we're receiving can be trusted? 859 00:41:33,000 --> 00:41:34,209 - In our traditional mindset, 860 00:41:34,233 --> 00:41:36,309 it's very important to know who is behind 861 00:41:36,333 --> 00:41:38,576 this currency because their reputation 862 00:41:38,600 --> 00:41:40,409 is significant in knowing that our funds 863 00:41:40,433 --> 00:41:42,876 in the true wealth is actually safe. 864 00:41:42,900 --> 00:41:44,042 - [Voiceover] In finance, we rely 865 00:41:44,066 --> 00:41:46,009 on trusted third parties like banks, 866 00:41:46,033 --> 00:41:48,609 credit card companies, remittance services. 867 00:41:48,633 --> 00:41:50,876 They keep track of money as it moves 868 00:41:50,900 --> 00:41:52,376 from one account to another. 869 00:41:52,400 --> 00:41:54,409 And they charge us handsomely for it. 870 00:41:54,433 --> 00:41:57,009 We trust that their digital ledgers of credits 871 00:41:57,033 --> 00:41:59,200 and debits balance. 872 00:41:59,933 --> 00:42:02,109 A financial system that cuts out these middlemen 873 00:42:02,133 --> 00:42:04,909 could be faster, cheaper 874 00:42:04,933 --> 00:42:06,633 and more secure. 875 00:42:07,500 --> 00:42:09,209 But Bitcoin is digital. 876 00:42:09,233 --> 00:42:13,076 Music and movies are easily pirated, copied, stolen. 877 00:42:13,100 --> 00:42:15,109 How can a digital currency retain value 878 00:42:15,133 --> 00:42:17,633 if anyone can make a million copies? 879 00:42:18,133 --> 00:42:21,409 The answer is at the core of Satoshi's invention. 880 00:42:21,433 --> 00:42:23,909 A Bitcoin is not a file on a computer. 881 00:42:23,933 --> 00:42:26,609 It's an entry in the publicly-distributed database 882 00:42:26,633 --> 00:42:28,133 called the blockchain. 883 00:42:29,333 --> 00:42:32,276 Just as the Medici kept a ledger of credits and debits. 884 00:42:32,300 --> 00:42:34,809 Today's banks record each transaction 885 00:42:34,833 --> 00:42:37,276 as a plus and minus in their ledgers. 886 00:42:37,300 --> 00:42:39,676 Now we call them databases. 887 00:42:39,700 --> 00:42:42,109 Bank accounts are replaced by a digital wallet 888 00:42:42,133 --> 00:42:43,833 that you alone control. 889 00:42:44,500 --> 00:42:46,409 Bitcoin's ledger is the blockchain. 890 00:42:46,433 --> 00:42:48,909 A record of every bitcoin in existence 891 00:42:48,933 --> 00:42:51,809 and every bitcoin transaction ever made. 892 00:42:51,833 --> 00:42:55,400 It always balances because no bitcoin ever leaves it. 893 00:42:56,933 --> 00:42:59,709 When a bitcoin is "sent" from one digital wallet 894 00:42:59,733 --> 00:43:01,509 to another, what they are really sending 895 00:43:01,533 --> 00:43:04,309 is control over that part of the database. 896 00:43:04,333 --> 00:43:08,009 Code that is a unique key for the new owner. 897 00:43:08,033 --> 00:43:10,109 As the network processes transactions, 898 00:43:10,133 --> 00:43:12,776 it constantly synchronizes the one ledger 899 00:43:12,800 --> 00:43:14,876 across the global network. 900 00:43:14,900 --> 00:43:17,209 Each computer, or Bitcoin miner, 901 00:43:17,233 --> 00:43:20,576 has a complete and identical copy. 902 00:43:20,600 --> 00:43:22,909 And because the blockchain is public, 903 00:43:22,933 --> 00:43:26,809 it cannot be controlled by any one person or computer. 904 00:43:26,833 --> 00:43:29,076 Owners of the Bitcoin mining computers 905 00:43:29,100 --> 00:43:32,509 are rewarded with new Bitcoins for processing transactions 906 00:43:32,533 --> 00:43:34,333 and keeping the network secure. 907 00:43:39,633 --> 00:43:42,309 In other words, the Bitcoin network replaces banks 908 00:43:42,333 --> 00:43:43,700 and bankers. 909 00:43:45,100 --> 00:43:47,209 Today, the combined computing power 910 00:43:47,233 --> 00:43:49,209 of this global network is greater 911 00:43:49,233 --> 00:43:53,109 than the 500 biggest supercomputers combined, 912 00:43:53,133 --> 00:43:54,833 times 10,000! 913 00:43:55,700 --> 00:43:58,009 And because every transaction is verified 914 00:43:58,033 --> 00:43:59,876 and recorded by the network, 915 00:43:59,900 --> 00:44:02,209 a bitcoin cannot be forged. 916 00:44:02,233 --> 00:44:05,509 Digital currency cannot be debased with cheap metals, 917 00:44:05,533 --> 00:44:08,276 or printed by the billion at will. 918 00:44:08,300 --> 00:44:11,509 Too much currency can unleash a monster, 919 00:44:11,533 --> 00:44:14,209 skyrocketing prices, trillion dollar bills 920 00:44:14,233 --> 00:44:16,633 that can't buy a loaf of bread. 921 00:44:16,933 --> 00:44:18,976 - There is a big movement in the U.S. demanding 922 00:44:19,000 --> 00:44:20,809 that the Fed be audited so 923 00:44:20,833 --> 00:44:22,433 that we can find out what they are doing. 924 00:44:23,233 --> 00:44:24,876 Nobody really knows how many dollars 925 00:44:24,900 --> 00:44:26,609 are in existence for example. 926 00:44:26,633 --> 00:44:28,209 Ben Bernanke created several trillions 927 00:44:28,233 --> 00:44:30,409 of dollars over the last several years. 928 00:44:30,433 --> 00:44:32,733 But nobody really knows where they landed. 929 00:44:33,433 --> 00:44:34,876 - At any time for any reason, 930 00:44:34,900 --> 00:44:37,409 the central banks can print as much money as they want. 931 00:44:37,433 --> 00:44:40,009 They call it fancy things like quantitative easing. 932 00:44:40,033 --> 00:44:41,409 And when they do that it makes the dollar 933 00:44:41,433 --> 00:44:43,876 or euros or yen that you and I have worth less. 934 00:44:43,900 --> 00:44:47,709 So if the world starts using bitcoin as their currency 935 00:44:47,733 --> 00:44:50,733 it can't be controlled by central bankers or politicians. 936 00:44:51,133 --> 00:44:53,009 - [Voiceover] Remember, central banks create money 937 00:44:53,033 --> 00:44:54,809 to boost the economy and try 938 00:44:54,833 --> 00:44:57,709 to pull it back out before inflation heats up. 939 00:44:57,733 --> 00:45:00,542 But no one knows how much magic money global banks 940 00:45:00,566 --> 00:45:04,333 are creating to boost their profits with questionable loans. 941 00:45:04,733 --> 00:45:06,309 - Bitcoin is completely the opposite. 942 00:45:06,333 --> 00:45:07,409 It's totally transparent. 943 00:45:07,433 --> 00:45:09,433 You know exactly how many exist. 944 00:45:10,100 --> 00:45:11,709 - [Voiceover] The computer code behind Bitcoin 945 00:45:11,733 --> 00:45:13,676 has a built in brake pedal, 946 00:45:13,700 --> 00:45:15,176 cutting the creation of bitcoins 947 00:45:15,200 --> 00:45:17,433 in half every four years. 948 00:45:18,133 --> 00:45:21,209 This ensures a transparent controlled scarcity 949 00:45:21,233 --> 00:45:24,109 and ultimately limits the total number of bitcoins 950 00:45:24,133 --> 00:45:25,600 to 21 million. 951 00:45:26,400 --> 00:45:30,400 No lobbyist, no politician, no banker can create more, 952 00:45:30,933 --> 00:45:34,633 or change the mathematical rules dictating their creation. 953 00:45:35,500 --> 00:45:36,976 - Advancing accountability. 954 00:45:37,000 --> 00:45:39,309 And that's something that's the most exciting about Bitcoin 955 00:45:39,333 --> 00:45:40,909 and technology behind it. 956 00:45:40,933 --> 00:45:43,809 Is not so much that it will supplant the dollar 957 00:45:43,833 --> 00:45:47,209 or that it will supplant government itself. 958 00:45:47,233 --> 00:45:50,209 But all of a sudden there is a competitor to government. 959 00:45:50,233 --> 00:45:52,109 And that government itself now needs 960 00:45:52,133 --> 00:45:54,633 to look over its shoulder more than it did. 961 00:45:55,000 --> 00:45:56,576 - [Voiceover] This new digital currency 962 00:45:56,600 --> 00:45:59,109 can be purchased online with a credit card 963 00:45:59,133 --> 00:46:01,409 or in person with cash. 964 00:46:01,433 --> 00:46:04,533 And it has the five key characteristics of money. 965 00:46:04,933 --> 00:46:07,033 But is it a store of value? 966 00:46:07,900 --> 00:46:11,009 Is it stable or will it diminish over time, 967 00:46:11,033 --> 00:46:15,433 like a commodity rendered useless, or a crop that fails? 968 00:46:15,933 --> 00:46:17,809 The ultimate power of a cryptocurrency 969 00:46:17,833 --> 00:46:20,009 is unleashed by mainstream adoption 970 00:46:20,033 --> 00:46:23,833 and an ever-growing volume of transactions. 971 00:46:25,033 --> 00:46:27,609 - With bitcoin, the currency is being created 972 00:46:27,633 --> 00:46:30,076 much more slowly than other currencies. 973 00:46:30,100 --> 00:46:31,776 And the effect of that has been 974 00:46:31,800 --> 00:46:34,809 to turn it into what is essentially a speculative asset. 975 00:46:34,833 --> 00:46:37,076 If you ask a lot of Bitcoin enthusiasts 976 00:46:37,100 --> 00:46:39,509 whether they are spending the currency, they're not. 977 00:46:39,533 --> 00:46:42,409 They're sitting on it and waiting for the price to go up. 978 00:46:42,433 --> 00:46:45,309 It isn't a currency if you don't use it to pay people. 979 00:46:45,333 --> 00:46:47,409 The point is that the average person is quite happy 980 00:46:47,433 --> 00:46:51,609 to walk into a bar and hand over a five dollar note 981 00:46:51,633 --> 00:46:54,076 in order to get a drink. 982 00:46:54,100 --> 00:46:55,976 So you've got to realize that most people 983 00:46:56,000 --> 00:46:58,533 are happy with the money system they have. 984 00:46:59,733 --> 00:47:02,309 - [Voiceover] If most people are happy with cash, 985 00:47:02,333 --> 00:47:04,533 they're in love with plastic. 986 00:47:05,033 --> 00:47:07,709 In the U.S. two-thirds of in-person sales 987 00:47:07,733 --> 00:47:10,100 are done with debit or credit cards. 988 00:47:11,133 --> 00:47:14,676 That plastic is a 60 year old technology, 989 00:47:14,700 --> 00:47:16,476 created by a middleman. 990 00:47:16,500 --> 00:47:19,409 Never designed for the internet. 991 00:47:19,433 --> 00:47:21,509 Each transaction requires personal data 992 00:47:21,533 --> 00:47:24,576 like your name and address. 993 00:47:24,600 --> 00:47:27,433 Credit card databases are regularly hacked 994 00:47:28,433 --> 00:47:32,000 with fraudulent purchases charged to your account. 995 00:47:32,500 --> 00:47:35,009 Criminals buy and sell stolen credit cards 996 00:47:35,033 --> 00:47:38,533 by the thousands in dark corners of the internet. 997 00:47:39,233 --> 00:47:41,309 In some parts of London, one-third 998 00:47:41,333 --> 00:47:45,800 of all online credit card transactions are fraudulent. 999 00:47:46,500 --> 00:47:49,709 Card issuers don't hold you responsible for fraud 1000 00:47:49,733 --> 00:47:52,109 but protection comes with a price, 1001 00:47:52,133 --> 00:47:54,176 2 to 4% in fees. 1002 00:47:54,200 --> 00:47:56,800 That's 50 billion dollars a year. 1003 00:47:57,233 --> 00:47:58,576 - The issue with credit cards 1004 00:47:58,600 --> 00:48:00,476 from the merchant's perspective 1005 00:48:00,500 --> 00:48:01,976 is there's a lot of risk. 1006 00:48:02,000 --> 00:48:04,309 If they a take a credit card, there might be a chargeback, 1007 00:48:04,333 --> 00:48:06,809 there might be fraudulent purchases. 1008 00:48:06,833 --> 00:48:08,209 In fact there are hundreds of billions 1009 00:48:08,233 --> 00:48:11,200 of dollars every year in fraudulent purchases. 1010 00:48:12,133 --> 00:48:14,509 - [Voiceover] A bitcoin purchase is done for pennies 1011 00:48:14,533 --> 00:48:16,009 but there are no protections. 1012 00:48:16,033 --> 00:48:17,509 If you lose your passwords, 1013 00:48:17,533 --> 00:48:20,476 or are fooled into paying the wrong person, 1014 00:48:20,500 --> 00:48:22,609 you can never get your money back. 1015 00:48:22,633 --> 00:48:25,409 It is like digital cash. 1016 00:48:25,433 --> 00:48:28,409 For a seller, this means no chargeback risks. 1017 00:48:28,433 --> 00:48:31,876 For an e-commerce companies like Expedia or Overstock, 1018 00:48:31,900 --> 00:48:35,733 cutting credit card fees can double their profit margin. 1019 00:48:37,400 --> 00:48:40,209 - You could not miss the point more effectively 1020 00:48:40,233 --> 00:48:42,809 than by thinking of bitcoin as a currency 1021 00:48:42,833 --> 00:48:45,309 and payment network that will make shopping easier 1022 00:48:45,333 --> 00:48:47,009 for the first world. 1023 00:48:47,033 --> 00:48:51,333 Bitcoin is about everything else, everywhere else. 1024 00:48:54,100 --> 00:48:56,409 - [Voiceover] There are 2.5 billion people 1025 00:48:56,433 --> 00:48:58,033 without a bank account. 1026 00:48:58,933 --> 00:49:02,009 With Bitcoin, a mobile phone with an internet connection 1027 00:49:02,033 --> 00:49:06,333 is now a bank, with access to the global market place. 1028 00:49:07,033 --> 00:49:09,209 - What happens when Bitcoin services 1029 00:49:09,233 --> 00:49:10,776 and infrastructure and Bitcoin wallets 1030 00:49:10,800 --> 00:49:13,476 and payment processors start going into these countries. 1031 00:49:13,500 --> 00:49:16,309 These people will be able to gain benefits 1032 00:49:16,333 --> 00:49:19,009 from trade where they could not previously. 1033 00:49:19,033 --> 00:49:22,609 These people will be able to send money home, 1034 00:49:22,633 --> 00:49:24,609 international remittance, which is one 1035 00:49:24,633 --> 00:49:27,933 of the major pain points of the current financial system. 1036 00:49:28,600 --> 00:49:30,209 - Here, if i send 100 dollars. 1037 00:49:30,233 --> 00:49:32,609 With banks it's going to cost me 20%. 1038 00:49:32,633 --> 00:49:35,009 Western Union's going to cost 10%. 1039 00:49:35,033 --> 00:49:37,509 Other options that are competing with Western Union 1040 00:49:37,533 --> 00:49:39,609 are still going to be about 5%. 1041 00:49:39,633 --> 00:49:42,976 And if you are sending to really remote areas 1042 00:49:43,000 --> 00:49:46,233 it's going to be anywhere between 15 and 30%. 1043 00:49:48,600 --> 00:49:50,209 - So in terms of money remittances 1044 00:49:50,233 --> 00:49:52,976 it is going to be a game changer using Bitcoin. 1045 00:49:53,000 --> 00:49:54,376 You do not need a bank account. 1046 00:49:54,400 --> 00:49:55,576 You just need an internet connection 1047 00:49:55,600 --> 00:49:58,209 and a wallet to get set up. 1048 00:49:58,233 --> 00:50:00,509 It's a tool to give people an access 1049 00:50:00,533 --> 00:50:02,676 into the global ecosystem and give them a promise 1050 00:50:02,700 --> 00:50:06,309 for an economic future and specifically provide a way 1051 00:50:06,333 --> 00:50:08,809 for them to not be dependent on a government 1052 00:50:08,833 --> 00:50:10,709 that could shut down their bank accounts 1053 00:50:10,733 --> 00:50:12,576 or even could go into their bank accounts 1054 00:50:12,600 --> 00:50:14,300 and take out finances. 1055 00:50:15,900 --> 00:50:17,409 - Goldman Sachs came out with a report 1056 00:50:17,433 --> 00:50:19,309 and they basically looked at 1057 00:50:19,333 --> 00:50:21,676 if you were to replace all transactions globally, 1058 00:50:21,700 --> 00:50:25,109 so FX, bank to bank transactions 1059 00:50:25,133 --> 00:50:29,733 with the Bitcoin protocol and still charging 1%, mind you, 1060 00:50:30,033 --> 00:50:33,409 it would save the global economy 200 billion, 1061 00:50:33,433 --> 00:50:36,576 not million, 200 billion dollars a year 1062 00:50:36,600 --> 00:50:38,909 in saved transaction costs 1063 00:50:38,933 --> 00:50:42,433 which ultimately goes back into the hands of the consumer. 1064 00:50:42,733 --> 00:50:44,809 - [Voiceover] An international wire transfer 1065 00:50:44,833 --> 00:50:47,276 can take up to four days. 1066 00:50:47,300 --> 00:50:49,409 Yet the internet allows us to instantly 1067 00:50:49,433 --> 00:50:52,909 and globally share text, pictures, videos, 1068 00:50:52,933 --> 00:50:54,233 anything digital. 1069 00:50:54,633 --> 00:50:55,809 Why not money? 1070 00:50:55,833 --> 00:50:58,209 Money, which, we now know only exists 1071 00:50:58,233 --> 00:51:00,666 as digits in a bank's database? 1072 00:51:01,533 --> 00:51:02,709 - Wouldn't it be great, 1073 00:51:02,733 --> 00:51:04,576 if you could send Bitcoin transactions 1074 00:51:04,600 --> 00:51:06,376 just simply via a tweet? 1075 00:51:06,400 --> 00:51:10,409 For example, you would say @theendofmoney 1076 00:51:10,433 --> 00:51:13,376 one dollar worth of bitcoin and so we built just that. 1077 00:51:13,400 --> 00:51:16,233 All you have to do is to hashtag it with tippercoin. 1078 00:51:16,933 --> 00:51:18,376 Press send. 1079 00:51:18,400 --> 00:51:20,376 And our twitterbot will process the transactions, 1080 00:51:20,400 --> 00:51:23,676 notify you and give you a link and this will allow you 1081 00:51:23,700 --> 00:51:26,800 to either withdraw your bitcoins or send it to someone else. 1082 00:51:27,433 --> 00:51:29,209 - With Bitcoin, you can send one dollar 1083 00:51:29,233 --> 00:51:31,709 or 1,000,000 dollars worth of value anywhere in the world. 1084 00:51:31,733 --> 00:51:32,909 You can do it for free 1085 00:51:32,933 --> 00:51:34,609 or you can pay the Bitcoin network fee, 1086 00:51:34,633 --> 00:51:36,009 which is still just around a penny. 1087 00:51:36,033 --> 00:51:37,509 And there is nothing that the big banks 1088 00:51:37,533 --> 00:51:39,333 or the politicians can do to stop it. 1089 00:51:39,733 --> 00:51:42,809 - [Voiceover] A cryptocurrency that can only be created 1090 00:51:42,833 --> 00:51:45,409 and transferred with computer networks 1091 00:51:45,433 --> 00:51:48,833 may be the next step of the digital revolution. 1092 00:51:49,433 --> 00:51:51,500 The rise of machines. 1093 00:51:52,000 --> 00:51:55,376 Self-driving cars, drones, 1094 00:51:55,400 --> 00:51:58,800 robots that rely less and less on humans. 1095 00:52:00,766 --> 00:52:03,676 - What I often think is that the future of Bitcoin 1096 00:52:03,700 --> 00:52:07,376 or digital currency from a broader perspective 1097 00:52:07,400 --> 00:52:10,909 is really about machine to machine payments. 1098 00:52:10,933 --> 00:52:14,509 So by the time you have an un-manned taxi driving you 1099 00:52:14,533 --> 00:52:17,276 around New York, and then going to power up 1100 00:52:17,300 --> 00:52:19,576 at an unmanned power station, 1101 00:52:19,600 --> 00:52:23,309 or going to get repairs at an un-manned auto shop. 1102 00:52:23,333 --> 00:52:26,109 You'll see the machine to machine payments done 1103 00:52:26,133 --> 00:52:28,100 with some sort of digital currency. 1104 00:52:47,933 --> 00:52:50,076 - We actually built this world that we live in 1105 00:52:50,100 --> 00:52:51,509 over the last two or 300 years. 1106 00:52:51,533 --> 00:52:52,909 We made some mistakes. 1107 00:52:52,933 --> 00:52:55,700 We've learnt to make things better. 1108 00:52:57,433 --> 00:52:59,609 The idea that there is this magic key 1109 00:52:59,633 --> 00:53:02,009 that if you just sort of stop doing a few things, 1110 00:53:02,033 --> 00:53:05,476 that they'll be perfect order that will settle, 1111 00:53:05,500 --> 00:53:09,576 is a very childish, 1112 00:53:09,600 --> 00:53:11,509 ideological delusion 1113 00:53:11,533 --> 00:53:12,909 in my opinion. 1114 00:53:12,933 --> 00:53:15,509 But that's not to say 1115 00:53:15,533 --> 00:53:17,609 that Bitcoin isn't an exciting thing. 1116 00:53:17,633 --> 00:53:20,076 It's an terrifically exciting thing. 1117 00:53:20,100 --> 00:53:23,776 But we have to try and engage with it 1118 00:53:23,800 --> 00:53:27,833 with working minds not with magical thinking. 1119 00:53:28,500 --> 00:53:31,109 - People are suggesting that it's going 1120 00:53:31,133 --> 00:53:33,676 to be another world currency 1121 00:53:33,700 --> 00:53:36,309 rivaling the dollar, or the euro, or the yen. 1122 00:53:36,333 --> 00:53:39,133 I think that's not going to happen. 1123 00:53:40,033 --> 00:53:41,809 I prefer to trust the banks or the central government 1124 00:53:41,833 --> 00:53:44,776 compared to the Bitcoin is because someone is accountable. 1125 00:53:44,800 --> 00:53:47,133 Whereas with the Bitcoin it is completely deregulated. 1126 00:53:48,133 --> 00:53:50,276 There is no central control. 1127 00:53:50,300 --> 00:53:52,309 There is no one held accountable. 1128 00:53:52,333 --> 00:53:56,300 It is a free float, purely demand and supply driven. 1129 00:53:59,333 --> 00:54:02,009 - So, clearly, this is not a currency. 1130 00:54:02,033 --> 00:54:03,609 Currencies don't behave like this. 1131 00:54:03,633 --> 00:54:07,333 But what this is is a high-risk, speculative commodity. 1132 00:54:07,933 --> 00:54:09,309 - So, for the entrepreneurs, the bankers, 1133 00:54:09,333 --> 00:54:10,809 the governments and anyone else studying 1134 00:54:10,833 --> 00:54:12,976 and watching Bitcoin, all i have to say 1135 00:54:13,000 --> 00:54:15,009 is that there will probably be a lot of volatility 1136 00:54:15,033 --> 00:54:18,033 in an upward trajectory and to buckle up. 1137 00:54:23,133 --> 00:54:25,776 - [Voiceover] Criminals, scam artists, bad actors, 1138 00:54:25,800 --> 00:54:29,833 are drawn to any kind of money like a moth to a flame. 1139 00:54:31,633 --> 00:54:33,809 - Silk Road was a marketplace that was online. 1140 00:54:33,833 --> 00:54:35,976 It existed in the underground web. 1141 00:54:36,000 --> 00:54:37,376 Now this marketplace allowed people 1142 00:54:37,400 --> 00:54:40,033 to sell things that were illegal to governments. 1143 00:54:40,633 --> 00:54:43,609 - [Voiceover] Fake ID's, pirated music, 1144 00:54:43,633 --> 00:54:45,909 bibles in North Korea. 1145 00:54:45,933 --> 00:54:49,009 Are cryptocurrencies inherently bad 1146 00:54:49,033 --> 00:54:52,809 or just the newest tool to acquire the forbidden? 1147 00:54:52,833 --> 00:54:54,676 - Porn is illegal in Iran. 1148 00:54:54,700 --> 00:54:56,409 Well, there was a few percentages of sales 1149 00:54:56,433 --> 00:54:59,209 on Silk Road was to sell porn to Iranians. 1150 00:54:59,233 --> 00:55:00,776 Now, a much broader one, 1151 00:55:00,800 --> 00:55:03,533 that gets a lot of press for the guys at Silk Road is drugs. 1152 00:55:05,600 --> 00:55:08,109 - I've been doing research over the past couple of years 1153 00:55:08,133 --> 00:55:10,809 into the online drug marketplaces 1154 00:55:10,833 --> 00:55:13,609 in the Dark net using TOR and Bitcoin 1155 00:55:13,633 --> 00:55:18,200 as technologies to enable illicit drug transactions. 1156 00:55:20,733 --> 00:55:24,200 We did a global survey of drug users 1157 00:55:24,733 --> 00:55:26,976 and we had over 20,000 people respond 1158 00:55:27,000 --> 00:55:29,976 to that and the majority of those people 1159 00:55:30,000 --> 00:55:32,609 were buying traditionally illicit drugs. 1160 00:55:32,633 --> 00:55:33,933 Ecstasy, cannabis. 1161 00:55:36,133 --> 00:55:38,109 The F.B.I. brought down Silk Road. 1162 00:55:38,133 --> 00:55:40,609 It certainly hasn't stopped the trading 1163 00:55:40,633 --> 00:55:42,433 of illicit drugs online. 1164 00:55:43,533 --> 00:55:45,509 - A lot of people want to criticize Bitcoin 1165 00:55:45,533 --> 00:55:48,109 for the use for illegal things or illicit things. 1166 00:55:48,133 --> 00:55:50,709 But if you look at it, the most popular currency 1167 00:55:50,733 --> 00:55:54,133 in the entire world for doing bad things is the U.S. dollar. 1168 00:55:58,433 --> 00:56:01,209 - If you think of Bitcoin as a platform instead 1169 00:56:01,233 --> 00:56:03,476 of a currency then you really begin 1170 00:56:03,500 --> 00:56:05,600 to see the potential it has. 1171 00:56:06,133 --> 00:56:08,276 - The ledger which cannot be forged, 1172 00:56:08,300 --> 00:56:11,376 it cannot be changed and is universally accepted is Genius. 1173 00:56:11,400 --> 00:56:13,409 There will be Bitcoin technology forever 1174 00:56:13,433 --> 00:56:16,033 and it will have applications for years to come. 1175 00:56:16,233 --> 00:56:18,709 - [Voiceover] Creating a secure, global payment system 1176 00:56:18,733 --> 00:56:21,300 may just be the beginning. 1177 00:56:22,133 --> 00:56:24,676 Patents, contracts, land titles, 1178 00:56:24,700 --> 00:56:27,576 proof of ownership can be baked into Bitcoin. 1179 00:56:27,600 --> 00:56:30,033 Securely held in the public ledger. 1180 00:56:30,833 --> 00:56:32,209 - I read up more about Bitcoin. 1181 00:56:32,233 --> 00:56:33,876 I played with the source code. 1182 00:56:33,900 --> 00:56:35,409 I built some things that I realized, 1183 00:56:35,433 --> 00:56:38,509 this is a actually a very, very powerful protocol. 1184 00:56:38,533 --> 00:56:39,609 It's not just a currency but 1185 00:56:39,633 --> 00:56:41,700 it's actually programmable money. 1186 00:56:42,800 --> 00:56:44,809 - [Voiceover] The digital age has fundamentally 1187 00:56:44,833 --> 00:56:46,209 changed the world. 1188 00:56:46,233 --> 00:56:49,509 We have embraced digitized music, film, 1189 00:56:49,533 --> 00:56:53,100 medical records, communications, the internet. 1190 00:56:54,233 --> 00:56:56,109 The free exchange of information 1191 00:56:56,133 --> 00:56:58,933 and currency can fuel revolutions, 1192 00:56:59,533 --> 00:57:01,476 help in a disaster. 1193 00:57:01,500 --> 00:57:05,109 But our money is shackled to the 20th century, 1194 00:57:05,133 --> 00:57:07,933 manipulated by governments and banks. 1195 00:57:08,800 --> 00:57:10,809 The champions of Bitcoin ask us 1196 00:57:10,833 --> 00:57:13,609 to imagine payments without a middle man. 1197 00:57:13,633 --> 00:57:15,709 Investments without a broker. 1198 00:57:15,733 --> 00:57:17,276 Loans without a bank. 1199 00:57:17,300 --> 00:57:19,576 Insurance without an underwriter. 1200 00:57:19,600 --> 00:57:21,709 Charity without a trustee. 1201 00:57:21,733 --> 00:57:23,676 Escrow without an agent. 1202 00:57:23,700 --> 00:57:25,476 Betting without a bookie. 1203 00:57:25,500 --> 00:57:27,776 Record keeping without an accountant. 1204 00:57:27,800 --> 00:57:31,176 Global, secure, nearly instant 1205 00:57:31,200 --> 00:57:32,633 and free. 1206 00:57:33,133 --> 00:57:35,209 Is it fantasy or the future 1207 00:57:35,233 --> 00:57:37,009 of money and commerce? 1208 00:57:37,033 --> 00:57:40,133 (intense instrumental music) 1209 00:58:05,033 --> 00:58:06,309 - I love bitcoins. 1210 00:58:06,333 --> 00:58:08,109 I'm really into bitcoins. 1211 00:58:08,133 --> 00:58:09,976 ♪ Well Satoshi Nakamoto 1212 00:58:10,000 --> 00:58:12,509 ♪ That's a name I love to say 1213 00:58:12,533 --> 00:58:14,509 ♪ And we don't know much about him 1214 00:58:14,533 --> 00:58:16,233 ♪ But he came to save the day 1215 00:58:16,900 --> 00:58:19,109 If you don't know what a Bitcoin is, right, 1216 00:58:19,133 --> 00:58:20,409 usually the way people describe it 1217 00:58:20,433 --> 00:58:22,509 is a digital cash. 1218 00:58:22,533 --> 00:58:25,276 It's money for the internet. 1219 00:58:25,300 --> 00:58:29,376 ♪ Bitcoin as your going into the old blockchain 1220 00:58:29,400 --> 00:58:33,409 ♪ Oh Bitcoin, I know you're going to reign, gonna reign. 1221 00:58:33,433 --> 00:58:34,609 They were like, "oh, I love my bank." 1222 00:58:34,633 --> 00:58:36,009 I'm like, "really?" 1223 00:58:36,033 --> 00:58:37,409 You ask a banker, "you know what's two plus two?" 1224 00:58:37,433 --> 00:58:39,409 He's like, "well, I can tell ya but there's a fee." 1225 00:58:39,433 --> 00:58:41,333 (laughter) 1226 00:58:41,733 --> 00:58:43,309 ♪ Down the road it will be told 1227 00:58:43,333 --> 00:58:45,776 ♪ About the Death of Old Mount Gox 1228 00:58:45,800 --> 00:58:47,809 ♪ About traitors trading alter coins 1229 00:58:47,833 --> 00:58:49,309 ♪ And miners mining blocks 1230 00:58:49,333 --> 00:58:51,309 Now Bitcoins is a new technology. 1231 00:58:51,333 --> 00:58:54,276 I like to say it's banking (mumbling) 1232 00:58:54,300 --> 00:58:58,009 All of the convenience, none of the evil. 1233 00:58:58,033 --> 00:58:59,476 (laughter) 1234 00:58:59,500 --> 00:59:02,409 ♪ Oh Bitcoin, as your going into the old blockchain 1235 00:59:02,433 --> 00:59:06,509 ♪ Oh Bitcoin, I know you're going to reign, gonna reign 1236 00:59:06,533 --> 00:59:08,776 ♪ Till everybody knows, everybody knows ♪ 1237 00:59:08,800 --> 00:59:10,009 You know when I go in line 1238 00:59:10,033 --> 00:59:12,709 and I buy like, I don't know, a pair of socks. 1239 00:59:12,733 --> 00:59:15,009 If I pay with a credit card 1240 00:59:15,033 --> 00:59:16,576 I'm just buying socks. 1241 00:59:16,600 --> 00:59:20,609 Right, if I buy those socks with bitcoin, 1242 00:59:20,633 --> 00:59:22,409 it's a revolution. 1243 00:59:22,433 --> 00:59:23,876 (laughter) 1244 00:59:23,900 --> 00:59:26,233 I am sticking it to the man. 1245 00:59:31,433 --> 00:59:36,009 ♪ Oh Lord, pass me some more 1246 00:59:36,033 --> 00:59:37,709 There's always people who are not ready 1247 00:59:37,733 --> 00:59:39,376 to get into the new technology. 1248 00:59:39,400 --> 00:59:40,909 You know, like when the internet came out, 1249 00:59:40,933 --> 00:59:42,209 there was people going, 1250 00:59:42,233 --> 00:59:44,776 "nah, I don't think this is going to be popular." 1251 00:59:44,800 --> 00:59:46,109 (laughter) 1252 00:59:46,133 --> 00:59:47,676 And then e-mail came out and people were like, 1253 00:59:47,700 --> 00:59:51,109 "nah, this isn't gonna catch on." 1254 00:59:51,133 --> 00:59:52,276 And now Bitcoin comes out, 1255 00:59:52,300 --> 00:59:53,776 people are like, "I don't think," 1256 00:59:53,800 --> 00:59:57,009 I'm like, "aren't you sick of being wrong? 1257 00:59:57,033 --> 00:59:58,833 "Get on this train."