Bitcoin Basics with Expert Andreas M. Antonopolous

[Music] with no further ado I would like to go ahead and welcome andreas to the stage [Music] hi everyone Wow is this thing on you can hear me okay good Wow hi everyone oh my god what a welcome thank you so much so this is my first time in Denver for Bitcoin yeah and and after three days I can finally breathe so that's that's a lot better a lot better yeah I'm really really really really excited to be here I've never really talked about Bitcoin at more than 5,000 feet so that's a new experience for me so let me start by getting an idea about this this audience I know we wanted to talk about Bitcoin basics so I'm gonna start with a little quiz just to get a feel for who's in the audience so how many people here have conducted one or more Bitcoin transaction or other cryptocurrency transaction ever all right and how many have not ever okay great help those people please so I'm gonna talk a bit about some of the basics and also take questions and if you have questions which are about more advanced topics please feel free to ask me anything at all we'll do a Q&A session and and hopefully that will be fun so what is Bitcoin and why are we here today I'd like to start with the genesis story and take you back to when this started in October of 2008 a paper was published called Bitcoin and that paper explained how this system works and it was published under name of Satoshi Nakamoto and we now know that this is not a real name we don't know who Satoshi Nakamoto is or they are so somebody out there on the internet came up with an idea of how to build a digital currency and they published the paper in October 2008 now they had also written a prototype software program that ran the Bitcoin software which they launched on January 3rd 2009 so just a few months later and that was the beginning of the Bitcoin system it was the beginning of the Bitcoin network it was the beginning of the Bitcoin currency it was also the introduction to the world of this new concept which has now become a word that gets said on TV every single day on the financial news channels which is blockchain which is one of the technologies behind the Bitcoin technology so this sounds like a weird story right some person we don't know who it is shows up on the internet post the paper launches some software some other people run this software as well and this thing starts running embedded within the very first block that was created on the Bitcoin blockchain there was a message and this message was handcrafted into the Bitcoin software and it was embedded in there for a reason and the message is the headline from that day from a British newspaper The Times of London and it says January 3rd 2009 Chancellor of the Exchequer on the verge of second bailout for banks or something like that so the headline for that day the day bitcoin was launched was that the British Chancellor of the Exchequer which is like the head of the Treasury here right was going to start a second bailout for the banks now this may have been a coincidence I don't think it was I think that message tells us a bit about the motivation behind Bitcoin and part of the motivation behind Bitcoin was this idea that the financial system that has existed and hasn't really evolved much in the last twenty years isn't serving us it's serving someone very well just not us and what's ironic is when I say us I'm looking out at a bunch of people who represent 5% of the human population the most privileged to have access the most advanced banking in the world who have access to multiple foreign currencies who have the ability to send and receive money with their bank how many of you here don't have a bank account because you can't get one one great the average percentage in the United States is 18% that means 60 million people don't have bank accounts in this country want to take a guess about who those people are the poor that's a great answer poverty is one of the main reasons why people don't have access financial services but also lack of documentation a lack of documentation maybe because they don't have legal documentation so of course illegal immigrants are one of the big groups that doesn't have banking in this country but it can also be because they don't have documentation for other reasons a lot of perfectly legal residents of this country also don't have a driver's license or they don't have the necessary literacy or numeracy to open bank accounts and in this country 18 percent that's the lowest percentage in the world for the unbanked every other country has more people who are unbanked with some countries having more than eighty percent of the population having no access to banking whatsoever but at the same time if you talk to people in this country you'll already realize that the banking system doesn't serve us either it doesn't right the same people who are quite happy to sell a variable rate subprime mortgage to you or your parents or your brother or your children and then walk away from a pile of debt and get bailed out none of them went to jail more than a million homeowners and lost their home in the United States right and at the same time while they were doing the foreclosures they were using a technique called Robo signing where they was signing the foreclosure documents on deeds they didn't even own no one went to jail they were packaging toxic securities up and his technique called CDOs that they knew were fraudulent and they were talking amongst themselves and saying these are fraudulent so don't buy any but we'll sell them to the customers and no one went to jail so who are they serving well themselves yes but also not just themselves ironically a lot of the people who work at banks a part of middle class who are not being served by the banks themselves either right they serve the weapon dealers they serve the warmongers they serve the money launderers they serve the international drug cartels they serve the multinational corporations but they don't serve us and if they don't serve us here in this country imagine how much worse it is everywhere else if you can't imagine I can tell you much worse much much worse so here we are after 25 years of the internet the world is more connected than it's ever been the ability to communicate information instantaneously anywhere in the world exists for a very large part of the human population more people have access the internet than have access to clean drinking water more people have access to cell phones than have access clean water and yet in the last 20 years banking hasn't gotten better it hasn't gotten more inclusive if anything were backtracking because over the past 15 years international finance has become a weaponized tool of geopolitics it's being used by powerful countries to attack powerful countries in the form of sanctions currency controls embargoes and other forms of economic pressure so banking isn't serving more people it's serving fewer people and more and more countries are finding themselves in situations where for no fault of the citizens of that country they are under embargo or facing currency controls and they can't transact with people in other countries and they face calamitous economic conditions where they watch their life savings disappear overnight and this happened to my family in Greece in the 80s twice and it's happened again and again throughout South America throughout Africa again and again and again it's currently happening in Venezuela it's on the cusp of happening in Turkey it's happening in Greece again it's beginning to be a problematic situation in Argentina in Brazil and a bunch of other countries so the economic system that we have is not serving people and the internet hasn't brought us a financial system that connects everyone together and part of the reason for that is because modern banking has become a deputized system of law enforcement domestically and a militarized system of control internationally our banking is part of the domestic police system and it is part of the international military system just like the banking in every other country it doesn't serve Commerce it serves politics so back in the early days of Bitcoin something interesting happens it was an organization called WikiLeaks there was publishing secrets that the US State Department didn't want published secrets about war crimes committed by US forces and as a result they wanted to shut down WikiLeaks and one of the ways they were trying to shut down leaks is by prohibiting people from sending money to support that organization right so of course the US government first appealed to the court system to get the necessary convictions in order to stop WikiLeaks from breaking the law of course they didn't WikiLeaks wasn't breaking the law and therefore they couldn't take them to court they didn't have the basis in law to take them to court instead what they did was they pressured Visa MasterCard American Express PayPal and all the American banks and caught WikiLeaks off without any legal process now at the same time you could use your Visa card to send money to racist groups in Alabama to send money to all kinds of atrocious political groups around the world but not WikiLeaks as this was happening Bitcoin was just emerging and within it buried in that first block was that little message and that little message said to me and to many others this is why we're doing this this is why Bitcoin needs to exist because 25 years into the internet revolution in this world we are no close to having a global connected community in finance than we were 20 years ago in fact we are further and the financial system is not getting better at serving people it's getting worse at serving people and with control over money comes corruption we all know that right power corrupts absolute power corrupts absolutely and there is no more absolute power than powerful money you have freedom of expression great but if I can if I can control where you spend your money you don't have freedom of expression yeah the freedom to vote but if I can control who can send money to political parties and which political parties you don't have the freedom to vote watch what's happening in Russia or Turkey that's straight out of the PlayBook of Putin right starve them of funds no opposition election with only one candidate I win also democracy the bottom line here is this Bitcoin didn't appear in a vacuum and for many people it seems miraculous how Bitcoin emerged suddenly in 2009 and nobody noticed at first it was just the purview of a few weird geeks in a few weird mailing lists but after a while people started noticing and now it's become this worldwide phenomenon and you might be skeptical like some person we don't know invented something we don't understand launched it as onto the world and now you know my younger cousins think I should invest all of my money into this thing and my aunt thinks it's a pyramid scheme and I can't tell who's right if you think about this as an investment you may be missing the most important point which is that what this represents isn't an opportunity to get rich isn't an opportunity to find a new thing to invest in it's an opportunity to change the fundal one the fundamental way that finance money and banking works in the 21st century worldwide and if you don't change it for you if you don't think you need to change it for you think for a moment about the billions of people who have no access to banking and no hope of ever getting access to banking and then think about what happens if all of them are able to run a bank on a twenty five dollar Android phone and what that does to our world so bad people are going to be able to do some transactions and that's okay because some billions of people are good people are going to be able to do some transactions and that's how it works and on that simple balance we can change the world so my interest in Bitcoin stems from two sides on the one hand I'm a geek I love technology it's so cool and I get so excited by it that I can't sleep and I want to read everything about it and then I discover something else and that's even more excited and then I stay up longer and I have some more coffee and I read more and I just get all excited some of you share that with me you don't have to it's ok but some of you I know know exactly what I'm talking about and that's a really cool reason to be interested in this technology it's the kind of technology you could learn about it's the kind of technology that can lead to a computer science degree or a specialization in another field of study it's something that you could learn as an accountant as someone who works in insurance or finance and it would be really useful and interesting as part of your career just like learning how to use databases or build a website or whatever else you might be interested in technology but on the other hand I look at this technology and I'm interested in it because of politics not the politics of parties the politics of principles the politics of growing up as a kid in Greece and seeing what happens when money stops working and this is an experience I don't wish on anyone and it's an experience that is alien to Americans at least in the modern era and I hope it remains alien but I'm not that sure it will the bottom line is that money is this magical technology and as long as it works we don't need to know how it works we don't concern ourselves with it and we don't need to really worry about it too much because if we did and we actually read about how money works we'd be horrified surely that can't be true they just make it out of thin air and distribute it to banks they get to lend out money that didn't exist and then charge us interest and get richer and richer no come on that's a scam that's a pyramid scheme the dollar works on a pyramid scheme tell me it isn't so if we understood modern central banking most of us would be horrified so it's convenient that as long as it works we don't really need to pay attention well let me tell you something in 2008 it broke and we didn't fix what broke in 2008 our economy broke the worldwide economy broke and central banking broke hard and it hasn't been fixed in the mean time since then the world has issued almost a hundred trillion dollars in debt by some measure all of which is money borrowed from your future retirement plans from your future education plans from your future health care plans from the economy right and that money isn't gonna be paid back it's not gonna be paid back and there's a very simple reason for that everyone's broke JPMorgan Chase is bankrupt Citibank is bankrupt Bank of America is bankrupt goldman sachs is bankrupt the United States government is bankrupt Europe is bankrupt the euro is bankrupt Deutsche Bank is bankrupt Japan is bankrupt China is bankrupt they're all bankrupt they can play around with the books hide some debts make some bilateral agreements shuffle around pretend to bail out Greece send the money and then backdoor it straight back to Deutsche Bank find some other Patsy's make it appear like nothing's happening they're all bankrupt and so at some point there's going to be a reckoning we never fixed anything that happened in 2008 what we did was destroy currency in order to preserve the illusion of economy and that's gonna come back and bite us now you don't have to believe me you don't have to think that this is going to be important in your life and I really really do hope it doesn't but one of the reasons Bitcoin was created and one of the reasons it's important is because it is neutral because it is independent because no one can control it because no one can change its issuance because no one can create it out of thin air it's ironic that when you see criticism of Bitcoin by mainstream economists they say things like it's not backed by anything and really the question you should be asking at that point and the dollar is of course the dollar is backed but you really don't want to hear that story as to what it's backed by because then you have to learn some history about Henry Kissinger and the Saudis and the little deal made in 1971 some towers fell some nasty things happened and we've been at war for eighteen years but anyway the dollar is backed by something war to protect oil and Bitcoin is backed by an international community of geeks the same geeks who brought you the Internet so again at some point hopefully you never have to make this choice in your life because you can always have the freedom to choose one currency versus another but at some point you might be forced to choose between the bankers who brought you the Great Depression and the geeks who brought you the Internet I hope you make the right choice but then again if you hear some of the people in the whole blockchain cryptocurrency Bitcoin space talk you might think that the goal of all of this is to eradicate government's money as the first step towards eradicating government altogether and replacing all currencies with Bitcoin one coin to rule them all world domination I'm not of that opinion in fact I think the idea of having only one world currency is a bit of a throwback to our current currency system we've grown up with a system of currency where all currencies are backed by nation-states they represent flags right they have wrapped up in the commercial mechanism of value a bit of nationalism and patriotism and a flag waving person and in each country it's a different flag and you know they can all do their little chance by the way if you go to other countries when they wave they've their flag they also chant number one it's a bit like when you ask people are you a good driver and they say yeah definitely and then 80% of people say they're above-average driver how does the math on that works so we have become accustomed to a world in which currencies represent nations and therefore they're part of this battle it's like the world is a big chessboard and currencies are pawns that are fighting on this big geopolitical battle and the dollar wins if the ruble fails it's country versus country and in that environment it's natural to think that currency as a system is a winner-takes-all system or zero-sum game where the only way that one currency wins is by another currency losing and that's a world in which you cut off your nose to spite your face which is a good summary of our current foreign policy but also a good summary of the foreign policy of the European Union China and Russia we are currently engaged in currency wars and in those currency wars we are expected to assume that our currency which represents our flag is the one we should be backing but if you stop and think about that for a second you suddenly realize that that's not money anymore that token is no longer representing a commercial transaction it's not representing value for use in business it's representing something else it's representing some kind of nationalistic flag waving thing that you're trying to beat the other side with and in that environment if that's what you know if that's what you grew up with then when something like Bitcoin comes along your natural inclination is to think oh this one could win the zero-sum game this one could dominate all the others but what if that's not how it plays out what if instead all along money was simply a form of language what if we understood that money is a way for us to communicate value to each other and as a language there can never be one that wins there will always be variety because every place has its tradition and its special needs we have languages like those of the Inuit that have eight words for snow they don't need that in the Kalahari Desert so they're going to have a different language that has 20 words for sand which they don't need in Alaska but the bottom line is that languages adapt to the local environments and there will always keep proliferating and there isn't one wins in fact if you speak three languages or four languages you're better off than if you just speak one so in fact having variety is what gives you greater value what if money works that way what if in fact we're going from a world with a hundred and ninety five currencies to a world with a thousand currencies to a world with ten thousand currencies a hundred thousand currencies and you can use as many of them as you want or not and you can choose at any moment in time and then when you hear that you probably think well that sounds very confusing I don't want a thousand currencies I can barely keep track of how many euros are in a dollar when I go on vacation to Disneyland in Paris well the good news is that we're not talking about traditional paper money we're talking about purely electronic money and all of the world's currencies are going to purely electronic money at which point the difficulty of trying to figure out which currency you have which currency the shop will take what the exchange and how to convert them is something that disappears into your smartphone or your iPad or your SmartWatch or whatever other device is holding your money and then the fact that you have ten currencies really isn't an issue because you don't even know you have ten different currencies what if we're going to a world where fully connected instantaneous commerce is possible by anyone anywhere and they don't even need to commit to a specific currency and no currency wins because we all win by having choice and that's really what it boils down to until now you get to use the currency of the country you were born in and you don't have a choice if you're an American you also have the choice to use other currencies but in many countries in the world you don't just won and you still have to use that one to pay for government services and pay your taxes and things like that and you still have to play the games of geopolitics because your retirement and your education fund and your health care and your job and your income and all of your expenses are denominated in the currency that they're using as a weapon not that you wanted to be playing in those games but you get to what does that look like it looks like waking up in the morning and deciding to go to the supermarket early because you know that at noon they change the prices every day and eggs could be 30% more expensive later in the afternoon that's what it looks like and I've seen that in Greece and they're experiencing that in Venezuela and Turkey today so when you understand that bitcoin happened in 2009 you might think well why needs it what are we going to do with this is it just about beating the dollar and having a new thing that wins everything it's not it's about having a choice and for most of the people in this country that choice isn't very important but for the rest of the world that choice is absolutely critical most people live under horrible governments that do not give them the freedom to transact with anybody but they also don't give them the freedom to escape from whatever crazy war attrition trade war currency war they're playing at the moment most people live in countries where it is impossible to distinguish between organized crime and organized banking although to tell you the truth the customer service from the black market organized criminal who changed my money in Argentina was a hell of a lot better than the Bank of Argentina where had tried to change it earlier so maybe there is a way to tell the difference between organized crime and organized banking both are criminals some of them give better customer service but if you live in a country like that and suddenly something like Bitcoin comes into the world not quite yet because it's difficult to use and not many people have the tools and the skills to use it but one day soon for many people and already for some people you suddenly have a choice you can say you know what you go play your games mr. Aragon you want to try and play Russia against America in a currency and trade war fighting over f-35s and s for hundreds if you know what I'm talking about great while you take the lira to trash I'm going to take just a bit of my wealth and move it into Bitcoin and no one can stop me because this is an internet currency that doesn't pay attention to borders if you live in Venezuela and your government is in a death spiral you can say I'm going to take some of my money and I'm going to convert it to Bitcoin or have someone send me Bitcoin from another country and I'm going to be able to provide food for my children and I'm gonna be called a terrorist by my own government and I'm going to break the law and my children are gonna get fed we know of people who actually bought food on Amazon Prime had it shipped to Colombia and smuggled into Venezuela using Bitcoin food this technology gives people choice and we already have more than a thousand currencies that are trying to find different ways to use that same basic technology to do different things it's a very exciting technical space which has erupted over the past ten years and created this enormous diverse environment with a lot of exciting development going on and at the same time it's a giant speculative bubble with a lot of greedy people running around in circles screaming trying to get rich and at the same time it's an enormous leap our 'fl international movement for freedom and choice that can change the lives of billions thank you like what do you think the people's responsibility to that action and also I hope you have like awesome security because you're like totally a threat to the establishment you're awesome thank you thank you fortunately you're wrong about that last thing so I'm not a threat at all ideas are powerful and ideas change the future more effectively than any other thing in the history of humanity not people ideas and the good news is that Bitcoin isn't people its ideas there's a lot of people behind it but fundamentally it's an idea and in one really beautiful way it's an idea that has been distilled into some mathematical formulas and put together as software so that idea now runs on the internet and it doesn't run in one place on the Internet it's an idea that has been set free and runs everywhere and it's an idea that now that it's a bit better understood it's so simple to implement that among the hundreds and hundreds of people who contribute to this code there are people who could pick up this idea and recreate it in a weekend and write that code all over again in a variety that we've never seen before which makes this idea very very dangerous because it's an idea that's completely unstoppable now governments have a problem with unstoppable things primarily because their general application of power is to stop things and when you talk to people in government's there is something funny that happens which is they assume that you are questioning their authority they assume that you are questioning whether they are juley authorized that they have the moral authority to stop cryptocurrencies to stop blockchain to stop Bitcoin I'm not questioning their authority that's a political question which isn't very interesting to me I'm questioning their ability it's a whole other question they can have all the authority in the world zero ability to act on that authority how are government's going to react I recently did a little study which I'm going to release a public domain which is a mash-up between the world's freedom index which is a score of every country in the world on Civil and Political liberties which is done by an independent organization very very respected backed by many international institutions versus the legal status of Bitcoin and other cryptocurrencies in each country if you lay those two maps over each other it's a perfect match free countries free Bitcoin not free countries not free Bitcoin and then you suddenly realize Bitcoin isn't being tested by governments governments are being tested by Bitcoin it forces them to reveal their true colors countries that do not respect the individual freedoms of their own citizens are against crypto currencies countries that do respect the individual freedoms of their citizens support or at least allow or they think they allow crypto currencies to continue and so what's really interesting is that when you have an idea that is powerful and freeing that idea is like a mirror you put up to your government and you see what's reflected back what system of government do you have well here's a litmus test how do they feel about this because it's an idea that's powerful and gives people freedom this is the state today free countries allow the use of these technologies it not going to be the state forever and the reason is that this is an idea that's very powerful and very freeing and so even governments that appear to be free will be challenged by this test and eventually they will fail it they will fail it now when things are hunky-dory they'll fail it when they need to because their own currency is suffering so when you see crises there's a need for a scapegoat right and that scapegoat has to be something convenient I expect that governments will not react well to this phenomenon we've seen how the government of Turkey the government of India the government of Venezuela have acted they call people who use Bitcoin terrorists are there any terrorists in this room I think so ironic of course because the main sponsors of terrorism are some of these governments right back at you but they will do that they will use propaganda and misinformation to tell us tell people that bitcoin is used to buy drugs the bitcoin is used to fund criminal activities the bitcoin is used to fund terrorism as if there's any form of money that is not used to do those things and and this is a great irony because money is a tool to convey value and if you're conveying value of course you're going to use it to convey value on things that are not strictly legal or at least in this country or that country they're not strictly legal all money has been used to do that forever the illegal activities themselves have been used as money do you know what you can buy drugs with anything everything there is nothing you can't buy drugs with so the idea that this is the problem is ironic governments will react poorly they'll try to stop it they'll fail to stop it they'll try to demonize it they'll fail to demonize it because in the end people will see that when it becomes a choice between the future of their children and obeying a stupid law guess what wins every time and that's exactly what's happening in Venezuela so I'm very positive that with the right powerful idea we can get a world that is much more free than it is today but it won't be without a fight and most of that fight will be about propaganda let's go to this site what's going on first I've been following you since 2016 I'm from Dallas Texas my name is Sean and when I found out about Bitcoin I heard that you when you found out that Bick when you didn't sleep for like a week you lost like 25 pounds is that true I went into a state of excitement geek excitement for four months and during those four months I forgot to eat okay and I slept five or six hours a night because I couldn't not sleep otherwise I would have forgotten to do that too yeah so it's it's true and I did lose 26 pounds on the most inadvisable diet ever okay yeah and so okay I don't know who all knew that about you but I now everybody does and so my question is about security and I've listened to one of your talks about quantum computing and you had said that we can assume that the NSA has quantum computing currently so my question is how can Bitcoin safeguard against quantum computing because once that's reached they will be able to essentially break into the wallets simultaneously that's a very good question so quantum computer isn't a on/off thing or is that that's a double pun actually it's not like you either have quantum computing or you don't have quantum computing the question is how powerful is it how many bits how many qubits of quantum computing do you have so the number of qubits you need to break the encryption that you have in wallets the current set of encryption you have in most block chains is far greater than even the wildest speculation of what might exist in intelligence agencies that doesn't mean it doesn't exist but I'm not worried about the NSA having quantum computing because you're one of the things that is a very basic concept in security is the idea that if you have a very powerful secret weapon you do not use it you you wait and so you have a very good reason to use it one way of explaining that is what happened in Coventry when the British had broken enigma they had the most important secret was keeping secret the fact that they'd broken enigma otherwise they would go change the the encryption code so to keep that secret they had to do parallel construction if they found out that some one thing was going to get bombed they have to I don't know captured German soldier who knew about it and then say that he told them so that they would have a different reason and when they didn't have a different reason they let the Germans bomb Coventry thousands of people died to protect the secrets of enigma so all I'm saying is if the NSA has a quantum computer and they really want to not people not know that that quantum computer which can also break all of the encryption keys on all of the nukes in the world all of the communication keys and all of the nuclear subs and all of the military intelligence networks and all of the commercial networks I don't think of it going to use it to break Bitcoin if you know what I mean like that small fish to them the real problem becomes when you have broad commercial availability of quantum computing but not broad enough that all of us can use it in our wallets and that's that interim period that's a bit awkward during that interim period Bitcoin needs to change its algorithms but one of the interesting things that happens is that while you can change the algorithms all of the active wallets some wallets have lost keys or the people who had those keys are dead and they can't change the signing algorithm which means that those wallets will get captured by quantum computers so one of the interesting things that happens is we will know when quantum computing exists when satoshis coins move thank you that's one of the reasons they'll move eventually they will move and they'll move because someone will be able to break the keys but for the rest of the ecosystem we can migrate quite easily to another algorithm it's not really as big a threat as people think it is yes thank you you spoke a little bit about the tools that are needed or the tools that will change in the space over the coming years can you talk about what tools you feel what additional tools you feel are really necessary for the space to continue to progress I get that question a lot and what people want me to say is that what we really need is a combination of artificial intelligence quantum computing and IOT that will enable us to use prediction markets to bring forth the geek rapture or something like that and unfortunately the answer is rather boring what we needs in order to make it easier for more people to use these things and to get broader adoption and to promote this technology and get this technology in more hands to make it a real choice for the people who really need it not try to sell it to those who don't but for the people who really need it we need wallets we need wallets that are easy to use easy to understand secure by design and I remember a time when there was only one Android wallet which was actually written by a German guy called Andreas not me and oneexchange right back in 2013 there was one wallet for Android called the Bitcoin wallet didn't need to be more fancy than that not much competition out there so wallets wallets are absolutely necessary exchanges ATMs even better ATMs more so than exchanges and ATMs and multiple languages so my mission at the moment is in education and I think one of the things that we're missing is that Bitcoin today is primarily an english-language phenomenon and that is a huge drawback because the places where it's needed are spanish-speaking countries and Chinese speaking countries and russian-speaking countries and many other languages not just English certainly not predominantly English so translating educational material but also translating wallet interfaces and exchanges in ATMs I mean quite honestly throughout the u.s. Southwest there should be in every single Bottega every single little convenience store there should be a Bitcoin ATM that doesn't have a word of English on it and that's just in Spanish and it has one big button and it says send money to Mexico and to facilitate the remittance market where they get charged ridiculous amounts by Wells Fargo and Western Union and MoneyGram and all of these exploitative companies to send money home to their families right so that's just an example these are boring infrastructure projects they're not cool they have no IOT or AI or quantum anything in them and they require a lot of focus on user experience and design they require product managers and product designers who think carefully about the experience of using that product and that's something that most computer geeks are not that good at especially the ones who work on you know protocols so the first group of people who got bit going to where it is today by weird coincidence are entirely unequipped to get the cooperate needs to get to the next stage which is why we need to be nicer to the people with a purple hair who know how to design a YouTube user interface and get them to join our industry and recognize that it's not just about the protocol so wallets infrastructure exchanges ATMs basic boring stuff and education education at all levels from the very basic things I've had 74 of my videos translated into Spanish by volunteers if you speak Spanish go to YouTube and help me do more these are really really important projects I think let's go with this I thank you I'm gonna run a bit long on questions if that's okay yes you were talking about financial institutions having caused many problems you know that bitcoin is is combating and I'm curious as the blockchain ecosystem matures these same institutions are hopping on the bandwagon they're recreating you know this a lot of the same financial instruments or have ambitions to if they haven't quite done it yet and I'm curious what the implications are what you think the implications are for when these guys hop on the bandwagon and they're probably going to go a lot faster then you know the rest of us can even if we as individuals have access to creating our own financial instruments on the blockchain that's a great question I get I get that question a lot too I'm not particularly worried because the fundamental issue here is that what most financial institutions are trying to do is take the fundamental idea and use it to do business as usual without changing the fundamental practices and the most important thing to realize about this technology is that its main feature is the thing we call decentralization which is this architecture this systems architecture which says no one's in charge no one is in control everyone participates it's a collaborative project and the truth the thing that gets recorded on the blockchain is the result of a collaboration of hundreds of thousands of computers and it's not controlled by any single entity so they could adopt that they could adopt decentralization as a principle and that would make the economy far more robust they're not going to do that they're going to try to pretend to do that while creating something which is they control because the nature of corporations is centralization the nature of financial corporations is even more so centralization so as to the fact that they will be able to move faster there is this pervasive idea that just because financial services companies have all the money quite literally because they made it themselves that they can simply buy their way into the future fortunately for us unfortunately for them there are a few things you can't buy innovation and creativity is one of them right you can't buy innovation and creativity these large organizations once they get beyond the certain size if innovation arises within their company they will strangle it within 72 hours probably by deciding to create an innovation committee to study it if they see innovation outside their industry if it's not too disruptive they're going to buy it embrace it ask it to get a haircut wear suits and get into a 401k at which point all of the creative and innovative people will leave and they'll be left with a husk of a product unless it's a very disruptive innovation in which case they won't even try to buy it they'll try to snuff it out now this technique has worked for them really well in the past because in financial services they could either buy the disruptive competitor sue the disruptive competitor or their favorite technique have the government turn off their disruptive competitor for them by making sure that there are enough regulations in the way that the smaller competitor can't compete and then bitcoin happens you can't buy it because it's not an it you can't sue it because there's nowhere to sue and the government can't regulate to the out of existence because we forgot to ask their permission and now they're faced with in the first time in maybe 75 years of traditional financial services with the one competitor they can't do any of those things they haven't started panicking yet because hubris is a pretty big mountain to overcome but at some point they will and some of the smart bankers are already getting fat and what they're doing is they're taking their Christmas bonus and they're jumping ship at the end of the year and then they're using their Christmas bonus to fund the blockchain startup in January and I have heard this story repeatedly from former Goldman Sachs bankers and JP Morgan Chase bankers and others the rats are already abandoning the so not worried about that nice huge fan thanks for coming out to cholera thank you for having me thank you so and I apologize if I misunderstood you but I think I heard you saying that maybe you envisioned this world where there were multiple you know everyone had multiple currencies in their wallets sometimes maybe they wouldn't even know what was there or they wouldn't even care and I was yes kind of curious how that would develop because maybe you don't have one coin to rule them all but there may be one or two coins that are more efficient and more trustworthy than others and where one is more efficient how would it develop that you would have these other more non efficient coins in your wall why would you even have those and also from a human perspective it's already difficult enough to maybe understand a handful of coins it's almost inefficient for me to go have to study many more coins in order to just conduct you know the transactions that I want to very good that's a great question so one thing to appreciate is that money is a multi-dimensional thing and the three dimensions we recognize today are store value which is the ability of a currency to maintain value of a long periods of time or appreciate in value and can be used for very long horizon savings medium of exchange which is the efficiency of which you can do transactions especially smaller transactions and unit of account which is the ability of a currency to be stable in value for sustained periods of time so that you can price things in that unit so you can use it for accounting and these functions are distinct today and for the most part the way money has worked until now is you have a currency and it has an intrinsic nature to it and that's a trinsic nature imbues it with characteristics that make it better or worse in these categories so for example if you're using gold as money it has certain characteristics that make it a very good store value and these are implicit in the chemical structure of gold it doesn't corrode it doesn't it doesn't interact with other chemicals it can be stored for long periods of time it's malleable you can form it into different shapes etc etc and then it has other characteristics like it's too bloody heavy to be used for day-to-day transactions which make it a very poor medium of change now these characteristics are intrinsic to the nature of gold itself the same thing applies to paper cash and plastic credit cards and the US dollar and all of the other things we use as money but what if there were new characteristics and what if instead of just taking the money we have and accepting whatever mixture of these characteristics it has we could actually engineer them think of it in the terms of material sciences you know in the olden days if you wanted an alloy that was made a perfect spear tip you found which alloy had the best characteristics and used that one nowadays we make one at a molecular level for the specific application engineer to have certain properties that is not here it is let's use it because it matches our needs it's here are our needs let's take nature and twist it to our needs and make it do what we want we can now do that with money we can engineer the fundamental properties of money so within your multi currency wallet there will be currencies that are better at one thing versus the other currencies have to make trade-offs design trade-offs and one of the things you'll hear from currency maximalists especially in the cryptocurrency space is that their currency happens to be best at everything right but the truth is that the nature of currency means that almost always there are big big design trade-offs to be good at one thing you're bad at another right like comparing a Ferrari with an industrial tractor like so which is better a Ferrari or an agricultural tractor well it very much depends on what you're trying to do because if what you're trying to do is Bale some hay your Ferraris useless and expensive but your industrial tractor which happens to be a lot more keaney by the way is very good at that just can't go very fast Lamborghini makes tractors yes that's how they started so the bottom line is that you will have a wallet your wallet will probably display the value of all of the things you own in a units that make sense to you now already if you have a cryptocurrency wallet what unit do you use any one Bitcoin milli Bitcoin Mbits you're lying you use dollars I use dollars I don't know how much zero point zero zero four three one Bitcoin is at any point in time it's a shitty unit of account bitcoin is not a good unit of account units of accounts have to be stable to less than one percent for years Bitcoin hasn't been stable to one percent for more than a minute you know it has ten years so it's a terrible unit of account but you might have a good unit of accounts maybe the dollar is it I don't know maybe it's International Monetary Fund's SD ours as they I don't know it doesn't it doesn't matter you can call them galactic credits for all I care and in fact that sounds like a joke but I'm actually serious an artificial unit that is not actually used for any other purpose except as a unit of account can have very stable value and this is actually the mechanisms that they've used in places like Brazil and Argentina over the years to battle hyperinflation which is create a completely separate currency that is not traded or paid for salaries or goods but is only used for pricing so we have precedents in economics with this so imagine that all you see is a unit of account but in the background your wallet intelligently uses the best store value for your big savings account and a very efficient medium of exchange currency for some of your loose coins and then when you go and buy your wallet negotiates with the coffee shop vendor which currencies match and picks one maybe makes an instant his conversion and sends the merchants that which they then see on their screen in galactic credits again the trick with technology is to take the complexity away in using abstraction layers to make it disappear into the background you would not be able to use the internet if you needed to understand how BGP routing works or how SMTP envelopes work or what any of these funny words I'm saying are and you don't have to because engineer is hide that complexity so that's what I'm envisioning and it's going to be a very different experience than what we have today but it is very much possible I'll take three more questions on this side and two more questions on that side then we'll wrap it up let's keep them quick now all right round how do you expect culture to change as Bitcoin becomes more widely adopted fantastic question how do I accept expect culture to change there's this fantastic video clip from the late 80s early 90s of Good Morning America one of these silly TV shows and you've got all of these people sitting on a couch around there and they're preparing to film a segment where they're going to explain the Internet to other people but they're running into one small problem which is they have no frickin clue what it is and and this is the outtakes where you can see them discussing it and it is absolutely hilarious you're a very famous American TV personality so I don't personally know and they're they're going so wait so the Internet is the app thing and the other person no no no no that's email I think no I think the Internet is the www thing does that have an app no no it's just www and then dot HTTP I don't know it's something like that and so the culture is struggling okay no I just called a American morning TV show culture dear [Music] but the rest of the culture was also struggling and two things happen this is a process of convergence one part of convergence is that the technology gets a hundred times easier to use and the other part of convergence is that the culture gradually adapts the people who are already of a mature age let's say I have to learn some new words and get very confused and that's that's one of the bad things about aging change isn't fun and then there's a whole generation of people who are born into it and they don't know any different I love watching my niece interact with windows not windows 10 windows in the house because when she sees glass she goes and tries to interact with it because all of the glass in her life is responsive and always has been so she assumes this is a property of glass not devices if the glass looks even slightly black she taps it but this is really a keen insight into the culture because what's happening is she is now we're living in a world where glass always responded and here's the interesting thing as of 2009 a whole generation of kids have been born for whom Internet's money always existed and it will be normal in fact the best part is one day it will be boring and that's when we know it's really mainstream hi grant my name is grant from Denver I appreciate you coming through here because we're kind of growing as you can see a little bit we're trying to get there ways that our communities ready for it I think I was gonna ask you about privacy in general with with blockchain and I know we have our own zee coin or Z cash and there's Bernero and all this do you see a second layer protocol for Bitcoin to render those not needed I guess in essence or do you see do you have a one of those protocols that you see being the most promising to actually be up to officers gate the keys and keep your your transactions private that's a great question I think privacy is probably one of the most fundamental things that needs to be done and it needs to be done in the base protocol of Bitcoin and it is on the roadmap honestly I've made some controversial statements before and I'll make a controversial statement now which is privacy before scaling and the reason privacy before scaling is because you can do scaling and layer two and you can do privacy and layer two if layer one is in private and we learned that lesson the hard way with the internet and it has been a disaster from that perspective ipv4 did not incorporate privacy features and as a result the correct economic incentives were there to turn the entire Internet into a giant surveillance machine now there are parts of it that are encrypted but most of us don't use those parts and so as a result we all suffer privacy is so important it has to be done first fortunately there's a lot of research being done in Bitcoin to do that and Bitcoin can also benefit from some of the research that's happening in other systems that's the beauty of a big open source ecosystem is that we can all dip in the ideas of other teams and learn from what others are doing if we're not too caught up in the screaming tribalism of the cryptocurrency tribes which is one of the risks but there's also second layer privacy technology lightning Network significantly improves the privacy profile of Bitcoin hues and it's also getting better so the combination of those two technologies I think will give us better privacy and furthermore I expect we will see the second layer networks eventually become multi currency routing networks meaning that all of the block chains will be connected in a higher layer so that you can move between currencies in milliseconds transparently for almost no fees or no fees at all and at that point the privacy currency is one swap away from the one you're using now and it becomes very easy to be fungible I would prefer to see privacy in every currency and fact I think currency without privacy is a bug and it's a dangerous bug which if not fix will have consequences yes hey thank you so much for being here thank you so I just wanna say welcome to Colorado and really I hope that I can impress upon you how much we want you here as a community oh thank you yeah so I'm part of this growing movement here I think there's so many that I recognize specifically we're here to shell Colorado but also these technologies and these social movements that you're so much about so I guess what I'm asking is please make us a regular stop on your journeys we'd love to have you back yes and we believe I think in education evangelism and advocacy for all these things and like you pointed out we don't need it yet but moving forward we probably will so what in your opinion is the best most effective ways to promote inform and inspire adoption of these things here and then globally so I think one of the most important things is not to try to sell this technology to people who don't need it and to be humble about it I know that we all have this excitement right I felt it's myself which is we've discovered this little secret and most people don't know about it yet and we want to tell everyone and this happens to me regularly in my life and nobody listens and well okay a few more people listening this time but several previous times didn't go so well in that enthusiasm one of the things that happens is we risk coming across as being pushy especially when we're excited about things like the price because then and people are motivated by greed like anybody who tells you they're not motivated by greed is either an alien or lying or not aware of their own motivations but we are all motivated by greed it's okay to recognize that when the value of these currencies Rises and we've made an investment it's not I mean it feels good first of all you feel personally vindicated is like show these people who doubted me they said it was a pyramid scheme but now I'm making money well guess what pyramid schemes making money so if you think that's the answer it's not a pyramid scheme I'm making tons of money that sounds exactly like every pyramid scheme but at some point many of us have this moment where we got in because we were excited or we heard about it and maybe we got very excited about the price but the price doesn't last right eventually you get a downturn most people leave and some people stay and some people who stay read something and learn something and realize that there's more to this than just an investment they realize that there's something else going on here something that's meaningful and deep and important and at that point if you can convey that enthusiasm without being the crazy person at the party to the people who really are interested in hearing about it and there's plenty of people who are and who need this and if they don't they don't that's okay too at the end of the day the most important thing is basic education and to me one of the most important parts of basic education is teaching people how not to get scammed robbed or losing their money so teach them about scams right how to be critical about all of these things that are bubbling up in our space don't go day trading suddenly because you discovered oh there's not just one currency there's 1,200 on coin cap dot IO and I think some of those are going to boom any second now and I'm gonna go invest in these penny stock bad move right protect your friends from doing that going crazy speculation protect your friends from falling for pyramid schemes there are a lot of pyramid schemes and Ponzi schemes in this space just in the last two years we had bit connect and one coin those have been wound up but the next one's just round the corner right there are a lot of pilis actors because you have a combination of money and technology and it's promising educate people how not to lose their coins warned them about putting money permanently on exchanges or other custodial wallets in which they do not control their keys and explain to them why that means they do not actually own any coins teach them how to do backups and make sure they actually do backups teach them how to make a plan for inheritance because things happen and maybe you want to give that gift to your family teach them about how to use this technology to change their own life and that doesn't mean becoming millionaires but it might mean becoming an expert or a teacher or a user of this technology sooner than everybody else and so if you focus on these core education things and you avoid the temptation of all of the drama and tribalism and fear of missing out and greed then these people will stay through each one of the cycles and we can start building more and more community and that works I know because I've seen it work for the past five years thank you so much wait cool talk thank you thank you I want you maybe to talk a little bit about what you think would be positive steps moving forward into the future like how would we know that Bitcoin is succeeding and then flipside if there are some things that we might see in the future that should make us concerned yes okay so I did a talk about this topic specifically in Dublin a few months ago it's called measuring success and it's about how you really measure success in a technology like this and to me measuring success is about whether we can deliver the fundamental principles the Bitcoin and other cryptocurrencies give us to as many people as possible without diluting those principles so if we are able to get a DC centralized open borderless neutral censorship resistant currency payment systems smart contract system or whatever else to as many people as possible we went if instead what we give as many people as possible is a distorted version of that that is controlled by a few companies with heavy controls on who can use it and when they can use it centralized access points whitelists and blacklists and criminal protection and safety measures added on to ensure that effectively its face book coin or Fed coin or Google coin or some other perversion of this idea that's not success that's recreating business as usual we already have PayPal we already have Visa we don't need more of that we need something different so success is maintaining the principles and may giving the choice to as many people as possible to adopt those principles if they need them in their life right so a system that works for lots of people and preserves those principles and what are the bad signs the bad signs are when you start seeing and you see that all the time in fact interested companies and interested individuals and interested governments coming and saying for your safety we have to make a few minor changes we have to make sure that criminals can't use this we have to make sure that we can control who uses this technology we have to make the technology safer for your own good and what do you say off bitcoins fine but they will do that in every country in the world and we already have safe money and the only criminals who can use that are the ones who already have a banking license we want to go away from that alright last question over there great thank you thanks Andreas this has been great and my name is Russell and I I have been I started a company to do to do non-custodial stuff for merchants so they get accept payments right and I find that in the in the sort of Bitcoin friendly space that we have here you've got these people skew either towards the hot lers or in for investments and the crypto commerce people which I sort of skew towards what what can you and I find myself going up against the Hodler who owned all this Bitcoin could very easily be spending a little bit of it and make it make the whole area I hope the whole space a lot more open what do you say to them if anything to get them to be a little more open about maybe spending a little bit of their Bitcoin on Commerce to move the move the space further I don't say anything's them the market is telling you that the current preference for this technology in this country and in other developed countries is as a political store value hedge against inflation and other geopolitical effects that's what the market is telling you now if you're in business of doing Commerce and the market is telling you that right now it isn't a very useful system of Commerce and the reason it isn't a very useful system of Commerce comes down to two things one we already have useful systems of covers right we already have credit cards and we have PayPal and we have all of these technologies that we can use to do commerce and they're very easy to use and most of them have most of us have have access to these technologies which means that in order for Bitcoin to be better than those technologies it has to be significantly enough better to justify the steep learning curve the difficulty in security and all of the other things we don't have to worry about and I could tell you all day that it is and the market is telling you that it isn't so believe the market if the market is telling you the Bitcoin is not sufficiently better than visa for an American to use to buy a cup of coffee that is because it isn't and that's okay why because there are four billion people in the world who don't even have access to that and they will do something much more important than buy a cup of coffee right they're going to buy some freedom with it in a country where they can't even imagine that happening the fact that Bitcoin encourages holding or hoarding as it's called by mainstream American economists or savings as it's called by rational people is is because implicitly people recognize that the published inflation rate today is not the real inflation rate so the published inflation rate today is what 2.8 percent today excluding housing energy food and health care so as long as you don't eat breathe live or get sick 2.8 percent the bottom line is that people implicitly feel that there is inflation in many parts of our lives that is much greater than that and when they feel that they take preventive measures they look at various places they could invest their money and they consider Bitcoin as one of them and they invest in that so the reason you're not able to get ecommerce working is because it's not right it's not the right time the technology is not ready for it more importantly the technology is already serving a goal that the market considers more important and that doesn't mean the Bitcoin can only be store value it just means that it's more useful as a store value here than it is elsewhere and in the future it may play other roles and in different demographics in different economic environments it will play other roles but right now that's where we are so as an entrepreneur listen to the market right it's ok if it's not the right time yet find something else to do with this space for which there is the right time sorry I can't give you a better answer that's a good answer thanks all right and with that we're done with the QA thank you so much

Channel: Arapahoe Libraries

Views: 12,650

Keywords: bitcoin, andreas antonopolous, digital currency, programmable money, arapahoe libraries, best-selling author, expert, andreas m. antonolopous, bitcoin currency, library, money, bitcoin basics, learn bitcoin, learning, learn about bitcoin, bitcoin expert, author, denver

Id: 5Uc_x3DdeJI

Length: 84min 7sec (5047 seconds)

Published: Thu Aug 09 2018