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

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[David] Money, we use it every day. We worry about getting more of it, we worry about running out of it. But how often have you asked yourself, what is it? What is money? My name is David Foox. I was born in South Africa, grew up in New Zealand, and finally settled in New York City. I became an attorney, but after years of practicing law, I realized my heart was elsewhere. So I started painting, became an artist, and eventually found my way into filmmaking. I produced a documentary called Love Child, about video game addiction, and in the course of meeting people in the gaming and technology world, I discovered the world of Bitcoin. Why are banks so inefficient? Why are credit cards so expensive to use? And why does the world have hundreds of different national currencies instead of just one? There's a technology called Bitcoin that answers those questions, and it changed the way I look at money and the world we live in. Bitcoin is a brand new form of digital currency. It's similar to traditional currency, like the dollar or the euro, but instead of being issued by a central bank and printed on sheets of paper, it's completely digital. Bitcoins are created by a simple piece of open-source software originally released in 2009, that uses a series of rules and mathematical algorithms to generate digital units of money called Bitcoins. Right now, there is a vast network of computers around the world simultaneously running Bitcoin software, creating new Bitcoins and trading Bitcoins across the network. Each Bitcoin is unique, and cannot be copied or destroyed. And many Bitcoin users believe it's better than the money we've used for thousands of years. I went to lunch with a buddy, and he was like, "Hey man, let me tell you about this nerd money." "Oh my God, cool." And that's how I got into it. And I was fascinated. He didn't say anything about it. I pretty much went down the deep dive and researched it myself. Within about two to four weeks, I was sold that this was the next revolution in our world. We finally needed a financial revolution and Bitcoin was definitely it. My name's Nolan Bushnell. I'm probably best known for founding Atari and then Chuck E. Cheese and automobile navigation and some of that crazy stuff. I believe that Bitcoin has an interesting opportunity to be the Internet currency. It's not just money, it's not just politics, it's not just technology. Bitcoin is cash for the Internet. As a security professional, I set out to try to prove it wrong and try to debunk whatever this Satoshi Nakamoto guy had created, sitting at the dining-room table in my condo working away at this Bitcoin thing. Once I fully understood how Bitcoin worked, it hit me like a ton of bricks. This is actually the most brilliant thing that I'd ever laid my eyes upon. First time I read about Bitcoin, I thought it was nerd money. I laughed at it and I walked away. Second time, about six months later, I read the Satoshi Nakamoto paper, it blew my mind. I got hooked. I spent months reading everything I could about Bitcoin, and almost immediately after that, switched my focus full time to this. [David] In 2008, a person using the name Satoshi Nakamoto released a report on the Internet popularly referred to as the Bitcoin White Paper. In it, he described a new software protocol of his own invention in which a digital currency called Bitcoin could be generated and kept secure by a peer-to-peer network of computers. According to Satoshi, Bitcoin could be a cheaper alternative to the cost in bureaucracy of existing banks and financial institutions. On January 2nd, 2009, Satoshi Nakamoto released his free open-source Bitcoin software on the Internet, inviting anyone to use it. Bitcoin was created under a pseudonym. The person goes by the name of Satoshi Nakamoto, but the public doesn't know who that individual is, nor do I. We don't know if he's just one person or multiple person. I tend to believe it's just one person. It has been one of the biggest mysteries raging across the Internet and business world. Who is Satoshi Nakamoto? An Australian tech entrepreneur named Craig Wright revealing to BBC that he created the cryptocurrency. [David] The true identity of Satoshi Nakamoto has never been proven. Various journalists, bloggers, and news outlets have tried to identify the person, or group of people, who invented Bitcoin under that name, but so far, none of these reports is conclusive. I'm not Satoshi Nakamoto. [David] The real Satoshi, whoever he is, may choose to remain anonymous forever. I mean, we all are Satoshi. And you can never necessarily prove that I'm not Satoshi unless you know who Satoshi is. Satoshi Nakamoto was the first person to create Bitcoin and create the very first block, the genesis block. Satoshi took technologies from different parts of a computer science space and connected them together in an amazing way. But none of the cryptography was new. The computer science language wasn't new, the networking wasn't new. He just connected everything. He solved the puzzle. [David] The earliest adopters of Bitcoin were attracted to it not because of its inventor, but because of the innovative technology underlying the software. [Allen] About 1880, Thomas Edison brought people into the light out of gas lighting. He didn't do it by inventing the light bulb, he did it by building the infrastructure. That's someone that was heralded as a quack and a lunatic before he figured this stuff out, and now he's changed the world. The Wright brothers, right, no one can ever fly, that's impossible. Well, they figured it out. If you just think, in two lifetimes, we've gone from recording sound to introducing light, to cars, airplanes, putting the man on the moon, computers, the Internet. Why is it so unrealistic to think that we can't reshape the world of finance? It's about time. [David] Bitcoin relies on very complicated cryptographic mathematics, but the principles behind it are actually fairly simple. First, Bitcoins have value because they are scarce. Only 21 million Bitcoins will ever be in circulation. So like gold or diamonds, Bitcoin derives its value from scarcity. [explosion] Second, Bitcoins can be transmitted digitally over the Internet from one individual to another from anywhere in the world. It's a technology protocol. There's no third party, there's no intermediary. It's a relationship between you and your money, and no one else. Neither of us need to trust each other and we don't have any access to each other's data, and there's no central entity that has access to that data. Yeah, it's like trying to explain the Internet -in 1994 -Yeah. And the one thing that kind of everyone gravitated to was email. It takes a week to deliver you a message, now I've got the ability to send a message instantaneously. The mail system worked, this was just a lot better. An email's significantly better than a letter. It's just quicker, faster, easier, cheaper. Bitcoin's like email for money versus the bank being like the post office for money. Bitcoin is the transfer of value between people using blockchain. Bitcoin is the money, if you will, blockchain is the log. [David] Each transaction is recorded onto a digital ledger called the blockchain, and that ledger cannot be altered or erased. So once a transaction is made, it's permanent. Each new Bitcoin user is issued a digital Bitcoin wallet with a unique identifying code. One individual can send Bitcoins to another individual instantly with a click of button, and that change of ownership is simply recorded onto the end of the blockchain. In fact, every Bitcoin transaction ever made is on the blockchain right now. The Internet we use today is the Internet of information. The blockchain is the Internet of value. You can't actually fake Bitcoin because every Bitcoin transaction is transparent on the blockchain. It's like a giant Excel file that runs on the Internet that's hosted by no one, and it's just showing who has what. And if I am that line item on the Excel file and it says I own $1,000, I can transfer some of that to you and it's updated on that public Excel file and anyone can say, okay, does he have that money? This whole concept of programmable trust is a huge, huge deal for the Internet. Satoshi had solved this problem with distributed consensus. [David] Unlike writing a check, we don't need a bank to verify a Bitcoin transaction, because each Bitcoin transaction is automatically verified by the Bitcoin network. It's a technique called distributed consensus. Basically, the network of Bitcoin computers across the world looks at every transaction and comes to an agreement of who transacted what and when it happened. Then that transaction is recorded to the end of the blockchain ledger. This model of organization is a brand new thing. It hasn't existed in human civilization before. It's really just a special type of database that allows you to basically store any type of arbitrary data in a distributed fashion. And you can basically ensure the integrity of that data because you have millions of computers running around the world looking at that data and verifying it and all agreeing by consensus that that data is true. Everything can be cryptographically proven to be correct, and there's no way to shred it. [David] Bitcoin is a new form of digital money. It's an alternative to government issued money, also known as Fiat currency, like the US dollar, the euro, or the Chinese yuan. But Fiat currency is far from perfect. A long time ago before there were banks, it was a person-to-person exchange. As trade expanded across towns and even oceans, physical security of money became a really serious issue, and so we invented banks. Banks were a technical solution to a problem of theft and security, so we established a network of these banks that we placed around the world. That whole system relied on these banks trusting each other, and then those banks in turn trusting individual trading partners. So if I wanted to trade with you, I had to not only have a bank that trusted me, you had to have a bank that trusted me and then the banks had to trust each other. The entire system is built on trust. There's a lot of waste and inefficiency that emerges from that system. Bitcoin is essentially returning back to our roots, which is to enable a platform that allows individuals to be able to transact directly with their neighbor, except now their neighbor can be in China. Well, now shall we see how we make money? This is our mainframe room with presses printing various denominations of bills. Now the result is valuable green paper, which people refer to as money. [Woman] If it's only green paper, what makes it so valuable? We have faith in our government and the government says it's worth something. And so that's what dollars are backed by. Fiat currencies in general are inflationary. All of the proponents of Bitcoin feel that it's inherently better than government-backed currencies because its monetary policy is written in code. It cannot change. There's 21 million Bitcoins that will be released over time, unlike any government-backed currency which the monetary policy change is based on who's in power, and the governments can create inflation as much as they want. Fiat money is great, but we live in a digital age. You should be able to send money from here to Japan without an archaic system. Bitcoin was really the first to suggest that we could do large scale peer-to-peer commerce, economics, politics, governance in a way that, you know, is incentive-compatible. [Ahmed] Most people are completely oblivious about how money is created. A lot of people actually still think that money is backed by something, like the Fiat money that people use is backed by something, which is simply not true. Money hasn't been backed by anything since the '70s. It's really like based on a leap of faith. We are trusting that our government will do a good job in controlling the supply of money. [David] Satoshi released Bitcoin in the wake of the US economic crisis of 2008, a crisis which led to the worst recession in nearly a century. Congress has hammered out the most far-reaching rescue package of America's financial system since FDR's the New Deal. They're gonna destroy our currency, that's what's gonna happen. That crisis taught us several things. One, the world is incredibly interconnected in ways that we didn't fully appreciate. Two, the world was over-leveraged in ways that were underappreciated. And three, central authorities are not as trustworthy as maybe we all thought. And so Bitcoin is in many ways a reaction to the colossal failure by the incumbent system. I have 20,000 Republic dataries. Republic credits? Republic credits are no good out here. I need something more real. I don't have anything else, but credits will do fine. No, they won't. [Francis] A lot of the people who were interested in Bitcoin were people who were coming from either the financial sector, or that had a lot of financial knowledge, and they saw Bitcoin as a hedge to a global financial crisis, much like the gold bugs see precious metals as a hedge. [David] Satoshi's Bitcoin protocol allows for anyone with enough computing power to generate new Bitcoins by performing complex calculations using Bitcoin software. This process of creating Bitcoins is called mining. And some of the first Bitcoin enthusiasts were drawn to the currency by the prospect of amassing a fortune from the comfort of their own homes. People wanna know, how can I trust the security of Bitcoin? It's because of the miners. These are the guys that are telling everybody else whether your transaction or you sending Bitcoin is legitimate or not. And these guys can prove that with math. [Lisa] So that is why Bitcoin is secure because it's using something called elliptic curve algorithm. Over time, it will get more and more difficult as the mathematical algorithms become more difficult to calculate. And the way that that network was built is through a financial incentive. They said run the Bitcoin software, and become a miner. You're gonna earn Bitcoin in exchange for contributing, call it compute to the network. So I got in initially mining, and then that kinda spun up to a whole part where I tapped out all the power at my house. And my wife was like, all right dude, you need to get these things out of my place. [Charlie] My family are coal miners. I'm from West Virginia. These guys are getting paid in scrip, a currency that was owned by the coal company. And my grandfather was one of the key people who helped disrupt that process. He was involved in an altercation called the Matewan Massacre, and that resulted in 11 people who were dead after a shootout when the coal companies themselves were trying to kick people out of their own houses. The US dollar is effectively a note that's pledged by the full faith and credit of the US federal government. The scrip currency created value because the coal company said, well, as long as we're in business, this will be valuable. Bitcoin itself, it's not connected to a Fiat currency. It is not connected to any currency in the world that is backed by any sovereign nation. [David] In order for Bitcoin to have value, it had to have users, people who were interested in actually making transactions with Bitcoin instead of traditional currency. And the first group of people who took interest were already using digital currency, it just happened to be in an economy not quite of this world. [upbeat techno music] People playing video games today, things like World of Warcraft and EverQuest, and what eventually became Second Life, I think the people in these sort of persistent worlds have a desire to buy and sell the digital assets that they're creating. And this is before any game company in the world was doing this, or had a microtransaction business model. [David] Virtual world gamers were already trading in-game assets with each other. It began as a barter system and soon people were spending real money to buy in-game currency. Linden Dollars, the currency of the game Second Life, could be bought with real US dollars. Magic: The Gathering online digital cards could be purchased online with real money. It's no coincidence that the first major Bitcoin exchange site was an evolution of this idea. Mt. Gox, which originally stood for Magi: The Gathering Online eXchange, was launched in 2010 and it soon became the most popular site for buying and selling Bitcoins from around the world, and so, Bitcoin had its first user base. But how did it go from gamer currency to something people would use on a wider scale? It didn't take long before word spread in the worlds of computing and finance that this currency has some unique advantages. No one is sitting at home thinking, oh, I wish I could buy coffee easier. And I don't even think if you could buy it with Bitcoin, I would. Why won't I just use cash or my credit and get the points? Why would I? So what if I said, hey, you could use a check-like system and it would settle instantly, and nobody would forge it, and nobody would put an extra zero on the end of your check. Then people start to think, oh, okay, I see it. On this check, you do a few things. One is that you write who you're going to pay to. Bitcoin has that exact thing. So you have essentially a payout address, you're paying to something. You have an amount, so you're going to fill in the amount of how much you're gonna send. Bitcoin has an amount. And the last thing you do is you sign it with your physical signature. And Bitcoin doesn't use physical signatures, except Bitcoin uses digital signatures. Whereas credit cards, for example, you don't give money to anyone where you're paying with your credit card. What you're giving to people is access to your funds. You're giving them your credit card number, the security number, the expiration date, and you're opening your books and you're saying, come take money out of my account, and don't take too much and don't give my information to anyone else. So Bitcoin is the complete opposite of that. You don't have to give any private information, you're just giving it. So, it's really just like cash for the Internet. You have the responsibility now to control your money. You are your own bank, but you have to be responsible for that. Because my company works in Bitcoin, we also get paid in Bitcoin. So in my everyday life, I use it to feed myself, to pay for bills, I pay my employees. A lot of my life revolves around it. There's a lot of places that accept Bitcoin as a payment, where you can go to a bar, pay in Bitcoin, go to a burger place, grab lunch, eat sushi, go on a date, all paying with Bitcoin. [Andreas] That instinctive experience of ease of use, of being able to transfer money quickly anywhere in the world with few restrictions, and then while you're having that experience, having your deposited check held for five business days, and finding your bank closed at 4 p.m. on a Friday will tend to form a really nice juxtaposition of old versus new. You start wondering, why do banks work as if they're still stuck in the 1950s? Why do I have to jump through hoops to access my own money? Why am I paying fees for someone to hold onto my money? And why are you closed on a Saturday in the year of the Internet? The traditional banking system's gotten really good at making us not really care a whole lot about our fees. Like they hide them, or, you know, it's just a dollar, it's just 50 cents, you know, it's just 2%. How do you feel about those fees? I think I'm getting ripped off. Overdraft fees and there's a fee to keep a savings account. You're putting yourself on a debit card or a credit card, but they wanna charge you $5 to use your card when you do it. It's my money and they're taking a little bit out of it for themselves, but they didn't really earn it. I earned that money and it's my hard working money and I'm paying for something for a product, but you're gonna take a little bit of it for yourself when it shouldn't really go to you. That's how I feel. ATM fees, and transfer fees, and overdraft fees, and all of these fees that are associated with handling your own money, right, you could do most of what you do with that bank account with Bitcoin and do it for free. [Eric] Bitcoin is a purely digital cash. It's a way of one person sending money to another person for any purpose without any opportunity for censorship or limitation, also without any opportunity to become a middleman and take a cut of that transaction. It can't be true. How can you transfer something from A to B without having a middleman C? Once you start to realize the power of Bitcoin, you realize why everybody is so passionate. Think about how many people clip a fee or grab a piece of the business, from stock transfers to real estate, to any other thing where you store value. I heard somebody that tweeted out or said, hey middleman, look out, technology is coming for you. [David] The traditional banking system in the US is fairly convenient and secure, but consumers still spend billions of dollars annually to pay for the massive bureaucratic system, including billions of dollars in overdraft fees alone. Billions more are lost to credit card fraud. What if all of these inefficiencies could be eliminated? Credit cards were created in 1950, and credit card technology has hardly really been built on or further innovated since really its inception. Credit card companies are highly susceptible to hacks. It's costing our economy billions of dollars in loss today. The huge benefit is, especially for small business, transaction fees. If you're in a restaurant, transaction fees typically around 20 or 40 cents. That's huge for a nickel and dime business. Restaurants, it's a very small profit margin. So when you have 40 cents of it or 20 cents of it as a transaction fee, that's huge. [David] Most people don't know that every time you go to a store or restaurant and use your credit card instead of cash, the merchant has to pay the credit card company a transaction fee, usually around 2% or more. So why is no one complaining? Because credit card companies have lobbyists who have helped to enact no surcharge laws across the United States. These laws prohibit merchants from charging for credit card usage, which means the fees remain secret and the credit card companies get richer and richer. I've recently ran a business and I'm thinking that we paid, depending on the transaction, we paid somewhere between 3 and 5%. They used to charge me I think, uh 20 cents per swipe, plus 2.25%. That's a hefty fee. I don't think it's fair that they're making the restaurant pay money on the money they're making. It's almost like a tax, but they're not really... They shouldn't be taxing people. They're not the government. They shouldn't be allowed to do that. Whenever you reduce friction, all of a sudden, new businesses respond. It just happens as the night, the day. Things that are idiot-proof are much more safe than things that can be messed with by idiots. [Brock] The whole world and pretty much every product and service in use today is built around a centralized architecture. Maybe you've got a bank that has got a centralized ledger and they own and manage and control the ledger, and this is a decentralized system, meaning no one owns or controls or runs it. You can't shut Bitcoin off. You can't shut it down. The only way to turn Bitcoin off is to shut off the Internet forever. You think about Facebook, you got all your pictures and you got all your social history there, what if Facebook is shut off? What if they close their doors? If those platforms are re-architected in a decentralized fashion, they essentially will run forever, and therefore, you have no risk of your data being lost. Sometimes the power goes out in one region. If your data centers are in that region and the power goes out, you actually lose access to those resources. For critical resources, like money, having some sort of centralized infrastructure is actually a very dangerous thing. The ability to create resilient distributed systems can actually solve many problems, not just with money. A great example is Uber. It's this company which has come out of nowhere, adopted a decentralized model and it works like crazy. We don't actually need third parties anymore. We'd prefer to trust in math than trust in some third party, some company. The printing press decentralized the manufacturing of books. It was one of the main catalysts in the industrial revolution. Before, you had to actually copy word by word, letter by letter these books, and it took a long, long time in the monasteries to do that. And so books were highly expensive, highly centralized tools, but the Gutenberg press had largely decentralized that. We saw centralizing of that industry with the industrial revolution. You had the printing presses and, you know, it centralized into newspapers, et cetera, and then the Internet comes along and the pendulum swings the other way, and it decentralizes again. If you asked me back in the '90s, do you think you're ever going to see CNN have a website, I'd be doubtful. If you asked me, do you think CNN will be showing tweets on TV, I'd be doubtful. But if you asked me, do you ever think CNN will be showing tweets on TV instead of reporting, because the tweets are the reporting [chuckles], I would have laughed. Information wants to diffuse, it wants to spread out, it wants to make itself available. You can see this trend all the way back through kings and fiefdoms, and all the way back to society prior to that. Power, once it aggregates, it slowly dissolves. Unlike gold or silver, you won't be able to confiscate it. You know, gold or silver, well, I mean, we saw how that worked out for the Incas and the Mayas. Like, they just got killed and their gold and silver was taken and shipped back to Europe. But with Bitcoins, you actually have to get the cooperation of the individual in order to solve the math problem to move those Bitcoins. [David] Because Bitcoin operates independently and without government interference, some of the early champions of Bitcoin see it not just as a currency, but as a means of social and political change. Bitcoin is the subversion of the authority of currency. Bitcoin is the idea that currency doesn't derive its value because it has the face of a queen on it. It doesn't derive its value because it's printed by an organization run by the banks, the Federal Reserve. It doesn't derive its value because a government says it has value. Bitcoin is just the most recent disruptive technology following a long line of disruptive technologies that came before it. The steam locomotive was a disruptive technology, and all the train tracks that came before it, it allowed you to move goods in a relatively short period of time from one location on the continent to another. The telephone is a disruptive technology, allowing seamless communication, instant communication over vast distances. Radio was disruptive, the Internet was disruptive. Bitcoin and this digital currency paradigm is something that's largely subversive to our man-made laws. Governments will be the ones that have to adjust, not Bitcoin, not the technology. All disruptive really means is that it changed society, it changed the status quo, it changed the way that things were being done. [David] Unlike a credit card transaction, it is possible to transact in Bitcoins without revealing your name and identity. People believe that you should have privacy in your home. You know, we all have curtains on our windows and locks on our doors and no one thinks that that's weird or wrong. But for some reason when it comes to money, people assume that you should not have privacy anymore, and that the government should be able to look into everything you do, even without accusing you of a crime. And that's wrong, but people tolerate it because that's how it's always been. Bitcoin is finally taking privacy back for people. In the current banking and financial system, those of us that are just individuals, we have nearly no privacy. The banks and credit cards know every transaction that we make. On the other hand, you don't get to know what your bank is doing with your money. Now obviously, you know, some establishments may be threatened by this, but equally, some establishments are threatened by free speech. You know, some establishments are threatened by the idea that people may choose to transact the way they wish to. Because Bitcoin is anonymous and because you can send it to anyone around the world for very cheap, people have been using it to go onto the deep web, and they also use it on Silk Road, and Black Market Reloaded, and Agora Markets to buy things like marijuana, heroin, drugs, or even prescription drugs. Things that they don't have access to normally, and perhaps they want to buy from a trusted source online. [announcer] Silk Road, a dark website akin to Amazon or eBay with buyers, sellers, user and product reviews, except the product in Silk Road's case is usually drugs, and the currency, as with most things on the dark web, is Bitcoin. [guest] Every transaction's recorded in the public log online, but names of buyers and sellers are never revealed. That's why some call it the wild, wild west for criminals. Bitcoin permitted Silk Road to happen because Bitcoin is a private financial system. I think things like Silk Road are totally legitimate. Free individuals should be able to do whatever they want with their own body, and if that means drinking a beer or snorting a line of coke, it's no one's business, but the person doing it. Before Bitcoin was around, people would buy these illegal effects with regular currency, which is untraceable. Silk Road takes a violent drug industry, because it's a black market, and turns it into a civilized market where people can log on to a website and buy a drug. They know exactly what they are going to get because it's all there. There are user reviews and seller reviews, and it's peaceful. [David] Among the earliest users of Bitcoin were speculative traders. The price of a Bitcoin began at a few pennies back in 2010, but the cost kept increasing and eager traders wanted to get in on the investment. Early buyers were making a fortune on the growth. You can look at Bitcoin as an investment, but if anything's a speculative vehicle, it's at the top of the risk pyramid. [David] Still, the vast majority of Bitcoin enthusiasts I spoke to were not looking to make a quick buck. They were looking toward the future. How could Bitcoin technology be used to improve our daily lives? [Brock] In the analog world when you walk down kind of the promenade and you see someone telling a joke or juggling, or singing and dancing, whatever it might be, you got the ability to throw out quarter and a half, right? And this is an analog sort of behavior that human beings have been actively participating in for thousands of years. But you can't do that online. The idea that I can go to YouTube and watch a video, and if I like the content that person has created, I can say here's nickel, or I could pay for a penny a minute. Or if I like, you know, this blog post that this journalist has written, you know, they could put in a paywall where I can read half the article, and, you know, for 10 cents, I unlock the rest of it. You can actually send people a nickel, or a quarter, or a dime. Where using traditional financial networks like a credit card and that, because of fees and charges, it doesn't really make sense to charge less than a few dollars for something. That micropayment idea is really an important one for the entertainment field or the content creators because when you hear a song that you really like, it's very easy to give applause. So your applause can be 25 cents or 50 cents, or what have you. Right now we have ads, right? So when you are experiencing someone's creativity, you first have to watch an advertisement before you can do that, and that's how these people get paid. Why can't we connect to each other? What I would like to do is have it so that I can send a first class email, and it's 25 cents, and if you open it and read it, you get the 25 cents. Look at what happened with the music industry, right. You had vinyl go away, which was around for a very long time, I think 10-plus years. And that got pushed out by cassettes, and then CDs had a nice run. And then what happened to CDs? People didn't wanna buy an album for $15 when they like one song on the album. Apple comes out with iTunes. You can buy a song for 99 cents. Brilliant, right? Deliver the content in the way the consumer wants to use it, and you'll see adoption. The same way that, you know, various small communications have enabled things like Uber and Google Maps that we maybe never would have seen in the early days of the Internet, these microtransactions where you can do much smaller financial transactions than the existing financial networks allow are going to create applications that we can't even envision today. [David] One of the most promising applications of microtransactions is charitable giving. With Bitcoin, a charity can crowdsource its funds from a wide array of small donors and it can transmit those funds to anywhere in the world at minimal cost. The BitGive Foundation is a nonprofit. It's actually the first 501(c)(3) IRS approved nonprofit in Bitcoin. It's a Bitcoin-based foundation. And what we do is support charities all around the world, a global mission of public health and environmental causes. What Unsung does is it connects restaurants, or grocers, or catering services, or just people who have excess food, and they can just go into the app and put in how much food they have available, and our volunteer drivers can just go pick that food up and take it directly to the homeless, or to a homeless shelter, or a women's shelter, or anybody really that's in need. People on Unsung compete against each other to like do the most good. Everyone has a Bitcoin address on it. You can actually tip the people that are performing the best. So it's actually, you can send them money directly. [Andreas] Currency is a form of human expression, and people who are laughing about that concept today, you know, will be surprised by what comes out of this cauldron. I've said often, Justin Bieber coin at this point would be worth more than about 30 national currencies if it launched tomorrow. I don't assign value, you don't assign value, kings and queens don't assign value, users do. And if they find that currency useful, you will have a little village in Papua New Guinea electronically trading on their Nokia phones Justin Bieber coin, and they will have no idea who Justin Bieber is. They'll know it's used to buy things and you can buy things with it. Well, guess what? There are villages in Africa right now who know nothing about who Queen Elizabeth is, but they know that the money that has her face on it works. There's really no difference between Justin Bieber and the queen. [audience laughing] One thing about the Bitcoin community specifically is that they comprise largely the smartest people in the world. [Michael] Before I got into Bitcoin, I was a digital forensic investigator. I conducted cybersecurity investigations for whoever got hacked. I left a very well paying job to take a huge risk and start my own Bitcoin security consultancy. [Bart] Bitcoin has passion in abundance. I've never seen a group of more talented engineers, mathematicians, entrepreneurs, CEOs. Everything from anarchists to libertarians to software developers to economists to politicians, accountants, lawyers, Wall Street bankers. You have a lot of forward-looking thinkers, a lot of people who are thinking not two years from now, not even five years from now. They're thinking 10, 20 years from now. [upbeat techno music] [Jinglan] I started off as a studio art major at Wellesley College. When I first heard about Bitcoin, I thought it was a company doing innovative things. And as I read more, I was like, wow, I really want to understand more about how this works. It's my senior year now. I've switched to computer science. The biggest thing about the Bitcoin community is that it sees the potential for massive change in a very positive way for society over a long period of time. That core ethos holds the Bitcoin community together in a way that no other community I've ever seen does. I was a child actor. I was essentially doing commercials and a few movies from when I was nine years old until I went to college around 18. I had some bit parts in Addams Family Values and Casper. I've decided to scalp you. [ominous drumbeats] And burn your village to the ground. [Indians ululating and war whooping] It wasn't a career path for me but it was a lot of fun as a kid. I grew up as an actor. It sure would be a shame if I accidentally told my dad about you taking me boxing. It would be a shame if I threw you out that window also. [chuckles] I decided to stop acting around 14, 15, and that's because I wanted to be an entrepreneur. When people ask me, they're like, oh, what do you do? I say I have a Bitcoin company. They're like, oh, are you the CEO of Bitcoin? I'm like, no. I say, that's like saying are you the CEO of the Internet? [Trace] We had this movement, uncoordinated, decentralized people working in their own self-interest and it's really kind of congealed this community. Bitcoin is definitely an industry that knows how to party, knows how to have fun. [Trace] A lot of us that have been around since those early days, we don't know each other, we're friends, we like to have fun with each other. 'Cause if you're not having fun, why do it? [Andreas] People sometimes say that we're the early adopters. No, we're not the early adopters, we're the lunatic fringe. The early adopters come later. Welcome to the lunatic fringe. [Travis] When we have a borderless digital money supply that doesn't recognize geopolitical boundaries, I think there will be a sort of social cultural collaboration and freedom that we haven't seen before. It's just a completely revolutionary new financial system. [Eric] It's going to make things more fair. It's going to enable more peer-to-peer systems to be built. It'll be a more transparent economy. More incorruptible as well. If some form of structure can take away your property or your wealth, you're gonna be stranded. Being financially independent and not being subject to third parties' power is one of the most freeing things in the world. The ability to keep property and keep wealth is a huge step in your freedom. This is something that hasn't changed much in the last hundred years. In the Bitcoin world, we're taking this big quantum leap and moving ahead several orders of magnitude and freedom. [Justin] It removes borders from financial transactions, very similar to how the Internet erased borders from conversations and from communications. [Erik] It's the future because it's just better. It's faster and easier to send money and store money with Bitcoin than it is with traditional finance, without anyone getting involved, without any bank fees or wait times or any censorship of the transaction whatsoever. [Micah] We would've never been able to imagine social networking taking over our lives and changing the way we fundamentally communicate with another individual. And we wouldn't have imagined how Twitter could essentially start a whole movement of people in the Middle East. We just would not have imagined that the Internet was capable of doing that, and yet it was. Freedom usually wins. I-- I would say always wins but there are too many examples of really bad guys messing it up. [ominous music] Mt. Gox unexpectedly shut down today, owing hundreds of millions of pounds and prompting the sharp fall in the value of the currency. [TV reporter] Currency community was shaken by the shuttering of Mt. Gox. The firm froze withdrawals in early 2014. It said there was a bug in the software underpinning Bitcoins that allowed hackers to pilfer them. So what's happened today is Mt. Gox, which is the most famous as the oldest, the original Bitcoin exchange, has disappeared from the Internet. And that means 744,000 Bitcoins are missing, unaccounted for, and people might have lost what they thought was worth about 400 million dollars. Bitcoin, it's the first time we've had Internet money. And therefore, you've given hackers a greater incentive than they've ever had in history to, you know, find holes in your security. [David] Mt. Gox had become the most popular platform for buying and selling Bitcoins and it sold over half a billion dollars worth of Bitcoins to users across the globe. The problem was that Mt. Gox was structured in such a way that they held their customers' Bitcoin wallets and the private keys to access them within their central database and didn't take enough precautions to safeguard those keys. So when hackers attacked their systems, they were able to steal thousands of Bitcoins valued at hundreds of millions of dollars. The biggest thing you learn quickly in the exchange business, people don't like it when you mess with their money. You start to really realize that when you see that picket of people outside Japan Mt. Gox office, trying to kill the dude that they think ripped them off. If the owner of the company had actually recruited the right sort of people, put in place the right corporate governance and managed the business in a way it should have been as a business that was processing 500 million dollars a month of transactions, it could have easily been avoided. It was ultimately negligence and, you know, incompetence. [David] Charlie Shrem was one of the early success stories of the Bitcoin arena. He founded a Bitcoin exchange platform in 2011 called BitInstant and went on to receive a 1.5 million dollar investment from the Winklevoss twins in 2012. The Winklevoss twins. Look at them. They're like two genetically enhanced Ken dolls. Do you know how much Bitcoin they're worth? BitInstant was one of the easiest ways to get US dollar into Bitcoin, and he ran that service for a long time. I was running this thing out of my basement, and it was a free-for-all company that was growing too quickly. I was processing millions, tens of millions of dollars, being the only employee of the company, and I couldn't control it all. [David] By 2014, he was arrested on federal money laundering charges. Charlie Shrem, 24 years old, arrested today and charged with engaging in money laundering with a user at Silk Road. [mumbles] you recall that Silk Road was that infamous black market drug website often referred to as essentially the eBay for drugs. I'm not gonna sit here and say I didn't do something wrong. I did, I committed a crime. I took money from people that they wanted to buy drugs on the Internet instead of buying on the streets, and I didn't stop them. He was a very big person in the media about two years ago. So when I first got into it, he was a huge deal. Uh, and then there was sort of his downfall. And my sentencing is tomorrow. I pled guilty to aiding and abetting and unlicensed money transmitting business. I hope the judge decides to give me a non-incarceration sentence. I've definitely suffered for my crimes. I've been under house arrest for a year with an ankle bracelet on. I have lost my freedom, family life, disowned from my family. I just completely lost everything. I am someone who was tasked of being a guardian for Bitcoin almost directly from Satoshi in the really early days. He's going to be going away for a while. I tried my hardest to stay on the right side of the law, and I failed myself. I'm the first real, like Bitcoin felon. None of these problems are as big in the Bitcoin community as they are in the traditional banking and financial sector. The drug trade in the United States is estimated to be 300 billion-plus dollars per year, and yet the Department of Justice sees as only 1.5 billion at most. Current regulation of the banking and financial system hardly exerts a credit card fee on the drug trade in the US. [David] In October 2013, the FBI shut down the Silk Road website. Its founder, Ross Ulbricht, known under the pseudonym, the Dread Pirate Roberts, was convicted to life in prison. Subsequent black market websites have also been systematically shut down by law enforcement, and their administrators brought to justice. There's been a lot of misinformation and communication issues around what Bitcoin really is, and the media has created a lot of hype out of some of these scandals, from Silk Road to Mt. Gox. Those are the controversies. It happens with any new industry, porn, sex, drugs. Krusty, are you broke? Yeah, all it takes is some bad luck at the ponies, worse luck in the Bitcoin market. Hackers stole over five million dollars in Bitcoins from a Slovenia-based Bitcoin exchange. Man, if you're not safe to keep your money in a Slovenian Bitcoin exchange... [audience laughing] It was a bad thing for Bitcoin because of all the media attention. And they were talking that Bitcoin got hacked. They didn't say hackers attacked. And because Bitcoin is so new and innovative, not a lot of people truly understand it. We have three major enemies to Bitcoin: banks, governments, and media, and these are all actually intertwined. So if we don't do anything collectively as an industry to combat a lot of these myths and this constant highlighting on these two major issues, Mt. Gox, Mt. Gox, Mt. Gox, Mt. Gox, scam, scam, scam, scam, Silk Road, Silk Road, Silk Road. And we're ignoring all of the amazing infrastructure being built in this industry because none of us are coming together to tell the world what's going on. [David] Mt. Gox, Silk Road and other scandals solidified the public view that Bitcoin was seedy and illicit. Most banks refused to do business with Bitcoin companies. Pretty much everyone you talk to here has probably had a bank out closed on them. If you have the name bit or coin in your name, the banking industry is pretty much discriminating against you and they won't service you. I think we're really tracking very closely along with Gartner's hype cycle. There is a lot of hype very early on in any technology. Right now I think we're in the trough of disillusionment. And then as soon as we emerge from the trough of disillusionment, the world starts to get a little bit better. These problems have occurred in Bitcoin because they already occur in the traditional banking and financial system. But the difference with Bitcoin is we are finding solutions, technological solutions, to prevent these same kinds of failures within Bitcoin from occurring in the future. Bitcoin is the first opportunity we've ever had to catch the actual big fish involved in crime. When Mt. Gox claimed they lost all their Bitcoin, users of Mt. Gox pooled together the knowledge that they had about transactions from-- to Mt. Gox and from Mt. Gox. They found 200,000 Bitcoins they asserted were in-- still in the control of Mt. Gox. Only then did Mt. Gox say, oh, we actually do have control of this 200,000 Bitcoins. There's a difference between the protocol and a company that uses the protocol. It's sort of like back in the early '90s, Hotmail got hacks, right, but we didn't lose faith in the email protocol underneath, right? There's nothing wrong with the email protocol. It really is about improving the best practices that people use to secure Bitcoins. After the Mt. Gox failure, so Bitcoin exchange was hacked and a lot of money was lost, um, the concept of multi-signature wallets became extremely popular. People started adopting best practices, people were much more aware of security, and as a result, the entire system of Bitcoin was safer. Multi-signature essentially eliminates single points of failure and it splits the risk up amongst multiple parties who are signing a transaction. It's kind of like, you think about if you wanna launch a nuclear missile, you got two keys that both need to be inserted and they both need to be turned at the same time. All these big hacks, right, Target and Chase and all these huge institutions that are spending millions and millions of dollars trying to secure the databases, but the truth is, if they hold them all in one place, you only have to hack one place. The better model is decentralizing security. Ultimately, Bitcoin gives us tools that allows us to create systems that are more secure than the current banking infrastructure. The problem is just that not all of them have been implemented yet. I don't think we should view Bitcoin as this big four-eyed monster with seven arms and two eyeballs on its neck. Keeping an open mind is something that's been really important throughout history in general. People are often adverse to change and that's understandable, but I think when we hear about scary things like Bitcoin, just remember to take a deep breath and really thing about where this technology is coming from. [David] For many Bitcoin developers, Bitcoin is not only a currency, but a platform upon which to build new and more complex applications. And the crucial element underlying Bitcoin that allows for that innovation is the blockchain. The technology gave us for the first time a way to agree on a record. And Bitcoin uses that to transfer value around, but we can use this for all sorts of things. It doesn't just have to be about Bitcoin. It can be anything that anybody wants to publicly store. Think of public records, think of the legal system, music, content, books, licensing. There's all these sorts of things that blockchain technology can be used for. Anything you burn or put on the blockchain can never be changed for any reason, no matter the expense. [David] Blockchain technology developers are working on ways to link all kinds of data to the blockchain. Anything from concert tickets to the deed to your house could be registered, providing a permanent and incorruptible record of ownership. Let's say that I buy a ticket to a Taylor Swift concert, and for whatever reason, I can't go to the show and so I'm gonna go sell my ticket. And I have this PDF ticket on my computer and I go to Craigslist. Now let's say that I sell to four different people because I'm a bad person. So now one of those people are gonna be able to get into the show, and the other three will be scammed, they won't be able to get in. And so we have to rely on these third party systems to kind of be the source of truth. So instead of having a third party organization, that's all guaranteed by cryptography and by distributed data. My bicycle got stolen and I had a friend who called me and said, oh my gosh, your bike is two houses down. But I get there and I see that is definitely my bike. And then the problem arose, how do I prove this is my bike? But with blockchain technology, we can actually tokenize the ownership of that bicycle, and then I can prove that I own it. And then if I sell it to you, I can transfer that token and you can prove that you own it and we can track it all the way down the blockchain. If I went and bought a Louis Vuitton bag, that Louis Vuitton bag could come with a token that is my certificate of authenticity. And when I go sell that or a bottle of wine or a piece of art, when I go sell that to someone, I'm transferring with that certificate of authenticity essentially using a transparent system like the blockchain. [Eric] I think what will happen is the companies that do not adopt the technology will find themselves in stiff competition with those who do adopt it. I like to take Kodak as an example. They used to be the biggest producers of handheld cameras, film cameras, and when the digital camera revolution came around, they took a hard hit because of it. So I think it's gonna be the same in the banking sector and all industries. We'll eventually be dealing with some kind of cryptocurrency or some kind of crypto technology. We're trying to release the power of the blockchain. It's blank paper. It-- it's featureless. But the people building applications can draw on it whatever they want. There's no boundaries, there's no fences, there's no rules. Banks and other large financial institutions will increasingly embrace blockchain technology for the exchange of all sorts of assets, stocks, bonds, title to traditional assets. [David] Blockchain technology is a tool for secure and efficient verification, and this could be very useful for banks who spend billions on transactions and verification each year. With Bitcoin and blockchain, we no longer need intermediaries. Two banks can send transaction directly from one to another. Anything that has a middleman can be rewritten to be without a middleman using blockchain technology. Right now we rely on realtors when selling property from person A to person B. That transaction can be distilled into what's called a smart contract. Any kind of legal transaction for which you currently need an attorney can happen on blockchain, and it will happen within a couple of seconds at most. [David] A smart contract is essentially a transaction written in software. It could simplify transactions between two people, but it can also make a transaction between two machines. Many developers are working on technologies for advancing the Internet of things, which is the interconnection between machines and objects such as your phone and your stereo, or your fridge and your microwave oven. The possibilities are limitless. I can rely on cryptography and an open network to be able to have two devices interact with each other in a safe and secure way. That is the real future of the blockchain. The great thing about the blockchain is at its core, in essence, it's an anti-corruption tool. Here you have a technology that for the first time can provide for a global, decentralized, distributed, cryptographically secure, verifiable and auditable elections. [David] Each ballot cast in an election could be registered to the blockchain, recording your vote securely and permanently. You vote, you see your vote in the blockchain. You know that it's been counted and counted properly. The whole incorruptible and transparent nature of Bitcoin means you could integrate transparent accounting systems, not only into governments, but into big companies as well. [David] All Bitcoin transactions are permanently traceable, so you could follow the money as it goes from the taxpayer to the government and find out where each dollar is actually being spent. And with that accounting system run on the Bitcoin blockchain, you'd be able to trace every cent of your taxes. People could see Department of Roads spent $100 on 10 hammers. This could be considered suspicious or not. The user can click, it's not suspicious. Who it goes to, why it goes to them, how it gets paid, how choices are made, the very idea of democracy improves once you have the blockchain. We all know that if there's one class of people that we cannot trust, it's bureaucrats. Nobody's life, liberty or property is safe -when congress is in session. -[laughter] We can actually detect why problems exist and either fix the problems or hold the parties accountable who failed to do what they were supposed to do. [Eric] In countries where people own land but they don't have a deed for it and then, you know, their government will come and reclaim the land from them and tell them they don't have paperwork, there are now companies that are developing technologies where you can actually timestamp a deed to your land onto the blockchain, allowing you to have an incorruptible record, proof of ownership. And that is especially interesting in developing countries with unstable governments and unstable economies and currencies. [David] Hyperinflation is an economic phenomenon in which a country's currency rapidly loses its value due to oversupply in other factors. The value of the national currency plummets while prices soar. So if a citizen simply hold their money in cash or bank accounts, their savings would plummet in value. In these cases, Bitcoin can provide a more secure way to store or transfer wealth. What happened in Zimbabwe was they kept printing and printing until the money got to this one hundred trillion dollar note, and it was still not worth enough to buy them a loaf of bread. In Buenos Aires, every couple of years, the government just prints money out of thin air and people are unable to store their value in any way. They need to have some sort of alternative because if they keep their money in the bank, two years later, that money could be worth half of what it was before. [Brock] We live in a country where we got banks, we've got pieces of plastic in our pockets that make buying things relatively convenient. We've got rule of law, in theory they're there to protect us. If something goes wrong, we got faith in the commercial system. And of the 200 currencies in the world, we actually have one that we would all like more of. But when you start looking at the rest of the world, you'll start to understand why Bitcoin's appealing. And so the countries where I think Bitcoin has the greatest potential, call it this year, would be places like Argentina and Venezuela. Bitcoin creates opportunity for exit. That is, people who are dissatisfied with the monetary system in their own countries can exit. They can leave and use Bitcoin. Not leave physically, but leave the intellectual space of money and value transfer. Now, they may take more risk in doing so, but there may be a great deal of reward. For these guys, it's not necessarily ideological, it's just practical. They can't get their money out of their country if there's capital controls. Their money from one month to another can be worth next to nothing. So for them, it's a question of survival, it's a question of preserving their wealth. My family came to the US from Russia a few years before communism and Russia fell and they basically took what they could with them to come to America. [David] The US financial crisis was followed closely by a worldwide recession. In the nation of Greece, this recession spurred a government debt crisis, leading to capital controls and nationwide bank closures. [TV reporter 1] Quietly over the past week, Greeks have withdrawn more than one and a half billion euros. At the ATMs, people couldn't take out more than 60 euro per day, and then they ran out of 10 euro bills, so it was 50 euro per day. [TV reporter 2] But I think if you're in a neighboring state, a state that also has a debt problem, say Portugal or Ireland, you're thinking, hey, maybe I should diversify my investment, maybe I should stay away from treasury or things like that and I should consider Bitcoin. This is a sign of the apocalypse. Give me some of that crazy digital Internet money. The Greece crisis where the Greek government imposed capital controls, I think was a wake-up call for a lot of Europeans to realize that suddenly, their bank accounts can be frozen. There is a middleman between them and their money. The government can just simply tell the bank that no, you can't have access to your money. I think this was a really great wake-up call for countries like France, Italy, Portugal, which are facing economic situations that are not so different from that of Greece. And these citizens realize that, okay, this happened in Greece, it can happen here. It was too late for the Greeks to get into Bitcoin because the capital controls came in too fast, but it's not too late for us. We're seeing what's happening in Greece. Europe and Spain aren't far behind. And if those people need to leave a bad situation to come to a freer world, it will be very difficult to do unless you have a medium of exchange to take your hard earned capital with you, and Bitcoin, I believe right now, is the best way for a person to do that. [David] In June, 2016, Great Britain shocked the world when its citizens voted to leave the EU. I think this will be the most consequential thing post-war that we will have seen potentially. Of course, the pound has cratered, falling to its lowest level in over 30 years. Lots of shock on the markets. It's been absolute carnage this morning. There's been low liquidity, but there has been a high of trading volumes in most assets. A lot of wealth has been destroyed as equities have dropped globally. And probably the most extreme moves have been in currency markets. [David] The value of the British pound crashed overnight, and in the same period, the value of Bitcoin climbed. With so much uncertainty in government-backed currencies, it's no wonder that people are looking for alternatives. And Great Britain may not be alone. What if the exit-fever spreads to places like the Netherlands, Finland, Hungary, Austria, or even France? Even in the US, overseas currency exchange is a daily necessity for millions. As a nation of immigrants, many people send portions of their paychecks overseas to support relatives in their native countries. These transfers are called remittances, and the number one company that handles them is Western Union, which handles a fifth of worldwide money transfers, sending nearly 100 billion dollars annually. There are places in Central Valley here in California where fruit pickers are bussed every Friday to a giant department store owned by the fruit company where they get to get their paycheck in one line, send most of their paycheck back to Mexico in a second line, and get soap and basics and fruits and some food in the third line. Right now if you wanna send money across a border, it can take days. It can be extremely expensive. Western Union on average charges 10%. But the people that actually are sending smaller amounts of money are being charged, in some cases, 20 or 30 %. If I'm a nurse here in the US, I need to get money back to my family in the Philippines, how do I not loose 15% in that transaction? There is no banking infrastructure there, there's no accounts they can sell their Bitcoins and withdraw money to. It needs to really happen in physical locations. Once you have sort of Bitcoin ATMs on both sides of a border, the savings are so significant that I can see everyone saying, oh, do it this way, do it this way. And I can see that happening in a very, very short period of time. And it's not because they care about Bitcoin or blockchain tech. They care about saving 20 bucks. [Reeve] In today's economy, people work from all around the world and you want to crowdsource labor and talent and technology from all different places around the world. But you can't pay them. It's really challenging to pay lots of people in different countries today. If I want to go and do work for clients in, say, you know, South Africa, it's a real head scratch just trying to figure out how on earth are they gonna go pay me? You know, they have so many barriers between them and me. One of the biggest problems right now is under-banks people who can't have access to our financial system. [Perianne] The World Bank did a study and they found that over 74% of the world's population does not have access to basic financial services. In many countries, they don't have a lot of the traditional infrastructure that we're used to here in the United States, like credit cards and basic banking. [Jim] I heard it said the other day that it's expensive to be poor, and it really is. Half the world's people don't have access to formal financial services, and that prevents them from improving their lives, educating their children, getting good, healthy food. [Paul] It's extremely tough to get a bank account in the Philippines. Bitcoin provides that opportunity to have a bank account on your mobile device where countries like these have actually pretty decently high rates of smartphone penetration. [Brock] In a lot of these sort of developing nations, they've got the ability to roll out the latest and greatest which is blockchain tech and their entire population can be banked overnight by having nothing more than a phone. [Andreas] There are more people with text messaging cellphones than access to safe drinking water. And in terms of total manufacturing, I think more cellphones have now been made than humans currently alive. There are places where the nearest bank branch is a 100 miles upstream by canoe, and yet there's a solar powered cellphone tower microwave uplinked right there and people in that village have text messaging phones, usually a Nokia 1000, like the most popular phone in the world. Make Bitcoin usable on those devices and we can see some immediate applications. We're all connected through the Internet and now Bitcoin allows our transfer value to be connected. From here to China to the middle of Africa, with some of you guys just an SMS phone, you can be sending value. [David] In our increasingly global economy, wouldn't we benefit from a worldwide currency? The Economist magazine predicted this in 1988. So if we have a new community, that's the community that exist on the Internet, the folks that can participate to exchange value are only those folks with access to the traditional banking system, and that's not the majority. Commerce opens up once other people can participate. And think of a company like M-Pesa in Africa who converted a mobile system into effectively a payment system because of the demand side. [David] Kenyans lacked a stable currency or any reliable way of transferring money from person to person or city to city. What they did have was a popular cellphone network. So spontaneously, cellphone users started exchanging cellphone minutes in place of currency. And within a few years, they had leapfrogged traditional banking systems in favor of digital currency. You are nobody without your mobile phone in Kenya. In fact, nearly every single adult in the country has one. But the most exciting development in recent years is this, M-Pesa. [announcer] It enables a mobile phone to work like a debit card. During a transaction, money is deducted from a prepaid account connected to a user's phone. [Reeve] Individual users trade in cellphone minutes because it's not inflationary. They don't trust their local currency. They solved the problem because the unbank didn't have bank accounts. Now they can trade cellphone minutes because it's a store of value because they believe it has value and everyone's willing to accept it. Bitcoin could replace that on a global scale and open up e-commerce market places to Africa and open up remittance. [Travis] In the next few years, we're gonna have a couple of billion people coming online and I think Bitcoin technology gives them the opportunity to bank this currently under-banked population. [David] With all of the potential uses for Bitcoin and blockchain technology, it seemed like only a matter of time before it would achieve mainstream acceptance. But after years of hype, the mainstream public did not adopt Bitcoin and the headlines made its fate clear. [dramatic music] The Hong Kong based Bitfinex exchange has revealed it was victim to a hacking attack. Nearly 72 million dollars have gone missing in a Bitcoin heist. According to Reuters, nearly 120,000 units of the digital currency was stolen from Bitfinex, an exchange in Hong Kong. When the DOJ calls someone up and says that's an illegal currency and it's against the laws of the United States [indistinct] if you do it again, we'll put you in jail, it's over. There will be no real non-controlled currency in the world. [dramatic music] [David] But while the world scoffed, Bitcoin just kept on growing and doors to the world of mainstream business began to open. A busy year for Bitcoin. VC Investments topped one billion dollars, with NASDAQ, American Express, Visa all investing in Bitcoin startups. It is getting a lot of attention. People are fascinated by anything that makes new highs every day for weeks on end, which Bitcoin has done. The amount of innovation that you're gonna see come out of this sort of venture capitalists flowing into the industry over the next one, two or three years is going to be astounding. You certainly got some serious backing. I mean, Mark Andreessen backing your competitor, Sir Richard Branson backing you, you get the venture capitalist that put the first round in at Snapchat. Small bull case scenario is a $400 billion market cap, so. -[Man] A $400 billion, with a B? -Yes. We've got Zynga, Dish Network, Dell, Overstock, these are all publicly traded companies that are accepting Bitcoin. Microsoft, Dell, Newag, everyone takes Bitcoin. We are building and investing in Bitcoin companies, most active investor in the space, so we've invested in 60 companies. We've also launched a Bitcoin ETF-like vehicle called the Bitcoin Investment Trust, and it's traded publicly. Do you think this is a currency, a currency that's really gonna work eventually? Well, I think it is working, and there will be other currencies like it that may be even better. But in the meantime, there's a big industry around Bitcoin. And what we're gonna see coming up over the next couple of years, and it's already starting, is you're gonna see apps basically built on top of this protocol that allow people to interact with Bitcoin better. [Reeve] You can see why all of the technologists and these people that are really smart and dive into it are so excited about it. They're like, Jesus, this really can disrupt the legacy financial system because it is that much better. No one's saying it's gonna replace this. What's eventually gonna happen is the legacy financial institutions are going to replace their systems with blockchain technology. [David] Bitcoin may not replace the dollar in the near future, but banks and financial institutions have already seen that blockchain technology is the wave of the future. And since they can't destroy Bitcoin, they have to embrace it. [Reeve] And so what I see for the near future is small companies and all the entrepreneurs out there proving the concept, showing that it works, ensuring that it's safe, secure and easy to use, and getting through all of the regulations. Then the big legacy financial institutions will start adopting it because the concept's proven and in a decade, they'll start utilizing it. In the long run, I truly believe that an open financial platform like Bitcoin will take over most of the economy. Large banks and financial institutions who are moving millions if not billions of dollars around the world every day, and they have massive human processes that are built around movement of money. These systems are so inefficient that by applying blockchain technology, we can literally save the banks, and ultimately the end customer, billions and billions of dollars in transaction fees and costs. There is this great movement in financial institutions to research blockchain technology. So you have a lot of great examples such as Citigroup and Barclays who have blockchain technology incubators and they are realizing the potential of this technology, and that's a great step forward. The NASDAQ is embracing Bitcoin technology. The exchange is test-driving Bitcoin based technology in its pre-IPO private market of about 75 companies. The NASDAQ essentially is working on creating this kind of decentralized system. So if it works, which middlemen are gonna lose? Well, a lot of them. You have governments who have started to back this technology and who realize that as nation states, they're competing against each other to have these innovative businesses on their territory. And you also have financial institutions who are realizing, wait, we cannot out-compete this new technology. It's just better. So if we can't out-compete it, we need to integrate it. We have a lot of work to do, but I think in 25 years, Bitcoin will be the backbone of our financial systems. [Andreas] The one and only thing needed for Bitcoin to reach mainstream adoption is time. Because with time, we're going to build better interfaces, we're going to evolve the technology, we're going to help people understand it, we're going to make it easier to use, easier to secure, we're going so spread it to more devices, to more systems, we're going to build more useful applications, and then it will be adopted. It's already being adopted, but I expect we're gonna see that accelerate. Right now, there's not a real killer consumer application for Bitcoin. It still needs to be shown as valuable to the everyday consumer. It's gotta be simple enough that kind of anyone's mom could use this and not have to understand how it works and be able to use it safely and securely. A lot of people are focused on the technology and how it works and what's gonna make it better, but the average consumer and the average user of Bitcoin in the future probably won't know all that much. Right now, they don't understand how credit cards work all that well. But credit cards do work and they do use them. They don't understand why rectangles of paper or plastic have value, but they use them all the same. In a not too distant future, they'll recognize that the payment system they're using on their phone or some other device, even though it's Bitcoin backed, is useful and they won't actually really distinguish it from all the others. If you just look at how behavior changes, it changes by generation. Over time, we're gonna see people accepting digital currencies as a mainstream form. [David] Despite all the advancements since Satoshi first published his paper, applications of Bitcoin technology are just beginning to take shape. Until Bitcoin, the only thing or entity that could own and control money was a human being or the legal fiction of organized human beings or corporation. With Bitcoin, a machine, a device, a software agent, a non-human entity, can own, manage and control Bitcoin. [David] With smart contract technology, we could even allow machines to conduct more complex operations and transactions on their own. A machine could have ownership of itself, could contract for its own resources and I guess, livelihood, and then could contract out to produce different income streams. [David] In the future, a machine could become autonomous and conduct its own business, such as a car that could buy its own gas or purchase replacement parts for itself. You could even program a business to be run entirely by software. I don't know what happens when machines can use wallets, and one theory is that they use that to exterminate humankind because they haven't kept up on the interest payments. [audience laughing] Another theory is that you can do some really interesting things, including, among other things, autonomous organizations or distributed autonomous corporations. [David] This autonomous corporation could be programmed to conduct transactions, make business decisions and generate profits without any humans involved. In 2016, this concept became reality when an autonomous corporation called the DAO launched publicly, and within weeks, it received over $150 million from individual investors around the world. One of the idea, for example, is a charity that operates based on a mathematical organizational charter and disperses funds based on an algorithm and is not controlled by anyone other than the people who fund it. [Ami] You have all these computers doing all these mathematical calculations or the purpose of verification, which is a good thing. Why aren't we calculating a cure for cancer? Why aren't we trying to figure out a new source of energy? It took 20 years for Internet to spread all around the world. It took five years for Facebook to reach one billion of people. It took only two years for WhatsApp to reach one billion of people. It's going to become faster and faster and faster the speed of change. In ten years, we'll be living in completely different world. Bitcoin or blockchain tech is the most significant invention of my lifetime and it's pretty simple to understand. We live in a world where a lot of people are disenfranchised because they don't have access to basic financial services. They're denied access to the financial system. What this technology has done is it's democratized the global financial system in a way where every human being on the planet now has equal access. I mean, this is going to enhance and improve the lives of billions, and in this case, the least fortunate billions of people on the planet. [David] The complete story of Bitcoin and blockchain technology is yet to be written. We can only imagine what the future holds. [dramatic music]

Info

Channel: Plot11

Views: 203,778

Rating: undefined out of 5

Keywords: bit x bit, bitcoin movie, bitcoin, cryptocurrency news, bitcoin news now, crypto news, bitcoin news, crypto currency, crypto currencies, satoshi nakamoto, btc news, documentary, block chain, smart contracts, blockchain news, bitcoin mining, btc news today, blockchain technology, cryptocurrency market, bitcoin documentary, cryptocurrency documentary, full documentary, digital money, Cryptocurrencies, bitcoins, bitcoin explained, crypto documentary, documentary bitcoin

Id: JQB0CiT08Bk

Channel Id: undefined

Length: 77min 35sec (4655 seconds)

Published: Fri Dec 25 2020