- I want to show you something that to me is quite bizarre. It's a tweet sent by the
Mayor of Miami, Florida. Francis Suarez saying
that he wants to take his next paycheck 100% in Bitcoin. But wait, scroll down
and look at the replies. And there's this guy, Eric Adams saying that he wants to take
his next three paychecks in Bitcoin. Oh and by the way, if you
don't recognize this guy, it's because he was just elected as the Mayor of New York City. - [Announcer] The Mayor of the people. - These are major politicians here and they are very publicly
promoting cryptocurrencies. I feel like I can't go 10
minutes on the Internet without running into some
Bitcoin this, Ethereum that, or hearing about some young dude becoming really rich from
some dog-related meme money. (dog barking) I'm sure you've noticed this, too, if you spend any time on the Internet. Maybe you've been avoiding
it, kind of like I have, because I don't know the
vibes are just kind of off. - Thank you, Michael. Call me the doge father. - That's weird. It's really weird. - But there's no avoiding this. 2021 is the year that crypto
went full blown mainstream. - We've seen the price of Bitcoin double. - Just right now I've
made an extra 200 dollars. - El Salvador became the first country in the world on Tuesday to
make Bitcoin legal tender. (man speaking Spanish) - The whole thing is a joke. - [Man] Even the Flintstones
new about the crypto. - How can you make a sense of this? - [Announcer] Dogecoin
is the people's crypto. - Just became a Dogecoin millionaire. - The big story this morning. Staples Center getting a name change. - It's soon going to be
known as Crypto.com Arena. - [Man] There's a spike
in crypto currency scam. - Non fungible tokens, they're taking over the art world. - Your work's sold for $69 million. - Sold. - So the hustle. - This movement started as
a small ideological project before eventually attracting
hoards of scams and gamblers. And now it's been embraced by Wall Street and Silicon Valley. The question we all
need to be asking is not how does the blockchain work, and what's the technology
that underpins all of this. What you need to be asking is is this takeover a good thing, because that's a really
complicated question. - Hold on. Yes, it is a great thing. - Okay. - Actually, this is not good. This is very bad. - It's bad? Wait, hold on a second. I don't do these types of videos where I do like this sort
of debate myself thing. That's not what I do. Why are we doing this? - Well, you do now. - Okay, I'll let you to work this out and debate the pros and cons of crypto. But I just want to say
one last thing here, which is that this space
is really hard to navigate for anyone looking for good information. Most of the commentary around crypto comes from people who have
a direct financial stake in getting more people to
buy their coin of choice. There's a lot of motivated
reasoning that can happen when your money is on the line. So with that, I'm just going to sit back and enjoy the show. (bell ringing) Okay, wait, everyone
pause just for a second because I need to thank today's sponsor because that's literally my job. That's how I pay my bills. So I'm going to do that now. And then we can get back to it. The sponsor of today's
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if it works for you. Thank you, Betterhelp for
sponsoring this video. Now let's get back to our debate. Go ahead guys. - Okay, let's start out
with the most obvious just waste here, which is
all of the wasted energy. Look at this chart. This chart is the amount
of electricity it takes to run the Bitcoin network, just Bitcoin, not any other cryptocurrency. Right now, it's almost on par with the electricity consumption of Argentina, a whole country. Why does it take so much energy
to create Internet money? - Well, let's also be honest. - Great question. It's because the security
of Bitcoin and Ethereum depend on thousands of computers
racing to randomly guess a 64-digit number first
day and night, forever. And when the price of Bitcoin goes up, more computers jump on board,
which is more electricity, which is more climate change. And they work so hard that
they wear themselves out and just die after a few years, becoming a pile of useless e-waste, tons of energy, tons of waste. Why are we doing this? - Okay, hold on, hold on. You've been talking for long enough. Let me chime in here. Yes these computers use
a lot of electricity, but not all of that
electricity is produced by burning fossil fuels. You'll notice that more and
more our electricity is clean. It comes from solar
panels and wind turbines. There's even this recent survey where they ran around and asked, where do you get your electricity from? And for the crypto miners that responded, 40% of their energy comes from renewables. Crypto mining is also
well-suited for grabbing energy that might otherwise be wasted. There's this one oil facility in Utah, where they have to burn
a bunch of natural gas because it's like a by-product
from their oil extraction. So instead of just burning
this into the atmosphere, they put a crypto mine
in a shipping container to use that natural gas as electricity to run their computers. Stuff like this is brilliant. And it's happening all over the place. There's also wind energy
from these big wind turbines. Oftentimes the wind is
blowing and making electricity at times when humans don't really need it like in the middle of the night. So these crypto computers
that are mining cryptocurrency never need to sleep. And so they can ramp up in the night and use this electricity
that would have otherwise just gone to waste. And besides why are we singling
out crypto for using energy? Everything uses energy. The question is whether or not
the product merits that use which it does. And let me explain why. - Wait, no, no, no, no, no, no. You're not going to explain why, because that's the whole point. You just said it. You're talking about Internet money. That's built off of
electricity and fancy math. - I hate math. - The product is useless. It's actually worse than useless. It's actually harmful. Every week some new
crypto company gets hacked or runs some scam or claims
that their scam was a hack. There's no consumer protection. It's the wild west. And there's a lot of predatory behavior. (gun firing) The most recent example is
the Squid Game cryptocurrency. - Investors crying scam
over a cryptocurrency inspired by the hit
Netflix show, Squid Game. - Someone decided to make a
cryptocurrency called Squid. They posted this beautiful
paper outlining that it was like a play-to-earn online game. It was going to be released next month. They got all the hype going. The price shot up like this. And as soon as it got right here, the creator cashed out and
disappeared with over $3 million. - Wow! It went to zero. - This happens all the time. Well, why are people buying it? People wouldn't be buying it
if it wasn't honest, something. People are willing to buy
whatever if there's enough hype. - Why are you buying it? - Because it's Supreme. - And because of guys like this, a 33-year-old California dude
who put his entire savings into Dogecoin, and now he
says he's a millionaire. Everyone wants to be this guy. They want to be the next
version of this dude. This is classic casino psychology. The winners are nice and loud, telling everyone how lucky they were and the losers quietly
retreat into their shame. It all creates this false impression that everyone is getting hilariously
rich and you're not, which happens to literally be the name of this New York Times headline, which is not very helpful for
quelling the FOMO among people who might invest their precious money into fake Internet money. (joyous music) The fact is there's nothing backing this. This is all human
psychology, which I get it. A lot of financial systems
are human psychology, but when you invest in a
home or a business stock, you're betting on something
that has a track record of being useful to people. With crypto, you're investing in a belief that a bigger group of
followers is coming behind you and that each of those
people will be betting on the same belief. - It's not even a scheme per se. It's ... I have to go make a call. - Those guys at the top need
us to buy, or they lose. You may have noticed that recently on your PayPal app or your Cash App, you can now buy crypto. Well, it turns out that the
CEOs of those companies, these guys are both personally
invested in Bitcoin. They're up here at the top of the pyramid. And so of course, they're
going to make it easy for you to buy in too, because
they get rich if you buy in. (man laughing) (audience laughing) But the upshot is yes, it is possible to make money with this. It's always been possible to
get rich with rising bubbles that transfer wealth
from the late adopters to the early ones. That doesn't mean it's a good investment. And it also definitely doesn't
mean it's good for the world. - Dude, you're totally
missing the point, okay. Yes, it is true. And you're right, that
in these early days, there's a lot of nonsense and
scams and garbage happening, but that's what happens
when there's innovation. People jump in and try things out. They make mistakes, people get scammed, but eventually the technology matures, that's where we're headed here. Don't look at the random
dude who's getting rich. Instead you need to look back
at the first year of Bitcoin, back in January, 2008. - Let's talk about the speed with which we are watching this market deteriorate. - This could be the most
serious recession in decades. - The economy was in a free fall. Banks and regulators
had massively mismanaged our financial system. Governments were bailing out these banks because they were "too big to fail". And out of nowhere, someone
writing under a pen name, Satoshi Nakamoto, proposed
this idea of Bitcoin, which was a peer-to-peer
electronic cash system, something that wouldn't
need governments or banks. The first block of code to start off this decentralized record that
every Bitcoin transaction would be built upon. In that first code, you
see a little Easter egg, a headline from the day's news of governments bailing out banks. Nakamoto wrote that "the root problem with
conventional currency is all the trust that is
required to make it work." Bitcoin would solve this using the same ethic that
had built the Internet. Connecting strangers from around the world without the need of a middleman. So yes, this is useful
because detaching money from these big institutions
that have screwed it up is useful for a lot of things. - Oh yeah, totally. You mean like buying drugs? - Well, yes, but also
a bunch of other things that you probably can't imagine because you live here
in the United States. Consider Nigeria for a second. Last year, the government
literally froze the bank accounts of 20 people who were
protesting police brutality in the country. But some of them were able
to still receive donations through Bitcoin because the
government couldn't freeze that. Look at another example, Venezuela, a place where a stack of
money is worth nothing because of hyperinflation. - Purse is made entirely of the bills of the Venezuelan currency, the bolívar. Inflation is so high
that this money is now completely worthless. - This wiped out people's life savings, all because of trust in
these big institutions. These are problems that
don't happen with Bitcoin. There's no government that
can freeze your account. There's no government
that can print more money and de-value your coins. It's not controlled by governments
or a team of executives. It's controlled by the community. The fact of the matter is,
all money is turning digital. And let me guess: you probably
trust your central bank and your government because
you live here in the US. But according to the
Human Rights Foundation, more than half the
world's population lives under an authoritarian regime. - I get it, I get it. Removing banks and
governments as the middleman has some major upside, but who's going to protect
the Nigerians and Venezuelans from Bitcoin scammers and hackers? I mean, just look at this list. This is a list of all of
the cryptocurrency exchanges that have been hacked. It's a really long list. Imagine if you're just a normal consumer who isn't like a tech person, like if you don't have at least
some institutional buffer, you're way more vulnerable. But the blockchain it's so secure. It's public record. It's verified through all
this fancy technology. Yeah, the blockchain is. The blockchain is a
fantastic, really cool thing, but people aren't interacting
with the blockchain directly. You still need all of these services to buy and sell your crypto. It's these third party companies that turn into another middleman, vulnerable of being hacked,
and they are all the time. But let's just say that your
crypto assets are totally safe. They never get hacked. You're still subject to
insane levels of volatility. I mean, look at Bitcoin's graph. It's swinging all of the time. It swings by 30% or more, which is great if you're
like a risk-tolerant guy with a ton of money to
play with on the Internet, this is a really fun thing to do. But what if you're somebody who
actually needs your currency to stay stable so that
you can know its value so that you can go buy,
I don't know, groceries? So how do you control
these hyper volatile assets so that they stay predictable? Well, maybe some sort
of authority middlemen. And now we're right back
into the messy world of trust and middlemen,
government control. This is happening right
now in El Salvador. - El Salvador became the
first country in the world on Tuesday to make Bitcoin legal tender. (man speaking Spanish) - What does this mean for Bitcoin? What does this mean for El Salvador? - Earlier this year, the
president of El Salvador announced that Bitcoin would become
like an official currency, like a legal form of money, and that every business in the country would have to accept it. - [Anchorman] It'll run as another option alongside the current currency, US dollar. - But guess what? All of the infrastructure
to actually use Bitcoin to buy things, the app where you can actually
exchange and buy Bitcoin, the ATMs to withdraw the cash, it's controlled by the
national government. It's like crypto is fantastic in theory, and for a select few people
who have disposable income to play around with, but it rarely happens in practice without the same old
dynamics of a middleman coming in to make sure
it works for the masses. - Oh, gosh, you're focusing
so much on how it works NOW. I mean, if you were to apply that logic, like go back to the Internet 1.0. - [Woman] Information super-highway. - [Man] Everything unique for
great Internet experience. - Wake up and smell the '90s. - You have an Internet
browser in the 1990s. We have the birth of a website. It is a thing that you
log onto the Internet. You read things, you
click links and that's it. It is a read-only experience. People could have thought
like, oh, that's the Internet. Like, this is what we do. We go read things. - This is boring. - It's just a digital encyclopedia that's connected to
other people's computers. - I don't need a history lesson. Where are you going with this? - Just hear me out for a second. - Yeah, hear him out. Come on. - Wait a minute. You're still here? - Yeah, I'm still here. I've been here the whole time, trying to make up my
mind as you two argue. Go ahead. - Okay. So that was the Internet in the '90s, but then we got Web Two. (electronic music playing) In the 2000s, you start to see webpages go from static to dynamic. Users can now generate their own content from blogs to uploading to My Space, and then Facebook and YouTube. They're now participating in the Internet. They're up-voting comments. That's where we are now. We're in a part of the Internet where you're actually participating. We are creating the Internet together, but in doing so, we
created these centralized digital kingdoms owned
by giant tech companies who, in exchange for us
being able to participate in this cool new Internet, they take our data. They show us ads and they
make billions and billions and billions of dollars. (joyous music) Sometimes they share a little bit of those billions of dollars
with the creators, but most of us are doing free work for these big tech companies
so that we can participate and make content for their
interactive web pages. There is a better way, Web Three. This is what we're moving into. It'll allow us to move
money, make purchases, connect with people
without the permission of Mark Zuckerberg or JP Morgan or the government of the United States. They're not a part of
this equation at all. It is a vision for an
entirely new type of Internet. - Do you hear yourself? You sound like some
authoritarian politician peddling some utopian
vision for the future. Let's get back to facts. - Wait, no. This is actually happening. This isn't some nebulous
vision for the future. We get it, Bitcoin was a currency that is inherently limited, but Ethereum is a new technology that uses the same concept
of getting rid of middlemen. But instead of just allowing
us to do the currency thing, it allows you to do tons of things that we used to need institutions for. It's something called a token. - Oh gosh, here we go again with tokens. Tokens, tokens, tokens. Tokens, let me guess, they're
going to save the world. They're going to change everything. Everything is solved by
tokens on the blockchain. All I see tokens being used
for is selling digital art for millions of dollars to speculators who want attention on the Internet. - Yes, making digital things
scarce on the Internet is one of the first major
applications for this. But this is just the beginning. You got to think ahead, man. Think about it. Borrowing money, signing
contracts, investing. There's so many things that we do where there are huge
middlemen in the center who were making tons of
money off of ensuring that the transaction goes properly. - I'll take that back. (woman screaming) I mean, just imagine an Internet that is owned and governed by the users. Instead of logging onto
each of these platforms with your separate username, giving over all of your data, you log onto one unique wallet that holds all of your
personal information, all of your crypto
assets that are protected by this very sophisticated cryptography. Your data isn't owned and stored by these giant tech companies. But instead, it is stored
on encrypted ledgers and you get to decide
who you share it with and how to value it. I'm telling you, I know it's really early. And all you're seeing is like
millions of dollar cat gifs. (joyous music) But what this is doing is
fueling a creative boom among really bright developers, which in 10 years from now will have totally
transformed the Internet. - I hear you painting this
picture of some Internet utopia, where everyone has a voice. I would love a world where users actually have ownership over what happens online and they can share
decision-making and revenue. And while we're talking about blockchain, this cure-all technology that
people just throw around, like it's going to save everything. Let us remember that in reality, blockchain is secured with cryptography, which is actually very
inefficient by design. If you really want decentralization, you need to have a network
that is redundant and slow and hard to navigate without a third party being your middleman. You, the user have to
trust in these companies to run things smoothly. So why do you need a blockchain anymore, when now you're trusting
a third-party company to do all this work for you? I think it's a much more
narrow tool than you think. And a lot of people are
going to lose a lot of money before they realize that that's the case. - Woo, okay. Let's all take a deep breath. That was a lot. And as impassioned as this got, I promise you it's a
hundred times more intense in Twitter feeds around the Internet. People feel very strongly
on both sides of this. You'll probably be
seeing it in the comments here pretty soon. I want to know which of
these people you agree with. Do you agree with the
optimistic view of crypto, or do you think that this is just another obscure technology that will have its day and be a bubble that eventually bursts? For me, I'm still learning. I'm going to drink in as much
information on this topic as it develops because we're
still in the early stages. And I actually don't think it's healthy that we have to make
our minds up on topics that are still really, really theoretical. To me, it's a much better idea to sit back and take in the information as it comes. And eventually you'll start
to develop your own opinion. You should be compelled
to do so by the evidence, by the data that speaks to you, not by angry bullies in Twitter feeds. So, keep your mind open, but not so open that your brain falls out. Be careful out there. (gentle music) - Don't forget to, uh, buy
Dogecoin and buy, um, Ethereum. Ugh!
I don’t think i can trust a dude that put himself on the thumbnail with a “what I’m I talking about” expression. Not once but 3 times on a single video. 🤷🏻♂️