All language subtitles for Banking.On.Bitcoin.2016.720p.WEBRip.x264.AAC-[YTS.MX]

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[MUSIC PLAYING]

I REALLY LIKE IT
DOWN HERE.

I LIVE LITERALLY RIGHT BY
THE WORLD TRADE CENTER.

I WALK HOME.
I LIVE ABOVE IT, ACTUALLY.

MY ANKLE BRACELET.

TELLS THE GOVERNMENT
WHERE I AM

EVERY SECOND OF THE DAY,

ANY TIME OF THE DAY.

BUT IT'S GONNA COME OFF
WHEN I GO TO PRISON, I THINK.

I MEAN, I DON'T THINK
I'M WEARING THIS IN PRISON,
SO...

THAT'S WHAT
THE PLAN IS FOR THAT.

[MUSIC PLAYING]

[BRIAN WILLIAMS]
CLOSING NUMBERS
ON THE MARKETS TODAY,

AT ONE POINT, THE MARKET
FELL AS IF DOWN A WELL.

[NEWSCASTER]
IT WAS AN HISTORIC DAY,

WITH WALL STREET SHAKEN
TO ITS VERY FOUNDATION.

AND EVEN THE HEALTH
OF THE MOST TRUSTED FIRMS

ARE NOW BEING
CALLED INTO QUESTION.

[RAND PAUL]
WE HAVE FORMER
SECRETARIES OF TREASURY

WHO GO FROM GOVERNMENT
TO WALL STREET

POCKETING HUNDREDS
OF MILLIONS OF DOLLARS.

[ERIK VOORHEES]
IN 2008, I BECAME
SOMEWHAT OBSESSED

WITH THE ROLE
THAT MONEY ITSELF PLAYED
IN THE CRISIS

AND THE ROLE THAT GOVERNMENTS
AND BANKS PLAYED IN MONEY,

AND WHY WAS IT
THAT OUR MONEY WAS CONTROLLED
BY CENTRAL BANKS?

[GAVIN ANDRESEN]
IF SOMETHING NEW HAPPENS,

IS THE GOVERNMENT
LIKELY TO GIVE IT A NOD

OR AT LEAST IGNORE IT FOR A
WHILE, OR IS THE GOVERNMENT

LIKELY TO COME DOWN
AND TRY TO CRUSH IT

BECAUSE THEY'RE AFRAID
OF ANYTHING NEW AND DIFFERENT?

[NICK SPANOS]
THIS IS A MONETARY
REVOLUTION.

BITCOIN IS
THE HONEST CURRENCY.

[QUIET CHATTER]

[NANCY CANNUCCIARI]
OKAY, THIS PAST WEEK

WE'VE BEEN TALKING
ABOUT MONEY.

I'M GONNA ASK EVERYBODY
WHAT YOU THINK MONEY IS.

CAN YOU GIVE ME
SOME ANSWERS NOW?

MONEY IS, LIKE, PAPER

AND YOU CAN, LIKE,
BUY STUFF WITH IT.

SO YOU HAVE TO HAVE, LIKE,
FOUR QUARTERS FOR A DOLLAR.

YOU NEED MONEY TO BUY
YOUR HOUSE, LIKE, FOOD,

WATER, OXYGEN--
NOT OXYGEN.

[PAUL VIGNA]
MONEY IS BASICALLY JUST
AN ACCOUNTING SYSTEM.

IT IS A WAY OF RECORDING
WHO OWNS WHAT,

WHO HAS WHAT,
WHO OWES WHAT TO WHOM.

THAT IS ALL MONEY REALLY IS.

AND YOU NEEDED SOMEBODY

WHO COULD STAND AS
THE CENTRAL ISSUER,

SOMEBODY WHO WAS
THE TRUSTED THIRD PARTY,

SOMEONE WHO COULD GUARANTEE
THAT THE MONEY WAS REAL.

AND FOR
HUNDREDS OF YEARS NOW,

WE HAVE HAD
GOVERNMENTS ISSUE MONEY.

AGAIN, MONEY IS JUST
AN ACCOUNTING SYSTEM.

THAT'S WHAT BITCOIN IS.

BITCOIN IS REALLY JUST
AN ACCOUNTING SYSTEM.

IT IS A WAY OF
RECORDING TRANSACTIONS,

RECORDING VALUE,

AND IT DOES IT DIGITALLY,

SO YOU AND I CAN SEND IT
TO EACH OTHER DIRECTLY,

AND EVERYTHING IS RECORDED
IN THE OPEN LEDGER.

[MICHAEL CASEY]
BY MONITORING AND
UPDATING THAT LEDGER,

IN A COLLECTIVE,
CONSENSUS-BASED SYSTEM,

YOU DO AWAY WITH THE NEED

FOR SOMEBODY IN THE MIDDLE
HAVING TO BE

THAT SORT OF REPOSITORY
OF ALL THE INFORMATION.

AND THAT'S WHAT GETS AWAY
FROM THE FEES,

THE INEFFICIENCIES,

AND ULTIMATELY THE POTENTIAL
FOR CORRUPTION AND RISK

THAT COME WITH CENTRALIZING
INFORMATION IN THAT WAY.

[VIGNA]
WHAT IT DOES IS IT TAKES

THAT TRUSTED
THIRD PARTY FUNCTION

AND IT AUTOMATES IT.

IT PUTS IT
INTO AN OPEN LEDGER
THAT IS PUT ONLINE

THAT IS THERE
FOR ANYBODY TO SEE,

SO THAT EVERY BITCOIN
IS ACCOUNTED FOR,

SO THAT YOU KNOW
THAT YOU'RE NOT GETTING
A COUNTERFEIT BITCOIN.

[NATHANIEL POPPER]
IT'S KIND OF REMARKABLE
THAT THIS IDEA OF BITCOIN

WAS LAUNCHED
JUST A FEW WEEKS

AFTER LEHMAN BROTHERS
WENT BANKRUPT

AND THE WHOLE SYSTEM
NEARLY COLLAPSED.

AND THE PROBLEMS
THAT CROPPED UP IN THE CRISIS

WERE VERY MUCH
A PART OF THE WRITINGS
OF SATOSHI NAKAMOTO.

I THINK WHAT THE CRISIS
SHOWED IS THAT

THE EXISTING SYSTEM
HAD SOME MAJOR FLAWS.

IT WASN'T WORKING
AND PEOPLE WERE HUNGRY

FOR SOME SORT
OF ALTERNATIVE.

[VOORHEES]
I DISCOVERED BITCOIN'S POWER

WHEN I UNDERSTOOD
FOR THE FIRST TIME

THAT IT WAS NOT CONTROLLED

BY A CENTRAL COMPANY
OR A CENTRAL PERSON.

BECAUSE I KNEW THAT MEANT
IT COULDN'T BE SHUT DOWN.

AND IF IT CAN'T
GET SHUT DOWN,

ALL IT NEEDS IS
TO DO SOMETHING USEFUL,

AND IT WILL BECOME
MORE AND MORE ADOPTED

AND AS THE VALUE GROWS,
PEOPLE WILL FIND

MORE AND MORE USES FOR IT.

[SPANOS]
THE BEAUTY OF BITCOIN IS,

IT'S EASILY TRANSFERRABLE,
IT'S ANONYMOUS.

AND BY 2140
THERE'S GONNA BE 21 MILLION,

AND THAT'S THE CAP.

THERE'S ONLY
X AMOUNT OF GOLD.

THERE'S ONLY X AMOUNT
OF BITCOIN.

[ANDRESEN]
BEFORE, IF YOU WANTED
TO SEND

SOMETHING OF VALUE
ACROSS THE INTERNET,

YOU HAD TO GET
SOMEBODY ELSE INVOLVED.

YOU HAD TO HAVE
A CREDIT CARD COMPANY

OR PAYPAL,
OR MAYBE A BANK

INVOLVED
IN THE TRANSACTION.

THE PROMISE OF BITCOIN
IS THAT

YOU'RE DIRECTLY SENDING
THIS CURRENCY TO ANOTHER PERSON

AND THEN
THE BITCOIN NETWORK

PERFORMS THE FUNCTION
THAT NORMALLY PAYPAL

OR A BANK OR
YOUR CREDIT CARD COMPANY
WOULD PERFORM.

BITCOIN REALLY
PUTS THE CONTROL BACK
IN THE HANDS OF EVERYBODY.

EVERYBODY WHO'S PARTICIPATING
IN THE BITCOIN SYSTEM

IS CONTROLLING
HOW IT WORKS.

[JEFFERY TUCKER]
IF YOU WANT TO LOOK
FOR THE GENESIS

OF CRYPTOCURRENCY,
IT WAS THE CYPHERPUNK
MOVEMENT,

YOU KNOW, GROWING OUT
OF A KIND OF A LOVE
OF THE INTERNET

AND ITS POSSIBILITIES.

THE DISCOVERING
OF CRYPTOGRAPHY AND IMAGINING

THAT YOU COULD GIVE BIRTH
TO A NEW WORLD, REALLY,

OUT OF THE INTERNET.

A WORLD THAT LIVES OUTSIDE
OF THE NATION-STATE,

AND OUTSIDE THE STRUCTURES
OF POWER AND THE HIERARCHIES

THAT ARE ASSOCIATED
WITH THAT.

[ALEX WINTER]
THESE PEOPLE HAD TALKED
ABOUT THE NEED

AND THE POSSIBILITY
FOR A DIGITAL CURRENCY

THAT WAS ANONYMOUS
OR COULD BE ANONYMIZED,

USING CRYPTOGRAPHY.

THE CYPHERPUNKS THAT EMERGED
IN THE EARLY '90S

WERE HYPER-CONCERNED
ABOUT PRIVACY,

ABOUT PERSONAL LIBERTY,

AND A LOT OF PEOPLE HAD COME UP
WITH THEIR OWN SYSTEMS.

SOME OF THEM CAME
VERY CLOSE TO HAPPENING.

THE ONE THAT PROBABLY CAME
THE CLOSEST WAS DIGICASH
FROM DAVID CHAUM.

[DAVID CHAUM]
PRIVACY OF PAYMENTS

IS ACTUALLY ESSENTIAL
FOR DEMOCRACY.

THE REASON IS NOT
BECAUSE YOU NEED TO BE ABLE

TO MAKE PRIVATE PAYMENTS
IN ORDER TO EXPRESS YOURSELF,

BUT RATHER THAT IN ORDER
TO INFORM YOURSELF,

YOU MAY NEED
TO PURCHASE INFORMATION

AND THAT'S THE THING
THAT ALLOWS YOU TO HAVE
OPINIONS WORTH EXPRESSING.

[ANDY GREENBERG]
ALTHOUGH I WOULDN'T SAY
DAVID CHAUM WAS A CYPHERPUNK,

HE DEFINITELY INSPIRED
THE CYPHERPUNK MOVEMENT.

IT'S AS IF THE CYPHERPUNKS
KIND OF CAME UPON

DAVID CHAUM'S TOOLS,
LIKE THE TECHNOLOGY

OF SOME ALIEN SPECIES,

AND THEY ONLY TOOK
THE WEAPONS.

THEY WERE MOST INTERESTED
IN THE ONES THAT COULD BE USED

TO DISEMPOWER THE GOVERNMENT
AND EMPOWER INDIVIDUALS.

[VIGNA]
THE BREAK BETWEEN HIM
AND THE CYPHERPUNKS CAME

WHEN HE REALIZED
HE WOULD NEED

EXISTING INSTITUTIONS
TO HELP HIM WITH IT,

SO HE STARTED
TALKING TO GOVERNMENTS,

HE STARTED TALKING TO BANKS.

HE WAS VERY CLOSE
TO HAVING

THIS THING HAPPEN
IN THE LATE '90S,

AND NOBODY WAS REALLY
PREPARED FOR THIS

OUTSIDE OF
THE CYPHERPUNK MOVEMENT.

[POPPER]
PEOPLE IT SEEMED LIKE

HAD ALMOST SORT OF
GIVEN UP ON THE PROJECT.

OTHER THAN A FEW
EXPERIMENTS HERE AND THERE,

BY HAL FINNEY,
NICK SZABO,

THE CONVERSATION AROUND THIS
REALLY DIED DOWN.

AND THEN ALL OF A SUDDEN
IT CAME BACK TO LIFE

AFTER THE FINANCIAL CRISIS,

AND YOU HAD PEOPLE
GOING BACK TO THOSE EXPERIMENTS
IN THE 1990S

AND LOOKING AT NEW WAYS OF
PUTTING THOSE IDEAS TOGETHER.

NICK SZABO, IN 2006,
HAD JUST FINISHED UP

A MID-LIFE STINT
AT LAW SCHOOL,

AND IF YOU LOOK NICK'S WRITING
AROUND THE FINANCIAL CRISIS

THAT IS REALLY REVIVED
HIS INTEREST

IN THESE IDEAS THAT,
YOU KNOW,

HE HAD BEEN WORKING ON
IN THE 1990S

WITH PRIVACY AND CONTRACTS
AND THE PROBLEMS

OF GOVERNMENTS
AND OTHER TRUSTED
THIRD PARTIES.

AND HE BROUGHT BIT GOLD
BACK INTO THE CONVERSATION.

[VIGNA]
SO HAL FINNEY
CAME UP WITH HIS OWN SYSTEM.

ADAM BACK HAS HASHCASH,
WEI DAI HAS B MONEY,

SZABO HAS BIT GOLD.

[WINTER]
SO WHAT SATOSHI DID
IN 2008,

WAS SATOSHI TOOK
A LOT OF THESE IDEAS
AND MADE THEM WORK.

HE CREATED
AN ENCRYPTION-BASED
PROTOCOL--

IT'S NOT REALLY
A CURRENCY--

UTILIZING A LEDGER
CALLED THE BLOCKCHAIN,

ALLOWING FOR MANY KINDS
OF TRANSACTIONS TO OCCUR.

CONTRACTS,
ALL KINDS OF THINGS

CAN BE BUILT
INTO THE BLOCKCHAIN.

AND IT DOES THIS
THROUGH A SYSTEM
OF CONSENSUS BUILDING

WHERE MULTIPLE COMPUTERS
ALL PARTICIPATE

IN THE MANAGEMENT
OF THE BLOCKCHAIN LEDGER,

A KIND OF DIGITAL DOCUMENT,
IF YOU WILL,

THAT KEEPS TRACK
OF ALL THE PAYMENTS.

I UNDERSTAND
IT'S SOMETHING THAT

IS INSTANTANEOUS ONLINE

AND IT CAN GO
FROM ONE COUNTRY
TO THE OTHER

AND YOU KNOW,
THEY CAN HAVE THEIR MONEY.

WELL, I NEVER HEARD OF IT
UNTIL NANCY CALLED ME

AND MENTIONED
DIGITAL CURRENCY

AND I'M THINKING
SHE MUST HAVE BEEN

IN THE BOTTLE THIS MORNING
OR SOMETHING.

-[LAUGHTER]
-DIGITAL CURRENCY, OH.

WHAT, WHAT?
YOU KNOW.

BUT THEY SAY
IT'S FOR PEOPLE WHO DON'T
HAVE BANK ACCOUNTS.

I CAN'T UNDERSTAND.

IF YOU HAVE ONE COIN,
IT'S--

LET'S SAY IT'S WORTH
$150.

WHAT DO YOU DO,
GIVE THE NUMBER OR SOMETHING
TO THE--

SAY, THE GROCERY
STORE PERSON,

AND THEN THEY SUBTRACT IT?

HOW DO YOU KNOW?
HOW DO YOU MAKE CHANGE?

HOW DO YOU KNOW WHAT YOU HAVE
LEFT OR WHAT YOU'VE SPENT?

[VIGNA]
YOU CAN HAVE
THE MONEY SUPPLY

CONTROLLED BY A COMPUTER.

THAT'S ALL BITCOIN
REALLY IS.

THE KEY POINT HERE IS THAT

THIS A DISTRIBUTED LEDGER.

THERE IS NO CENTRAL SERVER.

ALL THE OTHER LEDGERS
THAT WE HAVE,

ALL THE BANKING LEDGERS,
ALL COMPANY LEDGERS,

THEY ALL SIT AND RESIDE
INSIDE THAT COMPANY,

WHICH MEANS THEY HAVE
ONE POINT OF ATTACK.

THEY CAN BE HACKED.
JP MORGAN WAS HACKED

BY, YOU KNOW, THE CYBERTHIEVES
NOT SO LONG AGO.

HOME DEPOT, TARGET,
WE'VE HAD ALL THESE COMPANIES
GET HACKED,

PRECISELY BECAUSE THERE'S
ONE CENTRAL REPOSITORY
OF INFORMATION.

THE BITCOIN LEDGER RESIDES,
ON, YOU KNOW,

THOUSANDS OF COMPUTERS.

YOU CAN'T HACK THAT.

EVERY SINGLE TRANSACTION
IS RECORDED,

AND ONCE IT IS RECORDED
IN THE BLOCKCHAIN,

IT IS THERE,
IT IS PERMANENT.

IT CANNOT BE ALTERED.
IT CANNOT BE CHANGED,
SO THAT YOU CAN READ IT.

NOW THE IDENTITIES
OF THE PEOPLE ARE ENCRYPTED.

THE WALLETS ARE ENCRYPTED,

SO YOU DON'T KNOW WHO
IS SPENDING THE MONEY,

BUT YOU KNOW THAT EVERY
SINGLE BITCOIN OUT THERE

HAS A HISTORY,
YOU KNOW WHERE IT'S BEEN,

YOU KNOW THE DIFFERENT
ADDRESSES IT'S GONE BETWEEN.

THE MOST IMPORTANT PIECES
OF THE BITCOIN INFRASTRUCTURE

ARE THE MINERS.

THESE ARE THE COMPUTERS
THAT ARE TASKED

WITH MAINTAINING
THE LEDGER OF THE BLOCKCHAIN

TO VERIFY THE INFORMATION,
TO UPDATE IT,

TO MAKE SURE
THAT IT IS TRUSTWORTHY.

SO HOW DO WE
INCENTIVIZE THEM TO DO SO?

AS THEY ARE GOING
THROUGH THE PROCESS OF
CONFIRMING TRANSACTIONS,

THEY ARE SIMULTANEOUSLY
BEING SUBJECTED TO

A VERY, VERY DIFFICULT
COMPUTING TEST.

THE BITCOIN CORE PROTOCOL
IS FORCING THEM

TO LOOK FOR A NUMBER.

ALL OF THESE MINERS
ARE ULTIMATELY COMPETING

TO BE THE ONE THAT RECEIVES
THAT PAYOUT EVERY TEN MINUTES.

BUT REALLY THAT'S
THE SECONDARY COMPONENT.

THEY'RE REALLY BEING
REWARDED WITH BITCOIN,

BUT WHAT IS
THE MORE IMPORTANT TASK

IS THE VALIDATION
AND VERIFICATION

OF TRANSACTIONS AND
THE MAINTAINING OF THE LEDGER.

BITCOIN, IN BEING
THE FIRST TO ACHIEVE

THIS HOLY GRAIL
OF DECENTRALIZED
VALUE EXCHANGE

THAT TRANSFERS
THAT PROCESS OF TRUST

TO A COLLECTIVE AGREEMENT
AROUND A BODY

OF INDEPENDENT COMPUTERS

WHO ARE COMPELLED
BY AN INCENTIVE SYSTEM

TO MAINTAIN THAT CONSENSUS

AND AFFIRM THE INFORMATION
TO BE CORRECT

IS INCREDIBLY LIBERATING
BECAUSE IT MEANS

THAT WE CAN DO IT WITHOUT
ALL THESE INTERMEDIARIES

IN ALL
THESE DIFFERENT REALMS.

THE MOST IMPORTANT THING BEHIND
BITCOIN IS NOT THE CURRENCY.

THE KEY FACTOR
IS THE BLOCKCHAIN.

[TUCKER]
NOBODY EXPECTED THIS.

YOU KNOW, IN 2008,
VERY FEW PEOPLE CARED ABOUT IT.

IT WAS JUST
THE COMPUTER SCIENTISTS

AND THE SORT OF CODE GEEKS
THAT WERE REALLY INTERESTED.

ALL OF MY COMMUNICATION
WITH SATOSHI

WAS EVER VIA EITHER
THE BITCOIN TALK FORUMS,

WHICH, ALL OF
THAT COMMUNICATION IS...

PUBLIC, OR PRIVATE FORUM
MESSAGES OR PRIVATE EMAILS.

SATOSHI WAS ALWAYS
ALL BUSINESS.

IT WAS JUST ALWAYS
ABOUT THE CODE.

MY VERY MESSAGE
TO SATOSHI,

I ASKED HIM, "SO,
IS SATOSHI YOUR REAL NAME?

WHAT HAVE YOU DONE BEFORE?

CAN YOU TELL ME
A LITTLE BIT ABOUT YOURSELF?"

AND HE JUST IGNORED
THAT COMPLETELY.

BUT CAME BACK AND SAID,
"YOU KNOW,

GREAT TO HAVE MORE
EXPERIENCED PROGRAMMERS

HELPING OUT
WITH THE PROJECT."

YOU KNOW, "HERE'S
A COUPLE OF PROBLEMS
THAT NEED TO BE SOLVED.

MAYBE YOU CAN
HELP SOLVE THEM."

[VOORHEES]
IN 2011,

I WAS INTO BITCOIN
SORT OF JUST AS A HOBBY.

I DIDN'T REALLY KNOW
WHAT TO DO IN IT YET.

I WAS TRYING TO MEET
EVERYONE I COULD,

FIGURE OUT WHAT PROJECTS
WOULD BE COOL TO WORK ON.

I MET ROGER VER SORT
OF IN AUGUST OF THAT YEAR

AND A FEW MONTHS LATER,
HE RECOMMENDED TO THIS GUY,

CHARLIE SHREM,
WHO STARTED BITINSTANT

THAT THE CHARLIE
SHOULD HIRE ME

AS THE HEAD OF MARKETING
FOR BITINSTANT.

[SHREM]
BITCOIN IS CASH
WITH WINGS.

IT'S THE ABILITY TO BE ABLE
TO TAKE A LOCAL TRANSACTION

AND DO IT GLOBALLY,
AND THAT'S WHY BITCOIN

IS GONNA OVERTURN
THE FINANCIAL INFRASTRUCTURE.

BITCOIN IS LIKE
THE LARGEST

SOCIOECONOMIC EXPERIMENT
THE WORLD HAS EVER SEEN.

[VOORHEES]
OUR CONVERSATIONS
WOULD RANGE FROM

YOU KNOW,
THE MUNDANE AND PRACTICAL,

LIKE HOW THE HELL
ARE WE GONNA GET
ANOTHER BANK ACCOUNT

SINCE OUR CURRENT
BANK ACCOUNT'S

PROBABLY GONNA GET
SHUT DOWN ANY DAY NOW?

TO VERY HIGH-MINDED,
ASPIRATIONAL ONES,

LIKE, IS THIS ACTUALLY
GONNA CHANGE THE WORLD
IN A GOOD WAY?

ARE WE JUST A BUNCH
OF CRAZY PEOPLE

WHO DON'T KNOW WHAT
THE HELL WE'RE TALKING ABOUT,

OR ARE WE ACTUALLY
STARTING TO

INITIATE AN INDUSTRY
WHICH, IN HINDSIGHT,

WILL LOOK OBVIOUS
TO EVERYONE,

BUT, YOU KNOW,
RIGHT NOW DOES NOT?

[CASEY]
CHARLIE SHREM WAS,
AT THAT STAGE,

A FAIRLY HIGH-PROFILE FIGURE
IN THE BITCOIN COMMUNITY.

THE VICE CHAIRMAN
OF THE BITCOIN FOUNDATION

AND YOU KNOW, ONE OF THESE
BITCOIN MILLIONAIRES

WHO'D MADE A LOT OF MONEY
VERY QUICKLY.

AND REALLY PLAYED
AN IMPORTANT ROLE
IN THE INFRASTRUCTURE

OF MANAGING THE MOVEMENT
OF FUNDS AROUND THE SYSTEM

IN THAT EARLY
RUDIMENTARY PHASE.

[MAN]
632 BID!

654 OFFER IN THE NEW YORK
CASH MARKET FOR BITCOIN.

BUYERS RIGHT NOW
WILL PAY $632 CASH
ON THE SPOT.

WHO'S NEXT FOR THE BITCOIN?
YOU WANT TO KNOW
WHAT BITCOIN IS?

YOU KNOW WHAT I PREFER?
I PREFER DOLLARS.

IF YOU WANT TO GO ON
DOWN TO 40 BROAD,

RIGHT NEXT DOOR TO
THE STOCK EXCHANGE THERE,

TO THE NEW YORK
BITCOIN CENTER,

YOU CAN BUY AND SELL
ALL THE TIME.

- YOU HAVE A TABLE
IN THE MIDDLE.
- YEAH.

JUST ONE SMALL TABLE,
ROUND.

AND I HAVE FLOWERS,
LIKE A FLOWER ARRANGEMENT.

- A VERY NICE
FLOWER ARRANGEMENT.
- BITCOIN FLOWERS?

BITCOIN FLOWERS.
BITCOIN FLOWERS WOULD BE

WHITE LILY,
PURPLE AND ORANGE.

JUST RIGHT HERE,
THREE COLORS.

WE'RE PUTTING TOGETHER
THE FIRST BITCOIN CENTER

HERE IN NEW YORK CITY,

RIGHT NEXT DOOR TO
THE NEW YORK STOCK EXCHANGE

BITCOIN IS A NEW SPACE,

AND MANY OF THE RULES
AND REGULATIONS HAVEN'T
BEEN IMPOSED YET.

BUT WE WILL OPEN
ONE DAY SOON,

AFTER THE LAWYERS
DO THEIR JOB,

A LIVE DIGITAL CURRENCY
EXCHANGE.

WHAT'S HAPPENING HERE
IS A FUSION BETWEEN

WALL STREET AND BITCOIN,
HOPEFULLY.

[POPPER]
SATOSHI SEEMED
TO ACKNOWLEDGE

THAT IT WOULD BE HARD
FOR BITCOIN TO DEVELOP
IN ANY WAY

IN WHICH IT WASN'T INTERACTING
WITH THE REGULAR ECONOMY

OF DOLLARS AND EUROS.

THE PROBLEM
WITH EXCHANGES IS

THAT THEY TOOK YOU BACK
TO THIS OLD WORLD

THAT BITCOIN WAS REALLY
TRYING TO GET AWAY FROM.

AS SOON AS YOU MOVE
BACK TO AN EXCHANGE,

YOU'RE MOVING BACK
TO A WORLD

IN WHICH SOME THIRD PARTY
HAS ALL THIS PERSONAL DATA
ON YOU,

HAS ALL OF YOUR MONEY,

HAS ALL OF THE SECURITY
VULNERABILITIES,

AND REALLY HAS NONE
OF THOSE STRENGTHS

THAT BITCOIN
WAS DESIGNED TO PROVIDE.

JED MCCALEB
CREATED MT. GOX,

ESSENTIALLY
ON A LARK ONE NIGHT

BECAUSE HE COULDN'T
BUY BITCOINS AS QUICKLY
AS HE WANTED TO.

[CASEY]
AND INTERESTINGLY,
HE DID IT BY STARTING

WITH A URL
THAT HE'D PREVIOUSLY USED

TO RUN MAGIC CARD
TRADING SITES.

SO YOU GET AN IDEA
ABOUT WHERE SOMEBODY'S IDEAS
ARE COMING FROM

AND HOW REALLY KIND OF
RUDIMENTARY SOME OF THEM WERE.

[POPPER]
JED ESSENTIALLY THREW
THIS SITE TOGETHER,

AND PUT IT ONLINE WITHOUT
TOO MUCH THOUGHT.

JED ESSENTIALLY SOLD IT
TO THE FIRST PERSON HE FOUND.

WHO WAS MARK KARPELES,
A FRENCH GUY

WHO WAS LIVING IN TOKYO.

HE REALLY KNEW
VERY LITTLE ABOUT MARK

WHEN HE DECIDED
TO SELL IT TO HIM.

AND ONCE HE TOOK IT OVER,

IT BEGAN GROWING
MUCH MORE QUICKLY

THAN MARK WAS EXPECTING
OR WAS PREPARED FOR.

[VIGNA]
THERE ARE 21 MILLION BITCOINS

PROGRAMMED INTO THE SYSTEM
THAT ARE GOING TO BE RELEASED.

IT'S A SET NUMBER,
BUT WITHIN THAT,

EVERY SINGLE BITCOIN
CAN BE DIVIDED UP

INTO A HUNDRED MILLION
DIFFERENT PIECES

SO THERE'S ROOM FOR IT
TO EXPAND AS THE USE EXPANDS,

ESPECIALLY IN
THE EMERGING MARKETS,
IN THE DEVELOPING WORLD.

THAT IS REALLY
THE MOST INTERESTING PLACE

TO SEE
WHERE THIS THING GOES.

SO IN MY POCKET I HAVE
A HUNDRED TRILLION
ZIMBABWE DOLLARS

FROM THE RESERVE BANK
OF ZIMBABWE,

JUST AS A REMINDER
OF WHAT HAPPENS

IF OUR GOVERNMENTS
SCREW UP OUR MONEY.

YOU KNOW, ZIMBABWE'S
A GOOD EXAMPLE

OF A GOVERNMENT THAT LOST
THE TRUST OF THEIR PEOPLE,

AND THEY LOST
THE TRUST OF THEIR PEOPLE

BY PRINTING TOO MUCH MONEY

AND CAUSING RUNAWAY
HYPERINFLATION.

SO I THINK YOU WILL SEE PEOPLE
IN OTHER PARTS OF THE WORLD

WHO'VE EXPERIENCED
HYPERINFLATION

WHO'VE EXPERIENCED
BANK FAILURES.

I THINK THOSE WILL BE
THE KIND OF PEOPLE

WHO ARE LOOKING FOR SOMETHING--
SOMETHING NEW, RIGHT?

THEY'RE WILLING
TO TAKE THE RISK.

A LOT OF US
TAKE THE CAPACITY
TO SEND MONEY TO OTHERS,

RECEIVE MONEY,
STORE MONEY

AND DO IT ELECTRONICALLY
THESE DAYS FOR GRANTED

BECAUSE WE ARE AMONGST
THE LUCKY 50% OR SO
OF THE WORLD

THAT HAVE BANK ACCOUNTS.

BUT 2.5 BILLION ADULTS
IN THE WORLD

DO NOT HAVE ACCESS
TO BANK ACCOUNTS.

A TECHNOLOGY LIKE BITCOIN,
CRYPTOCURRENCY,

HAS THE CAPACITY
TO BRING THOSE PEOPLE
INTO THE FINANCIAL SYSTEM,

TO GIVE THEM THIS POWER
TO EFFECTIVELY HAVE

WHAT YOU COULD ARGUE
IS A BANK IN THEIR CELL PHONE,

A BANK IN THEIR POCKET.

REALLY COULD OPEN UP COMMERCE
TO A LOT OF PEOPLE

WHO ARE CURRENTLY
EXCLUDED FROM IT.

[ANDRESEN]
SOMEBODY WHO IS MAYBE
WORKING IN ONE COUNTRY

AND, YOU KNOW, THEY WANT
TO SEND MONEY BACK HOME.

AND RIGHT NOW,
LIKE, WESTERN UNION
IS A BIG WAY

THAT PEOPLE DO REMITTANCES.

FROM A WESTERN UNION
PERSPECTIVE,

WE SERVE CLIENTS IN MANY
DIFFERENT LOCATIONS
AROUND THE GLOBE,

AND PRIMARILY
FOR REMITTANCES.

WESTERN UNION
SERVES TYPICALLY
AN UNBANKED CUSTOMER,

A CUSTOMER WHO IS
EITHER A MIGRANT WORKER,

OR AN INDIVIDUAL WHO DOESN'T
FEEL COMFORTABLE

IN THE FINANCIAL SERVICES
SECTOR.

[ANDRESEN]
AND THE PROBLEM
WITH REMITTANCES

IS THEY'RE REALLY EXPENSIVE.

SO IF I'M SENDING $100
BACK HOME,

I MAY END UP SPENDING
$5.00 OR $10.00

JUST ON FEES
TO GET THAT MONEY
BACK TO MY FAMILY.

THAT'S A HUGE PERCENTAGE
IF YOU'RE POOR AND WORKING.

SO SINCE BITCOIN
DOESN'T CARE ABOUT BORDERS,

I COULD JUST SEND BITCOIN
TO ANOTHER COUNTRY,

AND IF MY FAMILY
IN THAT OTHER COUNTRY

HAS SOME WAY OF SPENDING
THAT BITCOIN

OR HAS SOME WAY OF TRANS--

OF EXCHANGING THAT BITCOIN
INTO THE LOCAL CURRENCY,

THEN IT'S JUST
QUICKER AND CHEAPER
AND MORE CONVENIENT.

AND A LOT OF PEOPLE THINK
THAT REMITTANCES

WILL BE ONE OF THE REALLY BIG
FIRST USES FOR BITCOIN.

THE ONE CHALLENGE THERE
IS WE DEAL WITH

YOU KNOW, AT OUR COMPANY,
750 TRANSACTIONS, PEAK,
A SECOND.

AND THOSE HAPPEN INSTANTLY.

IF YOU LOOK AT A BLOCKCHAIN,
YOU HAVE TO WAIT
FOR VERIFICATIONS,

AND IF YOU DO
A RECENT TEST,

IT TAKES ABOUT 15 MINUTES
FOR EVERY TRANSACTION

TO BE VALIDATED
BY THE NETWORK.

THAT DOESN'T SCALE,

SO IT HAS
ITS CHALLENGES AS WELL.

WIKILEAKS, WHICH SOLICITS
AND PUBLISHES

SECRETS
AND SUPPRESSED MATERIAL

FROM WHISTLEBLOWERS
AROUND THE WORLD,

HAS BEEN UNDER CYBER ATTACK
FROM GOVERNMENTS

THAT WANT TO SHUT IT DOWN.

[NEWSCASTER]
PAYPAL IS THE LATEST BUSINESS

TO BREAK TIES WITH WIKILEAKS,

BUT THE WHISTLE-BLOWING
WEBSITE

DEDICATED TO
PUBLISHING CLASSIFIED
GOVERNMENT DOCUMENTS

STILL CONTINUES
TO SEEK FUNDING,

WHILE CROSSING OUT PAYPAL
AS ONE METHOD OF PAYMENT.

IN ORDER TO INSURE
OUR FUTURE SURVIVAL,

WIKILEAKS IS NOW FORCED
TO TEMPORARILY SUSPEND

ALL PUBLISHING OPERATIONS

IN ORDER TO DIRECT
ALL OUR RESOURCES

INTO FIGHTING THE BLOCKADE
AND RAISING FUNDS.

THE WIKILEAKS SCANDAL
SEEMED TO PROVIDE

AN OPPORTUNITY
FOR BITCOIN.

AT THE TIME,
THE BIG BANKS AND CREDIT CARDS

STOPPED PROCESSING PAYMENTS
FOR WIKILEAKS,

AND SOME PEOPLE THOUGHT THAT
BITCOIN WOULD PROVIDE A WAY

TO SEND DONATIONS
TO WIKILEAKS.

YOU COULD CERTAINLY
SEE IN THE HUBBUB
AROUND WIKILEAKS

THAT SATOSHI
WAS STILL SOMEBODY

WHO WAS VERY PARANOID
ABOUT THE GOVERNMENT,

AND THE GOVERNMENT COMING IN
AND TAKING TOO CLOSE A LOOK

AT THE BITCOIN PROJECT.

AND YOU COULD ALSO SEE
THAT SATOSHI,

I THINK, REALIZED
AT THIS POINT

THAT BITCOIN WAS STILL
YOUNG SOFTWARE

AND THE KINKS HADN'T BEEN
WORKED OUT YET.

[ANDRESEN]
IN, I THINK, LATE 2010,

HE ASKED ME IF IT'D BE OKAY
IF HE PUT MY EMAIL ADDRESS

ON THE BITCOIN.ORG
HOME PAGE,

'CAUSE HE HAD BEEN
THE PRIMARY CONTACT
FOR PEOPLE.

AND I SAID, "SURE."

HE WENT AHEAD
AND CHANGED THE WEB PAGE,

BUT WHAT HE DID IS
HE LEFT HIS NAME THERE,

BUT HE TOOK AWAY
HIS EMAIL ADDRESS.

AND SO IT WAS JUST ME
AND MY EMAIL ADDRESS

WHO WAS SUDDENLY GETTING
ALL OF THE ATTENTION.

I THINK THAT WAS SATOSHI'S WAY
OF KIND OF SAYING,

"YOU'RE THE LEADER
OF THE PROJECT NOW."

THERE WAS
ONE PARTICULAR EMAIL

WHERE HE TOLD ME
THAT HE WAS GONNA STEP AWAY
FROM THE PROJECT

AND DO SOMETHING ELSE.
HE NEVER TOLD ME WHAT ELSE

HE'S GONNA DO
OR THAT HE IS DOING.

I HAD JUST BEEN INVITED
TO GIVE A TALK AT THE CIA.

AND I TOLD SATOSHI THAT
I ACCEPTED THE INVITATION

TO GO SPEAK AT THE CIA.

[POPPER]
AFTER HE SENT
THAT EMAIL TO SATOSHI

TELLING HIM
THAT HE WAS PLANNING
ON GOING TO THE CIA,

HE NEVER HEARD
FROM SATOSHI AGAIN,

AND THAT WAS
ESSENTIALLY THE LAST TIME
ANYBODY HEARD FROM SATOSHI.

[VIGNA]
YOU VERY QUICKLY GET CAUGHT UP
IN THE QUESTION

OF WHO IS
SATOSHI NAKAMOTO?

WHERE DID THIS COME FROM?
WHO IS THIS PERSON?

I MEAN, THIS IS THE 2000S.

INFORMATION IS OUT THERE,
EVERYTHING.

EVERYONE KNOWS EVERYTHING
ABOUT EVERYBODY.

HOW CAN THERE POSSIBLY
BE A PERSON

THAT NOBODY KNOWS
WHO THIS GUY IS?

BUT THERE IS A PERSON--
AT LEAST I THINK IT'S A PERSON.

IT MIGHT BE A GROUP--

WHO NOBODY KNOWS
WHO THIS GUY IS.

AND HE KIND OF APPEARS
OUT OF NOWHERE IN 2008

ON THESE CRYPTOGRAPHY
EMAIL LISTS,

WITH THIS SYSTEM
CALLED BITCOIN.

HE'S VERY ACTIVE
IN THE EARLY YEARS,

THERE'S A LOT OF
BACK AND FORTH

WITH HIM COMMUNICATING
WITH PEOPLE.

[GREENBERG]
IT SEEMED LIKE MOST PEOPLE
KIND OF WROTE HIM OFF

AS KIND OF LIKE
A DELUSIONS-OF-GRANDEUR
KIND OF SCHEME.

HAL FINNEY,
ON THE OTHER HAND,

SEEMED TO BE REALLY INTERESTED
RIGHT FROM THE BEGINNING.

HE WAS A CRYPTO-IDEALIST.

LIKE, HE WAS NOT AS
KIND OF CYNICAL

AS MANY OF
THE OTHER CYPHERPUNKS

SO HE GOT REALLY
INTO THIS.

HE STARTED TALKING
TO SATOSHI NAKAMOTO,

WHO HE SAID SEEMED LIKE
SOME YOUNG JAPANESE
AMERICAN CODER.

HAL FINNEY WAS THE FIRST GUY
TO WORK WITH NAKAMOTO.

HE WAS A CRYPTOGRAPHER.

SOON AS NAKAMOTO
RELEASED IT,

HE WAS ONE OF THE FIRST PEOPLE
TO EMAIL HIM BACK AND SAY,

"HEY, THIS IS INTERESTING.
I'D LIKE TO WORK WITH YOU."

AND IN THE FIRST WEEKS
OF BITCOIN

HE WORKED WITH HIM
BACK AND FORTH

SETTING UP THE SYSTEM.

AND SATOSHI NAKAMOTO
ENDED UP SENDING HAL FINNEY

THE FIRST EVER BITCOIN
TRANSACTION.

[POPPER]
ANY DISCUSSION
OF SATOSHI'S IDENTITY

HAS TO GO BACK TO THE FACT
THAT BITCOIN

WAS BASED ON THIS
SMALL NUMBER OF PROJECTS
BACK IN THE 1990S

THAT ONLY A HANDFUL
OF PEOPLE KNEW ABOUT,

LIKE HASHCASH
AND BIT GOLD AND B MONEY,

AND SO YOU END UP WITH
A PRETTY SMALL GROUP OF PEOPLE

WHO WOULD HAVE KNOWN
ABOUT THESE PROJECTS.

[VIGNA]
PEOPLE THOUGH CHAUM,
DAVID CHAUM, WAS, YOU KNOW--

EVERYBODY IN
THE CYPHERPUNK MOVEMENT

AT ONE POINT OR ANOTHER,
THEY'VE SAID,

"WELL, HE MUST HAVE BEEN
SATOSHI."

THEY'VE ALL COME OUT
AND DENIED IT.

PROBABLY SOMEBODY
WHO STARTED OUT IN THE '90S,

IN CALIFORNIA,
WITH THE CYPHERPUNKS.

SOMEBODY WHO WAS VERY,
VERY GOOD AT CRYPTOGRAPHY

WHO UNDERSTANDS ENCRYPTION,
AND HAS DONE A WONDERFUL JOB

OF JUST SEPARATING BITCOIN
FROM ANYTHING THAT CAN
IDENTIFY HIM.

[POPPER]
I THINK FOR BITCOIN'S SAKE,

THAT CONTINUING ANONYMITY
OF SATOSHI

HAS ENDED UP BEING
A REALLY GOOD THING,

BECAUSE PEOPLE WHO
HAVE GOTTEN INVOLVED IN IT

HAVE BEEN ABLE TO WRITE
THEIR OWN IDEAS AND DREAMS

ONTO THIS TECHNOLOGY,

AND THERE WAS NOBODY
THERE TO SAY,

"NO, THAT'S NOT
WHAT I MEANT."

[SAXOPHONE PLAYING]

IN THE EARLY, EARLY DAYS,

THE FIRST GROUP WAS
REALLY JUST A BUNCH OF

MORE OR LESS
TECH-MINDED CODERS.

[VIGNA]
THEN YOU HAD THE LIBERTARIANS
COME ON BOARD,

WHO SAW IT THROUGH
A POLITICAL LENS,

I'M EXCITED TO BE
A LITTLE BIT OF A PART OF IT

WITH ALLOWING
AND ACCEPTING BITCOIN.

[VIGNA]
AND THEN YOU HAD THESE
TWO GROUPS WORKING TOGETHER

AND THEY OVERLAPPED TOO,

AND THE TIMING WAS VERY GOOD

BECAUSE THE EXISTING SYSTEM
WAS IN UTTER DISREPAIR.

IT WAS LIKE A MATCH
TO A PILE OF WOOD

WITH GASOLINE
POURED ON TOP OF IT.

AND THE WHOLE THING KIND OF
REALLY GOES VIRAL AND TAKES OFF,

AND THEN YOU HAVE THE SUITS,
THE VC MONEY,

AND IT WAS
VERY SMALL AT FIRST,

JUST A COUPLE OF GUYS
OUT IN SILICON VALLEY

WHO RAN INTO BITCOIN GUYS
AT COFFEE HOUSES

AND YOU STARTED HAVING
THIS MESHING OF CONVERSATIONS.

ONCE SILICON VALLEY
GETS ON BOARD,

THAT WHOLE DYNAMIC
STARTS TO TAKE OFF.

SO NOW YOU HAVE
THE TECH-MINDED CODERS,

THE LIBERTARIANS,
THE COUNTER-CULTURE PEOPLE,

THE VC, SILICON VALLEY,

AND YOU HAVE THIS ENTIRE
GREAT MISHMASH OF PEOPLE

COMING TOGETHER.

YOU HAD A NETWORK EFFECT.

THE MORE PEOPLE
THAT GOT INVOLVED,

THE STRONGER THE NETWORK GOT,

AND THE MORE IT GREW
AND IT REALLY STARTED GROWING
ON ITSELF.

AND IN 2013 ESPECIALLY,

YOU LITERALLY SEE
THIS THING MUSHROOM.

THE THING WAS JUST GROWING,
GROWING AND GROWING
AND GROWING

AS MORE AND MORE PEOPLE
GOT INVOLVED.

I THINK MOST BITCOIN
COMPANIES AT THE TIME

KNEW THAT A BIG PART
OF THE MARKET FOR BITCOINS

WAS PEOPLE BUYING DRUGS
ON SILK ROAD

WHO NEEDED BITCOINS
TO DO THAT.

THE BIG BANG MOMENT
FOR BITCOIN

WAS THE SILK ROAD.

WHAT ROSS ULBRICHT DID
BY CREATING THE SILK ROAD

WAS HE TOOK THIS
BY NO MEANS COMMON

BUT USABLE CRYPTOCURRENCY
CALLED BITCOIN

AND HE MARRIED IT
WITH A STREAMLINED,

WORKABLE USER INTERFACE

THAT WAS A FREE MARKET
THAT COULD SELL ANYTHING.

WHAT WOULD HAPPEN
IF PEOPLE WERE REALLY FREE

TRULY FREE TO TRADE
WHAT THEY WANTED TO?

[WINTER]
ROSS DID HAVE
AN EXTREMELY RADICAL

LIBERTARIAN VIEWPOINT,

AND REALLY WANTED TO EXPERIMENT
WITH USING TECHNOLOGY

TO CREATE FREE MARKETS
FOR PEOPLE.

WHAT ROSS ULBRICHT
DID IS A COMBINATION
OF TOR AND BITCOIN.

THAT WAS THE "AHA" MOMENT
THAT ROSS MUST HAVE HAD.

[GREENBERG]
THE SILK ROAD WAS
BASICALLY THE FRUITION

OF ALL THE CYPHERPUNK DREAMS,
THE CRYPTO-ANARCHISTS'
UTOPIA

THAT THEY HAD IMAGINED
IN THE '90S,

YOU KNOW, WAS REAL NOW.

THIS WAS A PERFECTLY,
IN THEORY, ANONYMOUS WEBSITE,

WITH PERFECTLY, IN THEORY,
ANONYMOUS MONEY

USED TO BY ANY CONTRABANDS
IMAGINABLE.

THE SILK ROAD WEBSITE
IS A PARTICULAR HEADACHE
FOR AUTHORITIES.

IT'S A ANONYMOUS
ONLINE MARKETPLACE

WHERE PEOPLE SELL DRUGS
THAT ARE POSTED TO CUSTOMERS

ALL OVER THE WORLD.

[CHRIS TARBELL]
CYBER INVESTIGATORS, YOU KNOW,
WHEN THERE'S A CRIME

CAN KIND OF TRACE YOU BACK
BECAUSE YOU HAVE AN IP ADDRESS.

IT'S LIKE
A TELEPHONE NUMBER,

SO IF YOU CALL
ANOTHER COMPUTER

THAT IP ADDRESS IS TRACKED.

ON TOR, THAT'S TAKEN AWAY,
BECAUSE YOUR INFORMATION

HOPS FROM COMPUTER
TO COMPUTER TO COMPUTER

SO THERE'S NO WAY
TO TRACE YOU BACK
TO YOUR ORIGINAL ONE.

TOR IS AN ANONYMOUS SYSTEM,

SO IF YOU USE
THE TOR BROWSER,

WHICH IT HAS A BROWSER.

YOU CAN GO TO TOR
AND DOWNLOAD THEIR BROWSER,

YOU CAN BROWSE WITH
SOME DEGREE OF SECURITY.

SO THAT'S GREAT FOR PLUGGING
YOUR BANKING INFORMATION

INTO A SITE
SO YOU DON'T GET HACKED.

THE OTHER COMPONENT OF TOR,
WHICH HAS SIMILAR USES,

IS CALLED
TOR HIDDEN SERVICES.

TOR HIDDEN SERVICES
IS ACTUALLY, TO PUT IT SIMPLY,

A URL THAT DOESN'T HAVE ".COM"
ON THE END OF IT.

IT HAS ".ONION."

AND THAT IS
ITS OWN LITTLE SPACE

WHERE YOU CAN CREATE WEBSITES
AND YOU COULD FREELY TRANSACT

WITHOUT OVERSIGHT
OR REGULATION.

[TARBELL]
PEOPLE PUT WEBSITES ON THERE

THAT ARE OUTSIDE OF
LAW ENFORCEMENT'S VIEW.

THERE'S HACKERS FOR HIRE,
THERE'S MALWARE,

THERE'S CREDIT CARD
DUMP SERVICES

THERE'S A WHOLE BUNCH OF THEM.

CHRIS TARBELL HAS ENDED UP
BEING, IN SOME WAYS,

THE MOST IMPORTANT
FBI DIGITAL CRIME INVESTIGATOR

OF THE LAST FEW YEARS.

HE WAS THE ONE WHO TOOK
DOWN ANONYMOUS, ESSENTIALLY.

SO WE DECIDED
TO START LOOKING AT SOME
OF THE SERVICES ON TOR,

AND SILK ROAD
BEING ONE THEM,

OTHER CASES,
THEY WOULD HIT TOR,

AND THEY WOULD KIND OF THROW
THEIR HANDS IN THE AIR

AND SAY "IT'S TOR, THERE'S NOT
MUCH WE CAN DO ABOUT IT."

I FOUND IT INTERESTING
TO KIND OF TAKE A LOOK AT IT
AND TACKLE IT.

[VOORHEES]
BITINSTANT WAS BASICALLY BORN

BECAUSE IF YOU WANTED
TO MOVE YOUR DOLLARS

INTO A BITCOIN EXCHANGE,

IT TAKES AT LEAST
THREE DAYS.

AND SINCE THE MAJOR EXCHANGE,
MT. GOX, WAS IN TOKYO

IT COULD TAKE
A WEEK OR MORE.

SO THAT'S REALLY
PROBLEMATIC,

AND BASICALLY
CHARLIE FIGURED OUT THAT

IF YOU JUST HELD A BALANCE
OF DOLLARS AT THE EXCHANGE,

YOU COULD GO TO HIM AND SAY,
"CHARLIE, I'LL GIVE YOU $100.

WILL YOU GIVE ME $100
OF CREDIT AT THE EXCHANGE?"

AND YOU CAN LITERALLY
THEN HAVE YOUR DOLLARS
AT THE EXCHANGE

IN TEN SECONDS
AS OPPOSED TO A WEEK.

SO THAT'S HUGELY HELPFUL,
ESPECIALLY WHEN BITCOIN
IS SO VOLATILE

AND YOU NEED
TO KNOW EXACTLY WHAT PRICE
YOU'RE GOING TO GET.

CHARLIE WAS RAISING CAPITAL

RIGHT AS, SORT OF,
I JOINED.

DURING THAT PROCESS,
HE CAME ACROSS LOTS OF

INTERESTED INVESTORS WHO WERE
STARTING TO GET A WHIFF

THAT MAYBE THIS
BITCOIN THING WAS COOL.

[CAMERON WINKLEVOSS]
WE HAD AN INTERESTING
DEBATE EARLY ON

ABOUT DO WE INVEST IN BITCOIN
OR BITCOIN COMPANIES

AND WE SORT OF
DECIDED TO DO BOTH.

MORE TOWARDS INVESTING
IN ACTUALLY BITCOIN

IN THE ASSET EARLY DAYS,

BUT ALSO TRYING TO PLACE
A FEW BETS IN THE ECOSYSTEM

TO SUPPORT THE COMPANIES,
SUPPORT THE ENTREPRENEURS,

AND SEE HOW THAT WENT.

A FEW DAYS AFTER THEY FIRST
FOUND OUT ABOUT BITCOIN,

THEY WERE IN THE BITINSTANT
OFFICES IN NEW YORK

MEETING WITH
ERIK AND CHARLIE.

AND ERIK AND CHARLIE
ESSENTIALLY TALKED THEM
THROUGH BITCOIN

AND ANSWERED ALL OF THEIR
QUESTIONS AND CONCERNS.

WHAT MADE YOU INVEST
IN BITINSTANT?

THERE ARE A LOT OF COMPANIES
AND EXCHANGES AND WEBSITES.

WITH RESPECT TO BITCOIN,
REGULATION IS OBVIOUSLY
A BIG QUESTION.

WHAT YOU DO WANT IS
A COMPANY THAT SORT OF TAKES
THAT SERIOUSLY

AND UNDERSTANDS THAT
THERE'S THE TECHNOLOGY ELEMENT,

THERE'S BUILDING THE COMPANY,

AND THEN THERE'S ALSO
CREATING THE COMPANY

THAT WORKS WITH REGULATORS.

AND SO THAT'S BITINSTANT.

IT'S NOT THIS SORT OF
COMPLETELY UNDERGROUND THING?

YEAH, CHARLIE THE CEO
HAPPENS TO HAVE BEEN IN
THIS SPACE FOR A LONG TIME,

SO HE'S SORT OF ON
THE PULSE AND THE CUTTING EDGE.

[SHREM]
YOU KNOW, YOU COME OUT
AND YOU SAY, LIKE,

"WE WANT THIS BITCOIN THING
TO OVERTURN EVERYTHING,"

BUT AT THE SAME TIME
WE HAVE TO BE COMPLIANT

AND YOU HAVE TO KNOW
YOUR CUSTOMER.

YOU HAVE TO KNOW
EVERY SINGLE CUSTOMER
NO MATTER WHAT.

EVEN IF THEY'RE TRANSFERRING
A DOLLAR OR $1,000.

AND HOW REASONABLE IS THAT?

THE TERM "MONEY LAUNDERING"
WAS INVENTED BY BANKS,

AND KNOWING YOUR CUSTOMER
SHOULDN'T BE

THIS COMPLICATED,
EXPENSIVE THING.

AND YOU SHOULDN'T
TREAT EVERYONE LIKE
A CRIMINAL IN THE BEGINNING.

[TYLER WINKLEVOSS]
THEY REALLY WANTED US INVOLVED.

PEOPLE WERE REALLY FRIENDLY,
BECAUSE IT BENEFITS YOU

TO ONBOARD MORE PEOPLE IN,

SO BITCOIN'S ALWAYS BEEN
THIS VERY FRIENDLY COMMUNITY

AND IT'S ALSO-- IN SOME WAYS
IT'S SELF-SERVING THAT WAY,

BUT WE WERE THERE
FOR THE RIGHT REASONS.

[POPPER]
AT THE TIME, BITINSTANT
WAS THE BIG COMPANY

OTHER THAN MT. GOX.

IT WAS THE WAY THAT MOST
AMERICANS WERE ABLE

TO BUY BITCOINS.

HERE IT IS.

SO BITINSTANT
WAS LOCATED RIGHT THERE.

I THINK IT'S THE ONE
THAT NOW SAYS "BLING."

IT WAS A WHIRLWIND
SIX MONTHS.

GOING FROM TOTAL OBSCURITY
WITH NO MONEY

TO BECOMING ONE OF
THE HOT STARTUPS OF BITCOIN.

BUT ALMOST AS SOON AS
THE TWINS MADE THEIR INVESTMENT
IN THE COMPANY,

IT BEGAN FALLING APART.

THE TWINS HAD A MUCH MORE
PRACTICAL APPROACH

TO BITCOIN
AND BITINSTANT.

THEY WANTED TO SEE
THE COMPANY MAKING MONEY

AND MAKING AS MUCH MONEY
AS IT COULD

AS QUICKLY AS IT COULD.

THEY SAW EARLY ON
THAT IT WOULD BE REGULATED,

THAT IT WASN'T
GONNA BE THIS BIG,

AND HAVE NO ONE BE
INTERESTED IN REGULATING IT.

SO THEY FEARED THAT
ALL KINDS OF REGULATORS

WOULD COME IN
AT ALL DIFFERENT ANGLES

AND TIE THE THING UP
IN A COMPLETE MORASS

WHERE NOTHING
WOULD EVER GET DONE.

SO THEY WANTED TO HELP
DRIVE THE REGULATION

SO THAT WHATEVER REGULATION
WOULD BE THERE WOULD WORK

AND WOULD NOT END UP
BEING A COMPLETE DEAD END
FOR BITCOIN.

[VOORHEES]
THAT STRATEGY IS SMARTER,

FROM PURELY
A BUSINESS PERSPECTIVE,

BUT I'M NOT IN THIS PURELY
FROM A BUSINESS PERSPECTIVE.

I AM IN THIS FOR BUSINESS
AND BECAUSE I'M TRYING

TO CHANGE THE WORLD
AND MAKE IT BETTER,

AND BUILDING
BITCOIN COMPANIES

AND BEGGING FOR REGULATION

THAT MATCHES EXACTLY
THE BANKING REGULATION

THAT HAS CAUSED
SO MANY PROBLEMS

I FEEL LIKE IS
COUNTERPRODUCTIVE.

FOR THE MOST PART,
BITINSTANT WAS ACTUALLY
TAKING STEPS

TO MAKE SURE THAT PEOPLE
WEREN'T USING THE SERVICE
FOR ILLEGAL PURPOSES,

BUT CHARLIE MADE THE MISTAKE
IN DEALING WITH BTCKING

OF ACKNOWLEDGING
THAT HE KNEW

WHAT BTCKING WAS DOING,

AND THAT HE WAS ACQUIRING
BITCOINS TO SELL THEM

TO SILK ROAD CUSTOMERS.

IN THIS CASE,
CHARLIE WORKED WITH THE GUY

AND WROTE EMAILS THAT
ESSENTIALLY ACKNOWLEDGED

HE KNEW WHAT
THIS GUY WAS UP TO.

THAT STUNNING ARREST
OF THE DRUG KINGPIN

WHO GOES BY THE NAME
"DREAD PIRATE ROBERTS"

AND APPEARS TO HAVE CORNERED
THE INTERNET DRUG MARKET.

HIS REAL NAME IS ROSS ULBRICHT
AND HIS WEBSITE, SILK ROAD,

IS PACKED WITH PRODUCTS
LIKE COCAINE AND HEROIN.

[NEWSCASTER]
THE PAYMENT SYSTEM
IS ALL THROUGH BITCOINS,

WHICH IS BASICALLY
DIGITAL CURRENCY,

NOT BACKED UP BY
ANY INTERNATIONAL BANKS,

NOT BACKED UP
BY ANY US BANKS,

BUT SIMPLY BASED ON
THE CONFIDENCE OF THE USERS

WHO EXCHANGE THESE BITCOINS
COMPUTER TO COMPUTER.

[WINTER]
THERE'S A REASON WHY
THE CASE WAS TRIED IN NEW YORK,

IN THE SOUTHERN DISTRICT,

AND LARGELY THAT
WAS BECAUSE OF BITCOIN.

ROSS WAS CAUGHT
IN SAN FRANCISCO.

THE SILK ROAD SERVERS
WERE OUT OF THE COUNTRY.

SO WHY WAS ROSS'S CASE
TRIED IN THE SOUTHERN DISTRICT
OF NEW YORK

WHERE MOST OF THE FINANCIAL
REGULATIONS CASES
ARE DEALT WITH?

WHERE THE DISTRICT ATTORNEY,
PREET BHARARA

HAS BEEN ALL OVER BITCOIN.

WHERE CHARLES SCHUMER,
THE SENATOR, HAS BEEN ALL OVER
BITCOIN.

ROSS ULBRICHT'S CASE
IS A BITCOIN CASE.

THERE'S ABSOLUTELY
NO DENYING IT.

THE LEVEL OF THREAT
THAT THE SILK ROAD POSED

TO THE MARKETPLACE,
TO WALL STREET,

WHETHER IT'S A PERCEIVED THREAT
OR AN ACTUAL THREAT,

WAS HUMONGOUS.

AND THE IDEA THAT SOMEBODY
COULD CREATE A MARKETPLACE

WHERE YOU COULD
FREELY TRANSACT WITHOUT
OVERSIGHT OR REGULATION

HAD TO BE DEALT
A MASSIVE AND PUBLIC BLOW.

BITCOIN KIND OF MONETIZED
THAT ANONYMOUS PART
OF THE INTERNET

AND MADE IT POSSIBLE
TO TRADE IN THINGS

THAT THE FEDERAL GOVERNMENT
DOESN'T WANT YOU TO TRADE IN.

LAW ENFORCEMENT
MOVES SLOWLY

BUT IT'S A BIG HEAVY WHEEL
THAT GRINDS FINELY,

SO, YOU KNOW, SOMEONE
WAS RUNNING A HIDDEN SERVICE,

AND NOW THEY'RE
IN PRISON FOR LIFE.

THEY WERE PLAYING HARDBALL.
IT WAS VERY EVIDENT

THAT THEIR INTENTION,
AS THE JUDGE HERSELF SAID
IN HER SENTENCING,

WAS TO MAKE AN EXAMPLE
OUT OF ROSS,

WAS TO SAY TO ALL OF YOU
PEOPLE USING BITCOIN,

TO ALL OF YOU PEOPLE
WHO WANT TO TANGLE

WITH UNREGULATED MARKETPLACES
AND TECHNOLOGIES

AND OPEN SOURCE
CRYPTOCURRENCIES,

"WE WILL THROW THE BOOK
IN ITS ENTIRETY AT YOU
IF YOU DO THIS."

WE SEIZED A WHOLE BUNCH
OF BITCOINS.

AND IN ORDER TO SELL
THOSE BITCOINS OFF
OR GO TO AN EXCHANGE,

YOU HAVE TO FIT WITHIN
FEDERAL LAW AND STATE LAW.

THERE'S NOT REALLY AN EXCHANGE
THAT COULD HANDLE THAT,

THAT MET THOSE REGULATIONS
AT THE CURRENT TIME,

SO IT HAD TO BE HANDLED
THROUGH AUCTION.

[WOMAN]
YOU KNOW ANYTHING
ABOUT BITCOINS?

THERE'S AN ARTICLE
IN "THE WALL STREET JOURNAL"
TODAY

- ON BITCOINS.
- [WOMAN] REALLY?

RIGHT HERE,
IF YOU WANT TO READ IT.

IT IS?

DIGITAL CURRENCY,
DID YOU SEE THAT?

[WOMAN #2]
WOW, OH!

"DIGITAL CURRENCIES
WILL DISRUPT GLOBAL FINANCE,

TRANSFORM THE WAY
WE PAY FOR THINGS,

AND JUST MAYBE,
MAKE THE WORLD A FAIRER PLACE."

FROM WHAT I'VE READ
ON THE COMPUTER,

THEY HAVE HAD
SOME PROBLEMS.

- YEAH.
- YEAH.

THE REASON IS
BECAUSE YOU CAN'T TRACK IT.

WELL, I THINK I DON'T LIKE
THIS IDEA AT ALL.

[ANDRESEN]
WHEN WE SAW
THE SILK ROAD SHUT DOWN,

A LOT OF PEOPLE SAID,

"BITCOIN'S NOTHING BUT
ILLEGAL DRUGS ON THE INTERNET.

THAT'S WHAT IT IS."

AND THEY WOULD POINT
AT THE SILK ROAD AND SAY,

"LOOK HERE
AT ALL THE STUFF
THAT'S HAPPENING HERE."

AND I THINK WHEN YOU SAW
THE SILK ROAD SHUT DOWN

AND BITCOIN
TRANSACTION VOLUME

TAKE A TINY LITTLE DIP,

AND THEN KEEP GOING UP,

YOU KNOW, I THINK THAT WAS
A GREAT EVENT TO POINT AT

AND SAY, "IT REALLY
WASN'T ABOUT THAT.

IT REALLY ISN'T ABOUT THAT."

IT'S A TINY LITTLE PART
OF THE ECONOMY.

[PETER CAVENAUGH]
I GUESS IN THE LAST WEEK

I'VE REALLY STARTED
HEARING ABOUT BITCOIN.

RECENTLY I HEARD
A SCENARIO

AFTER THE FBI HAD SEIZED
A BUNCH OF BITCOINS

DUE TO ILLEGAL TRANSACTIONS,

NOW THEY'RE GONNA BE
AUCTIONING THEM OFF

LIKE THEY WOULD
A PRIVATE YACHT

FOR, YOU KNOW,
FROM SOME DRUG DEALER.

SO THAT, IN A WAY,
LEGITIMIZES THE USE OF IT

AS A CURRENCY.

[SPANOS]
LOOKS LIKE
IT'S THE FIRST LIVE

BITCOIN EXCHANGE
ON WALL STREET.

LOOKS THAT WAY.

YEAH, SO ONE FOR 950.

-BUYING OR SELLING?
-[MAN] SELLING.

550 ON A THOUSAND--

RIGHT NOW WE WERE LOOKING
AT THE OPEN INTEREST

AT THE FLOOR OF
THE BITCOIN EXCHANGE.

THERE'S DIFFERENT
EXCHANGES THAT ARE ONLINE,

THAT WILL PRESENT
AT THE BIDDING HOUSE,

BUT THERE'S NO TRUE
OPEN OUTCRY EXCHANGE.

BUYERS AND SELLERS
COMING TOGETHER

IN AN OPEN, CLEAR,
TRANSPARENT, HONEST WAY.

-GOX IS THE HIGHEST ONE.
-WHY DON'T WE CALL IT 900?

900...

THERE'S MY TRANSACTION,

PROBABLY THE FIRST TWO
TRANSACTIONS OF THE DAY.

IT'S REALLY
NOT ABOUT THE MONEY,

IT'S ABOUT BEING INVOLVED,

AND I THINK THERE'S A LOT
MORE PEOPLE GONNA FOLLOW ME.

[TRISH REGAN]
CHARLIE SHREM,
24 YEARS OLD,

ARRESTED TODAY
AND CHARGED WITH ENGAGING
IN MONEY LAUNDERING

SHREM ENABLED PEOPLE
TO TRANSFER MONEY

FROM BITCOIN TO CASH
VIA HIS COMPANY
CALLED BITINSTANT.

NOW THE OTHER POINT
THAT THE DEA IS MAKING

IS THAT SHREM BOUGHT DRUGS
ONLINE AT SILK ROAD

AND THAT HE KNEW SILK ROAD
WAS A TRAFFICKING WEBSITE.

[NEWSCASTER]
AND WE KNOW
THE WINKLEVOSS TWINS

WHO OBVIOUSLY WERE FEATURED
IN THE MOVIE ABOUT FACEBOOK.

THEY'RE ACTUALLY INVESTORS
IN SHREM'S COMPANY.

YEAH, YOU KNOW,
A LOT OF PEOPLE ARE VERY
EXCITED BY THIS IDEA.

THEY LIKE THE IDEA THAT
YOU CAN HAVE A CURRENCY

THAT IS NOT TIED
TO ANY KIND OF CENTRAL BANK,

BUT AT THE SAME TIME,
I MEAN, THINK ABOUT IT.

IF YOU'RE IN
THE FEDERAL GOVERNMENT,

YOU DON'T LIKE THE IDEA
THAT PEOPLE COULD

EFFECTIVELY USE ANOTHER
FORM OF CASH

TO BUY THINGS THAT THEY
SHOULDN'T BE BUYING ONLINE.

[SHREM]
WITH ME, IT WASN'T ALL
MY CUSTOMERS.

IT WAS ONE CUSTOMER,

OUT OF ABOUT
100,000 CUSTOMERS.

THIS WAS ONE CUSTOMER.
ONE SINGLE--

AND I MADE THAT CASE
IN MY SENTENCING.

I SAID, "YOUR HONOR,
THIS WAS ONE CUSTOMER."

IT HAPPENED THAT I WAS LITERALLY
COMING HOME FROM AMSTERDAM.

I WAS IN MY SWEATSHIRT.
I WAS STILL STONED.

I DIDN'T KNOW
WHAT WAS GOING ON.

CHARLIE DID NOT KNOW
WHEN TO SHUT UP,

AND THAT ENDED UP
GETTING HIM IN TROUBLE,

AND PROBABLY LED TO THE END
OF HIS COMPANY.

[SHREM]
BUT THEY GOT ME UNDER
THE PATRIOT ACT,

AND IT'S MONEY LAUNDERING

BECAUSE I KNEW THAT
THE MONEY I WAS TAKING

WAS EVENTUALLY POSSIBLY
GOING TO BE USED FOR DRUG
TRAFFICKING.

NOW DRUG TRAFFICKING
IS NOT BUYING DRUGS,
IT'S SELLING DRUGS.

I DIDN'T HELP
THE DRUG SELLER.

I HELPED THE GUY
BUY DRUGS.

BUT I NEVER WENT
TO TRIAL BECAUSE--

AND I PLED GUILTY BECAUSE
WHO WINS AT TRIAL, YOU KNOW?

LIKE THIS GUY, SILK ROAD,
HE'S GONNA GO TO LIFE.

IN TRIAL,
ALL HE NEEDED TO GET
WAS A LADY

WHOSE SON DIED
FROM A COCAINE OVERDOSE

AND I WOULD'VE--
THE JURY WOULD'VE CONVICTED ME
RIGHT THERE.

SO ESSENTIALLY CHARLIE WAS
SELLING BITCOINS TO A GUY

WHO WAS SELLING
BITCOINS TO PEOPLE

WHO WERE PUTTING DRUGS
INTO THEIR OWN BODIES.

AND FOR THIS,
CHARLIE WAS CHARGED
WITH CRIMES

THAT COULD'VE PUT HIM
IN JAIL FOR 20 YEARS.

THAT'S WHAT THE PROSECUTORS
WERE SHOOTING FOR.

WE HAVE BANKS
THAT HAVE ATMS

ON EVERY STREET CORNER
IN AMERICA,

AND THOSE BANKS
KNOW VERY WELL

THAT THAT CASH
IS GETTING USED FOR DRUGS.

AND YET,
THAT'S FINE.

THEY'RE ALLOWED TO DO THAT.
NO ONE GETS IN TROUBLE.

BUT CHARLIE SELLS BITCOIN
TO A GUY WHO SELLS BITCOIN

TO SOMEONE WHO USES DRUGS,
AND HE GOES TO JAIL.

HE WAS AN ENTREPRENEUR THAT
STARTED BUILDING THIS INDUSTRY,

BUILT SERVICES
THAT PEOPLE FOUND USEFUL,

WHEN BANKERS ALMOST DESTROYED
THE WORLD ECONOMY

AND NONE OF THEM
GOT IN TROUBLE WHATSOEVER.

AND HERE WE HAVE THIS
23-YEAR-OLD KID,
HE GOES TO JAIL

BECAUSE HE STARTED
BUILDING AN ALTERNATIVE.

[BENJAMIN LAWSKY]
OVER THE LAST SIX MONTHS,

OUR AGENCY HAS BEEN CONDUCTING
AN EXTENSIVE INQUIRY

INTO VIRTUAL CURRENCY.

THE INFORMATION
WE'RE GOING TO GATHER

IN THIS FACT-FINDING EFFORT

WILL ALLOW US
TO PUT FORWARD,

DURING THE COURSE
OF 2014,

A PROPOSED
REGULATORY FRAMEWORK

FOR VIRTUAL CURRENCY FIRMS
OPERATING IN NEW YORK.

YESTERDAY, WE HAD
SERIOUS CRIMINAL CONDUCT

COME TO LIGHT INVOLVING
VIRTUAL CURRENCY

AS A VEHICLE
FOR MONEY LAUNDERING

DRUG TRAFFICKING,
AND OTHER MAJOR FELONIES.

RIGHT NOW, THE REGULATION
OF VIRTUAL CURRENCY INDUSTRY

IS STILL AKIN
TO A VIRTUAL WILD WEST.

THAT'S WHY
WE'RE EVALUATING

WHETHER OUR AGENCY
SHOULD ISSUE

A SO-CALLED BITLICENSE,

SPECIFICALLY TAILORED
TO VIRTUAL CURRENCIES.

[MORIARTY]
I THINK PEOPLE WHO IMAGINE

A VERY POWERFUL UTILITY,
LIKE BITCOIN

THAT WOULD SOMEHOW ESCAPE
REGULATION ENTIRELY

ARE EITHER NAIVE

OR EXTREME OPTIMISTS.

[VOORHEES]
BITCOIN IS
A BATTLE OF IDEAS,

AND IT FORCES THE ISSUE OF
WHETHER PEOPLE SHOULD BE

AS FREE IN THEIR HANDLING
OF MONEY AS THEY ARE

IN THEIR HANDLING
OF SPEECH OR RELIGION

OR RELATIONSHIPS
WITH EACH OTHER.

IF YOU WANT TO HAVE
THIS THING GO MAINSTREAM,

YOU'RE GOING TO HAVE
TO HAVE THE REGULATORS,

THE LAWMAKERS
WEIGH IN ON IT.

ONE OF THE FIRST ONES
WHO REALLY TOOK AN INTEREST

WAS BENJAMIN LAWSKY.

VERY IMPORTANT REGULATOR
IN THE FINANCIAL WORLD.

AND IN JANUARY, 2014,
HOLDS THESE PUBLIC HEARINGS

BECAUSE HE WANTS
TO COME UP WITH A LICENSE

FOR BITCOIN COMPANIES.

WE BELIEVE
THAT PUTTING IN PLACE

APPROPRIATE
REGULATORY SAFEGUARDS
FOR VIRTUAL CURRENCIES

WILL ULTIMATELY
BE BENEFICIAL

TO THE LONG-TERM STRENGTH
OF THE INDUSTRY ITSELF.

LAWSKY WAS ESSENTIALLY
GIVEN THE OPPORTUNITY

TO WRITE THE RULES
FOR THIS WHOLE NEW INDUSTRY
FROM SCRATCH.

[LAWSKY]
THE FIRST QUESTION
IS THE OBVIOUS ONE

THAT'S ON EVERYONE'S MIND.

SORT OF UNEXPECTED YESTERDAY,

BUT WITH THE ARRESTS
WE SAW OBVIOUSLY

THAT'S PUT A BIT OF A CLOUD

HANGING OVER
THE INDUSTRY RIGHT NOW,

AND SO HOW DO EACH OF YOU REACT
TO WHAT WE SAW YESTERDAY,

WHAT IT MEANS FOR BITCOIN
OR VIRTUAL CURRENCY
AND ITS FUTURE?

I THINK IT FURTHER
SUPPORTS THAT

BAD GUYS ARE GONNA DO
BAD THINGS,

AND THEY'RE GONNA
USE WHATEVER TECHNOLOGY
IS AVAILABLE TO THEM.

BUT I VIEW IT AS,
IF THE ALLEGATIONS ARE TRUE
AND THEY'RE CONVICTED,

THE SYSTEM WORKS.

[FRED WILSON]
ARE PEOPLE STILL DOING BAD
THINGS WITH BITCOIN?

SURE. IS THE MAJORITY OF
THE BITCOIN ACTIVITY VICE?

NOT A CHANCE.

SO I THINK
THE ISSUE YOU RAISE

IS ONE THAT PEOPLE
LIKE TO WRITE ABOUT,

THE MEDIA LIKES
TO WRITE ABOUT IT,
MAKES GREAT HEADLINES.

YOU GET A LOT OF CLICKS.
YOU CAN SELL A LOT OF ADS,

BUT I THINK
IT'S IN THE REARVIEW MIRROR.

THERE ARE SOME PEOPLE
IN THE BITCOIN COMMUNITY

FROM THE LIBERTARIAN
SIDE OF THINGS

THAT WANT GOVERNMENT
TO JUST LEAVE IT ALONE.

WOULD YOU SAY REGULATION
IS BOTH INEVITABLE

BUT MORE IMPORTANTLY,
ACTUALLY ULTIMATELY

GOING TO BE CRUCIAL
FOR THE SURVIVAL
OF VIRTUAL CURRENCY?

[WILSON]
SOUNDS LIKE A TERRIBLE
IDEA TO ME.

JUST UNDERSTAND WHAT WE'RE
TRYING TO DO WITH BITCOIN.

WE'RE TRYING
TO CREATE A WORLD

WHERE TRANSACTIONS
CAN MOVE GLOBALLY FOR FREE,
OKAY?

AND MAKING
THESE COMPANIES HIRE

YOU KNOW, SOME OUTSOURCED
COMPLIANCE FIRM

IS A BAD IDEA.

IT'D BE GREAT,
IN ANY INDUSTRY,

IF YOU COULD JUST
OPEN THE DOOR AND LET FOLKS

RUN OUT AND
GIVE IT A SHOT.

WE MAY CHOOSE NOT
TO INVEST IN A COMPANY

IF THEY CAN'T
GET LICENSED BY YOU.

[LAWSKY]
IF THE CHOICE ULTIMATELY
IS BETWEEN

PREVENTING MONEY LAUNDERING
ON THE ONE HAND,

AND I PROBABLY
SHOULDN'T EVEN USE THE WORD
"MONEY LAUNDERING"

'CAUSE IT'S TOO NICE
A WORD, FRANKLY.

MONEY LAUNDERING
IS THE FACILITATION

OF ALL KINDS
OF HORRIFIC CRIMES

THAT I THINK
EVERYONE IN THIS ROOM

NEVER WANTS TO SEE HAPPEN.

ACTS OF TERRORISM,
FUNDING ROGUE NATIONS, ETC.,

ALL TAKE PLACE THROUGH
MASSIVE MONEY LAUNDERING.

NOW THE CHOICE
FOR THE REGULATOR IS,

PERMIT MONEY LAUNDERING
ON THE ONE HAND,

OR PERMIT INNOVATION
ON THE OTHER.

WE'RE ALWAYS
GOING TO CHOOSE

SQUELCHING
THE MONEY LAUNDERING FIRST.

I AGREE THAT I DON'T THINK
ANYBODY WANTS MONEY LAUNDERING.

WHEN WE GOT A--
FIRST SAW BITCOIN

YOU KNOW, ABOUT A YEAR AND
A HALF, ALMOST TWO YEARS AGO.

I DON'T THINK
ANYBODY WOULD DENY

THAT IT WAS A BIT
OF A WILD, WILD WEST,

BECAUSE THERE WAS
NO REGULATION.

THERE WAS NO FRAMEWORK
TO EVALUATE

THE ASSET,
EVALUATE COMPANIES,

DETERMINE WHO WAS COMPLIANT
AND WHO WAS NOT,

AND A WILD WEST
ATTRACTS COWBOYS.

AND I DON'T THINK ANYBODY HERE
WOULD DISAGREE WITH THE FACT

THAT A SHERIFF
WOULD BE A GOOD THING.

[VOORHEES]
A LOT OF, I THINK,
THE ENTREPRENEURS

FEEL LIKE THEY HAVE
TO SELF-CENSOR.

THEY DON'T WANT TO COME OUT
VOCALLY CRITICAL
OF THE REGULATIONS.

PART OF THAT IS MAYBE
'CAUSE SOME OF THEM

JUST LIKE REGULATIONS,

BUT I THINK ANOTHER
PART OF IT,

SOME OF THEM JUST FEEL LIKE
THEY WILL GET

ATTENTION OF THE REGULATORS
IF THEY COME OUT AGAINST THEM.

YES, WE WANT THEM TO INNOVATE,
BUT AT THE SAME TIME,

WE JUST CAN'T LIVE IN A WORLD
WHERE WE'RE GONNA PERMIT

MONEY LAUNDERING
TO GO ON.

[ANDRESEN]
I THINK REGULATORS
SHOULD GIVE BITCOIN

SOME TIME TO GROW UP.

TOO MUCH REGULATION NOW

WILL JUST
STIFLE INNOVATION.

I THINK BEFORE REGULATORS
KIND OF COME IN AND SAY,

"WE'RE GONNA SOLVE
ALL YOUR PROBLEMS,"

AND THEN FAIL
TO SOLVE ALL THEIR PROBLEMS,

I THINK THEY SHOULD GIVE
THE INNOVATORS TIME

TO SOLVE THOSE PROBLEMS.

ONE FUNCTION OF REGULATION
IS TO MAKE THINGS CLEARER,

SO RIGHT NOW BITCOIN,
BECAUSE IT'S SO NEW,

IS IN A STATE OF FLUX
EVERYWHERE.

THE LESSON
FROM THE INTERNET

IS ANYTHING
THAT CHINA BANS,

INVEST IN.

[LAUGHTER]

AND THAT'S A JOKE,
BUT THE U.S.

ALLOWS GOOGLE TO OPERATE HERE,
ALLOWS TWITTER TO OPERATE HERE,

ALLOWS BITCOIN
TO OPERATE HERE,

ALLOWS FACEBOOK
TO OPERATE HERE.

CHINESE GOVERNMENT
DOESN'T ALLOW ANY OF THOSE
COMPANIES TO OPERATE

THE WAY THEY OPERATE
IN THIS COUNTRY,
OR AT ALL.

THIS IS ABOUT FREEDOM,
ULTIMATELY.

YOU KNOW, WE'RE 50 YARDS

FROM THE OLD
WORLD TRADE CENTER HERE

AND I THINK ALL OF US
NEVER WANT TO SEE

ANYTHING LIKE THAT HAPPEN
AGAIN, AND IT WOULD HAVE
BEEN A LOT HARDER

FOR 9/11
TO EVER HAVE OCCURRED

HAD WE HAD
THE PROTECTIONS IN PLACE

THAT WOULD
PREVENT THE MOVEMENT

OF MASSIVE AMOUNTS OF MONEY
AROUND THE GLOBE

BY PEOPLE WHO WOULD
WANT TO KILL EVERYBODY
IN THIS ROOM,

SO I THINK THE KEY IS

TO NOT CREATE
USELESS REGULATION

BUT I THINK THE MOTIVES
BEHIND A LOT OF THOSE RULES

ARE TO ENSURE WE DON'T
MISS SOMETHING AGAIN.

[VOORHEES]
SINCE 2001,

THERE'S THIS ABSURD
OBSESSION WITH TERRORISM.

SO ANY TIME A REGULARY
GETS UP AND SAYS,

"WELL, BITCOIN CAN BE USED
FOR TERRORISM."

WELL, OF COURSE IT CAN.
SO CAN ANYTHING.

SO CAN CELL PHONES
AND SO CAN THE INTERNET
AND SO CAN THE CAR.

IT DOESN'T MEAN THAT
WE SHOULD STIFLE THE GROWTH
OF THOSE INDUSTRIES

JUST BECAUSE BAD PEOPLE
CAN USE IT.

[NEWSCASTER]
THIS HAS ARGUABLY BEEN
THE WORST WEEK

IN THE CRYPTOCURRENCY'S
SHORT LIFE,

STUNNED BY THE COLLAPSE
OF ONCE-DOMINANT EXCHANGE
MT. GOX.

NOW THAT FAILED FIRM'S CEO
MARK KARPELES IS IN HIDING.

SOME 750,000 BITCOINS
ALLEGEDLY STOLEN OR LOST

WHICH ACCOUNTS FOR ABOUT 6%
OF THE TOTAL CIRCULATION.

[POPPER]
BY THE TIME
MT. GOX WENT DOWN,

IT WAS HOLDING WHAT
ITS CUSTOMERS BELIEVED

WERE ABOUT
A HALF A BILLION DOLLARS

WORTH OF THEIR BITCOINS
AND THE COMPANY'S BITCOINS.

IT WAS NO LONGER THE LARGEST
EXCHANGE IN THE WORLD.

BUT PART OF
WHAT'S SO AMAZING IS

THAT PEOPLE KEPT USING IT

EVEN AFTER THERE HAD BEEN
NUMEROUS INCIDENTS

IN WHICH IT WAS CLEAR
THAT THE COMPANY

WAS NOT UP TO THE TASK
OF SAFEGUARDING THE MONEY.

AND THE ONLY REASON HE SURVIVED
AS LONG AS HE DID

WAS BECAUSE IN 2013,
THE PRICE STARTED GOING UP.

PEOPLE KEPT
PUTTING MONEY INTO IT.

HE HAD MORE AND MORE MONEY
'CAUSE THE PRICE WAS GOING UP,

BUT AS SOON AS
THE PRICE STARTED GOING DOWN,

THIS IS WHAT HAPPENED,
RIGHT?

IT PEAKS IN LATE 2013.

IT STARTS COMING DOWN
IN 2014.

SOON AS THAT PRICE
STARTED COMING DOWN,

IT ALL JUST TUMBLED FOR HIM.

GOX WAS GOING TO COLLAPSE.

THAT IT LASTED
AS LONG AS IT DID

WAS ACTUALLY
KIND OF A STROKE OF FATE.

BUT ITS FAILURE WAS

IT DIDN'T HAVE
THE KIND OF MORE BORING

MAINSTREAM
INSTITUTIONAL CONTROLS

THAT WE REQUIRE TO BRING IT
TO THE NEXT LEVEL.

AND THERE'S A WHOLE BUNCH
OF MONEY MISSING,

AND NO ONE KNOWS
IF THEY JUST LOST IT,

IT IF WAS STOLEN FROM THEM,

IF THEY EMBEZZLED IT OR WHAT,

BUT THE IMPORTANT
LESSON FROM GOX

ISN'T THAT BITCOIN
DOESN'T WORK.

THE IMPORTANT LESSON
FROM GOX

IS THAT YOU DON'T
LEAVE YOUR MONEY WITH
A TRUSTED THIRD PARTY

BECAUSE YOU CAN'T
ALWAYS TRUST THEM.

YOU CAN ONLY TRUST THEM
UNTIL YOU CAN'T.

THIS WAS ALSO A LESSON
THAT PEOPLE WERE

SUPPOSED TO LEARN
DURING THE FINANCIAL CRISIS

BUT THEY DON'T SEEM
TO HAVE LEARNED IT YET.

[VIGNA]
MARK KARPELES

WAS A GAMER.

HE WAS NOT A FINANCE PRO.

HE REALLY DIDN'T KNOW
WHAT HE WAS DOING,

AND HE DIDN'T BUILD IT.
JED MCCALEB BUILT IT.

HE DIDN'T IMPROVE UPON IT.

I MEAN, IT LURCHED
FROM CRISIS TO CRISIS

THROUGHOUT
THE ENTIRE HISTORY.

LAST YEAR WAS
A TERRIBLE YEAR FOR BITCOIN,

AND AN ESPECIALLY
TERRIBLE YEAR FOR
THE FOUNDATION,

BECAUSE WE HAD
TWO OF THE PEOPLE
ON OUR BOARD OF DIRECTORS

WHO HAD TO RESIGN
IN DISGRACE, BASICALLY.

YOU KNOW, MY EXPERTISE
IS TECHNOLOGY.

MY EXPERTISE IS NOT
FIGURING OUT, LIKE,

WHO'S TRUSTWORTHY,
WHO'S NOT,

WHICH BUSINESSES
ARE GONNA SUCCEED,

WHICH BUSINESSES
ARE GONNA FAIL.

[LAWSKY]
AFTER WE HAD
HELD OUR HEARINGS,

WE THOUGHT WE WOULD TAKE
SIX MONTHS TO NINE MONTHS,
EVEN A YEAR,

TO DRAFT
OUR INITIAL REGULATIONS.

THIS WAS SO COMPLICATED
THAT WE WANTED

TO REALLY TAKE OUR TIME
AND GET IT RIGHT.

WHAT HAPPENED WAS, THOUGH,
MT. GOX COLLAPSED.

AND I THINK THAT GAVE US

A REAL RENEWED
SENSE OF URGENCY,

AND WE REALIZED THAT
IF WE GOT REGULATION RIGHT,

WE COULD CREATE MORE CONFIDENCE
IN BITCOIN, FRANKLY,

AS OPPOSED TO THE SORT OF
LOSS OF CONFIDENCE YOU SAW

NOT ONLY
FROM THE SILK ROAD CASE

BUT ALSO FROM THE COLLAPSE
OF MT. GOX.

[NEWSCASTER]
SO YOUR SENSE, THOUGH,

OF THE REGULATORS,
RIGHT NOW.

I ASSUME YOU'VE
HAD CONVERSATIONS.

THE DISCUSSIONS
THAT WE'VE HAD,

I THINK EVERYBODY
RECOGNIZES THE INNOVATION

AND DOESN'T WANT
TO STIFLE IT.

THEY JUST WANT TO MAKE SURE
THAT THERE'S HEALTHY REGULATION

SO IT'S USED IN A SAFE
AND PRODUCTIVE MANNER.

[SPANOS]
I'M NOT GIVING UP ON NEW YORK.
NEW YORK'S GIVING UP ON ME.

I CAN'T EVEN TURN ON
THE BITCOIN MACHINE.

AN ATM,
I CAN'T TURN IT ON.

I CAN'T MAKE TRADES.
I CAN'T DO ANYTHING.

THERE'S NO CASH FLOW
AT ALL.

AND IT'S POTENTIAL
REGULATION.

IT'S REGULATIONS
I SHOULD BELIEVE

IS COMING DOWN THE PIPE.

LIKE, I DON'T WANT TO DO
ANYTHING THAT SOMEONE'S
FROWNING UPON

RIGHT NEXT DOOR
TO THE STOCK MARKET.

THEY'RE GONNA LOCK ME UP.

YOU KNOW, YOU CAN'T
HAVE AN EXCHANGE.

WELL, WE DON'T.
PEOPLE MEET THERE

AND EXCHANGE
WITH EACH OTHER.

NEW YORK'S SITTING THERE
ON THE HIGH HORSE,

AND THE WHOLE WORLD'S
WAITING

ON NEW YORK TO CREATE
SOME FUCKIN' LICENSE.

[POPPER]
ULTIMATELY LAWSKY'S OFFICE
BROUGHT OUT

THE FINAL RULES
FOR THE BITLICENSE

IN THE SPRING OF 2015.

A LOT OF COMPANIES COMPLAINED
THAT THE REGULATIONS

WERE TOO BURDENSOME FOR THEM
TO OPERATE IN NEW YORK

AND STILL MAKE MONEY.

[TUCKER]
I SAW JUST OVERNIGHT

DOZENS OF COMPANIES THAT WERE
ON THE VERGE OF LAUNCHING.

THEY JUST THREW IN THE TOWEL
AND SAID, "WE CAN'T
AFFORD THIS."

ERIK VOORHEES' NEW COMPANY
SHAPESHIFT

WOULD HAVE HAD TO APPLY
FOR THE BITLICENSE

IF IT WANTED TO KEEP
CUSTOMERS IN NEW YORK.

SO, IN MY LAP HERE
I HAVE THE--

THE APPLICATION FORMS
FOR LICENSE TO ENGAGE

IN VIRTUAL CURRENCY
BUSINESS ACTIVITY,

WHICH IS A VERY STATIST WAY
OF SAYING THE BITLICENSE.

THE IS THE APPLICATION
TO BE APPROVED

TO DO BASICALLY WHAT WE'VE
ALL BEEN DOING FOR YEARS NOW,

WHICH IS BUILDING BITCOIN
COMPANIES IN NEW YORK.

AND A LOT OF
STUFF IN HERE I PERSONALLY
FEEL IS UNETHICAL,

SO WE'RE NOT GONNA
COMPLY WITH IT,

WHICH MEANS WE HAVE TO BLOCK
NEW YORKERS ENTIRELY.

AND WHEN
AN ENTIRE NEW INDUSTRY

STARTS BLOCKING
A PLACE LIKE NEW YORK

THAT USED TO BE THE FINANCIAL
CENTER OF THE WORLD,

HOPEFULLY SOME OF THOSE
POLITICIANS WILL TAKE NOTICE.

THE POINT OF IT
IS TO, ONE,

MAKE SURE THERE ARE ENOUGH
CONSUMER PROTECTIONS;

TWO, MAKE SURE WE HAVE
ADEQUATE CYBERSECURITY;

THREE, MAKE SURE THAT
THE COMPANIES ARE ADEQUATELY
CAPITALIZED

SO THEY DON'T COLLAPSE
UPON THEMSELVES.

[CASEY]
YOU KNOW, YOU'VE SEEN
A TUG OF WAR

BETWEEN THE HARD LINERS
AND THOSE WHO ARE SAYING,

"YOU KNOW,
YOU'VE GOT TO HAVE

ENOUGH SPACE
FOR INNOVATION IN HERE,"

AND THE SYSTEM HAS COME OUT,
I THINK,

PROBABLY STRONGER
AS A RESULT OF THAT

AND THERE'S
A WIDESPREAD VIEW

AMONGST CERTAINLY
THE BUSINESS BITCOIN COMMUNITY

THAT SOME LEVEL
OF REGULATION

GIVES LEGITIMACY
TO WHAT THEY'RE DOING.

IT GIVES PEOPLE
CONFIDENCE IN WHAT
THEY'RE DOING.

THIS IS AN IMPORTANT PART
OF GROWING UP.

ULTIMATELY, THEY'RE NOT
GOING TO GET IT RIGHT,

BECAUSE NO REGULATION
IS EVER RIGHT.

BUT I'M HIGHLY CONFIDENT

THAT WHATEVER HAPPENS
GOING FORWARD,

THE BITLICENSE
WILL BE LOOKED AT

AS A POSITIVE DEVELOPMENT

IN THE EVOLUTION OF BITCOIN

BECAUSE IT JUST REMOVED
ONE OF THE BIGGEST PIECES
OF UNCERTAINTY,

WHICH IS HOW IS THIS INDUSTRY
GOING TO BE REGULATED.

I THINK MOST OF US--
AT LEAST A LOT OF US--

THINK THAT
SENSIBLE REGULATION

THAT SETS GUIDELINES

THAT MAKES SURE
PEOPLE'S MONEY

DOESN'T JUST GO INTO
A BLACK HOLE

THAT THAT'S
A REALLY IMPORTANT THING,

THAT REGULATION.

I'M SURE SATOSHI
WOULDN'T BE HAPPY

TO SEE THIS KIND OF THING,

WHICH IS NOT BASED
ON THE LOGIC AND REASON

THAT A PROGRAMMER
IS USED TO.

I THINK A LOT OF DEVELOPERS,
UNDERSTANDABLY SO,

TRY TO STAY OUT OF
THE POLITICAL NONSENSE.

[NEWSCASTER]
IT HAS BEEN ONE OF
THE BIGGEST MYSTERIES

RAGING ACROSS
THE INTERNET:

WHO IS SATOSHI NAKAMOTO?

NEWSWEEK PUBLISHED
AN ARTICLE

CLAIMING THE MAN
IN THESE IMAGES IS
THE BITCOIN FOUNDER.

THE MAN WHO
CREATED BITCOIN,

IS KNOWN AS
THE FATHER OF BITCOIN,

THE ONLINE CURRENCY
NOW WORTH BILLIONS.

WHEN YOU ASKED HIM
ABOUT BITCOIN,

AND HE SAYS, "I CAN'T TALK
ABOUT THIS ANYMORE,"

HE WAS NOT REFERRING
TO BITCOIN.

BUT WITH ME, HE DEFINITELY
ACKNOWLEDGED BITCOIN.

I THINK AT THIS POINT NOW
HE'S SAYING

HE WAS CONFUSED
BY THE CONVERSATION.

CLEARLY SOMEBODY THOUGHT

THAT WE DID THIS
AS AN ACT OF WAR

AGAINST SATOSHI NAKAMOTO
OR BITCOIN,

AND I WANT
TO BE VERY CLEAR

THAT I CERTAINLY NEVER
MEANT IT THAT WAY.

I HAVE NOTHING TO DO
WITH BITCOIN.

[VIGNA]
IT WAS A MONSTER STORY.

HOW DID THEY FIGURE IT OUT?

OH, MY GOD, LOOK AT
THIS GUY THAT THEY NAMED.

HIS NAME IS
DORIAN SATOSHI NAKAMOTO,

LIVING IN CALIFORNIA,

BASICALLY HIDING
IN PLAIN SIGHT.

IT BECOMES A GIGANTIC
MEDIA SCRAMBLE,

AND THEN DORIAN EMERGES
FROM HIS HOUSE

LOOKING KIND OF DISHEVELED,
LOOKING KIND OF CONFUSED,

AND SAYS
HE'S NOT SATOSHI NAKAMOTO,

SAYS HE'S NEVER HEARD
OF BITCOIN.

HE DOESN'T UNDERSTAND.
HE HAD ONE CONVERSATION
WITH LEAH.

SHE MISUNDERSTOOD
WHAT HE SAID,

SHE TOOK IT
THE WRONG WAY.

AND YOU PROBABLY WOULD HAVE
HAD TO HAVE BEEN
A CYPHERPUNK

TO UNDERSTAND ALL
THE ELEMENTS OF IT

THAT HAD ALREADY BEEN
PUT TOGETHER.

THE ODDS OF IT SEEMED
VERY LOW TO ME

THAT IT WAS SOMEBODY
FROM COMPLETELY OUTSIDE
THAT COMMUNITY

WHO HAPPENED TO KNOW
ALL THESE DIFFERENT THINGS

AND PUT THIS TOGETHER
AND APPEAR OUT OF NOWHERE.

[GREENBERG]
THE DAY THAT "NEWSWEEK'S"
STORY CAME OUT

NAMING DORIAN NAKAMOTO
AS THE CREATOR OF BITCOIN,

I GOT THIS EMAIL
FROM AN OLD ACQUAINTANCE

THAT WAS TITLED
"WHAT ARE THE ODDS?"

AND IT LAID OUT THE FACT
THAT HAL FINNEY

LIVES LESS THAN
TWO MILES AWAY FROM

THE KNOWN ADDRESS
OF DORIAN NAKAMOTO

WHERE "NEWSWEEK"
HAD FOUND HIM.

AND HAL FINNEY IS THE NUMBER TWO
EVER USER OF BITCOIN,

WHO RECEIVED THE FIRST
BITCOIN TRANSACTION.

HE WORKED ON
AN EARLY PROTOTYPE

OF AN ANONYMOUS
CURRENCY SYSTEM.

HE WAS A CYPHERPUNK.

SO HOW COULD IT BE
THAT THE PURPORTED CREATOR
OF BITCOIN

AND THIS KNOWN, CONFIRMED,
SECOND-EVER USER OF BITCOIN,

HADN'T EVER COLLABORATED?

THAT HAL FINNEY, WHO WAS LESS
THAN TWO MILES AWAY

FROM DORIAN NAKAMOTO
HADN'T HELPED TO CREATE BITCOIN?

OR MAYBE HE REALLY WAS
THE CREATOR OF BITCOIN.

MAYBE HAL FINNEY
WAS SATOSHI NAKAMOTO.

[POPPER]
WHEN YOU LOOK AT
THE BITCOIN WHITE PAPER,

IT MADE REFERENCE TO
A LOT OF THE EARLIER PROJECTS

THAT FED INTO BITCOIN.

BUT IT'S VERY NOTABLE
THAT THE ONE PROJECT
IT DOESN'T REFER TO

IS NICK SZABO'S BIT GOLD,

WHICH IS PERHAPS
THE CLOSEST PRECEDENT

AND THE CLOSEST PARALLEL
TO BITCOIN.

[ANDRESEN]
I MEAN, BIT GOLD
IS SO CLOSE TO BITCOIN,

IT'S HARD NOT TO THINK

THAT, YOU KNOW,
MAYBE NICK IS SATOSHI.

[VIGNA]
A LOT OF PEOPLE WILL SAY
"NAKAMOTO MUST BE SZABO."

"NAKAMOTO
MUST HAVE BEEN FINNEY."

BUT I DON'T THINK
HE WAS TRYING TO LEAVE

ANY BREADCRUMBS OUT THERE
FOR ANYBODY TO FOLLOW.

[GREENBERG]
I TOLD MY EDITOR ABOUT IT.

HE AGREED THAT
"YOU FOUND SATOSHI NAKAMOTO."

SO I GOT ON A PLANE
TO SANTA BARBARA

AND I DROVE OUT
TO HAL FINNEY'S HOUSE.

BUT AT THIS STAGE,
HE WAS ALREADY

COMPLETELY PARALYZED
BY ALS,

THIS REALLY AWFUL,
DEBILITATING TERMINAL ILLNESS

THAT SLOWLY
SHUTS DOWN YOUR BODY

WHILE LEAVING YOUR MIND
COMPLETELY INTACT.

AND THE TIME WHEN
HE STARTED TO FADE IN
HIS PHYSICAL ABILITIES

DID ROUGHLY COINCIDE
WITH THE TIME

THAT SATOSHI NAKAMOTO
STARTED TO DISAPPEAR.

NOW MAYBE THE REASON
THAT SATOSHI NAKAMOTO

HAD CHOSEN TO FADE AWAY

WAS BECAUSE HAL FINNEY
WAS PHYSICALLY FADING.

[POPPER]
THERE HAVE BEEN A NUMBER
OF STYLOMETRIC STUDIES

AND YOU SEE SO MANY
OF THESE SIMILARITIES

BETWEEN SATOSHI'S WRITINGS
AND THOSE OF NICK'S,

INCLUDING THESE LITTLE THINGS
LIKE HAVING TWO SPACES

AT THE BEGINNING
OF A SENTENCE,

AND PHRASES AND SPELLINGS
THAT NOBODY ELSE USES.

[GREENBERG]
SO I TALKED TO HAL AS MUCH AS I
COULD, MOSTLY IN A KIND OF

ONE-WAY INTERVIEW BECAUSE HE
COULD REALLY ONLY RESPOND
WITH YES AND NO ANSWERS,

AND HE DENIED BEING
SATOSHI NAKAMOTO.

YOU COULD TELL
THAT HE WAS AMUSED
BY THE WHOLE IDEA

THAT I THOUGHT
HE WAS SATOSHI NAKAMOTO.

[POPPER]
ONE OF THE REALLY
REMARKABLE THINGS

FROM NICK SZABO'S WRITING

IN THOSE MONTHS
BEFORE BITCOIN

WAS PUBLICALLY LAUNCHED
IS THAT NICK,

IN RESPONDING
TO SOME COMMENTS

ABOUT A POST HE HAD MADE
ABOUT BIT GOLD,

ACTUALLY ASKED THE OTHER PEOPLE
WHO WERE READING HIM

IF ANYBODY WANTED TO HELP HIM
CODE THIS IDEA UP

INTO REAL SOFTWARE
THAT COULD WORK.

IT WAS NEVER TURNED
INTO A REALITY,

BUT WHEN YOU
LOOK AT BIT GOLD,

IT'S HARD NOT TO BE STRUCK
BY THE SIMILARITIES

BETWEEN IT AND BITCOIN.

IT'S POSSIBLE.

HAL COULD'VE
BEEN THE CODER.

I DON'T KNOW.

YOU KNOW, THIS IDEA THAT--
THAT HAL FINNEY COULD'VE BEEN

THE KIND OF GHOST CODER
FOR BITCOIN...

I GUESS IT'S POSSIBLE.

OTHER PEOPLE KIND OF
SPECULATING ON REDDIT

OR OTHER PARTS
OF THE INTERNET

THOUGHT THAT
MAYBE HAL FINNEY

HAD USED DORIAN NAKAMOTO
AS A PATSY.

IF HE WERE EVER TRACED
BACK TO DORIAN NAKAMOTO,

IT SEEMED LIKE THIS GUY
WAS THE CREATOR,

AND HAL FINNEY WOULD BE
SORT OF IMMUNIZED FROM IT.

EVERYONE ELSE WHO WAS
INVOLVED IN THE PROJECTS

LEADING UP TO BITCOIN
HAS RELEASED

THEIR COMMUNICATIONS
WITH SATOSHI FROM THIS PERIOD.

NICK HAS AVOIDED
DOING THAT,

AND ESSENTIALLY WENT SILENT
IN THOSE CRITICAL MONTHS

AFTER BITCOIN WAS RELEASED.

YOU KNOW, WHEN YOU TALK
TO PEOPLE FACE TO FACE,

AND THEY TELL YOU
THESE THINGS,

YOU CAN GET A SENSE
IF THEY'RE BEING HONEST.

IF HAL FINNEY ACTUALLY
HAD A SECRET

BILLION-DOLLAR CACHE
OF BITCOINS,

HE WOULDN'T HAVE BEEN ABLE
TO LIE TO ME SO EFFECTIVELY
ABOUT IT.

IN THE END, THE REASONS
TO BELIEVE THAT THIS WAS
ALL JUST A COINCIDENCE

BEGAN TO OUTWEIGH
THE COINCIDENCE ITSELF.

IT'S ALMOST LIKE AN EEL.

THERE'S SOMETHING THERE,
YOU CAN SEE IT,

BUT AS SOON AS YOU TOUCH IT
IT JUST SLIDES RIGHT OUT
OF YOUR HANDS

AND YOU'RE LEFT
WITH NOTHING.

ANYBODY WHO IS
OF ANY NOTE

IN THE CYPHERPUNK
MOVEMENT,

AND EVEN OUTSIDE
OF IT TOO,

HAS AT ONE TIME
OR ANOTHER

BEEN CALLED SATOSHI.

HAL FINNEY DENIED IT.
NICK SZABO DENIED IT.

THEY'VE ALL DENIED IT.

MAYBE ONE OF THEM
IS SATOSHI.

MAYBE ALL OF THEM
ARE SATOSHI.

IT REALLY IS A MYSTERY.

THAT'S THE ORIGINAL TICKER

FROM NEXT DOOR.

ALL RIGHT,
SO WE'RE OVER HERE.

BITCOIN CENTER, 100 FEET FROM
THE STOCK EXCHANGE, OVER HERE.

AND, UH...

YOU KNOW, SOME OF YOU GUYS
TOOK A HIT LAST WEEK,

LAST COUPLE OF WEEKS.

LOT OF THE BIG GUYS,

THEY GOT THEIR FOOTHOLD
IN THE BUSINESS

THAT THEY WEREN'T A PART OF
IN THE BEGINNING.

I DON'T KNOW
WHAT'S GOING ON.

BUT, UH, I DON'T KNOW.

I WOULDN'T WRITE OFF
BITCOIN THAT EASY.

I KNOW THAT BITCOIN
IS GONNA CHANGE THE WORLD.

IT'S CHANGING
THE WORLD ALREADY.

AND WE HAVE
TO STAND TALL

AND PROUD

AS BITCOINERS
AND EARLY ADOPTERS.

THEY DON'T KNOW ANYTHING
ABOUT NEW TECHNOLOGY,

BUT ONCE
IT STARTS MAKING SENSE,

THEY THROW THEIR DOLLARS
BEHIND IT.

[WINTER]
YOU KNOW, UNFORTUNATELY,

EARLY ADOPTERS

MAKE THE ROADS
THAT WE ALL TRAVEL DOWN,

AND THEY ARE USUALLY PAVED OVER
IN THE PROCESS.

THE FIRST GUY
THROUGH THE DOOR GETS SHOT.

YOU KNOW, BUT SOMEBODY'S
GOTTA GO THROUGH THE DOOR,

BUT THEY'RE GONNA GET SHOT.

CHARLIE SHREM,
ROSS ALBRICHT,

JULIAN ASSANGE,

THEY GOT SHOT
COMING THROUGH THE DOOR.

BUT WE'RE ALL UTILIZING
THE FREEDOMS

AND TECHNOLOGIES
AFFORDED TO US

BECAUSE THEY KNOCKED
THE DOOR DOWN.

[ELIZABETH]
HEY, MICHAEL.

CAN I PUT YOU
ON SPEAKERPHONE
FOR A MINUTE?

IF I KNOW HOW.

HEY, MICHAEL, CAN I ASK YOU,
WHERE DID YOU BUY BITCOINS?

YEAH.

DID YOU LOSE-- HOW MUCH--
DO YOU STILL HAVE THEM?

YOU PUT INTO IT.

CAN YOU USE IT?

DO I WANT TO BUY IT?
NO, NOT TODAY.

THOUGH IT IS GOING
TO BE AROUND.

DID YOU EVER USE IT
TO BUY ANYTHING?

-MICHAEL.
-[LAUGHTER]

NO, OKAY.

THEY SHOULD GO BACK TO,
YOU KNOW,

DAY ONE AND
JUST START ALL OVER.

FORGET ABOUT BITCOIN,
CALL IT SOMETHING ELSE.

I THINK IT'S BEEN
SO TARNISHED NOW

WITH THIS--
WITH THE SILK ROAD...

YOU KNOW, I JUST THINK,
YOU KNOW,

THAT ALL THAT STUFF ABOUT
$400 MILLION DISAPPEARING

AND... YOU'RE JUST NOT
GONNA GET OFF THE GROUND.

NOBODY'S GONNA--

YOU KNOW,
LIKE WARREN BUFFET SAID,

"STAY THE HELL AWAY FROM IT."

[LAWSKY]
TO PUT ALL THE CARDS
ON THE TABLE,

I'M GONNA BE
LEAVING THE DEPARTMENT
IN THE COMING WEEKS.

AND IF YOU ASKED ME
BACK WHEN I TOOK THIS JOB
IN 2011

WHAT I THOUGHT
WE'D BE WORKING ON
DURING MY TENURE,

DIGITAL CURRENCIES
WOULD NOT HAVE BEEN
AT THE TOP OF THE LIST.

[VOORHEES]
SO BEN LAWSKY CREATED
THIS THING CALL THE BITLICENSE

WHICH IS NEW YORK'S
ATTEMPT TO REGULATE

THIS SCARY NEW TECHNOLOGY.
IT'S NOW LAW.

AND HE HAS ANNOUNCED
THAT HE IS LEAVING GOVERNMENT

IN ORDER TO SET UP HIS OWN
PRIVATE CONSULTING FIRM

TO HELP COMPANIES NAVIGATE
FINANCIAL REGULATIONS

SUCH AS THE BITLICENSE
THAT HE CREATED.

SO WE ESSENTIALLY HAD THIS
BEAUTIFUL NEW ECOSYSTEM
BEING BUILT,

AND BEN LAWSKY COMES BY,

SAYS, "I'M HERE
TO PROTECT CONSUMERS."

HE BUILDS A HUGE
WALL AROUND THE THING,

AND THEN HE SITS
OUTSIDE THE GATE

CHARGING PEOPLE
TO GET IN.

THIS IS THE VERY DEFINITION
OF CRONY CAPITALISM,

AND, FOR SOME REASON,

BEN LAWSKY DOESN'T EVEN SEE
ANYTHING WRONG WITH THAT.

I THINK HISTORY
WILL NOT JUDGE HIM

AS FAVORABLY AS HE THINKS.

SO, UM, YEAH.

I'VE STARTED UP
MY OWN CONSULTING BUSINESS.

IT'S BEEN
QUITE INTERESTING.

DOING A LOT OF WORK
IN THE FINTECH SPACE,

BUT ALSO DOING WORK
WITH A LOT OF TRADITIONAL
COMPANIES

IN THE FINANCIAL SERVICES
WORLD AS WELL.

[POPPER]
BEN LAWSKY'S TEAM
AT THE DFS

THAT WAS WORKING ON
THIS BITLICENSE

AND THE BITCOIN INITIATIVE

HAVE ALL ENDED UP
LEAVING THE AGENCY

AND GOING
TO CONSULTING FIRMS

THAT ARE NOW WORKING
ON THESE ISSUES.

DANNY ALTER IS GOING
TO WORK FOR ITBIT

AND DANA SYRACUSE
IS GOING TO WORK FOR

THE CONSULTING FIRM K2.

ITBIT IS
PARTICULARLY NOTABLE

BECAUSE THEY WERE
THE FIRST TO FIND A WAY

TO PARTNER WITH THE DFS
TO GET LICENSED

TO OPEN THEIR OWN
BITCOIN EXCHANGE.

[SHREM]
WHEN THIS IS OVER,

DEFINITELY GOING TO LEAVE
NEW YORK WHEN I CAN.

WHERE I'M GONNA GO,
I DON'T KNOW.

I THINK THE BITCOIN COMMUNITY
IN NEW YORK IS DONE WITH.

NO, IT DOESN'T FOSTER
INNOVATION HERE.

IT'S TOO DIFFICULT
TO HAVE A BITCOIN COMPANY.

NO BANKS WILL
OPEN UP ACCOUNTS.

YOU HAVE THE THREAT
OF REGULATION,

AND YOUR HIGH-PROFILE
ARRESTS

LIKE MYSELF AND OTHERS.

NO ONE WANTS
TO DEAL WITH IT.

WHEN DID YOU FIRST
START DIGGING IN ON BITCOIN?

TWO, TWO AND HALF
YEARS AGO,

WHEN I TOOK OVER
THE FOREIGN EXCHANGE
PAYMENTS BUSINESS

- AT JP MORGAN.
- SO YOU PROBABLY
HAD YOUR MT. GOX,

BITINSTANT, YOU KNOW,
CHARLIE AND THOSE GUYS.

IT'S INTERESTING,
ALMOST NONE OF THOSE GUYS
ARE AROUND ANYMORE.

TWO YEARS AGO
AT ALL THE MAJOR BANKS,

BITCOIN WAS
AN AFTERTHOUGHT.

IT WAS KIND OF A--
MAYBE IN A HALLWAY
KIND OF CONVERSATION

AT THE WATER COOLER
AND NOW,

YOU KNOW, EVEN THIS WEEK,
I MET WITH ONE OF THE OTHER
MAJOR BANKS.

EVERYONE'S GOT
A BITCOIN SPECIALIST,
AT LEAST ONE WORKING GROUP.

KIND OF TEAMS OF PEOPLE
WHO ARE TRYING TO FIGURE OUT

HOW TO INCORPORATE
THE TECHNOLOGY

INTO THEIR
EXISTING OPERATION.

[CASEY]
BANKS AND INSTITUTIONS

ASSOCIATED WITH
THE FINANCIAL SYSTEM

ARE REALLY STARTING
TO RECOGNIZE

THAT THE PAYMENT SYSTEM
UNDERLYING BANKING

COULD BE MADE
MORE EFFICIENT

BY THE APPLICATION
OF BLOCKCHAIN TECHNOLOGIES.

[LAWSKY]
THE BLOCKCHAIN TECHNOLOGY

UNDERLYING BITCOIN

HAS BECOME SOMETHING THAT

A LOT PEOPLE ARE NOW
VERY, VERY INTERESTED IN

FOR ALL KINDS OF
OTHER USES,

WHETHER IT'S ALLOWING
FOR DERIVATIVES
TO BE TRANSFERRED

OR SECURITIES
TO BE TRANSFERRED,

OR ALL MANNER OF FINANCIAL
INSTRUMENTS TO BE TRANSFERRED

IN COMPLEX,
INTERESTING WAYS.

I THINK DIFFERENT COMPANIES

ARE GOING TO ADOPT
DIFFERENT STRATEGIES.

AND IT'S GONNA BE
FASCINATING TO WATCH

COMPANIES LIKE
DIGITAL ASSET HOLDINGS,

BLYTHE MASTERS' COMPANY,

DOING VERY,
VERY INTERESTING WORK.

[BLYTHE MASTERS]
I DIDN'T BECOME
AWARE OF BITCOIN

IN ANY MEANINGFUL SENSE
UNTIL 2014,

LATE IN THE YEAR,
AND AT THE TIME,

MY PERSPECTIVE WAS ONE
OF SKEPTICISM, I WOULD SAY.

SPECIFICALLY BECAUSE
THE STORYLINE THAT I HEARD

RELATED VERY MUCH
TO CRYPTOCURRENCY

AS A POTENTIAL MEDIUM
OF EXCHANGE AND STORE OF VALUE,

WHICH IS A VALID DEBATE
AND APPLICATION,

BUT IT DOESN'T HAVE
FULL EXTENT OF THE POWER

THAT THE UNDERLYING TECHNOLOGY
HAS TO ACHIEVE.

BLYTHE MASTERS
IS NOT JUST ANY BANKER.

SHE IS THIS PERSON
WHO I THINK IS REALLY SEEN

AS BEING BEHIND
SOME OF THE MOST
PROBLEMATIC INNOVATIONS

IN THE FINANCIAL INDUSTRY
OVER THE LAST THREE DECADES.

BLYTHE IS THE ONE WHO'S
ESSENTIALLY GIVEN CREDIT

FOR CREATING
THE CREDIT DEFAULT SWAP

WHICH ESSENTIALLY
PROVIDES A WAY TO BET
ON THE DEFAULT OF A BOND,

AND THE CREDIT DEFAULT SWAP
ENDED UP TAKING THIS PLACE

AT THE CENTER
OF THE FINANCIAL CRISIS

AND THESE BETS
THAT BANKS HAD MADE

AGAINST SUB-PRIME
MORTGAGES.

BLOCKCHAIN TECHNOLOGY
ERADICATES

A SIGNIFICANT AMOUNT
OF INEFFICIENCY IN THE SYSTEM,

AND REDUCES COSTS.

IT DOESN'T MEAN
THAT WE ARE DOING AWAY

WITH THE NEED FOR TRUST
IN FINANCIAL SERVICES AT ALL.

[POPPER]
BITCOIN WAS DESIGNED
TO FIND A WAY

TO CIRCUMVENT WALL STREET,

AND WHAT BLYTHE MASTERS
IS DOING

IS ESSENTIALLY
TRYING TO FIND WAYS

TO BRING WALL STREET
INTO BITCOIN

AND MAKE IT POSSIBLE FOR THEM
TO USE THIS TECHNOLOGY
AS WELL.

WHAT THE BANKERS SEEM TO BE
LOOKING TO DO AT THIS POINT

IS CREATE THEIR OWN
PRIVATE BLOCKCHAIN,

WHERE THEIR COMPUTERS
ARE POWERING IT.

RATHER THAN
THESE ANONYMOUS MINERS,

THEY WANT CONTROL
OVER THE SYSTEM.

THE BANKS ARE LOOKING
AT THIS INCREDIBLY WIDE ARRAY

OF WAYS THAT
THEY MIGHT USE THIS,

WHICH INCLUDE REPLACING
STOCK EXCHANGES,

FINDING NEW WAYS
TO ORIGINATE LOANS,

FINDING NEW WAYS TO MOVE MONEY
BETWEEN COUNTRIES,

AND, OF COURSE,
THAT'S GOING BACK

TO THE ORIGINAL IDEA
OF BITCOIN,

BUT NOW IT'S HAPPENING WITHIN
THESE FINANCIAL INSTITUTIONS

RATHER THAN OUTSIDE IT,
AS BITCOIN HAD IMAGINED.

[VOORHEES]
I HAVE NO PROBLEM
WITH THE BANKING SYSTEM

AND THE FINANCIAL INDUSTRY
CO-OPTING BITCOIN,

PRIMARILY BECAUSE BITCOIN
CAN'T REALLY BE CO-OPTED.

THE FACT
THAT IT'S DECENTRALIZED

MEANS NO ONE
CAN CONTROL IT,

NO MATTER WHO THEY ARE
OR HOW MUCH MONEY THEY HAVE.

[ANDRESEN]
I THINK IT'S
ALL GOOD FOR BITCOIN.

I THINK ALL OF THE INNOVATION
THAT'S HAPPENING,

BOTH ON WALL STREET
AND IN SILICON VALLEY

I THINK COMPETITION
WILL TAKE CARE OF

PEOPLE WHO WANT TO TRY
TO HAVE A MONOPOLY,

OR WHO WANT TO TRY TO CHARGE
MORE THAN THEY SHOULD

FOR WHATEVER
PRODUCT OR SERVICE

THAT IS HAPPENING
ON THE BLOCKCHAIN.

IT REALLY IS
AS ADVERTISED.

IT REALLY IS CONTROLLED BY ALL
THE PEOPLE WHO ARE USING IT,

AND IT REALLY IS DESIGNED
JUST TO BE A MORE EFFICIENT,

MORE FAIR WAY OF SENDING
VALUE OVER THE INTERNET.

[WINTER]
BITCOIN IS NOT NEUTRAL.

YOU CANNOT REMOVE
THE POLITICAL COMPONENT

THAT SATOSHI IMPLANTED
IN BITCOIN FROM BITCOIN.

THAT'S WHAT
A LOT OF THE PEOPLE

ON THE WALL STREET SIDE
TRY TO DO.

YOU CANNOT NEUTRALIZE
BITCOIN.

IT'S IMPOSSIBLE.

[SHREM]
THANKFULLY, I'M GONNA GO TO
A COMFY FEDERAL PRISON CAMP

WITHOUT FENCES, THAT HAS
POOL TABLES AND A TRACK,

AND BASEBALL FIELD
AND DECENT FOOD,

AND KIND OF
100 TO 200 PEOPLE
THAT ARE WHITE COLLAR.

THOSE GUYS IN PRISON
ARE THE BEST ONES
TO USE BITCOIN.

THEY'RE SMART.
I'M VERY EXCITED

TO TALK TO THEM ABOUT IT.

[VIGNA]
SO YES, THE VCS ARE
DRIVING THIS THING RIGHT NOW.

THEY'RE POURING
MONEY INTO IT.

THEY'RE BUILDING THESE
FOR-PROFIT COMPANIES

PEOPLE WHO HAVE A BACKGROUND
OUTSIDE OF BITCOIN

SEEING THE VALUE OF IT
AND COMING TO IT.

BUT JUST BECAUSE THEY'RE DOING
EVERYTHING THEY'RE DOING

DOESN'T MEAN
THAT THE LIBERTARIANS
AND THE UTOPIANS

HAVE TO GO AWAY.

BITCOIN IS OPEN SOURCE.

YOU CAN DO WHATEVER
YOU WANT WITH IT.

SO THEY'RE STILL THERE.

THEY'RE STILL BUILDING
THEIR PRODUCTS.

THEY'RE STILL BUILDING
THEIR VISION.

AND IF BITCOIN
GOES MAINSTREAM

AND IF IT GETS PICKED UP,

EVEN IF IT'S RUNNING
IN THE BACKGROUND,

THERE ARE GOING
TO BE ELEMENTS OF THAT

AND THAT'S KIND OF WHAT
UTOPIA MOVEMENTS ALWAYS ARE.

THE THING THAT THE UTOPIANS
WERE DREAMING ABOUT

IS NOT GONNA HAPPEN
THE WAY THEY EXPECTED IT,

BUT I DO THINK IT
IS GOING TO FILTER THROUGH

AND YOU ARE GONNA SEE IT.
YOU'RE GONNA SEE IT.

SO YOU'RE GONNA SHOW ME
THAT SATOSHI NAKAMOTO IS YOU.

YES.

SOME PEOPLE WILL BELIEVE,
SOME PEOPLE WON'T.

AND TO TELL YOU THE TRUTH,
I DON'T REALLY CARE.

BUT YOU CAN SAY,
HAND ON HEART TO ME,

"I AM SATOSHI NAKAMOTO."

I WAS THE MAIN PART OF IT.
OTHER PEOPLE HELPED ME.

I'M GOING TO COME IN FRONT
OF THAT CAMERA ONCE,

AND I WILL NEVER

EVER BE ON A CAMERA
EVER AGAIN

FOR ANY TV STATION

OR ANY MEDIA EVER.

[MUSIC PLAYING]

[MUSIC CHANGES]