Original subtitles

[low hum]

[sirens wailing]

[flames crackling]

LAURI LOVE: I'm Lauri Love.

I'm a electrical engineerstudent and activist,

internet busybody, [chuckles]believer in freedom

and autonomy andopportunity and franchise,

and try to do the thingsthat I can do to help those.

We're here at the site of theGrenfell Tower atrocity, where

people burned to their death.

So there's a few hundred people here

to have a silent walk to markthe fact that there's still

unfinished business here.

And that happened in aself-organized, decentralized

way.

And one of the benefits of the internet,

as long as we maintain that freedom,

is that there's low barriers of entry

to being involved in a protest action

or in a community responseto address a problem.

And we'll need that whenthe things that we rely on

to address problems fall short.

And increasingly,they're seeming to do so.

A lot of people usetechnology on a daily basis.

They don't really understand it.

They don't understand the waythat it can be used to control,

or it can be used to liberate.

When we use Twitter or when we use Facebook,

we're not really the users,we're not really the customers.

We're the product.

Every day that you're on that internet,

on that social network,you're being strip mined.

Your consumption habits, your choice

of what entertainment to watch, tie

down to a fixed identity that's correlated

with your purchasing.

You are being monetized on a daily basis,

and there's no informed bargaining there

because people didn't understandthat this was potentially

a system of control until it became one.

The internet is now a tool of the accumulation

of central power.

What that means is we're in a precarious position

if we don't take back someof that freedom and autonomy.

The blockchain enables differentkinds of pattern and structure

to grow.

It enables you to collaborate,not just on the level of ideas,

but on the level ofvalue and value creation.

Gives you an actual power toeffect change in the world.

And it's going to scare the shit out

of some very powerful people.

[atmospheric music]

JAMIE DIMON: I've also told people

that it can trade at $100,000before it trades to zero.

If you're stupid enough to buyit, you'll pay the price for it

one day.

I don't personally understand it.

Who cares about Bitcoin?

NEWS ANCHOR: Bitcoin's rollercoaster ride has seemingly

come from virtually nowhere andinto the public consciousness,

of course, over the last couple years--

MAN: If you're a modern criminal,

chances are you've used to buy guns, drugs,

and even launder money.

MAN: So there is a use case for Bitcoin--

if you're a criminal.

[laughter]

Great, great product.

I mean that.

MAN: I don't know who started it.

Who's actually there?

Is it ISIS?

MAN: Bitcoin is still in that sort of dark period

that most people don't understand it,

but are willing to trade because they think--

MAN: Make no mistake.

This is the Wild West.

There are now 1,300 cryptocurrencies--

MAN: Don't want to see investors make

the mistake of getting in here if they

are getting into somethingthat's fraudulent.

MAN: --no consumer protection.

MAN: --going up in thenext three to five years.

MAN: Is it a risk?

Absolutely.

Why not make a buck?

[cash register ding]

MAN: --biggest--

MAN: Why not make a buck?

MAN: I don't understand it.

MAN: Why not make a buck?

MAN: We don't know--

MAN: Why not make a buck?

MAN: The charts are ugly.

MAN: Why not make a-- why not make a-- why not

make a-- why not make a buck?

MAN: The underlying technology,it's called blockchain.

MAN: --Bitcoin price might be in a bubble,

but I think the blockchaintechnology behind it

is here to stay.

MAN: The next generation of the internet.

NARRATOR: The informationage is only in its infancy,

and yet we have already seen a barrage

of disruptive technologies.

Perhaps the most captivating andpolarizing of these innovations

is cryptocurrency and blockchain.

Do they represent a revolution that

will drive the next phase of this era,

or are they a sham createdby overzealous hackers

and fraudsters?

To find the answer requires going

back to the early days of the internet itself.

[projector whirring]

JOHN GILMORE: Late 1970s, early 1980s.

One of the beautiful things about internet

back in those days, there was nocentral point of control in it.

If you could talk anybody on the Net

into being your neighbor on the Usenet,

then you could get copiesof any message they got.

[phones dialing]

It was sort of like a forum,but distributed worldwide.

You could post messages in couple

of hundred different topic areas,

and that message would go into your computer.

And then the next time it made a phone call out

to one of its neighboring computers,

that message would get transferred.

So it would spreadthroughout the whole network.

LAURI LOVE: There was a very utopian ideal dream

with the internet.

It was a realized ideal of not being vested

in centralized power or authority,

but being a network that is opento all that anyone can access.

The internet was democratized.

NEWS REPORTER: A goal of theproject is to permit everyone--

young and old, rich and poor--

to be linked through computer networks.

BILL TAI: There was a rapidadvance in the '80s and '90s.

Sort of, like, private internets.

And then, boom, the wholepublic thing just exploded.

LAURI LOVE: We saw the warning signs

when the first centralizedservices were introduced.

The negotiation changed betweenthe user and the provider

of the service.

Imagine if you bought a house,and the basement was locked,

and only the original buildingcontractor had the key.

If you needed to make a change, repair anything,

you had to go to him.

You're at that person's mercy.

NARRATOR: The internet becamean integral part of our lives,

upending many establishedforms of business

and promising a connected,democratized world

through social networks.

Criticism began to grow as the internet became

more centralized.

While its worldwide user base expanded,

power was being concentratedin only a handful

of giant services and platforms.

But in 2008, everything started to change.

GEORGE W. BUSH: We're in the midst

of a serious financial crisis.

I cannot underscore enoughhow serious an issue this is.

NARRATOR: Amid a world economyon the verge of collapse,

a theoretical manifesto emergedby a pseudonymous creator named

Satoshi Nakamoto.

While some have been falsely identified

as Bitcoin's creator--

I just believe that somebodyput that fictitious name

in there.

NARRATOR: --and othershave claimed to be Satoshi

in the flesh--

So you're going to show methat Satoshi Nakamoto is you.

Yes.

NARRATOR: --the true identityof Satoshi is still unconfirmed.

MARK JEFFREY: We don't knowwho Satoshi Nakamoto really is.

Satoshi Nakamoto might be Satoshi Nakamoto.

It might be the NSA.

It might be a company.

It might be a smallwoman living in Arkansas.

We literally have no idea.

NARRATOR: But one thing seems clear--

whoever created Bitcoin andits underlying technology

had their sights set onupending centralized power

on the internet and beyond.

ALEX: How would you explainthe appearance of Bitcoin?

Well, I think what's interesting

there is suddenly thisthing came out of nowhere.

It actually made a lot of newtypes of transaction possible

that wouldn't have been possible before.

This website called Silk Road was starting

to actually use cryptocurrency to do

these illegal transactions.

And it also brought Bitcoinonto everybody's radar.

CHUCK SCHUMER: You want heroin,opium, cannabis, ecstasy,

psychedelics, stimulants.

You name it, they have it.

MATTHEW GREEN: So people were panicked.

A lot of people in law enforcement

didn't really know what to do about this.

They thought that this wasgoing to completely undermine

all of our legal systems and our law enforcement.

And to a certain extent, it did.

Government needs to payattention to this technology.

This was made all the more clear last month,

when federal law enforcementtook down and seized

an online marketplace called the Silk

Road, on which many illegalproducts and services were

bought and sold via Bitcoin.

LAURA SHIN: What'sinteresting is that Bitcoin,

it's proven that you can createa currency out of software,

and people will value it, and will use it.

NARRATOR: In April of 2013,Bitcoin's value swells.

Many call it a Ponzi scheme and a bubble.

REPORTER: What do you thinkof the Bitcoin bubble stories?

Cover of the Financial Times yesterday.

NICK COLAS: Yeah.

You know, bubble's aneasy term to throw around.

The question, really, you haveto ask about Bitcoin is, is it

going to move beyond justbeing this freak show reserve

currency story of the online world to being

a real, viable, long-termtransactional currency?

REPORTER: And you say yes.

I say it's very possible.

[ominous music]

LAURI LOVE: What Satoshi didwas solve one of the biggest

unsolved problems indistributed systems theory,

which is the Byzantine generals problem

is that you have a system that's not

being centrally orchestrated.

[battle noises]

How do you keep it in consensus?

If you're going to useit for electronic assets,

then the thing you want everyone to agree on

is that something's only been spent once.

That's been called the double spend problem.

And it had already been provedthat this problem cannot be

solved.

MARK JEFFREY: Satoshi Nakamoto came up

with a solution called the blockchain.

A lot of people are like, well, what's

the blockchain versus Bitcoin?

The blockchain is the flux capacitor

that makes Bitcoin possible.

DOC BROWN: This is what makestime travel possible-- the flux

capacitor.

MARK JEFFREY: So each cryptocurrency

has its own blockchain.

And the blockchain is basically a record

of all the transactions.

There's a lot of magic and crypto

mysticism around the blockchain,but really, the answer

is it's simply a record of all the transactions,

and it's constructed in such a way

that cheating is not possible, and that there

is no central server.

[birds chirping]

SPIROS MICHALAKIS: Myname is Spiros Michalakis.

I am a quantum physicisthere at the CalTech Institute

for Quantum Information and Matter.

The amazing thing about the blockchain

is how it takes some localized information

and decentralizes it in a global way

throughout the whole system.

And this is actually very similar to how

we try to protect quantum information

from the environment bytaking the local information

and encoding it in a veryglobal way, almost like--

as we call-- in a fractal waythroughout all these tendrils

where you have an initialseed, and then it would spread.

And each part of this fractal is one

of the users of the blockchain making sure

that the whole thing is consistent.

Each block contains some transaction data.

Each block in the chain is verified

and contains informationfrom the block before it.

This transaction history has an integrity

that comes from this idea.

And so if you want to mess with the chain,

you cannot just mess with any one block.

You have to mess with all of its history.

[fast-paced electronic music]

It's an amazing way of decentralizing

this information.

VINAY GUPTA: Decentralizedmeans the computers

are all over the world.

If one of them blows up,another one takes its place,

and you never really notice.

The network continues to function.

And it's not owned or run bya single organization, kind

of like the internet itself.

But blockchain isn't really a thing.

Blockchain is a process.

SPIROS MICHALAKIS: If youwanted to reverse this process,

it would be the same as tryingto take every atom of smoke

and try to reverse until itcame back to its original state

and place.

It's very difficult to do.

Even with the advent of quantum computers,

we don't believe that we can reverse this.

NEWS REPORTER: --losses on that, which

is key for people who boughtBitcoin near the end of 2013

as it ramped up to a peak of about $1,200.

It's currently trading for less than $600,

depending on where you look to try and do

a Bitcoin transaction now.

But--

NARRATOR: Regardless of thevolatility, Bitcoin's run-up

in value catches theattention of technophiles

and crypto fanatics across the globe.

Anyone can use their own equipment

to produce cryptocurrency ina process known as mining.

It was the beginning of a digital gold rush.

MAN: --recognizes all nine cards.

While that's initializing--it takes a while--

I'll take over the rig.

This is the rig here.

This is 9 RX 580, 8 gigabyte models.

SPIROS MICHALAKIS: Miningis using computational power

to try to verify one of these transactions.

MAN: My plan is-- becauseI have more over there.

My plan is to actually--

SPIROS MICHALAKIS: Getting alot of different individuals

out there--

[MEN SPEAKING IN DIFFERENT LANGUAGES]

SPIROS MICHALAKIS: --andgiving them an incentive--

for example, in the Bitcoin case,

by giving them a part of a bitcoin.

NARRATOR: It's a race to validate transactions

on the blockchain and be rewarded

with freshly-mined bitcoins.

The more computational power you have,

the better chance you have to succeed,

which requires a lot ofmachines, and a lot of energy.

NEWS REPORTER: When we were there,

he said his rigs were making $8 million

worth of Bitcoin a month.

I'm a smiling guy right now.

It's crazy.

It's the largest mine in North America,

and most of the rest of the world.

NEWS REPORTER: Inside, it's incredibly loud.

My God, how many machines are there?

[speaking icelandic]

INTERPRETER: There areover 10,000 graphic cards

on this side alone.

More than the world's biggest supercomputer.

[whirring]

[speaking mandarin]

LAURI LOVE: Satoshi was genius enough

to bend the rules of the framing of the question.

How do you actually make sure that this is

the right transaction history?

And it's introduced an economic incentive

to keep that consensus, whichunderpins the blockchain.

SPIROS MICHALAKIS: The users of the blockchain

maintain its integrity--

MAN: I have more cards to come.

SPIROS MICHALAKIS:--instead of having to have

trust in one central authority.

MAN: I got it running at 30 megahash

across nine cards stable.

SPIROS MICHALAKIS: And that iswhere the cryptographic idea

comes into play.

Cryptography has been somethingthat has been going on

for a very long time.

From the ancient Greeks, where they would just

shave somebody's head,they would write something

on the top of the head, let the hair grow,

and then send them on their merry way.

And on the other side, thereceiver of the message

would know to decrypt themessage by shaving their head.

[dynamic music]

JOHN GILMORE: Cryptographyis at the heart

of a bunch of important things.

It's at the heart of mathematics.

Many important questions in mathematics

have related to issues thatcryptography brings up.

Diplomacy.

How do you negotiate with your enemies?

How do you exchange messageswith your ambassador who is

sitting in a foreign country?

It has a lot to do with the conduct of war.

The Allies had made some advances in cryptography

during World War II that shortened

the war by multiple years.

SPIROS MICHALAKIS: Nowwe've gotten better at this,

but it's still what we call classical cryptography.

Everything that is encryptedis encrypted in that way.

In the blockchain, each one of the blocks

is protected using classicalcryptographic protocols.

MARK JEFFREY: With theinvention of the blockchain,

your trust is now in math--

the laws that underpin the universe.

Blockchain is basically a tool to rid

the world of a lot ofcorruption and unfair advantage,

and a lot of people arestarting to realize that that's

what this is, and they're starting

to squawk about it right now.

JAMIE DIMON: I don't personally understand

the value of somethingthat has no actual value.

You're stupid enough to buyit, you'll pay the price for it

one day.

I've also told peoplethat it can trade $100,000

before it trades to zero.

Tulips bulbs traded for $75,000once, something like that.

In the 17th century, in Holland, tulips

became so popular an entire business

could be bought with them.

The entire country.

It was, of course, tulip mania.

So what does Buffett not like right now?

That would be Bitcoin.

He says that Bitcoin right nowlooks a little bit tulip-like

to him.

I wouldn't be surprised if it's not around

in 10 or 20 years.

Everybody who's in it saysblockchain is so secure.

They act as if, look, nothing'smore secure than this.

It doesn't serve anysocially useful function.

This market doesn'tproduce even more tulips.

MAN: I haven't seen that chart since the tulip.

We ought to just go backto what we always have had.

What happened to gold?

I find generally thatpeople that say those things

are people that don't reallyunderstand the technology.

I just don't know how much homework they've done.

REPORTER: Can you givethem tenths and hundredths

of a bitcoin?

JIM CRAMER: I think that they're--

You can, right?

Yeah.

What about the mining of Bitcoin?

They have the picks,and they have the shovels.

REPORTER: Well, they're sellingit to the blockchain as--

the whole blockchain infrastructure.

REPORTER: It's ridiculous, is it not?

REPORTER: It's absurd.

REPORTER: Yeah.

MELISSA LEE: You have JamieDimon speaking about Bitcoin

just moments ago, makingsome very harsh comments.

You see the reaction there.

Down by 1.7%.

Here's what he said.

REPORTER: --people like JamieDimon calling Bitcoin a fraud.

MELISSA LEE: --worse than tulip bulbs.

He would fire any trader tradingBitcoin for being stupid.

And Bitcoin won't end well.

REPORTER: People like Jamie Dimon,

who say that it's a bubble.

He's starting to see peopletake money out of his bank

and put it into Coinbase.

Of course he's going to say that stuff.

So you got to look at who's the messenger.

SPIROS MICHALAKIS: These individuals probably

have other motives to wantthe blockchain to fail.

It's the same thing, I guess,as having a car company that

has been using gas say that, ah, hybrids

or totally electriccars, they're just a fad.

LAURA SHIN: It is true that these technologies

do represent a threat to them.

If they have done the research,then they will pretty quickly

figure out that these are probably

going to disrupt their business models.

NARRATOR: He deposits hispaychecks in the bank.

It is added to the amountof his credit in the bank.

BILL TAI: If you think aboutthe function of a bank,

the bank is really just aledger of who owns what when.

It's essentially cloud storage of money.

That's what a bank is.

You have to put your money somewhere,

and then the bankhandles moving it around.

And it takes days to figure that out, in their case.

And if you have another system--

--if you can automate all that--

--decentralized--

--so all the assets and allthe people around the assets

already know who ownswhat when whenever it is--

--store their money themselves and allows them to move

their money instantly--

--all the time--

--in any amount anywherein the world as easily

as transmitting an email--

[crescendo]

--what is the purpose of a bank?

--why do you need JPMorgan?

Why do you need Jamie Dimon?

The need for them vanishes from the world.

[birds chirping]

NARRATOR: We're likely years away

from blockchain-based technologies

replacing our current financialsystem, if they do at all.

But today, in nations like Kenya,

cryptocurrencies areproviding financial freedom

and empowering people to createincome in a struggling economy.

MAN [ON RADIO]: --analystssay it will take a long time

for the economy to recover.

EUGENE MUTAI: The first timeI heard of cryptocurrency, it

didn't make sense to me at all.

It didn't make sense to me, money,

like a form of digital money, and that's not

controlled by the government.

[girl babbling]

But I started miningcryptocurrencies June, mid-June

last year.

[light atmospheric music]

[whirring]

This cryptocurrency mining rigis just an ordinary computer

with a lot of graphic cards.

It's open air so that--

because it's generating a lotof heat, so that it can be

dispensed easily.

And so just down here--

My mining income is actually really good.

My current earnings per monthput me at a middle class level.

There's a lot of cryptocurrencybeing moved around

by just Kenyans.

There's some form of restrictions

from the government, who still think it's

a Ponzi scheme or a bubble.

But it will bank the unbanked.

It enables the people who didn'thave this financial support

before can finally access it.

Especially in Africa, wherewe're sitting at more than 60%

of unemployment.

I think cryptocurrencies are here to stay.

Blockchain is one of the biggestbreakthrough technologies

to ever exist to date.

And now we completelystart thinking about money

in a very different way.

NARRATOR: As the popularityof Bitcoin grows,

so does the number ofminers, and soon, there's

an explosion of cryptocurrencies.

REPORTER: So let me get this straight.

You took Bitcoin and you justchanged the font to Comic Sans.

And we put a dog on it.

NARRATOR: But Dogecoin was only the beginning.

Everything from Jesus Coin,TrumpCoin, and UFO Coin.

Of course, porn gets in thegame with Titcoin and even

[bleep] Token.

Most of these are scams or Bitcoin copycats,

raising the chorus of naysayers who dismiss

the entire space as a joke.

Bitconnect!

Woo!

NARRATOR: But to agrowing number of people,

blockchain is no joke.

They believe thistechnology has the potential

to upend everything from WallStreet to Silicon Valley.

[light electronic music]

REPORTER: Tim Draper recently beat out

44 other bidders at the USgovernment's Bitcoin auction

last week.

Are you that much of a believerin the virtual currency?

I am very excited about Bitcoin

and what it can do for the world.

We're here at Draper University Hero City.

There's a university across the street,

and an incubator andaccelerator here with a network

of venture capitalists.

It's a whole ecosystem.

But blockchain is very specialbecause it's a new thing.

And it allows a whole new form of creativity

that we can all benefit from.

It's amazing what the blockchain will

be able to do over the next 10, 15 years.

Insurance, banking, real estate.

Any of those industriesthat really hasn't caught up

to the new way of operating, those are all fair game.

Even venture capital.

By having it being a perfect ledger,

it becomes the accountant.

It becomes the lawyer.

It's like a bureaucrat that is incorruptible.

BETTINA WARBURG: If you take nothing else

away from this talk, I actuallywant you to remember that,

while blockchain technologyis relatively new,

it's also a continuation of a very human story.

TIM DRAPER: We are going through one

of the greatest transformationsin the history of the world.

Hang on for the ride.

This is going to be awesome.

This is bigger than the internet.

In my mind, this isbigger than the internet.

We are now entering afurther and radical evolution

of how we interact and trade.

NARRATOR: It took time beforethe finance and technology

sectors saw cryptocurrencyand blockchain as potentially

disruptive, while the USgovernment felt threatened

from the earliest days of Silk Road,

and maintained an aggressivelydefensive position.

[traffic noise]

STEVEN MNUCHIN: We are veryfocused on cyber currencies.

We want to make sure thatbad people cannot use these

currencies to do bad things.

[ominous music]

MAN: If you canestablish another payment

system via cryptocurrencies,that gives us less control

over putting sanctions on their economy.

No one can impose sanctions on Bitcoin.

It allows North Korea a lot ofleeway to move money around,

to collect money, to storemoney to do the things

that Kim Jong-un wants to do.

There's been talk about Iran doing this.

Obviously, Russia might start getting involved.

VLADIMIR PUTIN: [speaking russian]

MAN: It does complicate the narrative.

And this first step is somethingthat not only New York,

but DC should be paying attention to.

NARRATOR: In less stable nations,

cryptocurrencies provide a more urgent use

as a crisis currency thatcan help to circumvent

broken financial policy.

Venezuela is one such country.

And now to the continuingpolitical and economic crisis

in Venezuela.

REPORTER: With inflation through the roof,

with jobs, cash, food, and medicine scarce,

many Venezuelans have lostfaith in their politicians,

and they're increasingly lookinginwards, organizing themselves

in the hope of a better future.

GABRIEL: We have a very activecommunity of Bitcoin here.

It started around 2 and 1/2 years ago.

Many millions ofVenezuelans fled the country

because of economic turmoil.

They were scared.

Because we have capital controls.

We have hyperinflation.

The prices keep going up and up and up.

JORGE PEREZ VALERY: The IMF is predicting

that by the end of this year,Venezuela's inflation rate

could get as high as 13,000%.

LAURI LOVE: Bitcoin says,there's another way.

There's another way.

It's not going to inflatebecause we can't inflate it.

And that gives you some assurance.

That gives you incredible freedom.

MAN: [speaking spanish]

NARRATOR: Most cryptocurrencies,including Bitcoin,

are designed with a fixedsupply, and to be deflationary.

But Venezuela's government istaking all possible measures

to prevent further subversionof their economic power

by cracking down on miners and creating

a cryptocurrency of theirown that they can control.

REPORTER: The government has a plan

to pull the country out of a deepening crisis,

and it involves cryptocurrency.

Venezuela launched a newoil-backed digital currency

today.

This Bitcoin-esque virtualcurrency is called the Petro.

LAURI LOVE: Proving their fears of it

being too radical and revolutionary,

there's a attempt to put thegenie back in the bottle.

This is also a means toexercise control over it.

GABRIEL: When I found out about cryptocurrencies,

I could find my means to live here.

There are so many opportunitiesby doing cryptocurrency.

NARRATOR: Whatever the fate of cryptocurrencies

and their ability to disruptpolitical and economic power,

governments will likely fight back

against any attempt toloosen their grip on control.

Governments are threatened by this.

They're concerned about criminal activity.

Bad people.

Things like kidnappings beingpaid with ransoms of Bitcoin.

Bad things.

And there is kind of a long-term threat that

if something like Bitcoin can exist,

even if they shut this one down,now that proof of concept's out

there, maybe there could beanother one, and another one,

and maybe you can't put this idea away.

Hackers, they basically hadthis kind of idealistic vision.

NARRATOR: It's hard to pinpoint exactly where

and when the hacker movement got started.

Early hackers believed thatinformation and tools should

be free, and they openlyshared their work with others.

NARRATOR: The widespread proliferation

of open source technologies likecryptocurrency and blockchain

was exactly what hackers hadenvisioned from the beginning.

Hacker movements like the cypherpunks

were driven by their love of technology

and their strongly-held beliefs, from the right

to privacy to the freedom of information.

JOHN GILMORE: We all thoughtthat learning and teaching

about computer security was essential

if we were going to have networked computers.

It was important for privacy.

It was important for society.

MATTHEW GREEN: They said,maybe I could actually

build this kind of ideal civilization

where cryptography andcomputers can actually make

us more secure than we were.

This movement came a little bit out

of the political and alittle bit out of the tech.

It was the people working illegally

in the underground who'vemade most of the advances.

MAN: The liberal arts majorswhose only computer time

available was if they gummedup the locks and snuck

into the building late at nightbecause they weren't allowed

to sign up for this stuff.

STEVE WOZNIAK: I was pretty muchlike the rest of the hackers.

I felt that I was something.

The rest of the world didn'tthink microcomputers were

going to amount to anything.

I just thought I had a neat one for my house.

I'm going to show others.

I'm going to even help them build their own.

JOHN GILMORE: What Satoshiwas trying to do was say,

how can we make a currencythat won't be completely run

by the government?

And he tried to do itwith software, with code.

Released that software for free, and everybody

who makes bitcoins runs aversion of that software now.

NARRATOR: Some argue that thecomputer revolution could not

have happened without that hacker ethic.

MATTHEW GREEN: But thegovernment, years ago, they

decided that hackers were goingto break into every computer

and launch nuclear missiles.

And so they passed this incredibly strong,

vague, poorly-defined law calledthe CFAA, the Computer Fraud

and Abuse Act.

ALEX: Tell us about your case.

LAURI LOVE: I'm a international fugitive,

in the words of the Department of Justice,

because I'm perceived as beingrepresentative of this attempt

to undermine the authorityof the US government.

REPORTER: Lauri Love, who has Asperger's, is

accused of stealing huge amountsof data from US agencies,

including the Federal Reserve,the Department of Defense,

NASA, and the FBI.

American authorities want the 31-year-old

to stand trial in the Statesover charges of cyber hacking.

His lawyers say it could resultin a sentence of up to 99 years

in jail if convicted.

TOR EKELAND: The ComputerFraud Abuse Act, aka the CFAA,

has been called the worst law in technology.

And the courts are all over the place.

And it allows private partiesto essentially say, listen,

you violated our terms of service,

you've signed on to Facebook,you lied about your age,

bang, you've just committed a felony.

[ominous music]

Aaron Swartz gotprosecuted under the CFAA

for downloading a bunch of academic articles

out of basically a closet at MIT.

They went after him real hard.

REPORTER: The charges could have landed him

in prison for up to 35 years, along

with a million-dollar fine.

But with prosecutorspressing serious charges,

Swartz hanged himself Fridayat his Brooklyn apartment.

MATTHEW GREEN: The problem with these laws

is there's a lot ofprosecutorial discretion.

And so if the government wantsto go after somebody like Aaron

Swartz, they can do that.

And sometimes, you see people being extradited,

put in prison potentiallyfor years and years

for doing something that, if ithappened in the physical world,

we'd probably call kind of a minor prank.

TOR EKELAND: Lauri's a very interesting case,

because what he's alleged to have done

there is participate in an operation called

Op Last Resort.

So Anonymous hacked the UnitedStates sentencing guidelines

website and replaced thefront page of that website

with a game of Asteroids.

They didn't do any real harm.

What this was is this was a protest

of what happened to Aaron,and the abuses of the DOJ

in prosecuting computer crimes.

NAOMI COLVIN: When Aaron Swartztragically took his life,

there was a widespread sensethat US judicial system wasn't

working very well for peoplewho are involved in information

activism, or people whoare active on the internet.

NARRATOR: The internet saw therise of decentralized protest

movements, from Occupy and Anonymous in the US

to the Arab Spring in the Middle East,

where the internet was literally turned off

to squash the revolts.

As the internet became more centralized,

it became easier to disruptthese forms of protest.

But blockchain-based technologies

represent a new potentialfor decentralized protest

and the freedom of information.

AARON SWARTZ: There's a battlegoing on right now-- a battle

to define everything that happens

on the internet in terms of traditional things

that the law understands.

There are a lot of people,a lot of powerful people

who want to clamp down on the internet.

We can't let that happen.

It's a sort ofdisgusting and sick irony

that for allegedly being part of a protest

on those kind of issues, Lauri'snow facing exactly the same.

MATTHEW GREEN: Some peoplewho are security researchers

and ethical hackers, they say, well, I

want to poke at somethingbecause I'm curious.

And then, of course, there'sthe US government side, which

is a combination of, well,you could have done damage,

and, we're really embarrassedthat this was able to happen.

And sometimes, you see a huge overreaction.

TOR EKELAND: The Department of Justice

launched a bullshit prosecutionover some young kid,

and the full weight of the federal government

was brought against him.

And he killed himself because of it.

That's what should be punished.

But instead, we've got them trying

to throw somebody in jail for100 years who protested that.

--thank for coming on the program.

Thanks for having me.

How do you respond, in broadterms, to these accusations?

Well, what I'm hoping is ifthe extradition is refused,

I'll have the opportunity to respond

in court, which is theway these things are done.

The problem for me is there's been

no evidence provided over the three years

that I face these allegations.

INTERVIEWER: Are you a hacker?

LAURI LOVE: Yeah, Idescribe myself as a hacker.

A hacker someone who usestechnology, takes it apart,

and he puts it together in interesting ways.

And I also work promotingnew technologies,

such as blockchain technologiesthat could create a better

financial system.

TOR EKELAND: I think you're going

to see government always trying to control

any kind of technology that allows

for decentralization, becausethat's a threat to their power.

REPORTER: A judge ruled todaythat he can be extradited

to America to stand trial.

Lauri Love, who's 31 and suffersfrom Asperger's syndrome, now--

LAWYER: --Lauri's caseto the secretary of state

for an order for extradition.

We're extremely disappointed by that decision.

In fact, most of the written judgment

is all about the defense case,because the prosecution didn't

actually call any evidence.

It is my belief that it is not fair

or just that our boy, who'sgot mental health issues,

can be taken away from hisfamily or his support network.

Although he's lost today, this isn't

the end of the legal road for Lauri Love.

He still has the right togo to the court of appeal

to seek to have this decision overturned.

NARRATOR: While Lauri awaited a decision,

blockchain technology was developing fast,

and a new crypto assetexploded onto the scene--

Ethereum.

You are a platform that would be best--

Like a decentralized worldwide web.

REPORTER: Is there any--

OK, sorry.

My brain is smoking right now.

Give us a real-worldexplanation for what that means.

JOSEPH LUBIN: Bitcoin was a great application,

and we were all very excited about that.

We saw how powerful that first use case-- money--

could be.

Basically of the people, by thepeople, for the people money.

But the Bitcoin blockchainwas really just designed

for that one use case.

The entire Bitcoinnetwork is in the service

of this one application.

So Vitalik Buterin wrote some white papers,

and his key insight was,instead of putting a new pocket

calculator button at everynode of a peer-to-peer network,

why not put a full computer there?

And thus, Ethereum was born.

Ethereum basically asked a simple question,

which is, why can't we putprograms into the blockchain?

The blockchain can store data.

It can store transactions.

Why shouldn't it store programs?

And if we put a program into the blockchain,

why shouldn't it run atthe same level of security

as a bitcoin transaction?

LAURA SHIN: Ethereum is whatthey call a smart contracts

platform, which enables you tocreate more programmable money.

Smart contracts can disruptreal estate transactions,

the legal industry, things in insurance.

It's just much more complex processes

that you can run on Ethereum over Bitcoin.

Essentially, the technologyis a trust machine.

Everybody using it can trust it.

And so you can start building systems

that are different from the old systems.

BILL TAI: Civilization as we know it today is

a blip on a very long timeline.

Technology is a series of waves that

builds one upon the other withaccelerating speed and size

and depth.

You used to make computersout of things that

look like little light bulbs.

And that wave was totally changed

when it became littlegranular pieces that were

stuck on a piece of silicon.

That created the computer wave.

And then we had the phone system,

a very long physical wire.

When people figured out thatyou'd take the conversation

and chop it up into littlebits, deconstruct it

to its basic element, andthen flow those things

over the lines and reconstruct them,

they basically created thefoundation for the rule set

that became the internet.

So you could do everything.

Blockchain is the third wave of our lifetime

that is a totalreconstruction of behavior.

Identity, assets, governance.

Those are going to change.

NARRATOR: Blockchain's true believers

envision an entirely newepoch in human civilization.

Critics see deluded evangelismin the latest passing techno

fad, while some are just hoping to strike

it rich in the frenzy of crypto mania.

But whatever one thinks of this technology,

brilliant minds are hard at work,

inspired by blockchain's possibilities

and how it can be used to address the world's

most pressing problems.

BILL TAI: If you think ofthe power systems today,

think about what happenedwith Hurricane Irma blowing

through the Caribbean.

[wind howling]

Now you've got the nationstate of Puerto Rico, millions

of people that don't havepower for four to six months.

NARRATOR: The situation inPuerto Rico isn't unique.

The majority of the world's power grids

are centralized, and remainvulnerable to everything

from bad weather to cyber attacks.

DR. PETER LILIENTHAL: We're in this transition

from the old world of centralized power

based on fossil fuels with high emissions

to a future world of clean distributed power.

And the question is, how do we get there?

A microgrid.

And my definition ofmicrogrid is really simple.

It's any system that can stand on its own.

NARENDRA MODI: As the developingworld leaps billions of people

into prosperity, the world must turn to sun

to power the future.

SCOTT KESSLER: There's a really large interest

in microgrids as a way toelectrify the developing world.

So rather than install what would

be the traditional largeinfrastructure that connects

everyone, like the waythe US and other countries

electrified, you can start justby electrifying certain areas

in isolation.

These are sort of little grids, microgrids.

And what you need there issome element of control.

There has to be something there that's

balancing the amount of energy you have

and the amount of energy thatpeople are trying to consume.

What we can do is take control algorithms

and push them out into the blockchain.

Basically it becomes plug-and-play,

and as someone wants to jointhe microgrid, all they need

is one of these little hardwarenodes, and they're good to go.

Our first project's calledthe Brooklyn Microgrid.

It was an attempt to take what was

until then theory, somethingwe'd put in white papers

and PowerPoints, andactually have a real project

we can point towards.

SASHA SANTIAGO: The Brooklyn Microgrid

is in the middle of Gowanus and Park Slope.

This is perfect for a community solar setting,

so people on both sides of the pond

can participate in apeer-to-peer market here.

REPORTER: The Brooklyn Microgrid project,

a small power grid made up ofhouses on President Street.

It's using blockchain,the underlying technology

of cryptocurrency like Bitcoin,to decentralize and share

electricity.

SASHA SANTIAGO: So right now, we're

testing our hardware in about 60 houses.

So these are basically the small meter box.

Our technology is using blockchain

to count the electrons that isbeing put back onto the grid.

And we collectively pooleveryone's green energy source,

and we put it on a ledger, and let

everyone know in the communities,

guess what, this is the amountof energy that's been produced

in your neighborhood.

And if you want to buy energythat's local, that's green,

why not buy it from your neighbors?

BILL TAI: Blockchain allowsthe economic incentive

for every person that's got space on the roof

to stick a little solar generator on there,

or something else, and interconnect, and be

a supplier in a marketplace.

A peer-to-peer energy gridwhere all of the elements

were interconnected, and you'd have resiliency.

And the next hurricane thatblows through, part of the grid

might be gone, but you'd still be up and running.

NICK BEGLINGER: Even though I'ma climate guy for the last 10

years, I kept on reading about blockchain.

And we have quickly found thatit's not one particular area

that blockchain could reallyhelp implementing the Paris

Agreement.

But really, that there's a wholeplethora of different topics

one can and should go into.

SCOTT KESSLER: Blockchain is really

the perfect tool for the distributed energy

future we're moving towards.

MATTHEW GREEN: But there is a huge problem.

Bitcoin is using morepower than 158 countries,

which is not a good thing forcurrency network to be doing.

But it doesn't mean that thisis the future of cryptocurrency.

So I think the way weshould look at those things

is, when you give engineersa simple problem to solve,

or a straightforward problemto solve, they will solve it.

SCOTT KESSLER: That is Dare Henry,

and it's meant as a form ofcombining heat and computation.

So when you're running processes on a computer,

usually, we try to remove that heat,

whether it's through a fanor with some centralized air

conditioners.

Heat's usually a bad thing.

But if you flip that on its head,

and you try to run thecomputer as hot as possible,

and then you take that heat and use it

towards space heating and water heating,

we can actually increase the productivity

of our computation.

I'm a firm believer thatthe efficiency of the system

is only going to get better.

Right now, it's horribly inefficient.

I think the amount of energy being consumed

by these computers just to mine Bitcoin

is not a sustainable model moving forward.

I don't think what we have todayis where we're going to land.

NARRATOR: Energy and climate are not

the only real-world issues being examined

with blockchain-based technologies.

One of the biggest problemsfacing the average citizen

in the digital age is privacyand security, which at its root

is an issue of identity.

Here too, there are innovatorshoping that blockchain

will provide solutions.

[chatter]

MICHAEL SENA: Today, reputation and identity

is sort of bestowed uponpeople by a few main providers,

so Equifax being one.

MORGAN WRIGHT: Look, thisis the nuclear explosion

of identity theft opportunity.

Look, they've got names, date ofbirth, social security numbers,

addresses.

A lot of damage can be done.

More than 21 million Americanshad personal information

stolen from government files in a data breach

that was six times as largeas originally disclosed.

--big story.

Potentially tens of millions of Americans

are at serious risk of identity theft

again after this country'ssecond-largest health insurance

company, Anthem Insurance,got hit this time

by a massive electronic attack.

MAN: How does this continueto happen at, arguably,

the companies that should be thinking

about this kind of problem the most?

MICHAEL SENA: They have provenunable to securely protect

your data.

So all of your data is being stored

in one central place that isinsecure and easy to hack.

Your identity is now lost on the internet

amongst the millions of others.

Our system actually turns that on its head.

uPort is a self-sovereignidentity and user-centric data

platform.

What that actually means isthat you control your data.

No one else.

Basically, identity without middleman.

And so I as a user can justregister my own identity

and directly control it.

NARRATOR: With our personal data exposed--

and in some cases, beingsold to the highest bidder--

protecting our identity andeverything that comes with it

is more urgent than ever.

SEN.

DICK DURBIN: Mr. Zuckerberg, would you

be comfortable sharing withus the name of the hotel

you stayed in last night?

Um.

[nervous chuckle]

Uh, no.

[chuckling]

SEN.

DICK DURBIN: If you'vemessaged anybody this week,

would you share with us the names of the people

you've messaged?

Senator, no, I would probably not

choose to do that publicly here.

SEN.

DICK DURBIN: I think that maybe what this is all about.

Your right to privacy, the limits of your right

to privacy, and how much yougive away in modern America

in the name of, quote, "connecting people

around the world."

NARRATOR: While blockchain companies

attempt to address the issuesof identity and privacy,

the global refugee crisis has prompted

some of the largest and most powerful

humanitarian aid organizationsto pursue solutions

with new technology.

CHRIS FABIAN: I'm Chris Fabian.

I run a small team in UNICEFcalled UNICEF Ventures.

UNICEF is a huge 12,000-personorganization that advocates

for and pushes for the rightsof the world's most vulnerable

children.

And our team is a tiny startup within that.

We've been working on how we build up identity

in places for people who don't have an identity.

One of the things that we're testing now

is whether or not we can use tokens

to provide some de facto identity to refugees

or other unbanked people.

We're starting off with afew small tests in Ireland,

and hopefully, we're then goingto be testing that same token

in Lebanon and in Jordan.

[atmospheric music]

There are 55 million kids whoare on the move because of war

and violence, and those kids don't

have a sovereign governmentto issue an identity card.

So how do we make sure that they're

part of a global ecosystem,a global economy?

And you can't do thatwith old traditional ways.

You could imagine a scenario where

you have somebody who's traveledthrough Europe as a refugee,

and they started in Syria,and they ended up in Ireland.

If they're a teenager, they've probably

gone through five paper identifications

at each country.

But if they had a token thatcould inscribe each time they

went through a registration,like, hey, I did this,

I was there, then you wouldn'tneed to necessarily issue

a new ID each moment.

You have one number thatlinks you to your identity.

This shows that they had a history.

And you might then be morelikely to give them a job.

You know this person didn'tjust pop up out of nowhere.

And so for us, the token is an electronic version

of that existence trail.

Being able to count something that we know

is happening, being able to count it

in an authentic and auditable way,

and be able to do that publicly.

It's an accounting tool.

It's a ledger.

But if we can reduce the painpoints on the poorest people,

we give them a little bitmore time in their life.

And time is the most valuablething any of us have.

HOUMAN HADDAD: My name is Houman Haddad,

and I work for the UnitedNations World Food Program.

The World Food Program is the world's largest

humanitarian organization, andits mission is to end hunger.

We're in the Zaatari refugee camp,

which hosts 75,000 Syrian refugees who have

fled due to the conflict there.

Currently, we're in one of thesupermarkets that essentially

provides groceries tothe people who live here.

What is special about what isgoing on in this supermarket

is that all thetransactions are actually

authorized and recorded on a blockchain network.

It is through a projectcalled Building Blocks, which

is WFP's implementation of blockchain

technology towards humanitarian assistance.

[light instrumental music]

For the most part, this is a normal supermarket.

You walk in.

There is the usual groceryitems that you expect.

You pick them up, you go tothe cash, they are scanned.

But at the time that you want to pay,

instead of paying with a card or with cash,

you pay with your eyes.

That returns a special code, andyour entitlements on Building

Blocks are tied to that code.

So without having anyphysical device or a need

to memorize a password, the people we serve

can efficiently and effectivelymake their purchases.

What we've done with Building Block

is essentially taking allthis accounting portion

and put it on blockchain.

And because we're authorizingevery transaction ourselves,

we essentially have areal-time record of everything

that happens, so we're not as reliant

on third-party service providers, such as banks

and mobile money companies.

We believe blockchain has a lot of potential

to help WFP better do its work.

Some of the ideas are not fully developed yet,

but we have just started our journey.

We are doing a lot ofthings for the first time.

Everything is very new and exciting.

And we do want to move forward with blockchain.

NARRATOR: One area of global culture

that was completely upendedby the arrival of the internet

was the manufacture and distribution

of music and other media.

REPORTER: This freshman atPalm Beach Atlantic College

used to download songs fromhis favorite bands on Napster.

Now he thinks the musiciansare getting too greedy.

CHARLIE ROSE: Artists andthe recording industry

want the website shut down.

REPORTER: Federal court ruled Monday Napster

must stop allowing music fansto swap copyrighted material.

Napster users had downloadedan estimated 200 million songs.

CHARLIE ROSE: --is an action filed

by the legendary heavy metal group Metallica.

Hang on.

It's not about money.

It's about control.

It's really about the control.

MAN: We've all seen what'shappened to the music industry

with new technology.

INTERVIEWER: Can an artistsurvive on Spotify income?

I think that streaming--

I'm absolutely sure that streaming

will be the dominant way that artists

will get paid in the future.

MAN: They're not going to make any money.

MAN: What can artists do buttake what Spotify gives them?

MAN: 0.00006 of a cent.

I might have left a zero off there.

Is something like that nowhappening to movies and TV?

Yes.

Netflix has its own business model.

ANNOUNCER: Streaming video online.

WOMAN: Many people are gettingtheir content these days

on streaming services.

WOMAN: The movie industry is really

facing a crisis right now.

MAN: Being able to compensatethe rightful creators

is a big--

NARRATOR: A new model for thedistribution and compensation

for art and artists is badly needed,

and some believe blockchaincould lead the way.

[MUSIC - IMOGEN HEAP, "HIDE AND SEEK"]

IMOGEN HEAP: [SINGING] Mmm.

Spin me around again and rub my eyes.

Three years ago, I heard the word "blockchain"

for the first time, and I went through looking

what this thing was about.

[SINGING] When busy--

I feel like this blockchain revolution,

there's an opportunity for us torethink the music industry how

we would like it to be, so people

could do business easierwith our songs, and with us.

We did an early experimentwhere we did direct payments

using smart contract for thisone song called "Tiny Human."

You know, a kind of pay-as-you-use,

taking a little bit at a time.

[light music]

A Spotify or an iTunes has to deal

with 200 individual organizations

to send money to aroundthe world for one artist,

and that's crazy.

There's many applications which I

feel could spring out of this.

One of them could simply be, how could artists

give really easilytoward a disaster relief?

Then there's some acknowledgmentof that going to something.

So you actually become--

you become a beacon for whatyou stand for that's not

disconnected to the song.

[MUSIC - IMOGEN HEAP, "HIDE AND SEEK"]

[SINGING] Hide and seek.

One of the many positive things,I think, that came from Napster

is that there is this, look,you see what happened then

if you don't embrace change.

This is going to happen to you again,

but a million times worse.

[SINGING] --and seek.

I believe in the power of blockchain

to put something forward that's really

going to enable us to have aflourishing music ecosystem.

[SINGING] Oh, oh.

[cheering]

Thank you everyone, ah--thank you, everyone, thank you

for this amazing feeling.

[upbeat electronic music]

GRAMATIK: For me, it's very simple.

Trying to be financiallystable and independent, not

beholden to any gatekeepers and intermediaries,

and able to make music with 100% freedom.

In the beginning, I was tiedto some smaller label that

were trying to do it the old school way,

and I was very frustrated with that.

So I just ended up leaving andputting my entire discography

on Pirate Bay.

I just want to think about making good art.

Once you really realize what adecentralized technology means,

you can't think of the futurewith technology any other way.

You could tokenize anything, you know?

That's why ever since I found out

about blockchain and Bitcoinabout four years ago,

I've been waiting to utilizethis revolutionary technology

to change our industry.

I'm really excited to be able to be a part of it.

It's like stocks 2.0.

MAN: We are go for launch.

[upbeat electronic music]

NARRATOR: In November of2017, at a show in Zurich,

Gramatik launched the token for his own blockchain.

The token allows the buyer to share

in the revenue of Gramatik'sintellectual property,

creating a direct andequity-based relationship

between artist and fan.

GRAMATIK: The success of the platform

is way more important to methan the success of my token,

because the platformactually has the potential

to change the industry.

My token is just enabling me to make art.

That's what's most excitingabout the whole idea.

Being completely autonomous andfree to make your art the way

you want it without anybody controlling you.

That's what you dream about.

NARRATOR: Most of the investors are already

committed members of the cryptocurrency space,

so the question remains whetherblockchain technology is

a panacea or a case of wishful thinking.

REPORTER: AllegedBritish hacker Lauri Love

has been given the green light to appeal

his extradition to the US, wherehe's wanted for cyber hacking.

How are you feeling about it?

I'm really happy that we got this news

and not the other news that would mean I

would be getting kidnapped imminently.

So we're very thankful for it.

So all we're asking for in this appeal

is that the UK jurisdiction applies.

I've never been to America.

It's not that I've escaped from there

after committing some crimes.

Any crimes, if they were committed,

were committed in the UK, and wehave computer crime laws here,

and we have perfectly functioning courts.

So I'm just asking for what anybody else

in a similar position would expect,

and that's to be tried inthe courts of the country

where they live.

I'm happy to have my day in court

once I see some evidence against me,

because so far, no evidencehas been produced by the USA

about my involvement.

NARRATOR: Lauri's case receivedwidespread press in the UK--

REPORTER: The family are well-known locally,

and-- it would seem-- well-liked.

NARRATOR: --but saw littleattention in the US,

except amongst the technologycommunity and the more critical

political journalists.

BARRETT BROWN: They will over-indict

people to begin with, as theyhave done in Lauri Love's case.

Anyone who's indicted willgo through a certain level

of due process violation.

And anyone who's imprisoned in the US

will find that they haveno recourse to the courts,

although they're technically supposed to.

The prison authorities will work to stymie

the process of an inmate, forinstance, complaining about not

getting medication, beingheld legally in the shoe,

in the hall, for months on end.

Problem with the US justice system

is that it's one of those thingsthat no one actually seriously

asserts that it works properly.

LAURI LOVE: I'm facing being extradited

to a country I've never visited, and they'd

like to lock me up for 99 yearsbecause the US government has

stamped its mark on the internet while trying

to say that this is about freedom,

and trade, and nice things.

So we have a battle now.

REPORTER: No date has yetbeen set for the appeal.

[atmospheric music]

NARRATOR: By the end of the summer of 2017,

Bitcoin, Ethereum, and theentire cryptocurrency market

continues to climb to all-time highs,

blindsiding the establishment.

I don't understand what's behind Bitcoin.

I can't see any intrinsic value.

NARRATOR: Meanwhile, the Trump administration

intensifies the government'saggressive stance

on the internet and new technologies,

repealing net neutrality, aset of regulations intended

to maintain an open internet.

But several companies are fighting back

against excessive corporateand government control

of the internet using blockchain technology.

JOHN LYOTIER: If you looked atthis whole centralized system

we're living in, everythinggoes up and across the ISP,

and that's just not right.

That's really what we want to change.

We let people transmitinformation back and forth

without using the internet.

The internet itself is one giant mesh network.

It has centralized nodes that connect everybody

to each other.

But as soon as somebody canstart controlling that layer,

it's not a decentralized system.

But in our perspective, what we look at as

mesh is really much more of adevice-to-device communication

without having to go upto those central servers.

So my phone broadcasts signal,and your phone receives signal.

There's no internet, no ISP in the middle of us.

But we didn't quite realizehow much of a threat we were.

Not just to the telecom companies-- anybody

who's basically built their livelihood off

of the centralized system.

They're all threatened by thisnew decentralized ecosystem

that can evolve.

There's no need for a lotof these players and people

to exist in the first place.

That's really what thisdecentralized movement's all

about.

NARRATOR: While some lookto decentralize the internet

and exchange of information, others

look to decentralized systemsof financial exchange.

[traffic rumbling]

MICHAEL OVED: Finance proliferates

into all of society.

But currently, the way to trade assets

is through centralized exchanges.

Centralized exchangesare run by a third party.

At AirSwap, we're building a decentralized exchange

which allows you to just swapvalue with anyone globally

on a peer-to-peer basis.

These projects are a littlebit different than most, maybe,

start-ups.

For a token launch, you need a group of people

to be behind you to get this thing through.

NARRATOR: In October of 2017, AirSwap

launched its own token sale,otherwise known as an ICO.

An ICO is an initial coin offering,

which takes its name fromthe standard IPO, when

a company takes itselfpublic on the stock market.

An ICO will allow the publicto buy into the company

directly, and potentially provide

the company with much-needed financing

and support in order to survive.

MICHAEL OVED: Been at this for72 hours straight, actually.

The past three days were power naps.

It's like finals week in collegeor anything super intense.

NISSA SZABO: So the sale opens in 15 minutes.

We're just preparing the communication

that's all going to go out right at that time.

We'll be sending to email, social--

you know, Twitter, Facebook--as well as the Telegram channel.

Hey, someone's claiming they're a staff member

and they're not.

We should ban them.

"J Sitio."

I got it.

Somebody is posing as us.

And they're asking people tosend-- to contribute here.

MAN: There are still scammers in the room.

Take them out.

Yeah, I'm trying.

MAN: Can we--

WOMAN: Can we block them?

MAN: Yes.

In AirSwap Official.

Announce that we're being flooded.

I don't know if we can.

MAN: What was going onthere are two Google ads--

just some more scam websites.

Those are fake.

And then that's the real one.

We just need a single source of truth

for a list of offending sitesso we can track these things.

MICHAEL OVED: I mean, these are the same kind

of people that are justscamming people around the web.

Every token launch in thelast 12 months or something

will have a problem withpeople trying to steal funds

from the users, the customers.

There's tons of accounts.

I'm banning all of them.

MAN: How do I--

MAN: This is only going to get crazier.

MAN: Yeah, this is fucked up.

[dramatic music]

MICHAEL OVED: And now we're in the main sale.

People are just anxious right now.

They want to get in.

We actually thought we wouldget about 5,000 submissions.

We ended up getting 18,000 in 24 hours.

So that's about $12million the current price.

People are not popping champagne bottles today.

Today is not the end game.

It's really just the beginning.

[ominous music]

MARK JEFFREY: Hello?

How you doing?

Hey, did you change something?

MAN [ON COMPUTER]: No problem.

MARK JEFFREY: There we go.

Much better.

MAN [ON COMPUTER]: I justfinished watching the video

that you sent along.

Looks really cool.

Oh, cool.

Thank you, man.

Appreciate that.

In the developing world, people have no 911,

so we're looking at usingcryptocurrency, tokens,

the blockchain world, in order to create

an economic framework fordecentralized 911 worldwide.

So we created a currency called Guardium.

So you can think of it as thisnew worldwide public utility.

MAN [ON COMPUTER]: In the video, it

said that you guys were tryingto have a token sale November

15th or something, but that's changed now.

We did.

We pushed it back to January 22, just

for a whole bunch of reasons.

Technical volatility of the market

was just crazy at the time, and there

were like five or six things.

Yeah.

NARRATOR: And now everyone in the world

knows the words Bitcoin and cryptocurrency.

What had been dismissed since its inception is

a global phenomenon, a kind of crypto land

rush, both by financial investors and start-ups

creating their own ICOs.

And with that rush comesmassive speculation and hype.

MAN: Why not make a buck?

Check out crypto.

Dash digital cash.

MAN: Oh, please, please, please.

CHARLES PAYNE: Make no mistake.

This is the Wild West.

There are now 1,300 cryptocurrencies,

not to mention any number of companies

that claim to be in the blockchain business.

MAN: Initial coin offerings.

Obviously a lot ofopportunists out there either

creating their own bespoke coins,

or just essentially tryingto rebrand themselves

as a blockchain or Bitcoin play.

MAN: We have several examples where

people are trying to adopt the lingo

of Bitcoin and other cryptocurrencies

to try to enhance the valueof stocks that have nothing

to do with it.

NARRATOR: Celebrities jumponboard the ICO craze.

Everyone from Paris Hilton--

That's hot.

NARRATOR: --to Floyd Mayweather.

FLOYD MAYWEATHER: What's up?

It's the one and only, yourman Floyd "Money" Mayweather.

You see right there?

Get my card out.

My Centra card.

I'm doing big things.

MAN: And this is the strange thing

that I really don't understand, is

in the midst of news of this lawsuit,

the token price has gone up.

[cash register ding]

One thing's for sure.

We're in a really crazy market right now.

There are some really interesting things

that only these kind of distributed

decentralized systems can do.

But people are not necessarilybuying these currencies

because of the tech.

They're buying them becauseof other factors, like money.

NARRATOR: This flood of ICOs and speculation

suggests that cryptocurrenciesand blockchain-based

technologies will likelyrequire some form of regulation

in order to survive.

Companies like Omega One,another decentralized exchange,

are trying to navigate this unstable terrain.

MAN: I don't know about Omega One.

[chatter]

ALEX KEEGAN: So he's actuallyprobably putting on, supporting

through Omega One, and watching the exchange

to see if he can see it happening?

MAN: Yeah, exactly.

MAN: There's no doubt.

ALEX KEEGAN: The regulatory environment

is pretty uncertain.

MAN: He's got his two monitors open.

Basically, trading cryptocurrencies

is really dangerous and really expensive.

There's an interesting dynamic where

it's hard to provide goodprotections to token holders

because there isn't a regulatoryframework for that exact thing

yet.

A lot of what people have done, I think,

is just try to create no legalobligation to a token holder.

So at a high level, you see regulatory reactions

that make sense, from different countries.

In China, they want to crack down on Bitcoin.

And they're a situation where, much more

than it is the case in the US,this ICO market got really hot.

So we already know that in the last few months,

China has banned local bitcoin exchanges

and also cracked down on ICOs.

SKY GUO: The Chinese central government,

they fear that becauseit's kind of decentralized,

that they cannot fully control it,

that it may cause financial crisis.

The technology itself, of course, it

needs innovation and progress.

But it also needs some kind of regulation,

because right now, the ICOplace is full of scammers.

ALEX KEEGAN: In the US, this obviously

is a thing that needs some kind of regulation.

There is a question of which regulatory body is

going to regulate which things.

If a utility token isn't a security, what is it?

LAURI LOVE: There are attempts to understand

in the traditional economic, government,

legal frameworks, what is this?

--then some of them lookkind of like currencies.

Is it a currency?

Is it an asset?

Maybe that's a commodity.

Do you pay capital gains on it?

And how can we stop thethings that we don't like?

But fraudulent tokens don't help people.

NARRATOR: It's clear that whether or not

one believes in the validityof blockchain technology,

it faces many obstacles, andquestions remain unanswered.

Will blockchain really help solve some

of our most pressing issues?

Will cryptocurrency survivetheir inevitable regulation?

It's still too early to know for certain,

but that's not stopping anyonefrom forming an opinion.

MAN: We have these criteria fordetermining what a bubble is.

Bitcoin is a bubble.

It's certainly a bubble.

But is it a bubble?

Bring up the chart here.

Here's the bubble in the making.

WOMAN: We could be in a bubble.

MAN: I think it looks like abubble, smells like a bubble,

acts like a bubble, and feels like a bubble.

Bubble.

MAN: Bubble.

Bubble.

It is a bubble.

Bubble.

Bubbles.

Bubble.

WOMAN: Bubble.

MAN: Bubble.

MAN: Bubble.

WOMAN: Bubble.

MAN: Clearly a bubble.

MAN: The tulip bubble is the first and largest.

Bitcoin has now supplantedthat as the largest

financial speculativeepisode in human history.

My name is Mr. Bubble,and you can watch me pop.

MATTHEW GREEN: Now, the questionis how much of that value

is going to stick around.

If there's a correction, will people

run off and find other things to do?

It's not really clear what's going to happen.

But I think a lot of thisstuff is going to go away.

There's going to be a lot of wreckage.

In the '90s, we suddenly had theordinary person start getting

access to the web, and allof these new technologies

and new companies popped up.

REPORTER: For the customer,Amazon only exists

on the computer screen.

And then there's the boss, Jeff Bezos.

What kind of kid were you?

I was nerdy.

That hasn't changed, by the way.

[chuckles]

REPORTER: Maybe it was his intensity,

or maybe it was the way he talks.

Listen to the way he describeshis company's business plan.

We believe that this is acritical category formation

time.

MATTHEW GREEN: And everyonekind of overestimated.

They said, well, the internet'sgoing to be the future.

We're all going to bedoing all of our shopping

and all of our communicationover the internet by tomorrow.

REPORTER: If you'd bought $1,000worth of Amazon stock in 1997,

it would be worth between$30,000 and $60,000 today.

Is this investing, or is it gambling?

Right now, with the frenzy we've had,

to me it feels much more like gambling.

Because it's crazy.

Well, I don't find it rational,

to be honest with you.

It went up almost 1,000% last year.

When have you seen anything comparable?

MAN: Nothing.

MATTHEW GREEN: And so allthese companies arrived,

and of course, immediately,there was a huge bubble.

Has the 1990s boomshattered old assumptions

about how the economy works?

REPORTER: But investors keep flooding in.

MAN: It's not going to stop.

But what you could have is a decline

in these stocks of 50%, 75%.

[bell ringing]

REPORTER: Closing bell mightas well have been an alarm,

so savage was the selling.

A points drop never beforeseen on the US market.

MATTHEW GREEN: And 90% ofthem, 95% of them all failed.

Looks like the bubble burst.

BART SIMPSON: Bubbles can burst?

MATTHEW GREEN: But thething about that, obviously,

is that it didn't end up thatthe internet was worthless.

We are doing our shopping online.

REPORTER: And it's gettingreally nasty out there,

it seems to me.

The Barnes & Noble bookstore is so big,

it makes Amazon.com look tiny.

MATTHEW GREEN: It just took a little bit

longer than the people whohad originally visualized

this thought it would, and maybethere was a little exuberance,

and so now we're seeing that actually happen.

Yeah.

I have a word that I use to describe

the tendency of markets tobecome bubbles and pop and then

become bubbles again.

The word that I use todescribe that is capitalism.

They're all in business to make profit.

Of course they make a profit.

And it's a good thing.

That's the incentive thatmakes capitalism work.

[atmospheric music]

NARRATOR: As cryptocurrencyvalues continue

to soar to unprecedented heights,

there's widespread speculationabout the future of blockchain

technology.

The opinions are sohyperbolic and contradictory,

it becomes almost impossibleto parse fact from fiction.

VINAY GUPTA: So you get upto kind of where we are now.

We're sort of midway through the process.

Bitcoin is well-establishedas a reality.

Everybody's comfortable with Bitcoin's existence

to some degree.

What is it?

It's a bank account that storesmagic internet money that

comes from the centralbank of the internet, which

is a decentralized database which is everywhere

and nowhere maintained by a bunch of people

you don't understand.

[chuckling]

But the funny thing is that if I describe

to you how your governmentworks, it's even worse.

So every four years, we hold apopularity contest regionally.

We pick the person that ismost likable on television,

more or less regardless of their values.

We know nothing about them, so they could

be a person playing a role.

And then we assemble these people

into large groups that get to decide who lives

and who dies every day.

So don't assume that becausethe new stuff is weird,

it's any weirder than the old stuff.

The old stuff is just weirdstuff you got used to.

[crescendo]

REPORTER: How do you respond in broad terms

to these accusations?

LAURI LOVE: It's difficult to face

very serious allegations for three years

and not have any due process.

The issue is, if I were tobe extradited to America,

there'd be no day in court.

REPORTER: Can you get your headround this figure of 99 years?

LAURI LOVE: There's very poor conditions

in US prisons for people withmental health difficulties.

I think that I would be atrisk of dying, unfortunately.

REPORTER: That's a seriousfear for you, isn't it?

Do you have any steer from your legal team

about what the outcome ofthe extradition hearing

is going to be?

LAURI LOVE: I would hopethat the judge has enough

to make the correct decisionto refuse the extradition.

[ominous music]

[disco music]

[cheering]

CROWD: [CHANTING] Lauri!

Lauri!

Lauri!

Lauri!

TOR EKELAND: Who's the next Aaron Swartz?

Who's the next Lauri Love?

The ones who sincerely wantinformation to be free.

In a certain sense, the more things change,

the more things stay the same.

NARRATOR: The battle lines are drawn

between the fight fordecentralization and internet

freedom and centralized systemsand institutional control

with no clear path forward.

VINAY GUPTA: Right now, there's no way

of figuring out how everything in the world

works without having some kindof centralized governance.

The question is whethercentralization of functions

turns into centralization of power.

The unfortunate truth isthat centralization is often

very efficient.

And often, what centralization does

is it pulls people up beyondwhat they would do otherwise.

But what blockchain provides is a way

of getting hundreds ofmillions of individual actors--

whether they're people, companies, agencies,

charities-- all to cooperateon the same global databases

without requiring there tobe a centralized authority,

and that is more or less unprecedented.

It's a technology that changes the way

that we govern ourselves.

And the hope is that the blockchain

will allow people to run their lives in a way

where they're not constantlybeholden to bureaucracies

or monopolies.

If we've got a fair world in which we

have a genuine accountability, where

we can see who the bad actors are,

everybody can see what's happening,

and everybody is responsible, this

will produce a better world.

But if you get decentralization where

nobody can see what's goingon and nobody is responsible,

you've got a worse world.

So we've got to thinkreally carefully about what

it is we're trying to stop.

And what we're trying to stop is simple.

We're trying to stop the abuse of power.

This is the second part ofthe decentralization story.

And the world is changing.

NARRATOR: Lauri must now waitfor the High Court's decision

on his appeal that wouldallow him to avoid extradition

to the United Stateswith no guarantee of when

that word will come.

And at the same time, themarket value of Bitcoin

and other cryptocurrenciescontinues to soar,

fueling both the evangelists--

You think we have volume in Bitcoin now?

[chuckles]

NARRATOR: --and naysayers.

There is all this hype aboutblockchain, saying, OK, maybe

Bitcoin and cryptocurrenciesare a bubble or a fad,

but blockchain is reallya revolutionary industry.

It's been around for 10 years.

The only application, just a bunch

of cryptocurrencies that are a scam.

MAN: --markets I've ever seen.

MAN: --and this is just abubble, as several of your--

ALEX: So where is this all going, John?

It's still an experiment in process.

I think we're going to see a lot of motion

in different directions.

We're going to see evolution,and chaos, and an arms race.

Some governments will try to co-opt them.

Others will fight it tooth and nail.

BILL TAI: You can feel the energy.

The internet and decentralization,

and the ability forinformation to flow freely

across communities, is redefining things

because you present a fabricwhere everybody knows what's

going on if they want to.

IMOGEN HEAP: The future,it needs to be transparent,

it needs to be fair.

We're in a global time.

But the systems aren't really coping very well

with this phenomena.

We have to reinvent ourselves.

VINAY GUPTA: In this kind of field,

there's always going to bepeople trying to innovate

and people trying to standardize.

And the struggle between theinnovators and the standards

people is always going to be there.

But if you can't innovate, you're

rolling backwards every day.

The blockchain has existedfive years ago today,

and in five years, will bethree completely different

generations of technology withtotally different capabilities.

LAURA SHIN: Here we have thistechnology that is really

all about decentralization.

But will we end up with thisdecentralized blockchain world?

Whether or not that will actually pan out

is a big question.

CHRIS FABIAN: Humanity always finds a way

to revert to its lowestcommon denominator, which

is kind of greedy, and nasty, and fierce.

But when we were all on theinternet at the very beginning,

that was amazing, and there was a moment

where that thing was real, and pretty pure,

and wasn't co-opted.

I think we have that same thingin the space of blockchain

technology in general.

At least for a moment, I think we can

use it to do something good.

NARRATOR: As many predicted,the cryptocurrency market

pops, losing over half thevalue of 2017's all-time high,

with Bitcoin plummeting from$20,000 to below $7,000.

While many abandon ship, the true believers

hold course, firm in their resolve

that there's a future in blockchain technology.

MELISSA LEE [ON TV]: The Bitcoin bloodbath

continues as the cryptocurrencycollapses to a critical level.

How bad could the carnage get?

Our Bob Pisani's at the NYSE with the latest.

Hi, Bob.

BOB PISANI [ON TV]: Oh, thecharts are ugly, Melissa.

It was another rough day for Bitcoin,

which has gone on a complete round

trip from a little over$9,000 at the end of November

to $20,000 in mid-December--remember that-- and all the way

back down.

This is what technicians calla head and shoulders pop,

and it's a very negative--

J. CHRISTOPHER GIANCARLO:I'm the father of three

college-aged children--

a senior, a junior, and a freshman.

During their high school years, we

tried to interest them in financial markets.

We haven't been able to piquetheir interest in the stock

market.

I guess they're not much different

than most kids their age.

Well, something changed in the last year.

Suddenly, they were all talking about Bitcoin.

They were asking me what I thought,

and should they buy it?

One of their oldercousins, who owns Bitcoin,

was telling them about itand they got all excited.

And I imagined that maybemembers of this committee

may have had some similar experiences

in your own families of late.

It strikes me that we oweit to this new generation

to respect their enthusiasmabout virtual currencies

with a thoughtful and balancedresponse, not a dismissive one.

My 30-year-old niece, whobought Bitcoin years ago,

and she's an HODL, shesays, I'm going to own it.

I don't know what's going to come of it,

but I want to hang onto it.

And she's not a fraudsteror a manipulator.

She's just a kid, and believes in it.

And I was fascinated talking to her.

And I think she representsa lot of folks that think,

there's something in this.

I want to hold on to it.

[traffic rumbling]

[atmospheric music]

[applause and cheering]

REPORTER: How do you feel?

We're very happy and relieved, and we're

very thankful for the HighCourt, for the judges,

for their wisdom and discernment.

I'm thankful for all of the support

that we've had without which I'mnot sure I would have made it

this far.

This decision obviously affects my life.

But the reason that I've gone through this ordeal

is not just to save myself frombeing kidnapped and locked up

for 99 years in a countryI've never visited,

but it's to set a precedentwhereby this will not happen

to other people in the future.

You know, as we saw with theearlier part of the story

about the internet in general, it was great,

and people who make a lot of money

from things not being greatcame over, and took it over,

and recentralized it, andmonetized it, and it was bad.

The mathematics is on our side.

What's not on our side is human nature.

You can be bound by the system,or you can mold the system

and change it.

And it's incumbent upon usto embrace the accelerated

pace of change, because powerand institutions have inertia.

They will use the new technologies

once they understand themto solidify their power.

But if the internet allows people

to reach their full potentialwith cryptography, with Bitcoin

and blockchain, then we'll win.

[upbeat electronic music]

One, two!

One, two, three, hey!

Hi, Alex!

Hi, Alex!

We're celebrating not getting extradited!

[laughs]