Original subtitles

So here I have two devices and I will transfer one dollar

from this device to this device instantaneously.

Enter the amount.

And send.

I'm seeing the transaction now.

And there it is.

What you just witnessed is what looks like

a standard financial transaction.

Money was transferred electronically

from one account to another.

But while it appears like an ordinary bank transfer,

it may perhaps be the most revolutionary technology

you're likely to see in your lifetime.

This technology is called Bitcoin.

MAGIC MONEY: THE BITCOIN REVOLUTION

Subrip: Pix

Money makes possible the exchange of many different

goods and services among many different people.

Wherever we go, we see money being used

as a medium of exchange.

Money is at the core of our existence.

Everyday we transact with one another.

Currently almost all of our daily transactions

involve a third party.

A bank, credit card company, or remittance provider.

And ultimately it's these institutions that

carry out the transaction on our behalf.

This is until the invention of Bitcoin.

Bitcoin is truly one of the most important inventions

ever in the history of humankind.

That's how big of an impact it's gonna have on our lives.

And it sounds really difficult and complicated

and hard to understand hearing about it.

If you'd only heard about email it would sound difficult

and complicated and hard to use.

Bitcoin is literally easier to use than email.

So what exactly is Bitcoin?

Well for starters, Bitcoin isn't actually a coin.

Bitcoin is a new form of money.

A currency that lives solely on the internet,

one that some have even called magic internet money.

I think part of the confusion is that Bitcoin

is actually two different things.

It's both a currency and a payment network.

And we've never had one thing that's

both of those at the same time.

So the dollar is a currency, but it's not a payment network.

Paypal and Visa are payment networks,

but they're not currencies.

Bitcoin is both of those things at the same time,

but it has this other property, and that other property

is that it can instantly be teleported anywhere

in the world just like that almost for free.

And there's nothing that anybody can do to block

these teleportation's, there's nothing anybody can do

to intercept it, and if you're careful

about how you use Bitcoin you can do these

teleportations anonymously.

So with a push of a button, you can pay

anyone in the world or receive payment

from anyone, anywhere in the world.

In the aftermath of the global financial crisis

an author using the pseudonym Satoshi Nakamoto

posted a nine page document onto an online forum.

The document titled Bitcoin: a Peer-to-Peer

Electronic Cash System would soon become the building block

for what is today the first fully working concept

of decentralized money.

These are the daily candles of Bitcoin just in the

backdrop, but I want to talk about these trend lines.

You've seen them on other presentations,

even earlier today.

I started out working at Bear Stearns back in 2007,

so about a year and a half or so before the financial crisis

really started to hit.

And after Bear Stearns I joined JP Morgan, where I became

a VP and that was my last job.

All of these jobs were either mid-town or down-town Manhattan.

Tone Vays is a Wall Street veteran.

A former VP at JP Morgan, he now spends his time studying

and educating audiences about Bitcoin.

Bitcoin is generally difficult to explain.

You want to try and break it down as simple as you can.

So the simplest way is basically it's like a message,

it's a digital message that you're passing.

And normally we're all used to computers.

We're all sending emails, we're all sending pictures,

but you're always sending a copy.

Anytime you hit the send button in a computer

you always retain a copy, you always retain the original.

And when it comes to financial transactions, you hit

the send button and you have an intermediary, the bank,

that is moving money from one account to another.

And this is the problem that Bitcoin solved.

It was able to take something digital and when you hit

the send button, you're not actually sending a copy,

you're actually sending a digital object.

At It's core Bitcoin

is basically a new monetary system.

However Bitcoin is unlike any other system we've seen

in the past because it isn't centralized in one place.

This decentralized nature of the Bitcoin platform is one of

the things that make it so unique and world changing.

We're all familiar with Paypal

or Visa or bank of whatever.

All of these traditional services that we're used to

control who's allowed to have an account, who can send

money to who from what country's users can send

money to other country's users.

With Bitcoin there is no entity that's

controlling any of that.

There's just this software protocol that anyone can write

software to interact with and then anyone can install

that software on their phone or on their computer

and once they have the software installed they can now

interact with anyone else anywhere in the entire world

that's also using the Bitcoin software.

This software that runs the Bitcoin protocol

is commonly called a wallet.

A digital purse which stores and allows the holder

to move Bitcoins from one wallet to another.

The Bitcoin protocol is open source,

meaning that the programming code is

freely available to add to and redistribute.

In this way, similar to anyone being able to add a new

website to the world wide web, programmers are able

to add new products to the Bitcoin network.

We have Jason for whom this is very late evening

because he is in Australia and we're about to do

Jason's first Bitcoin transaction over Skype

as our medium, so everyone can see how quick and easy it is.

On my end I will hit send.

And Jason is gonna hit request.

So when he hits request, a QR code should have displayed

in the middle of your screen.

And he's gonna put it up the camera of Skype so I can

scan it with the camera in my cell phone.

Alright I see the QR code, my phone is trying to scan it

and there it is.

I scanned it.

So I feel kinda generous, let's send Jason five dollars.

So I have just sent Jason five dollars in Bitcoin

and let me know when it's registering on your end

that you have five dollars worth of Bitcoin.

And there it is.

Okay so that took about 10 to 15 seconds.

Bitcoin enables users to send and receive money

instantly without the involvement of a third party.

This digital breakthrough allows the user to effectively

become their own bank.

This is a complex idea to handle, but the possibilities

of this new bank-less currency are enormous.

With the exception of actually handing physical cash

to you, generally we have to rely on third parties

for lots of different payments, be it credit cards

or wire transfers internationally or even sort of

keeping cash under your bed,

storing large amounts of cash we use banks.

Bitcoin allows us to do all of those things

without any third parties.

So in that sense we can be our own bank,

our own payment system,

our own international wire system,

our own remittance system,

we can do all these things without relying

on any third parties.

That's what Bitcoin allows us to do.

Before Bitcoin all of these companies like Paypal and Visa

and Bank of America and, you know, any business, they had

a ledger that kept track of their account balances.

So Paypal has a ledger that keeps track of

who has how much money in each account

and that ledger is stored on Paypal servers

in Paypal's data centre somewhere.

And before Bitcoin, people thought that it

was impossible, the mathematicians

and computer scientists

thought it was impossible to have consensus

on a distributed ledger like this.

But what Bitcoin did is came along and figured out

how to keep track of this ledger

of who has what Bitcoins.

But instead of the ledger being on one data centre

it's on everybody's computer across the entire planet

that's running the Bitcoin network including

my laptop here.

I have a full copy of the entire Bitcoin ledger.

This public ledger known as the block-chain

is what could make Bitcoin a financial game changer.

Bitcoin is what is known as a cryptocurrency

meaning that it's a digital currency in which encryption

is used to regulate the creation of new units

and verify the transfer of funds.

New Bitcoins come into existence

through a process called mining.

A miner is a person or entity who runs a very powerful

computer in an effort to solve a complex mathematical

puzzle known as a block.

Miners around the world compete to solve or close a block

and are rewarded with newly generated Bitcoins

if they're successful.

All transactions that travel though the Bitcoin network

are pieces of this complex mathematical puzzle.

So when a miner solves a puzzle, they're actually

verifying the integrity of each and every transaction.

Welcome.

This is one giant abandoned recycling plant.

We've got incinerators over there, those two big silos.

Right around this wall we have

a megawatt worth of solar panels.

It's a lot.

Um that's about as much as what we consume.

So we're gonna be able to offset

our electrical costs completely.

This is a work in progress but a Bitcoin mine is a group

of computers that contribute it's processing power

to facilitating Bitcoin transfers

and the security of the network.

Yeah it is one big super computer and all of these

individual computers are kind of throwing guesses

at this mathematical problem.

And it's a very difficult problem,

it takes lots and lots of computers to guess it.

Once that guess is correct, that is sent to all the rest

of the computers and with that answer they record

all the transactions that have been done up to that point.

It's a very secure system for facilitating transfers,

recording transfers, and making sure that no kind of

shady work has been done.

Because there's some methods in financial transactions

where you can double send and this whole block-chain thing

is one great method of making sure that doesn't happen.

Say if Alice wants to send Bob an email.

What would happen under the hood is that along the path

of the email across the network, her email gets copied

in many places of the network and eventually the final copy

will be relayed to Bob.

That's how email works, that's how digital transfers work,

and that's how it should work for the majority

of digital transfers.

That's well and good, however in the case of money,

that would be disastrous if that were to be the way

that money was transferred digitally.

You don't want copies of the same

dollar bill to exist on the network.

That would ruin the scarcity premise of money.

And so this was the problem that Satoshi Nakamoto

tackled with the creation of Bitcoin.

And so what happens with Bitcoin on the Bitcoins block-chain

is that when Alice wants to send one Bitcoin to Bob,

she creates a transaction and that transaction gets

copied across the entire network.

However this is different than a single email as

that transaction has embedded in it instructions

to the rest of the network that says, from here on out

control over this Bitcoin is now conferred to Bob

and the rest of the network honours that.

One time I realized that Bitcoin is really difficult

for people to understand is I spent the whole evening

explaining Bitcoin to a friend of mine and then I got

home that night and she posted on my Facebook page

and she goes, yeah I was thinking more about Bitcoins

and you were explaining Bitcoin mining.

Does that mean that Bitcoins are originally underground?

I realized that Bitcoin's a difficult concept

for people to understand and especially Bitcoin mining

as well because Bitcoins are not originally under ground.

For new users Bitcoin

can be a difficult concept to understand.

Bitcoins aren't physical

and they certainly aren't underground.

However, there are some interesting similarities between

Bitcoin and a precious metal that is found underground.

Gold.

Gold has been money and a store

of value for thousands of years.

Today gold is mined all over the world.

The amount of gold that can be extracted from the ground

decreases over the life of a mine until eventually

the mine is exhausted of all of its gold.

Bitcoin are also mined in a similar fashion.

The Bitcoin algorithm is programmed so that the reward

for mining new Bitcoins is halved every four years

until the year 2140 when all Bitcoins

will have been deemed to have been mined.

Perhaps the mysterious creator behind Bitcoin

was trying to mimic the attributes of gold

almost as if to create a digital gold coin which could be

divided and then sent instantly around the world.

The creator of Bitcoin whoever he is was a really, really,

really smart guy and he obviously liked maths a lot.

And he sat down and did some calculations and thought

to himself if everybody in the entire world were to start

using Bitcoin, how many Bitcoins would we need in order

for that to be able to accommodate everybody using

Bitcoin for this.

And each Bitcoin can be divided down

to 100 millionth of a Bitcoin.

If everybody in the entire world were to start using

Bitcoin as their money, the smallest unit of the Bitcoin,

which is called the Satoshi, it's 100 millionth

of a Bitcoin, would still be worth less than one US penny

if the entire world were to start using Bitcoin.

So who is this Satoshi Nakamoto?

Two years after publishing the white paper for the peer

to peer electronic cash system, this mysterious figure

vanished never to be heard from again.

The only clues to his or her identity can be found

in the white paper.

Some speculate he or she is of British origin

due to the writings containing some British slang.

Others believe that rather than being one person,

Satoshi was a group of hackers working in concert

to create a new monetary system which would

decentralize money as we know it.

It's very interesting who Satoshi is.

There's lots of speculation especially

among the very early people in Bitcoin.

But what difference does it make

whether we know who created Bitcoin.

I don't know that it makes any difference.

There's lots of stuff that we use that we don't know

who created it and yet it gives us a lot of

advantages in our day to day activities.

I have no idea who Satoshi is.

We know very little about Satoshi and so he could be

at an event, someone we know,

someone I've spoken to, he could be a friend of mine

for all I know.

I don't know who it is and I don't know if we'll ever know

but it's a fun game.

Am I Satoshi?

I don't think I'll answer that one.

Regardless of the true identity of Satoshi,

what he or she has invented could have profound

effects on how our world evolves into the future.

Because Bitcoin enables the user to act

as their own bank, in essence it frees the user

from the traditional gatekeepers to their wealth.

We all use keys in our daily lives.

Keys allow us to access and control our valued possessions.

They also protect our valuables from being stolen.

Take your car as an example.

Holding the keys to your car

allows you access to it whenever you wish.

But suppose you've had a few too many to drink

and your loyal friend confiscates your keys from you.

The car may still be yours, but now you no longer

control it and must hail a ride home.

The same can be said of our finances.

Although you may have the debit card

and password to your bank account,

the funds aren't directly in your possession.

Every time you make a withdrawal or transfer from

your bank account, the bank is actually acting

on your behalf and moving the funds for you.

This is where bit is fundamentally different.

Bitcoin enables an individual to hold

the private keys of their own wealth.

So with pretty much every asset that we have out there

we don't directly hold the dominion or control

over that asset.

For example the Royal Bank of Scotland, they had 700,000

accounts, ATMs, just went down for the weekend.

Nobody could access ATMs, couldn't get money out.

You have a credit card or a debit card and it gets

turned off because of suspected fraud or you did

a charge in an unusual location.

Well guess what, the credit card company holds

those private keys, they get to make the choice, not you.

Bitcoin is very, very different in this regard.

It is built on public private key encryption.

And what that means is that you send Bitcoins to

the public key and then in order to send the Bitcoins

you have to be able to sign with the private key

where the Bitcoins currently reside.

And that literally is a number,

that private key is a number.

Bitcoin, nobody gets to turn it off.

If you have the private key,

you get to access it and use it.

With your Bitcoin wallets that there's associated

what are called private keys, okay, and these are

literally what they sound like.

They are private keys that can open and unlock your,

access to your funds.

But let's be clear, if you lose any of your private keys

you lose access to your funds, simple as that.

So we just bought some Bitcoins

out of a local Bitcoin ATM.

And so what actually comes out

is what we call a cold wallet.

It's a little piece of paper with two squares on it

or two things that look like Roche inkblot tests

and a bunch of alpha numerics underneath each.

Now the top is the public key which is what people

would use to send Bitcoins to this address.

And the bottom one is the private key which is what

you would use to scan in order to retrieve

Bitcoins from this address.

Now it's very important to note that, that private key

is something that you really shouldn't be showing

around everywhere because whoever scans this first

will be able to take the Bitcoins off this address.

Also if you were to happen to lose this piece of paper,

then you've actually essentially lost your Bitcoins

because nobody else has a copy of the private key.

Right now there actually is some Bitcoins on this

address so if you're seeing this for the first time,

you may be able to scan this off yourself

and take the Bitcoins for yourself.

So here is a Satori coin.

There is a value of 0.001 Bitcoin inside.

In today's exchange rate

that would mean about 45 cents.

So it's very minimal amount but it is true Bitcoin inside.

Now how to redeem the value out of this token,

one would have to peel off the hologram sticker

in the back, here we go,

and then a QR code would be exposed

and this QR code is the private key information

which is essentially like a password.

And with this private key

and only with this private key

one can redeem, you can import that value

to your Bitcoin wallet.

Anything that's physical has a very strong sense

of authority or authenticity and to make the barrier

to entry to Bitcoin as low as possible I think everyone

working on the project felt it was really important

that someone could have a part of Bitcoin that

they can hold in their hands that's portable

and doesn't cost very must to get started.

It's kind of a low commitment object.

Because Bitcoin is built on public private

key encryption the entire work flow for sending payments,

particularly online, is fundamentally different

from that of credit cards.

Credit cards were never built to be used

on the internet in the first place.

I mean when credit cards were made there was no internet.

So the pull system is that you've given the authorization

to the merchant or the credit card issuer to pull

from your bank account whenever it is that they feel

that they have a right to do so.

With a credit card, whenever you want to initiate

a transaction, you are effectively giving the keys

to the merchant and you give your keys

to every merchant you deal with.

So every time you make a transaction, for example,

online or so, you're taking a risk because you're entrusting

the merchant with this very personal information

which they could then take to initiate transactions as well

if they wanted to.

Whereas Bitcoins it's a completely different model where

the control is more weighted towards the consumer,

the consumer then pushes their funds to you.

And then if you're doing an internet service, right,

you could broadcast a Bitcoin address

and anyone in the world could send Bitcoin to you.

If you were a band, a musical band, and you're performing

out in the concert, and your concert was being broadcast

around the world, if you put up on the stage a sign

that had a Bitcoin address, well you could be funded

by anyone who's watching that broadcast anytime

they watched it from that point onward.

Bitcoin payments are a push system,

meaning that the funds are pushed from sender to receiver.

This makes for a faster and cheaper system than traditional

pull systems like credit card transactions.

This in turn also means that Bitcoin transactions

are final and cannot be reversed.

Credit cards actually has about

a six month settlement time.

Even though the transaction looks like it went through,

the person can then call back and say this was a fraudulent

transaction and then the credit card will take that money

away from the merchant in some cases, in some cases

the credit card will eat the cost and that's a charge back.

Now we pay for this, this is the three percent fee.

Merchants usually pay this three percent

in order to accept credit cards.

So Bitcoin transactions don't have charge backs.

I think of it as a good thing.

As much as people like to say how great it is

to dispute things, it very, very rarely happens.

Almost never do you order something from a legitimate

company and you are not satisfied and then the company

did not solve your problem.

Most of the time this situation happens is when

your credit card is actually stolen.

And your credit card can always be stolen.

Everyone's credit card is all over the internet

is just luck or bad luck if your credit card happens

to be used in a fraudulent transaction.

We have some businesses accepting Bitcoin,

mostly restaurants for example.

We have some restaurants here set up in Acapulco.

For merchants when they accept Bitcoin its for them

to have another option, an innovative option,

and for them they have a lot of advantages.

We don't charge what the credit card fees charge

every time they slide the card, three, four, five,

even 10 per cent depending on the credit card.

We don't charge anything.

We don't have a minimal fee.

You can pay 10 pesos, 50 pesos, we don't have a minimum.

With Bitcoin payments lowering the cost

of doing business and eliminating the possibility of

fraudulent transactions,

companies ranging from mum and pop

stores to multinational corporations have started

to embrace this new way to transfer value.

The first large publicly traded company to accept Bitcoin

is Overstock and they now ship goods to over 200 countries.

Last I checked, Amazon only ships to about 50, 60 countries.

So they're ceding entire markets with entire populations

in the billions, not even fighting for that market share.

Additionally if Amazon accepted Bitcoin, there would be

no fraud, there would be no charge backs,

so it would lower their cost.

It would greatly increase Amazon's profit margins

to accept Bitcoin.

Bitcoin allows merchants to accept payments

for their products and services seamlessly.

And although it's becoming a great tool for merchants

to offer their products to previously untapped markets,

it's the people in these developing countries

who will benefit the most.

Bitcoin is the easiest, safest, fastest, best option

for people that don't have bank accounts or that don't

have ID's or they don't have anything but a smart phone.

There's lots and lots of people in the world that,

that's the position that they're in.

And Bitcoin is this fantastic solution and opportunity

for them to participate in the world's economy

without having to deal with banks and having to

jump through all these hoops.

They just simply install an app and now they're a part

of the world's economy.

Something like 33 per cent of the credit card transactions

coming out of Africa are fraudulent.

So nobody wants to take business from Africa.

It's just too risky.

With Bitcoin you know the funds are good so as a merchant,

yeah, pay with Bitcoin, I'll sell anything you want,

you know, that's legal to Africa.

Then they're able to start having property rights.

And property rights is really want's going to help

lift them up out of poverty.

So Bitcoin does get into this niche of

the under serviced people in the banking industry.

So a lot of third world countries,

they may not have access

to bank accounts, they might not even have ID's

to open a bank account, but if they have cell phones

and if they have access to the internet, they can now

have the equivalent of a bank on their cell phone.

According to the latest World Bank figures,

there are approximately two billion unbanked people

throughout the developing world.

The adoption and use of Bitcoin in these countries

could transform this human rights issue and allow

the unbanked population of the world

to participate in the global economy.

For the first time in the entire history of the world

anyone can now send or receive any amount of money

with anyone else, anywhere, instantly, basically for free,

and it's impossible for anyone, including governments,

to stop them from doing that.

And as much as I love gold, gold can't do that.

Think about that.

Here, anybody in this room you can now send and receive

any amount of money with anyone, anywhere in the world,

right now, and there's nothing

that anybody can do to stop that.

That was not possible before the invention of Bitcoin

and that is a fundamentally world changing technology

for every single human being on the planet.

Wikileaks was able to find funding through Bitcoin

and this was in the midst of a financial blockade

that Wikileaks was facing.

At the time the US had ordered Visa, I think it was

Mastercard as well, Bank of America, to blockade

any donations to Wikileaks.

Say what you will about Wikileaks, not necessarily

that I condone everything they do, but I do think

it is very important for freedom in the world for people

to have uncensorable ability to donate money

to whatever political causes that they want to.

And so I thought that was extremely powerful for Wikileaks

to be able to defy the US in that sense.

Because Bitcoin puts the private keys

of wealth in the hands of the user, it can be used

to support activist causes.

But Bitcoin can also be used for a night out on the town.

My name is Ken Shishido, I am co-organizer for

Tokyo Bitcoin Meetup Group.

We have this special event tonight having burlesque dancers

receiving Bitcoin tips.

The reason why I do this is that sometimes we want to

make our meetup interesting instead of talking about

really, really technical stuff or political stuff.

So this is one of the event we want to make a really fun

and see what can be done using Bitcoin.

Currently if you're living in most countries,

buying things is not a problem.

You have credit cards, you can still use cash,

and to me that is not the true use of Bitcoin.

The true use of Bitcoin is to give you financial privacy,

which I find extremely important.

During the global financial crisis as cracks

in the financial system spread, institutions once thought

to be invincible were shown to be vulnerable.

As we now know, governments around the world were forced

to bail out financial institutions.

A bailout is when government takes tax payer money

and gives it to an irresponsible financial institution

to bailout their mistakes.

A bail in is different in that laws are written

which permit financial institutions to take funds

directly from customer accounts to shore up their losses.

Such a thing occurred in Cyprus in 2013.

Well I started learning about Bitcoin back in 2013

especially during the Cypress event when banks were

shut down and money was confiscated from people.

I remember telling my co-workers, some of the PHD's,

the quants, this is really bad, this is actually gonna

probably start happening in many other western countries.

And they were all laughing at me saying,

no it's just Cyprus it'll never happen here.

And that's when I knew someone must have come up

with a way to get around this problem.

When a depositor deposits dollars or Euros into the bank,

title to the dollars or Euros transfers to the bank

and those depositors become unsecured creditors of the bank.

If the banks screw up for whatever reason, there's now

been legislation passed in many of the countries

where they can be bailed in, meaning that their deposits

can be turned into shares of the bank.

Jeff Berwick is an entrepreneur,

financial commentator, and podcast host.

Having founded Stockhouse.com, Canada's largest financial

news website, Jeff's analysis, writings, and videos

have been viewed by millions of people around the world.

It's difficult to say exactly what's gonna happen

in the future,

but it's definitely going to keep happening.

I said after Cyprus it's gonna in Greece and then they

shut down the banks in Greece for months.

And of the interest to people who live in Europe is

on January first of this year, they passed a European

bank bail in legislation.

So that should be a huge wakeup call to people

that they're doing that.

So in Cyprus they didn't actually pass it before.

So in Cyprus they closed the banks then they came up

with some legislation so the banks could just take

their customers money to keep afloat.

So they didn't even have that legislation

and they did that in Cyprus.

Now they already have it in place

so they know what's coming.

I see Bitcoin as a way to

protect and hide your assets

and we're not saying this is bad, I'm not saying that

only criminals hide their assets, no.

People that have worked hard and they've paid taxes

and they've done everything and like what happened

in Greece and Cyprus where money and bank accounts

was just confiscated.

So if the next time the banking system gets in trouble,

it could be users accounts that are raided to help

fund the banking system.

We're talking people with significant money,

100,000, 200,000, but it's legal money,

they've worked hard for it.

Some economists believe that the global

financial crisis of the last decade was just a precursor

to a much larger calamity.

If this is the case, how will governments react in response

to the next failure of our financial system.

Unlike the current banking system, Bitcoin allows

individuals to hold the private keys to their wealth.

However, this also comes with the added responsibility

of securing the Bitcoins.

With Bitcoin you're in 100 per cent complete control

of your own money, but that also means you're 100 per cent

responsible for what happens to your own money.

So it's your job to make sure you keep your Bitcoins safe.

People are used to things like credit cards

and bank accounts and Paypal and if your

credit card gets stolen, you just call the credit card

company and they cancel it and that's the end of it.

If your Bitcoins get stolen, there's nobody that you

can call to ask for help.

But the other side of the coin there is that there's

nobody that you have to call to ask for permission

to use your Bitcoins however you want, so it cuts both ways.

Mt. Gox, the Tokyo based Bitcoin exchange

has filed for bankruptcy protection.

The announcement comes days after the exchange

announced that as much as 450 million dollars

of the virtual currency had gone missing.

CEO Mark Karpeles apologized and bowed deeply

on Japanese television.

It remains unclear if the missing Bitcoins were stolen,

voided by technological flaws, or both.

So actually this is the old Mt. Gox building.

Mt. Gox was the biggest Bitcoin exchange that ever existed.

I think at some point they were doing

over 100 million dollars a day worth of volume.

And they collapsed

in quite a spectacular fashion in 2014.

I think the size of the losses mounted

to over 450 million dollars.

They claim to have lost 850,000 Bitcoins of which

200,000 were found afterwards in some old wallet.

People were putting money in

and essentially giving them their Bitcoins.

Giving them control of the private keys

and the irony is that exact centralization risk

is what Bitcoin is supposed to free us from.

And Mt. Gox just took all of the decentralized nature

of Bitcoin and put it into one company with a lot

of peoples money and they on top of that, put the control

of that company's finances under one person

who has the keys to the kingdom.

We've probably seen over the last two or three years,

by my count somewhere between half a dozen to upwards

of 10 different major hacks of companies

that are involved in Bitcoin.

And one thing you have to understand is that Bitcoin

is fundamentally different from securing an asset

that's held within the regular financial space.

With Bitcoin if you ever get access to the private key

to someone's wallet, you can initiate a transaction

outside of the infrastructure of that company

without their knowledge.

That's unlike anything that exists currently

in the financial space, where if you want to

take money out of that target,

you have to have infiltrated their infrastructure.

I think it's part of the mentality where people are

trained not to trust themselves with their own money and so

everybody puts their money in a bank for safe keeping.

And so that sort of mentality where you put your money

in some pooled company whose sole purpose is to safeguard it

that is a really hard stigma to break, to change.

And I think this is the thing that's the most challenging

about Bitcoin is that it challenges people

to question that stigma.

It challenges people to take control of your own

money and value and to safeguard it yourself.

The collapse of the Mt. Box Bitcoin exchange

in 2014 caused much confusion and scepticism about

the security of Bitcoin.

However, years after the collapse of the once largest

Bitcoin exchange, Bitcoin is now on the radar of many

institutions within the financial industry.

The big question, the conversation you would hear

is that the question was whether blotching technology

would impact the financial industry.

And now if you go to the trade shows and you listen to

the media, the question is not whether,

the question is how blotching technology will impact

and transform the financial industry.

It's now a foregone conclusion that blotching technology

will impact the financial industry in a major way.

So that's where we are now.

But we weren't always there.

If you look just three years ago, two years ago,

the attitude was that Bitcoin was almost a laughable

concept and it was a non-sustainable system

and it couldn't be applied in the financial space.

This Bitcoin, while it looks great,

it's a nice piece of collection, you know,.

It's better than yen or a penny.

Some of the areas where Bitcoin has been

most popular so far is China which has

quite a high level of capitol controls.

Other countries like China, Argentina, Iran,

this is where Bitcoins really caught on to a lot of people

because you just simply, it's not easy to transfer

money in or out of the country without going through

regulatory problems or having to know someone

in the government, things like that.

So, definitely that is a huge boost to Bitcoin.

The advantages of Bitcoin continue

to increase its popularity around the world.

Sometimes in the most unlikely of places.

My name is David Hyett and I operate

the Phoenix Rising Caf� in Nimbin.

This is where our Bitcoin machine is located

right next to the traditional ATM machine,

so the customers have a choice of using either.

I saw that the current banking system was rather

restrictive and the independence of people running

their own banking systems really appealed to me.

And the fact also that it was digital and we're living

in a digital age, I just knew that it was something

that would have to get traction over time.

Bitcoin is definitely the largest innovation

in monetary science since Isaac Newtons gold standard.

Going to completely revolution how all of our assets

are held so it's going to disrupt the law, gonna disrupt

accounting, gonna disrupt our finance industry,

gonna disrupt so much.

It will also

rapidly decentralize the capital.

No longer will

millions of people accumulate all of their

capital into one big pile that then gets allocated by

a senior vice president of Merrill Lynch

or Bank of America.

It'll be millions of people that you have to go

and entice out of their capitol to go fight a war

in Afghanistan or Iraq.

Once you decentralize all of those private keys

it becomes much more difficult to get people to pay

for a lot of these goods and services that they otherwise

wouldn't necessarily pay for.

I'll just scan it and now I have your Bitcoin address

in my wallet right here, I'll go ahead and enter one dollar

and we'll hit send.

I am sending the transaction.

Sent and if you...

There you go, you heard the noise.

Before Bitcoin I was basically retired, I was just

hanging out, enjoying my life, practising jujitsu everyday,

and it was really fun but wasn't really gonna make the world

that much of a better place if at all.

And then I discovered Bitcoin and I looked around the world

and I saw all these wars being fought and central banks

debasing the currency and basically preventing the world

from being as good of a place as it potentially could be.

And I saw Bitcoin and I saw this as a tool to strip away

all of their power to do that.

Most people aren't interested in paying to kill people

they've never met in other countries.

Most people are willing to pay for roads and schools

and hospitals, so if the governments say we need money

for roads and schools and hospitals, I think people

would probably give them a good chunk of that.

If governments say we need money to go kill people

in other countries that you've never been to in your

entire life and you're probably never gonna go to

in your entire life, people are gonna say,

no I don't wanna pay for that.

But if you're using bank accounts and dollars and Euros,

governments can seize all the money out of your

bank account any time.

They can print as many new dollars or Euros as they want

to pay for these things at any time.

If the world's using Bitcoin, it takes away those tools

from government and I think that makes the world

a much, much better place.

For the first time in history,

Bitcoin now provides the entire world

with a completely decentralized payment system.

One where each individual holds the ownership and control

of their own financial wealth.

One where all users can transfer value and interact

freely amongst each other instantly.

What could the future of our world look like

with such a revolutionary tool?

The possibilities could be truly magical.

Bitcoin is magic internet money.

Bitcoin allows you to send and receive money with anyone,

anywhere in the world just like magic.

I'm at a loss for words because it's that exciting

and that world changing.

With Bitcoin you can pull out your iPod or your iPhone

or your tablet or whatever, install an app and in less

than 30 seconds you have the ability to send and receive

money with anyone, anywhere in the world basically for free.

And you can be 10 years old and do that or you can be

100 years old and do that,

and you can do that in any country.

That's magic.

Subrip: Pix