[Music] so here I have two devices and I will transfer one dollar from this device to this device instantaneously into the amount and send I'm seeing the transaction now [Music] and there it is what you've 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 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 every day 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 had 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 when 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 teleportations there's nothing anybody can do to intercept these teleportations and if you're careful about how you use bitcoin you can do these teleportations anonymously so with bitcoin with a push of a button you can pay anyone anywhere 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 it's just in the backdrop but I want to talk about these are trend lines you've seen them on other presentations even earlier today I started out working at Bear Sterns 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 Midtown or downtown Manhattan tone Vaes 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 is basically it's a 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 any time we hit the send button in a computer you always retain a copy always retained 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 cool 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 were used to control who's allowed to have an account who can send money from who from what countries users can send money to other countries 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 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 I 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 to the camera of Skype so I can scan it with the camera in my cell phone all right I see the QR code my phone is trying to scan it and there it is I scanned it so I feel kind of 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 [Music] 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 list currency are enormous hey Jenny Maas with the exception of actually handling physical cache geo generally we have to rely on third parties for lots of different payments but credit cards or wire transfers internationally or even sort of keeping cash under your bed storing large amounts of cash we use banks and what Bitcoin does is allow us to do all of those things without any third parties so in that sense we can be our own bank we can be our own payment system we can be our own international wire system we can be our own remittance system we can do all of these things without relying on any other third parties that's what Bitcoin allows us to do before bitcoins all these companies like PayPal and defend Bank of America and you know any business they had a ledger that kept track of all their account balances so PayPal has a ledger that keeps track of exactly who had how much money you need to PayPal account and that ledger is stored on PayPal servers in PayPal's data center somewhere and before the invention of Bitcoin people thought that it was impossible all those mathematicians and computer scientists thought that it was impossible to have consensus on a distributed ledger like this but what bitcoin did is it came along and figured out how to keep track of this ledger that keeps track us what bitcoins but instead of that ledger being on one data center it's on everybody's computer across the entire planet that's running the Bitcoin network including my laptop right here I have a full copy of the entire Bitcoin ledger this public ledger known as the blockchain is perhaps 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 through 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 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 its processing power to filling Bitcoin transfers and security of the network yeah it is one big supercomputer and all of these individual computers are kind of throwing guesses at this mathematical problem and so 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 there's some methods in in financial transactions where you could double spend and this whole blockchain thing is one great method of make sure that doesn't happen say if Alice wants to send Bob and 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 relate to do Bob that's how email works that's how digital transfers work that's how it should work for the majority of digital transfers that's that's well and good however in the case of money that would be disastrous if if that were to be the way that money was transferred digitally you don't want copies of the same dollar bill to be 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 the bitcoins blockchain 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 say a single email because 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 honors that one time I realized that while Bitcoin is really difficult for people to understand as 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 and does that mean that bitcoins are originally underground I realized that it coins a difficult concept for for people to understand and especially Bitcoin mining as well because bitcoins are not originally underground 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 miners exhausted of all of its gold bitcoins are also mined in a similar fashion the Bitcoin algorithm is programmed so that the reward for mining new bitcoins is half 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 I try to explain it in some really simple way like miners become are in miners they receive the reward just because they maintain security of Bitcoin mathematically it means that you need to solve quite difficult problems is that just guessing process you have to make millions and millions millions of gases and if you're right and you are able to close all this transaction inside of one block you're successful and you received 12. 5 bitcoins as minor originally this reward was 50 bitcoins every four years these this reward for miners is two times less so real world will be decreasing over the time the creator of Bitcoin whoever he is was a really really really smart guy and he obviously liked math a lot and he sat down and did some calculations and thought to himself if everybody in the entire world or to start using Bitcoin how many bitcoins will be needed in order for that to be able to accommodate everybody using Bitcoin for this and each Bitcoin can be divided down to a hundred millionth of a Bitcoin and if everybody in the entire world were to start using Bitcoin as their money the smallest unit of a 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 speculates 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 I think he was a clever guy he was not a normal geek he had good knowledge decentralized technology or the centralization he had good knowledge financial system and he was quite good culture but the cold the Bitcoin is not definitely the best one so it's definitely possible to You Tube write better code there is also conspiration theory if Bitcoin code was written by one guy or many different guys hard to say anyway I especially appreciate that it's first fully working concept of the source money it's very interesting like who Satoshi is there's lots of speculation especially among like the very early people in Bitcoin but what difference does it make whether we know who created Bitcoin I don't know 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 and 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 he could be someone we know it could be someone I spoken to he could be a friend of mine for all I know I don't know who it is I don't know if we'll ever know that it's a fun game am i Satoshi I don't think I 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 to our Christopher doesn't stick out there see her I lost height over my mama did Estella it carries over hey no Chris you need support Oconee create kind of like an almost ikuraga unique Mary must know yeah it is only a Scalia semen otherwise 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 Bitcoin 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 ROE Bank of Scotland they had 700 thousand accounts ATMs just went down for the weekend nobody could access the ATMs couldn't get money out you have a credit card or debit card and it gets turned off because of suspected fraud or you did a charge in a unusual location I 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 they're associated what are called private keys okay and these are literally what they sound like they're private keys that can open an 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 [Music] 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 ink large tests and a bunch of alphanumerics 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 with tree v' 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 this 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 forty five 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 else 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 their 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 much to get started it's kind of a low commitment object because bitcoin is built on public private key encryption the entire workflow for sending payments particularly online is fundamentally different from that of credit cards credit cards were never built to be used on internet in the first place I mean the credit cards were made there was no internet so a poll system is that you've given the authorization to the merchant or the credit card issues 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 right 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 fees this very personal information which they could then take to initiate transactions as well if they wanted to whereas Bitcoin Segel it's a completely different model where the control is more weighted towards the consumer the consumer then pushes their 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 a Bitcoin to you if you were a band a musical band and you're you're performing on the concert and your concert was being broadcast you know around the world if you put up on the stage a know a sign that had a Bitcoin address well you could be funded by anyone who was watching that broadcast any time they watched it from that point onward my name is sanshiro Fujimoto and i play the saxophone and other instruments i compose and love to form and make CDs and i make my living by being a musician today's a small live show I did without no admission fee and if you appreciate my music then you can tip me by tipping you don't know how much might get it zero or if your performance is great you might get more than you think so that makes me play better [Music] [Applause] direct interaction is more more about the art itself and if you tip someone in the street you don't tip big money you tip like 10 cents quarters and small money but to send the small money on the internet cost more than what you supposed to tip so bitcoin is much better way to tip someone in the Internet 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 pool 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 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 chargeback now we pay for this this is the 3% fee merchants usually pay this 3% 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 I'm how great it is to dispute things it very very rarely happens almost never do you order something from a legitimate company and you were 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 is 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 is for them to have another option and innovative option and for them they have they have a lot of advantages we don't charge what the credit card fees charge every time they sly the the card three four five even 10% depending on 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 mom-and-pop stores to multinational corporations have started to embrace this new way to transfer value and this is how about you our business here it's 1997 to 1999 Bogra i'ma [ __ ] shot captain mosquito more email Facebook toka SNSD Masuda machine demo passport Omo Picasso terrazzo knee Ikaruga traditi mas de Gotha Fox amo me renato sastra crazy toca toca Sagara organizaciones son O'Meara Dona moça to Keaney castle toga the universe macaque our builder odd even a photo cannabis the sweeter the photo canary Toto Pony [ __ ] ah Herrera teratoma Peru to Yokota most met a tiki bar no the Yadkin de arriba sky indeed survive Antonius ricotta Neotech pork orogeny Pete 0.
00 CEO circle at the killing delegate you will macaques 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 their seating 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 chargebacks so it would lower their costs 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 IDs or they don't have anything but a smartphone and there's lots and lots of people in the world that that that's the position that they're in and bitcoin is this fantastic solution and the 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 part of the world's economy something like 33% of the credit card transactions coming out of Africa or fraudulent so nobody wants to take business from Africa it's just too risky with Bitcoin you know the funds are good so it's a merchant yeah hey with Bitcoin also anything you want you know that's legal to Africa then they're able to start having property rights and property rights is really what's going to help lift them up out of poverty so Bitcoin does get into the this niche of the underserviced 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 IDs 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 in their cell phone according to the latest World Bank figures there are approximately 2 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 Siddalee 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 gold can't do that okay first think about that yeah 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 of the u. s. had ordered a visa I think was MasterCard as well Bank of America to blockade any donations to WikiLeaks say what you will about wiki you know WikiLeaks another story that I condone everything that if they do but I do think it is very important for freedom in the world for people to have uncensor abaut ability to donate money to whatever political causes that they want to and so I thought that was extremely powerful for a week at least to be able to defy the u.
s.
