Return to Video

Learn about Universal Subtitles

  • 0:03 - 0:05
    - [Voiceover] Look closely.
  • 0:05 - 0:07
    What do we all have in common?
  • 0:10 - 0:12
    No matter what corner of
    the world you live in,
  • 0:12 - 0:15
    You need food, water,
  • 0:15 - 0:17
    shelter and money.
  • 0:18 - 0:20
    Half of every transaction
    involves money,
  • 0:20 - 0:23
    in exchange for
    goods or services.
  • 0:23 - 0:27
    Stocks, a loaf of
    bread, illegal drugs,
  • 0:27 - 0:28
    You gotta pay for it.
  • 0:29 - 0:31
    We spend much of our
    live chasing money
  • 0:31 - 0:32
    to make a living,
  • 0:32 - 0:34
    and accomplish our dreams.
  • 0:34 - 0:36
    But it's also an
    instrument of destruction.
  • 0:36 - 0:38
    Some might say evil.
  • 0:38 - 0:42
    Driving criminals to lie,
    steal and even murder.
  • 0:42 - 0:44
    - The existing banking system,
  • 0:44 - 0:46
    extracts enormous
    value from society
  • 0:46 - 0:48
    and it is parasitic in nature.
  • 0:49 - 0:51
    - [Voiceover] Money is
    a catalyst for the worst
  • 0:51 - 0:54
    and the best of human endeavor.
  • 0:54 - 0:56
    Before civilization,
  • 0:56 - 0:58
    we created currency.
  • 0:59 - 1:01
    Fuel for wars.
  • 1:02 - 1:04
    The path to power.
  • 1:05 - 1:07
    Champion and enemy
    of innovation.
  • 1:08 - 1:10
    Money is so integral
    to our society,
  • 1:10 - 1:12
    and our global economy,
  • 1:12 - 1:15
    that its true nature
    remains a mystery to most.
  • 1:16 - 1:18
    This is the story of money.
  • 1:18 - 1:20
    Perhaps the end of
    money as we know it.
  • 1:21 - 1:23
    No matter how fat
    your bank account,
  • 1:23 - 1:25
    or how thin your wallet.
  • 1:25 - 1:28
    To us it's all cold, hard cash.
  • 1:28 - 1:30
    There are some who
    want to kill it.
  • 1:30 - 1:31
    Get rid of it.
  • 1:31 - 1:33
    Burn your dollars,
    your euros, your yen,
  • 1:34 - 1:36
    and transform every
    penny you have,
  • 1:36 - 1:38
    into ones and zeros.
  • 1:38 - 1:41
    Digital currency
    entrusted to the web
  • 1:41 - 1:43
    and computers spread
    across the planet.
  • 1:43 - 1:45
    Magic internet money.
  • 1:46 - 1:49
    It's called
    cryptocurrency, Bitcoin.
  • 1:49 - 1:51
    Invented in secret,
  • 1:51 - 1:53
    it was a gift to the world.
  • 1:53 - 1:54
    - It's not just a currency,
  • 1:54 - 1:56
    but it's actually
    programmable money.
  • 1:56 - 1:58
    - [Voiceover] A potential
    curse on bankers.
  • 1:58 - 2:00
    - I mean, there's nothing
  • 2:00 - 2:02
    that the big banks or
    politicians can do to stop it.
  • 2:02 - 2:03
    - [Voiceover] Breaking
    every governments grip
  • 2:03 - 2:05
    on money supply.
  • 2:07 - 2:09
    - What the internet
    did for information,
  • 2:09 - 2:11
    Bitcoin is doing for money.
  • 2:13 - 2:14
    - Could it be the new gold?
  • 2:15 - 2:17
    - No, you have to really stretch
  • 2:17 - 2:19
    your imagination,
  • 2:19 - 2:23
    to infer what the intrinsic
    value of Bitcoin is.
  • 2:23 - 2:26
    - Regulators, the Federal
    Reserve, the banking system,
  • 2:26 - 2:28
    at least understand
    this is a thing
  • 2:28 - 2:29
    that they have to
    take seriously.
  • 2:30 - 2:31
    - This going to change
    the economic culture.
  • 2:32 - 2:36
    - Bitcoin could be a
    micro-economic miracle worker
  • 2:36 - 2:39
    and it could be a
    macro-economic wrecking ball.
  • 2:40 - 2:43
    - [Voiceover] Is Bitcoin
    the currency of the future,
  • 2:44 - 2:46
    a Godsend for criminals,
  • 2:46 - 2:50
    or a recipe for
    financial disaster?
  • 2:52 - 2:55
    If you trust your
    money just as it is,
  • 2:55 - 2:57
    we have a little story to share.
  • 2:58 - 3:02
    (dramatic instrumental music)
  • 3:12 - 3:14
    Once upon a time
    there was a big party,
  • 3:14 - 3:18
    with everyone standing
    around the punch bowl, drunk.
  • 3:21 - 3:23
    Politicians credited
    the strong economy
  • 3:23 - 3:24
    to their wise decisions.
  • 3:25 - 3:27
    Businesses jumped into
    new profitable markets,
  • 3:27 - 3:28
    ignoring risk.
  • 3:28 - 3:30
    If fact the experts
    said there was no risk.
  • 3:34 - 3:36
    Then, troubling market
    data from minor countries,
  • 3:36 - 3:37
    spooked the markets.
  • 3:37 - 3:39
    Rumors spread.
  • 3:39 - 3:40
    More bad news rattled
    housing prices,
  • 3:40 - 3:42
    at the heart of the
    financial world.
  • 3:42 - 3:44
    A major bank went insolvent.
  • 3:45 - 3:46
    Investors and
    businesses made a run
  • 3:46 - 3:47
    on the other banks,
  • 3:47 - 3:49
    demanding their cash deposits.
  • 3:49 - 3:51
    The largest financial
    institutions
  • 3:51 - 3:53
    in the center of the
    modern world were frozen.
  • 3:54 - 3:55
    Assets were seized,
  • 3:55 - 3:57
    banks foreclosed.
  • 3:57 - 4:00
    A credit crunch threatened
    the entire world economy,
  • 4:02 - 4:04
    and then finally,
  • 4:04 - 4:06
    the government stepped in.
  • 4:06 - 4:08
    The largest bank bailout ever.
  • 4:08 - 4:12
    Swift action by the head
    of state had saved the day.
  • 4:12 - 4:13
    Remember that?
  • 4:14 - 4:16
    No you don't.
  • 4:16 - 4:18
    It happened 2,000 years ago.
  • 4:19 - 4:21
    Rome, 33 A.D.
  • 4:21 - 4:24
    Ground zero for the first
    recorded liquidity crisis
  • 4:24 - 4:26
    and government
    bailout in history.
  • 4:28 - 4:31
    The largest empire the
    world had ever seen,
  • 4:31 - 4:33
    was brought to its knees
    by a banking disaster.
  • 4:34 - 4:37
    Emperor Tiberius used money
    from the National Treasury,
  • 4:37 - 4:40
    to bail out the country's
    troubled banks and companies.
  • 4:41 - 4:43
    History may not repeat itself,
  • 4:43 - 4:46
    but it certainly rhymes, badly.
  • 4:47 - 4:49
    People in power and their money,
  • 4:49 - 4:52
    have always been at
    the very center of it.
  • 5:02 - 5:05
    (violin instrumental music)
  • 5:05 - 5:06
    The story of money
  • 5:06 - 5:08
    is as old as
    civilization itself.
  • 5:11 - 5:12
    When we lived in small tribes,
  • 5:12 - 5:15
    keeping track of debt was easy.
  • 5:15 - 5:17
    You owed somebody
    a load of firewood.
  • 5:17 - 5:19
    A neighbor owed you
    a piece of meat.
  • 5:20 - 5:22
    Credits and debits
    were kept in your head.
  • 5:22 - 5:24
    A mental ledger.
  • 5:24 - 5:26
    - Currency's a
    language that allows us
  • 5:26 - 5:29
    to express transactional
    value between people.
  • 5:30 - 5:33
    It's technology that's
    older than the wheel.
  • 5:33 - 5:35
    It's as old as fire.
  • 5:37 - 5:38
    - [Voiceover] When
    humans wanted to trade
  • 5:38 - 5:40
    outside their tribe or village,
  • 5:40 - 5:41
    they needed something,
  • 5:41 - 5:43
    everyone could agree had value.
  • 5:44 - 5:45
    Something scalable.
  • 5:46 - 5:48
    Enter commodity monies.
  • 5:50 - 5:50
    There were many kinds,
  • 5:50 - 5:52
    but each had to embody
  • 5:52 - 5:55
    the same five characteristics.
  • 5:55 - 5:58
    A commodity money is
    relatively scarce,
  • 5:58 - 5:59
    easily recognizable,
  • 5:59 - 6:02
    can be cut into smaller pieces.
  • 6:02 - 6:05
    You can substitute one piece
    for another of equal value.
  • 6:05 - 6:08
    And you can carry it around
    without too much trouble.
  • 6:09 - 6:11
    In ancient Rome, it was salt.
  • 6:11 - 6:14
    The Aztecs used Cacao beans.
  • 6:14 - 6:16
    It was whale teeth on Fiji.
  • 6:16 - 6:18
    Yak dung in Tibet.
  • 6:18 - 6:21
    Shells in Africa and China.
  • 6:21 - 6:24
    Grains, metal,
    ivory, rare stones,
  • 6:24 - 6:26
    leather, fish.
  • 6:26 - 6:29
    If it had the five
    characteristics of
    commodity money,
  • 6:29 - 6:32
    someone probably
    used it as currency.
  • 6:32 - 6:34
    - And then you ask,
  • 6:34 - 6:37
    what value did these
    currencies have?
  • 6:37 - 6:38
    If you go into a primary school,
  • 6:38 - 6:40
    you'll see children
    exchanging rubber bands
  • 6:40 - 6:43
    and Tamagotchi
    and Poke-man cards
  • 6:43 - 6:45
    and baseball cards and sweets
  • 6:45 - 6:48
    and candy and any
    other form of currency.
  • 6:48 - 6:49
    People invent currency,
  • 6:49 - 6:51
    when they have no
    other currency.
  • 6:51 - 6:54
    And now they're going to
    invent digital currencies.
  • 6:54 - 6:56
    - [Voiceover] But commodities
    that aren't durable,
  • 6:56 - 6:58
    are a lousy store of value.
  • 6:58 - 7:00
    A bad Cacao crop,
  • 7:00 - 7:02
    or a huge new salt discovery,
  • 7:02 - 7:03
    can throw your currency
  • 7:03 - 7:06
    and economy into turmoil.
  • 7:06 - 7:08
    A more stable system was needed.
  • 7:09 - 7:10
    About 2,500 years ago,
  • 7:10 - 7:13
    the first metal coins
    were minted in China,
  • 7:14 - 7:16
    and in what is now Turkey.
  • 7:17 - 7:20
    These coins shared the
    same five characteristics
  • 7:20 - 7:21
    with commodity money,
  • 7:21 - 7:24
    but were also very durable.
  • 7:25 - 7:25
    In some cases,
  • 7:25 - 7:28
    coins are the only thing left
  • 7:28 - 7:30
    of entire civilizations.
  • 7:31 - 7:35
    - Money does not originate
    with governments.
  • 7:35 - 7:38
    Money arises naturally,
  • 7:38 - 7:41
    as markets begin to develop.
  • 7:41 - 7:44
    And as people with a
    division of labor realize,
  • 7:44 - 7:45
    that if I have eggs,
  • 7:45 - 7:47
    and you have a cow,
  • 7:47 - 7:49
    we may need some
    medium of exchange,
  • 7:49 - 7:51
    in order for you to buy my eggs,
  • 7:51 - 7:52
    or for me to buy your cow.
  • 7:53 - 7:54
    - [Voiceover] Coins
    were an objective
  • 7:54 - 7:57
    and universal unit of account
  • 7:57 - 7:58
    and they allowed people
  • 7:58 - 7:59
    to buy and sell goods
  • 7:59 - 8:01
    over vast regions.
  • 8:02 - 8:04
    The market economy was born.
  • 8:04 - 8:05
    Coins worked,
  • 8:05 - 8:07
    but only if people trusted
  • 8:07 - 8:08
    that the king or emperor,
  • 8:08 - 8:09
    who issued them,
  • 8:09 - 8:12
    wasn't cheating on
    the metal content.
  • 8:12 - 8:14
    Using coins also meant,
  • 8:14 - 8:17
    that an authority now
    controlled the supply
  • 8:17 - 8:18
    of your currency.
  • 8:18 - 8:20
    Money and political power,
  • 8:20 - 8:23
    were inextricably
    linked, centralized.
  • 8:24 - 8:27
    Minting coins in a steady
    and predictable manner,
  • 8:27 - 8:30
    allowed economic
    growth and stability.
  • 8:31 - 8:32
    The Wu Zhu coin in China,
  • 8:32 - 8:35
    retained its value
    for 500 years.
  • 8:36 - 8:38
    In Constantinople, the solidus
  • 8:38 - 8:40
    lasted for 700 years.
  • 8:41 - 8:42
    - But in those times,
  • 8:42 - 8:44
    the coins didn't
    have the milled,
  • 8:44 - 8:46
    this sort of milled edge.
  • 8:46 - 8:47
    They were flat,
  • 8:47 - 8:48
    and what used to happen,
  • 8:48 - 8:51
    was as coins were passing
    from people to people,
  • 8:51 - 8:53
    people would cut
    little bits off.
  • 8:53 - 8:55
    And in fact,
  • 8:55 - 8:56
    some of the taxation
    that the kings would do,
  • 8:56 - 8:58
    would actually be
    take one eighth
  • 8:58 - 9:00
    of the coin off.
  • 9:00 - 9:02
    - [Voiceover] Taxes
    built castles,
  • 9:02 - 9:05
    and financed military campaigns,
  • 9:05 - 9:06
    expensive hobbies.
  • 9:06 - 9:09
    Soon, royal mints were
    substituting cheaper metals,
  • 9:09 - 9:11
    for silver and gold.
  • 9:11 - 9:13
    This is called debasement.
  • 9:13 - 9:16
    And Europe's kings
    made a habit of it.
  • 9:16 - 9:20
    The currency of France was
    debased every 20 months,
  • 9:20 - 9:22
    for 200 years.
  • 9:23 - 9:26
    If no one can trust the
    gold or silver content
  • 9:26 - 9:27
    of your coins,
  • 9:27 - 9:29
    how can you trade
    with other countries?
  • 9:32 - 9:35
    International merchants
    found a solution.
  • 9:35 - 9:37
    They recognized that
    one persons debt,
  • 9:37 - 9:39
    has value.
  • 9:39 - 9:41
    It can be traded or transferred.
  • 9:42 - 9:44
    When those IOU's came
    from reputable sources,
  • 9:44 - 9:47
    they could be used
    as a form of money.
  • 9:47 - 9:48
    Paper money.
  • 9:49 - 9:51
    This money was not based
    on hard commodities,
  • 9:51 - 9:52
    or metal, but instead,
  • 9:52 - 9:55
    on someone's promise to pay.
  • 9:55 - 9:57
    Merchant families
    like the Medici,
  • 9:57 - 9:59
    in 15th century Florence,
  • 9:59 - 10:02
    acted as clearing
    houses for these IOU's.
  • 10:02 - 10:03
    It worked like this.
  • 10:04 - 10:07
    An English trader ordered a
    shipment of Italian cloth,
  • 10:07 - 10:10
    from the Medici
    for 100 gold coins.
  • 10:10 - 10:13
    His promise to pay the
    Medici was put on paper.
  • 10:13 - 10:16
    Meanwhile, the Medici
    owed 100 gold coins,
  • 10:16 - 10:17
    to another trading partner,
  • 10:17 - 10:20
    for delivery of
    wine from France.
  • 10:20 - 10:21
    The parties didn't
    go to the expense
  • 10:21 - 10:24
    of transporting and
    exchanging gold coins.
  • 10:24 - 10:28
    Instead, the paper
    was transferred.
  • 10:28 - 10:30
    Everyone agreed that
    the paper had value,
  • 10:30 - 10:32
    100 gold coins.
  • 10:32 - 10:35
    But only because the
    everyone trusted the Medici,
  • 10:35 - 10:36
    as solvent middlemen.
  • 10:36 - 10:40
    They had created a
    paper money machine.
  • 10:41 - 10:42
    Within a few generations,
  • 10:42 - 10:44
    they rose from low crime
  • 10:44 - 10:46
    to high finance.
  • 10:46 - 10:47
    Their great wealth,
  • 10:47 - 10:49
    helped fuel the
    Italian renaissance
  • 10:49 - 10:50
    and elevated the family
  • 10:50 - 10:53
    to levels of enormous
    political power.
  • 10:53 - 10:56
    The power to marry
    into royal families
  • 10:56 - 10:58
    and get elected as popes.
  • 10:58 - 11:01
    The ties binding money
    to power, politics
  • 11:01 - 11:05
    and influence now ran
    through church and state.
  • 11:06 - 11:09
    Merchants had proven that
    creating paper currency
  • 11:09 - 11:12
    could be wildly profitable.
  • 11:12 - 11:15
    Goldsmiths wanted
    in on the action.
  • 11:15 - 11:17
    - Imagine it like this,
    if the goldsmith had seen
  • 11:17 - 11:19
    over a period of time that some
  • 11:19 - 11:22
    of the coins he is storing for
    people were gathering dust.
  • 11:22 - 11:25
    The people who own them,
    don't need them right now.
  • 11:25 - 11:29
    So what if I go and lend
    them out into the community
  • 11:29 - 11:31
    and I charge them
    interest on this loan.
  • 11:31 - 11:34
    So he starts out lending
    some of these gold coins
  • 11:34 - 11:37
    and then later he
    realizes, actually people
  • 11:37 - 11:39
    don't even want the gold
    coins they just want the piece
  • 11:39 - 11:43
    of paper that says that the
    gold coins are in the bank
  • 11:43 - 11:44
    and with the goldsmith.
  • 11:44 - 11:48
    So I can now make a loan
    with these pieces of paper.
  • 11:49 - 11:50
    And whatever I write
    on the piece of paper,
  • 11:50 - 11:54
    as long as the people trust
    me, they'll trust the paper.
  • 11:54 - 11:57
    And effectively the goldsmiths,
    the early day bankers,
  • 11:57 - 12:01
    they had literally acquired
    the power to print money.
  • 12:02 - 12:03
    - [Voiceover] More and more
    such private paper money
  • 12:03 - 12:06
    from merchants and
    banks circulated
  • 12:06 - 12:08
    and began to rival
    the crown's coins.
  • 12:09 - 12:11
    The power inherent
    in controlling
  • 12:11 - 12:14
    and issuing money began
    slipping away from the rulers.
  • 12:15 - 12:18
    They couldn't tax or de-base
    this new kind of money.
  • 12:18 - 12:21
    But they had bigger ambitions
    than ever with trading posts,
  • 12:21 - 12:25
    colonies, and empires that now
    stretched across the globe.
  • 12:28 - 12:29
    For centuries,
    European countries
  • 12:29 - 12:31
    would take turns
    building massive fleets
  • 12:31 - 12:34
    and waging war on each
    other to rule the world.
  • 12:35 - 12:38
    (yelling)
  • 12:40 - 12:43
    - Government wanted to
    take the people's money
  • 12:43 - 12:45
    in order to finance its wars.
  • 12:45 - 12:47
    That's essentially
    the history of money.
  • 12:47 - 12:49
    Money and warfare go together.
  • 12:52 - 12:54
    - [Voiceover] War is expensive.
  • 12:54 - 12:57
    One year's income taxes
    simply aren't enough.
  • 12:57 - 13:01
    Kings and queens had to borrow
    money against future taxes.
  • 13:01 - 13:04
    They needed a ground breaking
    financial innovation,
  • 13:04 - 13:06
    government bonds.
  • 13:06 - 13:10
    The loans came from
    rich merchant families
    and goldsmiths,
  • 13:10 - 13:14
    who by now had become powerful
    financiers and bankers.
  • 13:14 - 13:18
    Sovereign debt and deficit
    spending had been born.
  • 13:22 - 13:26
    (upbeat instrumental music)
  • 13:33 - 13:36
    In 1694, the bank of
    England was established
  • 13:36 - 13:39
    to fund a war against France.
  • 13:39 - 13:41
    England's central bank
    was privately owned
  • 13:41 - 13:44
    and granted the monopoly
    to issue banknotes,
  • 13:44 - 13:46
    paper that could be
    redeemed for an equal amount
  • 13:46 - 13:48
    of gold from the
    government's coffers.
  • 13:49 - 13:51
    The central bank soon also
    managed the entire debt
  • 13:51 - 13:53
    of the crown.
  • 13:53 - 13:56
    - Money has been a tool of
    sovereignty for centuries.
  • 13:56 - 13:59
    Being able to issue
    currency gave you the power
  • 13:59 - 14:03
    but it also gave the value
    to that monetary supply
  • 14:03 - 14:05
    by backing it with
    the force of state
  • 14:05 - 14:08
    with essentially
    the debt of state.
  • 14:10 - 14:12
    - [Voiceover] When the U.S.
    won independence from Britain,
  • 14:12 - 14:15
    the first article of
    the new constitution
  • 14:15 - 14:18
    gave congress the exclusive
    right to "coin money".
  • 14:19 - 14:23
    This currency's value was tied
    to gold in government vaults.
  • 14:23 - 14:26
    From 1781 until
    the panic of 1907,
  • 14:26 - 14:30
    the financial system of the
    U.S. was an economic Petri dish.
  • 14:30 - 14:34
    Brief central banks, state
    banks, private banks,
  • 14:34 - 14:36
    private currency,
    government currency,
  • 14:36 - 14:39
    depressions, strong
    growth, recessions,
  • 14:39 - 14:41
    regular boom and bust cycles.
  • 14:41 - 14:44
    - The long term, as far
    as capital is concerned,
  • 14:44 - 14:46
    people want predictability,
  • 14:46 - 14:48
    people want stability.
  • 14:48 - 14:49
    From the back of
    that they can plan
  • 14:49 - 14:52
    and it is very hard to
    plan in the long term
  • 14:52 - 14:54
    with it such a
    level of volatility.
  • 14:55 - 14:58
    - [Voiceover] In 1913, bankers
    and politicians decided
  • 14:58 - 15:01
    that it was in the country's
    best interest, and theirs,
  • 15:01 - 15:04
    to have a permanent
    central bank.
  • 15:04 - 15:06
    They created the
    Federal Reserve.
  • 15:07 - 15:10
    Among its jobs, expand
    or contract the supply
  • 15:10 - 15:12
    of a single national currency,
  • 15:12 - 15:14
    the Federal Reserve note.
  • 15:14 - 15:17
    The dollar was tied to
    gold and strategic control
  • 15:17 - 15:20
    of it would avoid booms
    that lead to busts.
  • 15:21 - 15:23
    At least that was the plan.
  • 15:24 - 15:26
    Then came 1929.
  • 15:28 - 15:31
    (yelling)
  • 15:32 - 15:35
    The great depression would
    have a profound effect
  • 15:35 - 15:39
    on monetary policy worldwide.
  • 15:40 - 15:42
    - [Roosevelt] I shall
    ask the Congress
  • 15:42 - 15:45
    for the one remaining
    instrument to me the president,
  • 15:46 - 15:50
    broad executive power.
  • 15:50 - 15:52
    - [Voiceover] Soon, the Fed had
    printed nearly all the money
  • 15:52 - 15:55
    it legally could to pump
    life back into the economy.
  • 15:56 - 15:58
    It needed gold to
    fire up the mint.
  • 15:59 - 16:02
    So in 1933, President
    Roosevelt issued
  • 16:02 - 16:04
    a controversial executive order,
  • 16:05 - 16:07
    forcing all U.S. citizens
    to sell their gold
  • 16:07 - 16:10
    to the Federal Reserve
    at a fixed price,
  • 16:11 - 16:13
    or go to prison.
  • 16:14 - 16:15
    The Fed offered far more cash
  • 16:15 - 16:18
    to foreign governments
    for their gold.
  • 16:18 - 16:20
    Many jumped at the offer.
  • 16:20 - 16:22
    Gold flowed in,
  • 16:22 - 16:24
    and dollars spread
    across the globe.
  • 16:33 - 16:36
    World War II devastated
    nearly every major economy,
  • 16:37 - 16:38
    except the United States.
  • 16:40 - 16:43
    The military and industrial
    juggernaut emerged
  • 16:43 - 16:46
    as the global
    financial super power.
  • 16:46 - 16:49
    The dollar had become
    the world's most stable
  • 16:49 - 16:50
    and trusted currency.
  • 16:52 - 16:55
    Other countries pegged their
    currency to the dollar,
  • 16:55 - 16:57
    which could still be
    redeemed for gold.
  • 16:58 - 17:00
    In fact, the U.S.
    owned more than half
  • 17:00 - 17:02
    of the world's gold reserves.
  • 17:03 - 17:05
    In the next few decades,
  • 17:05 - 17:07
    more dollars flowed
    to foreign countries.
  • 17:07 - 17:10
    Governments began
    debasing their coins
  • 17:10 - 17:12
    with cheaper metals
    and printing more
  • 17:12 - 17:14
    of their own currency
    than they had in gold.
  • 17:15 - 17:18
    The bond between precious
    metals and paper currency
  • 17:18 - 17:20
    was cracking.
  • 17:20 - 17:23
    - This is a 1966 50 cent piece.
  • 17:23 - 17:27
    It was the last coin
    in regular circulation
  • 17:27 - 17:28
    in Australia to contain silver.
  • 17:28 - 17:31
    It contains 80% silver,
  • 17:31 - 17:34
    so in 1966, this was 50 cents.
  • 17:34 - 17:37
    Nowadays it's 8
    dollars, roughly,
  • 17:37 - 17:39
    in silver alone.
  • 17:39 - 17:42
    - [Voiceover] By 1966,
    foreign nations had had enough
  • 17:42 - 17:45
    of the U.S. collecting
    gold and printing cash.
  • 17:46 - 17:48
    And they had more value
    in dollars than the U.S.
  • 17:48 - 17:50
    had bullion in its vaults.
  • 17:50 - 17:53
    They demanded gold in return
    for their paper dollars.
  • 17:54 - 17:56
    Arguments about the
    value of the dollar
  • 17:56 - 17:58
    versus their currency ensued.
  • 17:59 - 18:02
    In 1971, President Nixon
    settled the matter.
  • 18:02 - 18:06
    He severed United States'
    currency from the gold standard.
  • 18:06 - 18:08
    - I directed Secretary Conelly
  • 18:08 - 18:10
    to suspend temporarily
    the convertibility
  • 18:10 - 18:14
    of the dollar into gold
    or other reserve assets
  • 18:14 - 18:16
    except in amounts and
    conditions determined
  • 18:16 - 18:19
    to be in the interest
    of monetary stability
  • 18:19 - 18:21
    and the best interest
    of the United States.
  • 18:22 - 18:24
    - [Voiceover] Never again
    could anyone legally demand
  • 18:24 - 18:27
    U.S. Government gold in
    exchange for paper dollars.
  • 18:28 - 18:31
    For better or worse, the
    dollar was now backed solely
  • 18:31 - 18:34
    by the full faith and credit
  • 18:34 - 18:35
    of the United States Government.
  • 18:36 - 18:39
    The wealthiest nation
    the world had ever known
  • 18:39 - 18:43
    would bet its future on
    a single word, trust.
  • 18:44 - 18:46
    - People have this
    mythology of money
  • 18:46 - 18:48
    that is based on
    very little fact.
  • 18:49 - 18:51
    And one of the nice
    things about Bitcoin
  • 18:51 - 18:54
    is that it forces people
    to start to ask questions
  • 18:54 - 18:56
    about the fundamentals of money.
  • 18:57 - 19:00
    - A Bitcoin is an attempt
  • 19:00 - 19:03
    to adopt the advanced
    computerized system
  • 19:03 - 19:06
    that we have, the internet,
  • 19:06 - 19:10
    to resurrecting to what
    money used to be all about.
  • 19:16 - 19:19
    (upbeat instrumental music)
  • 19:22 - 19:24
    - I think our dollar policies
    our monetary policies
  • 19:24 - 19:26
    our fiscal policies
    have absolutely created
  • 19:26 - 19:28
    a nation of debtors.
  • 19:28 - 19:31
    Not just personal debt,
    not just corporate debt
  • 19:31 - 19:32
    but government debt,
    you have to look
  • 19:32 - 19:34
    at those all together
    as one big thing.
  • 19:34 - 19:36
    What is the wealth
    of the nation?
  • 19:36 - 19:37
    Well, the wealth of the
    nation is a gigantic hole
  • 19:37 - 19:39
    of money that we owe to
    the rest of the world,
  • 19:39 - 19:42
    that is never going
    to be paid back.
  • 19:43 - 19:45
    - [Voiceover] Today the
    United States pays more
  • 19:45 - 19:48
    than 400 billion
    dollars in interest
  • 19:48 - 19:50
    to its creditors, every year.
  • 19:51 - 19:52
    When a government
    spends more money
  • 19:52 - 19:54
    than it collects in taxes,
  • 19:54 - 19:58
    it simply borrows more
    or it creates more.
  • 19:59 - 20:01
    At one time, every
    piece of paper money
  • 20:01 - 20:03
    was backed by gold.
  • 20:03 - 20:05
    Remember, for every
    20 dollar bill,
  • 20:05 - 20:08
    there was $20 worth of
    gold in a government vault.
  • 20:09 - 20:10
    Not anymore.
  • 20:12 - 20:14
    Today, governments
    create currency
  • 20:14 - 20:16
    by first creating bonds
    or treasury-bills.
  • 20:17 - 20:19
    These bonds are
    sold in the market,
  • 20:19 - 20:22
    generating funds for the
    government that issued them.
  • 20:24 - 20:27
    Large banks buy U.S.
    bonds to flip them,
  • 20:27 - 20:30
    selling them to the Federal
    Reserve at a profit.
  • 20:30 - 20:31
    This is the magic money machine.
  • 20:32 - 20:35
    You see, the Fed is
    America's central bank.
  • 20:35 - 20:37
    But it doesn't have any money,
  • 20:37 - 20:39
    no cash on its balance sheets.
  • 20:40 - 20:42
    When a bank buys a
    bond and takes it
  • 20:42 - 20:44
    to the Federal Reserve,
    the Fed simply says
  • 20:44 - 20:46
    "thank you Mr. Banker,
  • 20:46 - 20:48
    "here's the principal
    and some profit."
  • 20:48 - 20:48
    (ching, ching)
  • 20:48 - 20:50
    New money isn't exchanged,
  • 20:50 - 20:52
    it simply appears on
    the bank's accounts.
  • 20:52 - 20:53
    Magic.
  • 20:54 - 20:55
    For 100 years and counting,
  • 20:55 - 20:58
    the precise mechanisms
    of these bond purchases
  • 20:58 - 21:01
    have remained a secret.
  • 21:02 - 21:04
    Here's where it gets
    really interesting.
  • 21:05 - 21:07
    The Federal Reserve is
    not a Government agency.
  • 21:09 - 21:12
    It's a private entity
    and its shareholders
  • 21:12 - 21:14
    are banks which earn a dividend.
  • 21:14 - 21:17
    As much as 80 billion
    dollars per year, total,
  • 21:17 - 21:19
    are paid out to some
    of the very same banks
  • 21:19 - 21:22
    that sell the Government
    debt to the Fed.
  • 21:22 - 21:23
    Which banks?
  • 21:24 - 21:25
    Don't even bother asking.
  • 21:25 - 21:27
    That's also a secret.
  • 21:29 - 21:32
    In other words, the magic money
    machine answers to no one.
  • 21:34 - 21:37
    The Fed also sets the bar
    for how much interest you pay
  • 21:37 - 21:40
    for a car, home,
    or business loan.
  • 21:40 - 21:44
    - The Federal Reserve has
    been given the impossible task
  • 21:44 - 21:46
    of trying to run the credit
  • 21:46 - 21:48
    and monetary system
  • 21:48 - 21:51
    as though we are
    the Soviet Union.
  • 21:51 - 21:54
    It's the central planner
    for the key aspect
  • 21:54 - 21:57
    of capitalism which is how money
  • 21:57 - 21:59
    and credit is allocated.
  • 22:00 - 22:02
    The Federal Reserve, on balance,
  • 22:02 - 22:04
    does not help the economy.
  • 22:04 - 22:06
    On balance, it
    hurts the economy.
  • 22:06 - 22:09
    And it's bound to make mistakes
  • 22:09 - 22:11
    even with the best
    of intentions.
  • 22:12 - 22:14
    - [Voiceover] The Fed is also
    supposed to boost employment
  • 22:14 - 22:16
    with low interest rates.
  • 22:16 - 22:19
    Encouraging people and
    businesses to buy more goods
  • 22:19 - 22:20
    and services.
  • 22:21 - 22:23
    - Governments getting
    involved in money
  • 22:23 - 22:26
    is a good thing, and
    it's also a bad thing.
  • 22:26 - 22:30
    It's a good thing because money
  • 22:30 - 22:32
    is the arteries of the economy,
  • 22:32 - 22:34
    the blood supply of the economy.
  • 22:34 - 22:37
    Markets are subject to
  • 22:37 - 22:39
    bouts of euphoria and despair.
  • 22:40 - 22:43
    And it makes sense
    for governments
  • 22:43 - 22:47
    to back currency and
    to manipulate it.
  • 22:47 - 22:49
    Moving the money
    supply up and down
  • 22:49 - 22:53
    is the most powerful
    way to sedate
  • 22:53 - 22:56
    that boom and bust cycle.
  • 22:56 - 22:58
    - [Voiceover] Manipulating
    the supply of money
  • 22:58 - 23:02
    has short term and
    long term consequences.
  • 23:07 - 23:10
    (instrumental music)
  • 23:17 - 23:21
    Central banks aim to
    create new money carefully,
  • 23:21 - 23:24
    strategically and
    very, very slowly.
  • 23:24 - 23:26
    Releasing more money
    into the economy
  • 23:26 - 23:31
    cause prices to rise,
    ideally by 2% every year.
  • 23:31 - 23:34
    That's supposed to
    foster economic growth.
  • 23:34 - 23:37
    But, 2% inflation
    means the buying power
  • 23:37 - 23:40
    of one cash dollar
    in your pocket today,
  • 23:40 - 23:43
    will be 98 cents next year.
  • 23:43 - 23:45
    And less nearly
    every year to come.
  • 23:47 - 23:49
    - Since 1913, when the
    Federal Reserve took over
  • 23:49 - 23:51
    the United States dollar,
  • 23:51 - 23:53
    we've seen that the United
    States dollar has decreased
  • 23:53 - 23:55
    in value 98%.
  • 23:55 - 23:58
    Inflation is a far higher tax
  • 23:58 - 24:01
    because on your income
    you pay it just once.
  • 24:01 - 24:03
    If inflation is 2%,
    you're paying a 2% tax
  • 24:03 - 24:05
    on your net worth
    every single year.
  • 24:05 - 24:07
    Your net worth that
    you held in currency.
  • 24:08 - 24:10
    - [Voiceover] So,
    what does that mean?
  • 24:12 - 24:15
    If you earned a dollar in 1913,
  • 24:15 - 24:17
    you could buy 16
    loaves of bread.
  • 24:18 - 24:21
    Today, a dollar
    barely buys you one.
  • 24:22 - 24:26
    That's not a quaint notion of
    how cheap things used to be.
  • 24:26 - 24:28
    It's proof that the
    value of your cash
  • 24:28 - 24:30
    is slowly withering away.
  • 24:31 - 24:35
    That one dollar
    invested at 2% in 1913
  • 24:35 - 24:39
    would now be worth 7
    dollars and 24 cents.
  • 24:39 - 24:43
    More than a 600% return
    versus a near-total loss.
  • 24:45 - 24:47
    - The U.S. dollar has gone
    from being worth one dollar
  • 24:47 - 24:51
    to now being worth
    about 4 cents,
  • 24:51 - 24:54
    so that's 96% of
    its original value.
  • 24:54 - 24:57
    That's a direct result
    of government control.
  • 24:58 - 24:59
    - [Voiceover] Governments
    don't create money
  • 24:59 - 25:01
    from thin air all alone.
  • 25:01 - 25:04
    You play a key role in
    the magic money machine.
  • 25:16 - 25:19
    - It's not really the central
    banks that are the problem.
  • 25:19 - 25:20
    They are part of the problem.
  • 25:20 - 25:21
    But the real problem is
    that we've given the power
  • 25:21 - 25:24
    to create money
    to the same banks
  • 25:24 - 25:26
    that caused the
    financial crisis.
  • 25:27 - 25:29
    - [Voiceover] We put our
    paychecks and savings
  • 25:29 - 25:32
    into a bank account and
    draw from it as we need it.
  • 25:32 - 25:35
    The banks are the custodians
    of our money, right?
  • 25:36 - 25:37
    Wrong!
  • 25:37 - 25:39
    It is now the
    property of the bank,
  • 25:39 - 25:41
    on their balance sheets.
  • 25:41 - 25:44
    They can do just about
    anything they want with it,
  • 25:44 - 25:47
    for example create new money.
  • 25:47 - 25:50
    Here's how, your bank
    account shows 100 dollars,
  • 25:50 - 25:54
    but the bank only holds
    three and loans 97
  • 25:54 - 25:55
    to Bob to buy something.
  • 25:57 - 26:00
    In the bank's computers,
    you still have 100 dollars
  • 26:00 - 26:01
    in your account.
  • 26:01 - 26:04
    But Bob now has 97 dollars
  • 26:04 - 26:06
    of new virtual money
    in his account.
  • 26:06 - 26:08
    Just digits on a
    computer screen.
  • 26:08 - 26:11
    There's no cash, no
    gold, or anything else
  • 26:11 - 26:14
    backing up the new
    numbers in Bob's account.
  • 26:14 - 26:16
    Just his promise to pay it back.
  • 26:17 - 26:20
    This is new money
    created as debt.
  • 26:22 - 26:25
    When those 97 dollars
    are spent, say in a shop,
  • 26:25 - 26:28
    the shop owner deposits
    it into another bank
  • 26:28 - 26:31
    and it is lent out again
    and again and again.
  • 26:31 - 26:33
    And each of these
    people have numbers
  • 26:33 - 26:37
    in their accounts showing
    that they own this money.
  • 26:37 - 26:40
    So your original 100
    dollars has multiplied,
  • 26:40 - 26:44
    now there are over 3,300
    dollars in the system.
  • 26:44 - 26:47
    This process of loaning
    out far more money
  • 26:47 - 26:50
    than a bank actually
    has, as cash on hand,
  • 26:50 - 26:53
    is called fractional
    reserve banking.
  • 26:54 - 26:57
    - In the U.K., 97% of
    the money that exists,
  • 26:57 - 27:00
    is just numbers in
    the computer system.
  • 27:00 - 27:02
    And those numbers have
    been created by the banks.
  • 27:03 - 27:05
    - [Voiceover] Banks earn
    untold billions in interest
  • 27:05 - 27:08
    every year by creating
    and lending virtual money.
  • 27:08 - 27:11
    What's more, banks don't
    even need your deposit
  • 27:11 - 27:13
    to create new money.
  • 27:13 - 27:16
    If they consider someone
    credit-worthy for a loan,
  • 27:16 - 27:20
    they can put new magic money
    into his or her account,
  • 27:20 - 27:21
    and start charging interest.
  • 27:22 - 27:23
    - So, reporters
    talk about Bitcoin
  • 27:23 - 27:26
    as though it's the
    first digital currency.
  • 27:26 - 27:28
    But actually we use
    digital currency
  • 27:28 - 27:31
    every time you
    make a transaction
  • 27:31 - 27:34
    through internet banking,
    or your bank card.
  • 27:34 - 27:36
    Actually it's not
    only digital currency
  • 27:36 - 27:38
    it's digital currency
    that is created by
  • 27:38 - 27:40
    the banks, essentially,
    out of nothing.
  • 27:40 - 27:43
    - [Voiceover] In other
    words, all new money is debt.
  • 27:43 - 27:45
    This is the part
    of money creation
  • 27:45 - 27:48
    that isn't taught
    in economics class.
  • 27:48 - 27:51
    Money in paychecks,
    bank accounts,
  • 27:51 - 27:55
    401ks, that loan to
    Bob, credit card debt,
  • 27:55 - 27:59
    your homeloan, all began
    life as virtual money
  • 27:59 - 28:01
    created by the banks.
  • 28:01 - 28:04
    The entire system
    is based on trust.
  • 28:04 - 28:06
    Trust in the bank's solvency.
  • 28:06 - 28:09
    Trust in the debtor's
    ability to repay their debt.
  • 28:10 - 28:12
    If all bank customers
    demanded just 3%
  • 28:12 - 28:15
    of their deposits
    right now, in cash,
  • 28:15 - 28:19
    this "run on the banks"
    would reveal the truth.
  • 28:21 - 28:23
    Almost none that paper
    currency you think
  • 28:23 - 28:25
    is in your bank account exists.
  • 28:26 - 28:27
    It never did.
  • 28:29 - 28:32
    (birds chirping)
  • 28:32 - 28:34
    Remember the drunken party?
  • 28:34 - 28:36
    (rock instrumental music)
  • 28:36 - 28:38
    Our financial crisis
    had everything
  • 28:38 - 28:40
    to do with virtual dollars.
  • 28:40 - 28:42
    Too many people, with
    very little income,
  • 28:42 - 28:45
    borrowed a lot of money
    they could never repay.
  • 28:45 - 28:47
    But the banks didn't care.
  • 28:47 - 28:48
    They didn't have to.
  • 28:48 - 28:51
    They quickly made
    and sold shaky loans
  • 28:51 - 28:53
    to someone else, for a profit.
  • 28:53 - 28:54
    - And I got them all approved.
  • 28:54 - 28:55
    - Hey!
  • 28:55 - 28:55
    (laughter)
  • 28:55 - 28:57
    - Apply now.
  • 28:57 - 28:59
    - [Voiceover] Selling bad
    loans was a good business,
  • 28:59 - 29:03
    until the whole thing blew up
    in a global financial crisis.
  • 29:09 - 29:13
    The magic money machine
    destroyed 30 million real jobs.
  • 29:17 - 29:20
    The United States alone
    lost 16 trillion dollars
  • 29:20 - 29:22
    in household wealth.
  • 29:22 - 29:26
    And the banks foreclosed on
    more than 1 million homes.
  • 29:29 - 29:33
    (angelic instrumental music)
  • 29:38 - 29:41
    Selling subprime loans and
    betting they will fail,
  • 29:41 - 29:44
    may not be sacred,
    but it is lucrative.
  • 29:45 - 29:48
    As much as a quarter of
    our best and brightest
  • 29:48 - 29:52
    are being lured by the siren
    call of the money machine.
  • 29:54 - 29:56
    Instead of science, engineering,
  • 29:56 - 29:59
    or medicine, they chose
    a career playing with,
  • 29:59 - 30:02
    betting with, other
    people's money
  • 30:02 - 30:04
    to get rich quick.
  • 30:04 - 30:05
    Very rich.
  • 30:05 - 30:08
    And sometimes, they
    take shortcuts.
  • 30:09 - 30:12
    ♪ Get by on a nickle and a dime,
  • 30:12 - 30:17
    ♪ Money has a funny
    way of bringing us down
  • 30:17 - 30:22
    ♪ They say it makes the
    world go round and around♪
  • 30:22 - 30:23
    - My ancestors in Greece talked
  • 30:23 - 30:27
    about the corrupting
    influence of power.
  • 30:27 - 30:30
    And nothing has changed
    in these 3,000 years.
  • 30:30 - 30:33
    When you give control of
    a massive amounts of money
  • 30:33 - 30:36
    to a few individuals,
    they will take advantage
  • 30:36 - 30:37
    of that control.
  • 30:37 - 30:39
    ♪ Oh, oh, oh♪
  • 30:40 - 30:42
    - Banks today are
    factoring in fines
  • 30:42 - 30:45
    and money laundering and all
    the rules that they break
  • 30:45 - 30:47
    into their cost
    of doing business.
  • 30:47 - 30:49
    JP Morgan is today
    coming out and saying
  • 30:49 - 30:52
    that Bitcoin is not a legitimate
    way of doing business.
  • 30:52 - 30:54
    Banks today are
    tied into a system
  • 30:54 - 30:57
    that is completely rigged
    to basically harvest money
  • 30:57 - 30:59
    from the entire global economy
  • 30:59 - 31:01
    and pump it into the
    hands of the very few.
  • 31:02 - 31:06
    ♪ Don't get consumed
    by your greed
  • 31:06 - 31:07
    ♪ La la la la la la♪
  • 31:07 - 31:10
    - The existing banking
    system is cozy.
  • 31:10 - 31:14
    Its captured the regulators,
    it extracts enormous value
  • 31:14 - 31:17
    from society without
    delivering anything in return
  • 31:17 - 31:19
    and it is parasitic in nature.
  • 31:20 - 31:23
    - The banks play a very
    pivotal role in an economy.
  • 31:23 - 31:25
    You look at any successful
    economy it has successful banks.
  • 31:25 - 31:28
    There is a very close
    correlation with banking profits
  • 31:28 - 31:29
    and the economy as a whole.
  • 31:30 - 31:31
    - [Voiceover] In
    Medieval Europe, a banker
  • 31:31 - 31:34
    who couldn't repay
    depositors was hanged.
  • 31:34 - 31:37
    Today, that same banker
    would get bailed out,
  • 31:37 - 31:41
    paid bonuses and enjoy
    some tax benefits, too.
  • 31:42 - 31:45
    To date, no senior
    U.S. banking executive
  • 31:45 - 31:48
    has been charged for
    selling the bad loans
  • 31:48 - 31:50
    that fueled the great recession.
  • 31:56 - 31:58
    In December 2014,
  • 31:58 - 32:01
    just 6 years after the
    last banking crisis
  • 32:01 - 32:04
    brought the world to its knees,
  • 32:04 - 32:06
    a Congressman snuck a
    last minute provision,
  • 32:06 - 32:10
    written by Citigroup into
    a crucial funding bill.
  • 32:11 - 32:14
    The provision allows
    the largest U.S. banks
  • 32:14 - 32:17
    to once again make
    risky derivatives bets
  • 32:17 - 32:19
    with bank deposits.
  • 32:21 - 32:22
    But no need to worry,
  • 32:22 - 32:26
    if the banks implode again,
    lost deposits must be paid back
  • 32:29 - 32:31
    by U.S. taxpayers.
  • 32:48 - 32:50
    (bell rings)
  • 32:50 - 32:53
    Today's financial
    innovators package assets
  • 32:53 - 32:57
    in ever more complex
    ways, slicing, dicing,
  • 32:57 - 33:01
    securitizing, always using
    someone else's money.
  • 33:01 - 33:05
    They sell debt, transfer
    risks, leverage bets.
  • 33:05 - 33:08
    That's what they
    call innovation.
  • 33:09 - 33:10
    - When you're talking
    about financial innovation,
  • 33:10 - 33:13
    Bitcoin certainly is
    a very good example
  • 33:13 - 33:15
    of innovation, but
    there's also been
  • 33:15 - 33:17
    other innovations that people,
  • 33:17 - 33:19
    a bit closer to the
    world of finance
  • 33:19 - 33:22
    would cite as good examples.
  • 33:22 - 33:25
    An example of that would be
    the original swaps market,
  • 33:25 - 33:28
    from there moving on to
    the credit default swap.
  • 33:28 - 33:31
    It is an excellent example
    of financial innovation.
  • 33:31 - 33:33
    But also if it's
    used incorrectly,
  • 33:33 - 33:36
    it can create a lot of
    problems as we've just seen.
  • 33:37 - 33:39
    - [Voiceover] History teaches
    that the most revolutionary
  • 33:39 - 33:42
    and disruptive innovation
    nearly always comes
  • 33:42 - 33:46
    from the fringe, not
    from corporate cubicles.
  • 33:46 - 33:48
    True innovators see
    the world differently.
  • 33:48 - 33:50
    They see the big picture.
  • 33:50 - 33:53
    Creating new products
    and entire systems
  • 33:53 - 33:55
    that lead to new industries.
  • 33:55 - 34:00
    Steve Jobs called them the
    "square cogs in round holes".
  • 34:00 - 34:03
    - It's unsurprising
    that new innovations
  • 34:03 - 34:07
    always come from a niche
    group of early adopters
  • 34:07 - 34:10
    because it is inherently
    very hard for many people
  • 34:10 - 34:13
    to realize the benefits
    of new technologies.
  • 34:13 - 34:16
    In 2011, most Bitcoin
    community people
  • 34:16 - 34:19
    were either
  • 34:19 - 34:22
    people from the technology
    space, the geeks and hackers,
  • 34:22 - 34:26
    or people from the traditional
    financial industry.
  • 34:26 - 34:29
    There are even some bankers
    and hedge fund traders
  • 34:29 - 34:31
    using Bitcoinica at
    that time as well,
  • 34:31 - 34:33
    which was really
    surprising to me.
  • 34:35 - 34:37
    - [Voiceover] A radical
    new idea is often met
  • 34:37 - 34:40
    with skepticism,
    ridicule, even hostility
  • 34:40 - 34:44
    from those who stand to
    lose most from its success.
  • 34:44 - 34:48
    Case in point, the automobile.
  • 34:51 - 34:53
    In the late 19th
    century, Karl Benz
  • 34:53 - 34:55
    and others built the first cars,
  • 34:55 - 34:58
    contraptions that could
    threaten the stagecoach
  • 34:58 - 35:00
    and railroad industries.
  • 35:00 - 35:03
    These "self-propelled
    vehicles'" or road trains,
  • 35:03 - 35:06
    would certainly scare
    horses, injure people
  • 35:06 - 35:08
    and damage roads.
  • 35:08 - 35:12
    Cars, the railroad barons
    said, were just too dangerous.
  • 35:13 - 35:15
    And to protect us,
    they used their power
  • 35:15 - 35:18
    to pass a law in 1865.
  • 35:18 - 35:21
    It required every
    automobile in England
  • 35:21 - 35:23
    to observe a four mile
    per hour speed limit
  • 35:23 - 35:27
    and to be operated
    by a crew of three,
  • 35:27 - 35:31
    a driver, an engineer
    and a flag man.
  • 35:31 - 35:34
    This heroic flagman
    walked in front of the car
  • 35:34 - 35:37
    to warn fellow citizens
    of the coming danger.
  • 35:37 - 35:39
    The railroad tycoons,
    the lawmakers,
  • 35:39 - 35:43
    the self-appointed
    gatekeepers used regulation
  • 35:43 - 35:44
    to stifle innovation.
  • 35:45 - 35:48
    But they didn't
    invent the flagman.
  • 35:48 - 35:50
    He's been around
    for a long time.
  • 35:52 - 35:55
    For centuries, very
    few could read.
  • 35:55 - 35:56
    Books were copied by hand.
  • 35:56 - 35:59
    The people in control, political
  • 35:59 - 36:02
    and religious leaders,
    wanted to keep it that way.
  • 36:02 - 36:05
    And they greeted Johann
    Gutenberg's printing press
  • 36:05 - 36:09
    with licensing laws,
    publishing bans, taxes.
  • 36:09 - 36:12
    In some parts of the world,
    printing was a crime,
  • 36:12 - 36:14
    punishable by death.
  • 36:14 - 36:16
    After all, they were
    just protecting us
  • 36:16 - 36:18
    from dangerous ideas.
  • 36:18 - 36:20
    Before the printing
    press, there were
  • 36:20 - 36:24
    an estimated 30,000
    books in all of Europe.
  • 36:24 - 36:26
    50 years later, there
    were 10 million.
  • 36:27 - 36:29
    As Gutenberg's
    invention flourished,
  • 36:29 - 36:31
    the Dark Ages withered.
  • 36:31 - 36:33
    Progress couldn't be stopped.
  • 36:33 - 36:36
    But the flagman
    never stops trying.
  • 36:36 - 36:38
    His masters set
    him loose on each
  • 36:38 - 36:40
    of these innovations
  • 36:40 - 36:42
    because they threatened
    someone's profits,
  • 36:42 - 36:44
    someone's control.
  • 36:48 - 36:51
    But remember, this is
    a story about money.
  • 36:51 - 36:55
    What if a technological
    innovation allowed anyone
  • 36:55 - 36:58
    in the world to
    be their own bank,
  • 36:58 - 37:02
    to create a currency free
    from taxes and banking fees?
  • 37:13 - 37:16
    The U.S. Constitution forbids
    citizens from printing
  • 37:16 - 37:19
    or minting their own
    currency, competing with
  • 37:19 - 37:22
    or undercutting reliance
    on the U.S. dollar.
  • 37:24 - 37:27
    In 1998, Bernard
    von Nothaus decided
  • 37:27 - 37:30
    to test the resolve of
    the federal government.
  • 37:31 - 37:33
    - The Liberty Dollar
    was available in gold,
  • 37:33 - 37:36
    silver, platinum, and copper.
  • 37:36 - 37:39
    It was available in three
    forms, both in specie,
  • 37:39 - 37:40
    in other words, gold and silver,
  • 37:40 - 37:45
    in paper, as warehouse
    receipts and in digital form.
  • 37:45 - 37:48
    Obviously, the government
    didn't like it.
  • 37:48 - 37:52
    They arrested me
    and convicted me
  • 37:52 - 37:55
    of counterfeiting,
    fraud, and conspiracy.
  • 37:55 - 37:58
    And i'm currently
    awaiting 22 years sentence
  • 37:58 - 38:00
    in federal prison.
  • 38:02 - 38:03
    - [Voiceover] Lesson learned.
  • 38:04 - 38:07
    - At a hacker's
    convention in Netherland,
  • 38:07 - 38:10
    there was a young hacker there
  • 38:10 - 38:15
    who used the alias
    of Satoshi Nakamoto,
  • 38:16 - 38:18
    and he talked to
    a friend of mine
  • 38:18 - 38:21
    and he identified the
    Liberty Dollar and me
  • 38:21 - 38:25
    as inspiring him to
    create a new currency.
  • 38:26 - 38:28
    - [Voiceover] Bernard
    von Nothaus's arrest
  • 38:28 - 38:30
    for creating "private money",
  • 38:30 - 38:32
    may also have inspired
    Bitcoin's inventor
  • 38:32 - 38:35
    to keep a lower profile,
  • 38:35 - 38:37
    publishing the
    invention under an alias
  • 38:39 - 38:40
    and vanishing.
  • 38:40 - 38:45
    - Part of me is interested
    to know who Satoshi is.
  • 38:45 - 38:48
    Maybe that's part of the
    mystique of the story,
  • 38:48 - 38:51
    it's completely irrelevant
    to the functioning of Bitcoin
  • 38:51 - 38:55
    because we have
    the code to read.
  • 38:55 - 38:57
    But it would be
    kind of fun to know.
  • 39:00 - 39:02
    - Who is Archimedes?
  • 39:03 - 39:06
    Who is Euclid?
  • 39:07 - 39:08
    We don't know.
  • 39:08 - 39:13
    We don't know if Euclid was
    one person or multiple people?
  • 39:13 - 39:14
    And you know what?
  • 39:14 - 39:15
    It doesn't matter.
  • 39:15 - 39:18
    Euclidian geometry works
  • 39:18 - 39:21
    whether i know who
    Euclid was or not.
  • 39:21 - 39:24
    Whether Euclid was a
    moral and good person.
  • 39:24 - 39:28
    Or whether he was a corrupt
    plutocrat and a bastard.
  • 39:29 - 39:34
    Science and mathematics
    have essential truths
  • 39:34 - 39:38
    that stands alone
    irrespective of its inventors
  • 39:38 - 39:41
    and irrespective
    of their motives.
  • 39:42 - 39:46
    Well, Bitcoin is a system based
  • 39:46 - 39:47
    on mathematical truths.
  • 39:47 - 39:50
    And these mathematical
    truths stand alone.
  • 39:50 - 39:52
    We can read the
    source code in Bitcoin
  • 39:52 - 39:55
    and understand it
    and it will be true
  • 39:55 - 39:58
    whether Satoshi Nakamoto
    is a man, a woman,
  • 39:58 - 40:01
    a collection of individuals,
    a government agency
  • 40:01 - 40:03
    or aliens from the future.
  • 40:05 - 40:07
    - [Voiceover] Bitcoin
    is digital currency
  • 40:07 - 40:09
    and computer software.
  • 40:10 - 40:13
    Capital b Bitcoin
    is the shared code
  • 40:13 - 40:15
    that creates a global
    payment network,
  • 40:15 - 40:18
    using computers connected
    to the internet.
  • 40:19 - 40:21
    Bitcoins are virtual currency.
  • 40:21 - 40:26
    Digital money created, stored
    and exchanged on that network.
  • 40:26 - 40:29
    But unlike virtual dollars
    created by a banker,
  • 40:29 - 40:31
    this new currency
    was created with math
  • 40:31 - 40:33
    by an anonymous inventor.
  • 40:34 - 40:38
    Bitcoin is an open-source
    software protocol,
  • 40:38 - 40:41
    like much of the code supporting
    the internet and email.
  • 40:42 - 40:46
    Open-source means anyone,
    everyone can use the protocol.
  • 40:46 - 40:49
    No one person or
    company can control it.
  • 40:49 - 40:52
    Every change to the
    software is public,
  • 40:52 - 40:54
    open and transparent.
  • 40:56 - 40:58
    The code was first
    developed by Satoshi.
  • 40:59 - 41:01
    Then there were
    dozens, now hundreds
  • 41:01 - 41:04
    of programmers
    constantly collaborating
  • 41:04 - 41:07
    to improve Bitcoin's
    features and security.
  • 41:09 - 41:11
    So what makes Bitcoin
    a breakthrough?
  • 41:12 - 41:14
    It tackles an
    ancient human dilemma
  • 41:14 - 41:16
    and solves a computer
    science problem.
  • 41:17 - 41:19
    Any shared information, or data
  • 41:19 - 41:21
    can be flawed, corrupted.
  • 41:22 - 41:24
    Anything can be faked.
  • 41:27 - 41:30
    How do we know that what we're
    receiving can be trusted?
  • 41:33 - 41:34
    - In our traditional mindset,
  • 41:34 - 41:36
    it's very important
    to know who is behind
  • 41:36 - 41:39
    this currency because
    their reputation
  • 41:39 - 41:40
    is significant in
    knowing that our funds
  • 41:40 - 41:43
    in the true wealth
    is actually safe.
  • 41:43 - 41:44
    - [Voiceover] In
    finance, we rely
  • 41:44 - 41:46
    on trusted third
    parties like banks,
  • 41:46 - 41:49
    credit card companies,
    remittance services.
  • 41:49 - 41:51
    They keep track of
    money as it moves
  • 41:51 - 41:52
    from one account to another.
  • 41:52 - 41:54
    And they charge us
    handsomely for it.
  • 41:54 - 41:57
    We trust that their
    digital ledgers of credits
  • 41:57 - 41:59
    and debits balance.
  • 42:00 - 42:02
    A financial system that
    cuts out these middlemen
  • 42:02 - 42:05
    could be faster, cheaper
  • 42:05 - 42:07
    and more secure.
  • 42:07 - 42:09
    But Bitcoin is digital.
  • 42:09 - 42:13
    Music and movies are easily
    pirated, copied, stolen.
  • 42:13 - 42:15
    How can a digital
    currency retain value
  • 42:15 - 42:18
    if anyone can make
    a million copies?
  • 42:18 - 42:21
    The answer is at the core
    of Satoshi's invention.
  • 42:21 - 42:24
    A Bitcoin is not a
    file on a computer.
  • 42:24 - 42:27
    It's an entry in the
    publicly- distributed database
  • 42:27 - 42:28
    called the blockchain.
  • 42:29 - 42:32
    Just as the Medici kept a
    ledger of credits and debits.
  • 42:32 - 42:35
    Today's banks record
    each transaction
  • 42:35 - 42:37
    as a plus and minus
    in their ledgers.
  • 42:37 - 42:40
    Now we call them databases.
  • 42:40 - 42:42
    Bank accounts are replaced
    by a digital wallet
  • 42:42 - 42:44
    that you alone control.
  • 42:44 - 42:46
    Bitcoin's ledger
    is the blockchain.
  • 42:46 - 42:49
    A record of every
    bitcoin in existence
  • 42:49 - 42:52
    and every bitcoin
    transaction ever made.
  • 42:52 - 42:55
    It always balances because
    no bitcoin ever leaves it.
  • 42:57 - 43:00
    When a bitcoin is "sent"
    from one digital wallet
  • 43:00 - 43:02
    to another, what they
    are really sending
  • 43:02 - 43:04
    is control over that
    part of the database.
  • 43:04 - 43:08
    Code that is a unique
    key for the new owner.
  • 43:08 - 43:10
    As the network
    processes transactions,
  • 43:10 - 43:13
    it constantly synchronizes
    the one ledger
  • 43:13 - 43:15
    across the global network.
  • 43:15 - 43:17
    Each computer, or Bitcoin miner,
  • 43:17 - 43:21
    has a complete and
    identical copy.
  • 43:21 - 43:23
    And because the
    blockchain is public,
  • 43:23 - 43:27
    it cannot be controlled by
    any one person or computer.
  • 43:27 - 43:29
    Owners of the Bitcoin
    mining computers
  • 43:29 - 43:32
    are rewarded with new Bitcoins
    for processing transactions
  • 43:32 - 43:34
    and keeping the network secure.
  • 43:40 - 43:42
    In other words, the Bitcoin
    network replaces banks
  • 43:42 - 43:44
    and bankers.
  • 43:45 - 43:47
    Today, the combined
    computing power
  • 43:47 - 43:49
    of this global
    network is greater
  • 43:49 - 43:53
    than the 500 biggest
    supercomputers combined,
  • 43:53 - 43:55
    times 10,000!
  • 43:56 - 43:58
    And because every
    transaction is verified
  • 43:58 - 44:00
    and recorded by the network,
  • 44:00 - 44:02
    a bitcoin cannot be forged.
  • 44:02 - 44:06
    Digital currency cannot be
    debased with cheap metals,
  • 44:06 - 44:08
    or printed by the
    billion at will.
  • 44:08 - 44:12
    Too much currency can
    unleash a monster,
  • 44:12 - 44:14
    skyrocketing prices,
    trillion dollar bills
  • 44:14 - 44:17
    that can't buy a loaf of bread.
  • 44:17 - 44:19
    - There is a big movement
    in the U.S. demanding
  • 44:19 - 44:21
    that the Fed be audited so
  • 44:21 - 44:22
    that we can find out
    what they are doing.
  • 44:23 - 44:25
    Nobody really knows
    how many dollars
  • 44:25 - 44:27
    are in existence for example.
  • 44:27 - 44:28
    Ben Bernanke created
    several trillions
  • 44:28 - 44:30
    of dollars over the
    last several years.
  • 44:30 - 44:33
    But nobody really knows
    where they landed.
  • 44:33 - 44:35
    - At any time for any reason,
  • 44:35 - 44:37
    the central banks can print
    as much money as they want.
  • 44:37 - 44:40
    They call it fancy things
    like quantitative easing.
  • 44:40 - 44:41
    And when they do that
    it makes the dollar
  • 44:41 - 44:44
    or euros or yen that you
    and I have worth less.
  • 44:44 - 44:48
    So if the world starts using
    bitcoin as their currency
  • 44:48 - 44:51
    it can't be controlled by
    central bankers or politicians.
  • 44:51 - 44:53
    - [Voiceover] Remember,
    central banks create money
  • 44:53 - 44:55
    to boost the economy and try
  • 44:55 - 44:58
    to pull it back out
    before inflation heats up.
  • 44:58 - 45:01
    But no one knows how much
    magic money global banks
  • 45:01 - 45:04
    are creating to boost their
    profits with questionable loans.
  • 45:05 - 45:06
    - Bitcoin is completely
    the opposite.
  • 45:06 - 45:07
    It's totally transparent.
  • 45:07 - 45:09
    You know exactly how many exist.
  • 45:10 - 45:12
    - [Voiceover] The computer
    code behind Bitcoin
  • 45:12 - 45:14
    has a built in brake pedal,
  • 45:14 - 45:15
    cutting the creation of bitcoins
  • 45:15 - 45:17
    in half every four years.
  • 45:18 - 45:21
    This ensures a transparent
    controlled scarcity
  • 45:21 - 45:24
    and ultimately limits the
    total number of bitcoins
  • 45:24 - 45:26
    to 21 million.
  • 45:26 - 45:30
    No lobbyist, no politician,
    no banker can create more,
  • 45:31 - 45:35
    or change the mathematical
    rules dictating their creation.
  • 45:35 - 45:37
    - Advancing accountability.
  • 45:37 - 45:39
    And that's something that's
    the most exciting about Bitcoin
  • 45:39 - 45:41
    and technology behind it.
  • 45:41 - 45:44
    Is not so much that it
    will supplant the dollar
  • 45:44 - 45:47
    or that it will supplant
    government itself.
  • 45:47 - 45:50
    But all of a sudden there is
    a competitor to government.
  • 45:50 - 45:52
    And that government
    itself now needs
  • 45:52 - 45:55
    to look over its shoulder
    more than it did.
  • 45:55 - 45:57
    - [Voiceover] This
    new digital currency
  • 45:57 - 45:59
    can be purchased online
    with a credit card
  • 45:59 - 46:01
    or in person with cash.
  • 46:01 - 46:04
    And it has the five key
    characteristics of money.
  • 46:05 - 46:07
    But is it a store of value?
  • 46:08 - 46:11
    Is it stable or will
    it diminish over time,
  • 46:11 - 46:15
    like a commodity rendered
    useless, or a crop that fails?
  • 46:16 - 46:18
    The ultimate power
    of a cryptocurrency
  • 46:18 - 46:20
    is unleashed by
    mainstream adoption
  • 46:20 - 46:24
    and an ever-growing
    volume of transactions.
  • 46:25 - 46:28
    - With bitcoin, the
    currency is being created
  • 46:28 - 46:30
    much more slowly than
    other currencies.
  • 46:30 - 46:32
    And the effect of that has been
  • 46:32 - 46:35
    to turn it into what is
    essentially a speculative asset.
  • 46:35 - 46:37
    If you ask a lot of
    Bitcoin enthusiasts
  • 46:37 - 46:40
    whether they are spending
    the currency, they're not.
  • 46:40 - 46:42
    They're sitting on it and
    waiting for the price to go up.
  • 46:42 - 46:45
    It isn't a currency if you
    don't use it to pay people.
  • 46:45 - 46:47
    The point is that the
    average person is quite happy
  • 46:47 - 46:52
    to walk into a bar and hand
    over a five dollar note
  • 46:52 - 46:54
    in order to get a drink.
  • 46:54 - 46:56
    So you've got to
    realize that most people
  • 46:56 - 46:58
    are happy with the
    money system they have.
  • 47:00 - 47:02
    - [Voiceover] If most
    people are happy with cash,
  • 47:02 - 47:05
    they're in love with plastic.
  • 47:05 - 47:08
    In the U.S. two-thirds
    of in-person sales
  • 47:08 - 47:10
    are done with debit
    or credit cards.
  • 47:11 - 47:15
    That plastic is a 60
    year old technology,
  • 47:15 - 47:16
    created by a middleman.
  • 47:16 - 47:19
    Never designed for the internet.
  • 47:19 - 47:22
    Each transaction
    requires personal data
  • 47:22 - 47:25
    like your name and address.
  • 47:25 - 47:27
    Credit card databases
    are regularly hacked
  • 47:28 - 47:32
    with fraudulent purchases
    charged to your account.
  • 47:32 - 47:35
    Criminals buy and sell
    stolen credit cards
  • 47:35 - 47:39
    by the thousands in dark
    corners of the internet.
  • 47:39 - 47:41
    In some parts of
    London, one-third
  • 47:41 - 47:46
    of all online credit card
    transactions are fraudulent.
  • 47:46 - 47:50
    Card issuers don't hold
    you responsible for fraud
  • 47:50 - 47:52
    but protection
    comes with a price,
  • 47:52 - 47:54
    2 to 4% in fees.
  • 47:54 - 47:57
    That's 50 billion
    dollars a year.
  • 47:57 - 47:59
    - The issue with credit cards
  • 47:59 - 48:00
    from the merchant's perspective
  • 48:00 - 48:02
    is there's a lot of risk.
  • 48:02 - 48:04
    If they a take a credit card,
    there might be a chargeback,
  • 48:04 - 48:07
    there might be
    fraudulent purchases.
  • 48:07 - 48:08
    In fact there are
    hundreds of billions
  • 48:08 - 48:11
    of dollars every year
    in fraudulent purchases.
  • 48:12 - 48:14
    - [Voiceover] A bitcoin
    purchase is done for pennies
  • 48:14 - 48:16
    but there are no protections.
  • 48:16 - 48:18
    If you lose your passwords,
  • 48:18 - 48:20
    or are fooled into
    paying the wrong person,
  • 48:20 - 48:23
    you can never get
    your money back.
  • 48:23 - 48:25
    It is like digital cash.
  • 48:25 - 48:28
    For a seller, this means
    no chargeback risks.
  • 48:28 - 48:32
    For an e-commerce companies
    like Expedia or Overstock,
  • 48:32 - 48:36
    cutting credit card fees can
    double their profit margin.
  • 48:37 - 48:40
    - You could not miss the
    point more effectively
  • 48:40 - 48:43
    than by thinking of
    bitcoin as a currency
  • 48:43 - 48:45
    and payment network that
    will make shopping easier
  • 48:45 - 48:47
    for the first world.
  • 48:47 - 48:51
    Bitcoin is about everything
    else, everywhere else.
  • 48:54 - 48:56
    - [Voiceover] There
    are 2.5 billion people
  • 48:56 - 48:58
    without a bank account.
  • 48:59 - 49:02
    With Bitcoin, a mobile phone
    with an internet connection
  • 49:02 - 49:06
    is now a bank, with access
    to the global market place.
  • 49:07 - 49:09
    - What happens when
    Bitcoin services
  • 49:09 - 49:11
    and infrastructure
    and Bitcoin wallets
  • 49:11 - 49:13
    and payment processors start
    going into these countries.
  • 49:13 - 49:16
    These people will be
    able to gain benefits
  • 49:16 - 49:19
    from trade where they
    could not previously.
  • 49:19 - 49:23
    These people will be
    able to send money home,
  • 49:23 - 49:25
    international
    remittance, which is one
  • 49:25 - 49:28
    of the major pain points of
    the current financial system.
  • 49:29 - 49:30
    - Here, if i send 100 dollars.
  • 49:30 - 49:33
    With banks it's
    going to cost me 20%.
  • 49:33 - 49:35
    Western Union's
    going to cost 10%.
  • 49:35 - 49:38
    Other options that are
    competing with Western Union
  • 49:38 - 49:40
    are still going to be about 5%.
  • 49:40 - 49:43
    And if you are sending
    to really remote areas
  • 49:43 - 49:46
    it's going to be anywhere
    between 15 and 30%.
  • 49:49 - 49:50
    - So in terms of
    money remittances
  • 49:50 - 49:53
    it is going to be a game
    changer using Bitcoin.
  • 49:53 - 49:54
    You do not need a bank account.
  • 49:54 - 49:56
    You just need an
    internet connection
  • 49:56 - 49:58
    and a wallet to get set up.
  • 49:58 - 50:01
    It's a tool to give
    people an access
  • 50:01 - 50:03
    into the global ecosystem
    and give them a promise
  • 50:03 - 50:06
    for an economic future and
    specifically provide a way
  • 50:06 - 50:09
    for them to not be
    dependent on a government
  • 50:09 - 50:11
    that could shut down
    their bank accounts
  • 50:11 - 50:13
    or even could go into
    their bank accounts
  • 50:13 - 50:14
    and take out finances.
  • 50:16 - 50:17
    - Goldman Sachs came
    out with a report
  • 50:17 - 50:19
    and they basically looked at
  • 50:19 - 50:22
    if you were to replace
    all transactions globally,
  • 50:22 - 50:25
    so FX, bank to bank transactions
  • 50:25 - 50:30
    with the Bitcoin protocol and
    still charging 1%, mind you,
  • 50:30 - 50:33
    it would save the global
    economy 200 billion,
  • 50:33 - 50:37
    not million, 200
    billion dollars a year
  • 50:37 - 50:39
    in saved transaction costs
  • 50:39 - 50:42
    which ultimately goes back
    into the hands of the consumer.
  • 50:43 - 50:45
    - [Voiceover] An
    international wire transfer
  • 50:45 - 50:47
    can take up to four days.
  • 50:47 - 50:49
    Yet the internet
    allows us to instantly
  • 50:49 - 50:53
    and globally share
    text, pictures, videos,
  • 50:53 - 50:54
    anything digital.
  • 50:55 - 50:56
    Why not money?
  • 50:56 - 50:58
    Money, which, we
    now know only exists
  • 50:58 - 51:01
    as digits in a bank's database?
  • 51:02 - 51:03
    - Wouldn't it be great,
  • 51:03 - 51:05
    if you could send
    Bitcoin transactions
  • 51:05 - 51:06
    just simply via a tweet?
  • 51:06 - 51:10
    For example, you would
    say @theendofmoney
  • 51:10 - 51:13
    one dollar worth of bitcoin
    and so we built just that.
  • 51:13 - 51:16
    All you have to do is to
    hashtag it with tippercoin.
  • 51:17 - 51:18
    Press send.
  • 51:18 - 51:20
    And our twitterbot will
    process the transactions,
  • 51:20 - 51:24
    notify you and give you a
    link and this will allow you
  • 51:24 - 51:27
    to either withdraw your bitcoins
    or send it to someone else.
  • 51:27 - 51:29
    - With Bitcoin, you
    can send one dollar
  • 51:29 - 51:32
    or 1,000,000 dollars worth of
    value anywhere in the world.
  • 51:32 - 51:33
    You can do it for free
  • 51:33 - 51:35
    or you can pay the
    Bitcoin network fee,
  • 51:35 - 51:36
    which is still just
    around a penny.
  • 51:36 - 51:38
    And there is nothing
    that the big banks
  • 51:38 - 51:39
    or the politicians
    can do to stop it.
  • 51:40 - 51:43
    - [Voiceover] A cryptocurrency
    that can only be created
  • 51:43 - 51:45
    and transferred with
    computer networks
  • 51:45 - 51:49
    may be the next step of
    the digital revolution.
  • 51:49 - 51:51
    The rise of machines.
  • 51:52 - 51:55
    Self-driving cars, drones,
  • 51:55 - 51:59
    robots that rely less
    and less on humans.
  • 52:01 - 52:04
    - What I often think is
    that the future of Bitcoin
  • 52:04 - 52:07
    or digital currency from
    a broader perspective
  • 52:07 - 52:11
    is really about machine
    to machine payments.
  • 52:11 - 52:15
    So by the time you have an
    un-manned taxi driving you
  • 52:15 - 52:17
    around New York, and
    then going to power up
  • 52:17 - 52:20
    at an unmanned power station,
  • 52:20 - 52:23
    or going to get repairs
    at an un-manned auto shop.
  • 52:23 - 52:26
    You'll see the machine
    to machine payments done
  • 52:26 - 52:28
    with some sort of
    digital currency.
  • 52:48 - 52:50
    - We actually built this
    world that we live in
  • 52:50 - 52:52
    over the last two or 300 years.
  • 52:52 - 52:53
    We made some mistakes.
  • 52:53 - 52:56
    We've learnt to
    make things better.
  • 52:57 - 53:00
    The idea that there
    is this magic key
  • 53:00 - 53:02
    that if you just sort of
    stop doing a few things,
  • 53:02 - 53:05
    that they'll be perfect
    order that will settle,
  • 53:05 - 53:10
    is a very childish,
  • 53:10 - 53:12
    ideological delusion
  • 53:12 - 53:13
    in my opinion.
  • 53:13 - 53:16
    But that's not to say
  • 53:16 - 53:18
    that Bitcoin isn't
    an exciting thing.
  • 53:18 - 53:20
    It's an terrifically
    exciting thing.
  • 53:20 - 53:24
    But we have to try
    and engage with it
  • 53:24 - 53:28
    with working minds not
    with magical thinking.
  • 53:28 - 53:31
    - People are suggesting
    that it's going
  • 53:31 - 53:34
    to be another world currency
  • 53:34 - 53:36
    rivaling the dollar, or
    the euro, or the yen.
  • 53:36 - 53:39
    I think that's not
    going to happen.
  • 53:40 - 53:42
    I prefer to trust the banks
    or the central government
  • 53:42 - 53:45
    compared to the Bitcoin is
    because someone is accountable.
  • 53:45 - 53:47
    Whereas with the Bitcoin it
    is completely deregulated.
  • 53:48 - 53:50
    There is no central control.
  • 53:50 - 53:52
    There is no one
    held accountable.
  • 53:52 - 53:56
    It is a free float, purely
    demand and supply driven.
  • 53:59 - 54:02
    - So, clearly, this
    is not a currency.
  • 54:02 - 54:04
    Currencies don't
    behave like this.
  • 54:04 - 54:07
    But what this is is a high-risk,
    speculative commodity.
  • 54:08 - 54:09
    - So, for the
    entrepreneurs, the bankers,
  • 54:09 - 54:11
    the governments and
    anyone else studying
  • 54:11 - 54:13
    and watching Bitcoin,
    all i have to say
  • 54:13 - 54:15
    is that there will probably
    be a lot of volatility
  • 54:15 - 54:18
    in an upward trajectory
    and to buckle up.
  • 54:23 - 54:26
    - [Voiceover] Criminals,
    scam artists, bad actors,
  • 54:26 - 54:30
    are drawn to any kind of
    money like a moth to a flame.
  • 54:32 - 54:34
    - Silk Road was a
    marketplace that was online.
  • 54:34 - 54:36
    it existed in the
    underground web.
  • 54:36 - 54:37
    Now this marketplace
    allowed people
  • 54:37 - 54:40
    to sell things that were
    illegal to governments.
  • 54:41 - 54:44
    - [Voiceover] Fake
    ID's, pirated music,
  • 54:44 - 54:46
    bibles in North Korea.
  • 54:46 - 54:49
    Are cryptocurrencies
    inherently bad
  • 54:49 - 54:53
    or just the newest tool
    to acquire the forbidden?
  • 54:53 - 54:55
    - Porn is illegal in Iran.
  • 54:55 - 54:56
    Well, there was a few
    percentages of sales
  • 54:56 - 54:59
    on Silk Road was to
    sell porn to Iranians.
  • 54:59 - 55:01
    Now, a much broader one,
  • 55:01 - 55:04
    that gets a lot of press for
    the guys at Silk Road is drugs.
  • 55:06 - 55:08
    - I've been doing research
    over the past couple of years
  • 55:08 - 55:11
    into the online
    drug marketplaces
  • 55:11 - 55:14
    in the Dark net
    using TOR and Bitcoin
  • 55:14 - 55:18
    as technologies to enable
    illicit drug transactions.
  • 55:21 - 55:24
    We did a global
    survey of drug users
  • 55:25 - 55:27
    and we had over
    20,000 people respond
  • 55:27 - 55:30
    to that and the
    majority of those people
  • 55:30 - 55:33
    were buying traditionally
    illicit drugs.
  • 55:33 - 55:34
    Ecstasy, cannabis.
  • 55:36 - 55:38
    The F.B.I. brought
    down Silk Road.
  • 55:38 - 55:41
    It certainly hasn't
    stopped the trading
  • 55:41 - 55:42
    of illicit drugs online.
  • 55:44 - 55:46
    - A lot of people want
    to criticize Bitcoin
  • 55:46 - 55:48
    for the use for illegal
    things or illicit things.
  • 55:48 - 55:51
    But if you look at it,
    the most popular currency
  • 55:51 - 55:54
    in the entire world for doing
    bad things is the U.S. dollar.
  • 55:58 - 56:01
    - If you think of Bitcoin
    as a platform instead
  • 56:01 - 56:03
    of a currency then
    you really begin
  • 56:03 - 56:06
    to see the potential it has.
  • 56:06 - 56:08
    - The ledger which
    cannot be forged,
  • 56:08 - 56:11
    it cannot be changed and is
    universally accepted is Genius.
  • 56:11 - 56:13
    There will be Bitcoin
    technology forever
  • 56:13 - 56:16
    and it will have applications
    for years to come.
  • 56:16 - 56:19
    - [Voiceover] Creating a
    secure, global payment system
  • 56:19 - 56:21
    may just be the beginning.
  • 56:22 - 56:25
    Patents, contracts, land titles,
  • 56:25 - 56:28
    proof of ownership can
    be baked into Bitcoin.
  • 56:28 - 56:30
    Securely held in
    the public ledger.
  • 56:31 - 56:32
    - I read up more about Bitcoin.
  • 56:32 - 56:34
    I played with the source code.
  • 56:34 - 56:35
    I built some things
    that I realized,
  • 56:35 - 56:38
    this is a actually a very,
    very powerful protocol.
  • 56:38 - 56:40
    It's not just a currency but
  • 56:40 - 56:42
    it's actually
    programmable money.
  • 56:43 - 56:45
    - [Voiceover] The digital
    age has fundamentally
  • 56:45 - 56:46
    changed the world.
  • 56:46 - 56:50
    We have embraced
    digitized music, film,
  • 56:50 - 56:53
    medical records,
    communications, the internet.
  • 56:54 - 56:56
    The free exchange of information
  • 56:56 - 56:59
    and currency can
    fuel revolutions,
  • 57:00 - 57:01
    help in a disaster.
  • 57:01 - 57:05
    But our money is shackled
    to the 20th century,
  • 57:05 - 57:08
    manipulated by
    governments and banks.
  • 57:09 - 57:11
    The champions of Bitcoin ask us
  • 57:11 - 57:14
    to imagine payments
    without a middle man.
  • 57:14 - 57:16
    Investments without a broker.
  • 57:16 - 57:17
    Loans without a bank.
  • 57:17 - 57:20
    Insurance without
    an underwriter.
  • 57:20 - 57:22
    Charity without a trustee.
  • 57:22 - 57:24
    Escrow without an agent.
  • 57:24 - 57:25
    Betting without a bookie.
  • 57:25 - 57:28
    Record keeping
    without an accountant.
  • 57:28 - 57:31
    Global, secure, nearly instant
  • 57:31 - 57:33
    and free.
  • 57:33 - 57:35
    Is it fantasy or the future
  • 57:35 - 57:37
    of money and commerce?
  • 57:37 - 57:40
    (intense instrumental music)
  • 58:05 - 58:06
    - I love bitcoins.
  • 58:06 - 58:08
    I'm really into bitcoins.
  • 58:08 - 58:10
    ♪ Well Satoshi Nakamoto
  • 58:10 - 58:13
    ♪ That's a name I love to say
  • 58:13 - 58:14
    ♪And we don't know
    much about him
  • 58:14 - 58:16
    ♪But he came to save the day♪
  • 58:17 - 58:19
    If you don't know what
    a Bitcoin is, right,
  • 58:19 - 58:20
    usually the way
    people describe it
  • 58:20 - 58:23
    is a digital cash.
  • 58:23 - 58:25
    It's money for the internet.
  • 58:25 - 58:29
    ♪ Bitcoin as your going
    into the old blockchain
  • 58:29 - 58:33
    ♪ Oh Bitcoin, I know you're
    going to reign, gonna reign.
  • 58:33 - 58:35
    They were like, "oh,
    I love my bank."
  • 58:35 - 58:36
    I'm like, "really?"
  • 58:36 - 58:37
    You ask a banker, "you
    know what's two plus two?"
  • 58:37 - 58:39
    He's like, "well, I can
    tell ya but there's a fee."
  • 58:39 - 58:41
    (laughter)
  • 58:42 - 58:43
    ♪ Down the road it will be told
  • 58:43 - 58:46
    ♪ About the Death
    of Old Mount Gox
  • 58:46 - 58:48
    ♪About traitors
    trading alter coins
  • 58:48 - 58:49
    ♪ And miners mining blocks♪
  • 58:49 - 58:51
    Now Bitcoins is
    a new technology.
  • 58:51 - 58:54
    I like to say it's
    banking (mumbling)
  • 58:54 - 58:58
    All of the convenience,
    none of the evil.
  • 58:58 - 58:59
    (laughter)
  • 58:59 - 59:02
    ♪Oh Bitcoin, as your going
    into the old blockchain
  • 59:02 - 59:06
    ♪Oh Bitcoin, I know you're
    going to reign, gonna reign
  • 59:06 - 59:09
    ♪Till everybody knows,
    everybody knows♪
  • 59:09 - 59:10
    You know when I go in line
  • 59:10 - 59:13
    and I buy like, I don't
    know, a pair of socks.
  • 59:13 - 59:15
    If I pay with a credit card
  • 59:15 - 59:17
    I'm just buying socks.
  • 59:17 - 59:21
    Right, if I buy those
    socks with bitcoin,
  • 59:21 - 59:22
    it's a revolution.
  • 59:22 - 59:24
    (laughter)
  • 59:24 - 59:26
    I am sticking it to the man.
  • 59:31 - 59:36
    ♪Oh Lord, pass me some more♪
  • 59:36 - 59:38
    There's always people
    who are not ready
  • 59:38 - 59:39
    to get into the new technology.
  • 59:39 - 59:41
    You know, like when
    the internet came out,
  • 59:41 - 59:42
    there was people going,
  • 59:42 - 59:45
    "nah, I don't think this
    is going to be popular."
  • 59:45 - 59:46
    (laughter)
  • 59:46 - 59:48
    And then e-mail came out
    and people were like,
  • 59:48 - 59:51
    "nah, this isn't
    gonna catch on."
  • 59:51 - 59:52
    And now Bitcoin comes out,
  • 59:52 - 59:54
    people are like,
    "I don't think,"
  • 59:54 - 59:57
    I'm like, "aren't you
    sick of being wrong?
  • 59:57 - 59:59
    "Get on this train."
Title:
Learn about Universal Subtitles
Description:

Learn about the Universal Subtitles project.

more » « less
Video Language:
English
Duration:
01:23

English subtitles

Incomplete

Revisions Compare revisions