let me fill in my passwords
i used to have a shirt in high school
that said technology must be used to
liberate the individual
and i didn't really know what it meant
for years because i didn't really think
about it but today i look back and i'm
like oh man hell yeah i like that shirt
i'm glad i wore that shirt because how i
really feel today my name is daniel ross
today is may
3rd 2012.
go through college and watch the
internet come and all these different
things and now like bitcoin
it's just a single technology built on
top of the internet but it's so
fascinating because there's so many
freaking things you can do with it and
it's also just a big experiment there's
no guarantees with it
we might just all be wasting our
time exploring concepts and ideas it's
like at this crossroads of technology
and philosophy and politics and
everything
you just
be a part of it it's fun
it's crazy though but it's fun
um first question is
what is bitcoin
[Music]
i can't tell you what bitcoin is in just
a few sentences
it takes time to understand it
the same way it took people time to
understand what the internet was
back in 1994
and then the ring around it
see that's what i said
um
yeah oh
internet is uh that massive computer
network the one that's becoming really
big now allison can you explain what
internet is
when the internet was taking off i was
in college at virginia tech studying
computer science
looking back it's amazing to think about
how much the world was changing
hey dan ready for the game i'm just
finishing up here with my new kayaking
friends kayaking friends on your
computer yeah i just got america online
that same type of innovation is
happening again with bitcoin it's the
smartest people in the room that are the
most excited about this so what are they
seeing
the internet changed the way the world
communicates
bitcoin changes the way money works
you can basically
put a bank in your pocket
wanna buy some secret stuff there is now
a new note that people are starting to
talk about the bitcoin the money
of the future
bitcoin was created to provide an
alternative to the banking system we are
in the midst of a serious financial
crisis and the federal government is
responding with decisive action
[Music]
unlike most currencies bitcoins are
issued according to a set of fixed rules
the idea was to create money whose value
couldn't be manipulated by a central
authority
the government no matter how many guns
they draw cannot
change a mathematical problem
they can point their guns at two plus
two but it's always going to equal four
it's fascinating to imagine what it
means to have global decentralized money
[Music]
and that's what's happening
[Music]
[Music]
thank you
my five-year-old's birthday
first round of burgers is ready second
round's going on in the second
first round of burgers ready
first round
dan's always been an idea guy
bitcoin's the perfect combination of how
can i change the world and make it
better but how can i also be a nerd
so mostly i've just been supporting him
and this craziness
eliza and i met in college and we've
been married for seven years
we live in pittsburgh where i'm from and
we have three boys
i've spent most of my career as a
database administrator
but for the past two years i've been
consumed with bitcoin
bitcoin's come into existence through a
process called mining
[Music]
i build computers to mine for bitcoins
[Music]
i'm glad that it's finally getting a
little bit cooler up
my wife won't be as angry that the
basement is so hot
i still got a bunch of mining rigs
running
right now actually right down here if
you want to go take a look
here they are
so what is bitcoin
bitcoin is a revolutionary technology
that enables a new way to send payments
over the internet
you can think of it as an open
accounting system where thousands of
computers all over the world work
together to track ownership of digital
tokens called bitcoins
when you send someone bitcoins the
transaction is broadcast to the entire
network
after it's verified it's recorded in a
public ledger called the blockchain
the blockchain contains a record of
every bitcoin transaction that has
occurred since the system began and it's
shared and maintained on the network so
everyone keeps the books so to speak
most currencies are issued by a central
authority that controls the money supply
bitcoin is a peer-to-peer system so
there is no central authority
instead
bitcoins are issued to users who help
process transactions in the network
this is known as bitcoin mining
bitcoin miners are specialized computers
that do the work required to verify and
record transactions in the blockchain
as a reward for their work the miners
earn bitcoins and this is how new
bitcoins are released into circulation
the system is programmed so that only 21
million bitcoins will ever exist and as
time goes by the mining reward decreases
the result is a predictable supply
that's governed by scarcity making
bitcoin somewhat like a digital gold
it's the first currency of the internet
and everyone is free to use it
with bitcoin you can send any amount of
money to anyone anywhere in the world as
easily as sending an email
[Music]
my brother nick is a filmmaker
after hearing me talk about bitcoin
incessantly for months we decided to
start documenting things
hey i don't think we'll need the small
camera
it can't hurt no i'd rather sleep up
behind i have so much equipment you mind
damn you really cramped it up huh not
that bad
jeez
right there
i was convinced that bitcoin was going
to be huge and i knew there were a lot
of others like me out there
zip my keys in my pocket so i don't
forget them later
[Music]
bitcoin was created by
what's believed to be a pseudonym a guy
named satoshi nakamoto invented an 09 by
a fictitious person named satoshi
nakamoto on halloween 2008 someone using
the name satoshi nakamoto posted on a
cryptography mailing list
i've been working on a new electronic
cash system that's fully peer-to-peer
with no trusted third party
the post contained a link to a white
paper in which satoshi proposed a new
type of payment system for the internet
it described a protocol that used
peer-to-peer networking proof of work
and public key cryptography
[Music]
for years computer scientists had been
experimenting with these technologies to
create digital money
but satoshi discovered a way to combine
them that had never been done before
in doing so he invented bitcoin
there are no records of nakamoto's
existence prior to the creation of
bitcoin
on his profile page he claimed to be a
34 year old man living in japan
although satoshi nakamoto is a japanese
name he wrote in perfect english when
communicating online and went through
great lengths to keep his identity
unknown
[Music]
nonetheless programmers and
cryptographers all across the world
recognized the brilliance of satoshi's
design and began collaborating with him
to further develop bitcoin
in october of 2009 the first exchange
rate was published listing the value of
1 309 bitcoins at one dollar
bitcoins were cheap and through the
following year they continued to trade
for fractions of ascent
in the spring of 2010 a florida man
named laszlo decided to try using his
bitcoins to purchase something
he offered 10 000 bitcoins to anyone who
would buy him pizza a man in london
accepted and placed a long distance
phone call ordering him two pizzas from
papa john's
this is generally acknowledged as the
first bitcoin transaction for a tangible
good
bitcoin was gaining momentum but in
order for it to thrive the coins needed
to be more widely accessible
a tokyo-based exchange named mount gox
was the first on the scene to take hold
of the marketplace and trading volume
started to pick up
by november 2010 already four million
bitcoins had been mined and the exchange
price briefly spiked to 50 cents per
coin
the market awoke and bitcoin was
starting to look like it might have real
potential as a currency
his name is julian assange assange and
his colleagues collect confidential
information and then make it public the
release of 250 000 state department
documents no doubt presents a serious
dilemma for this country
following a massive release of secret
u.s diplomatic cables
donations to wikileaks were blocked by
bank of america visa mastercard paypal
and western union
an article in pc world suggested that
bitcoin could be used as a workaround to
send donations to wikileaks
one of satoshi's last known posts was in
response to the article and stated it
would have been nice to get this
attention in any other context wikileaks
has kicked the hornet's nest and the
swarm is headed towards us
shortly after that satoshi disappeared
from the forums and was never heard from
again
two months later the silk road anonymous
marketplace was launched it functioned
as an online black market for drugs and
other illicit goods and used bitcoin
exclusively because it made the money
trail nearly impossible to trace
the silk road caught the attention of
new york senator charles schumer who was
outraged and publicly called for a
crackdown on the site
heroin opium cannabis ecstasy
psychedelic stimulants it's unbelievable
throughout all this the exchange price
continued to climb by february of 2011
bitcoin reached parity with the us
dollar sparking an influx of new users
and speculators
by june the price had soared to a peak
of 31 dollars before it came crashing
down
as the market tanked the mount cox
exchange was hacked further shaking the
confidence of investors and hammering
the price all the way down to the two
dollar range by october
while bitcoin enthusiasts kept hope
skeptics were quick to share their
hindsights and rants on blogs and in
news articles
many thought that the party was over and
that bitcoin was on its way out
i went online and i bought one bitcoin
last night really
it's the future i don't know that didn't
feel real no
real is gonna change
just watch
today i sent a total of
2700 bitcoins
to butterfly labs i purchased basically
a custom designed bitcoin mining super
computer
if bitcoin fails
[Music]
everything i have is worthless
the bitcoins i have the computers the
mining systems was all waste of money
[Music]
but if it succeeds then
[Music]
it will have been worth it i think
the bitcoin economy was a wild west in
cyberspace that was very attractive to
hackers and scammers
over the years tens of thousands of
coins had been stolen and 2012 proved no
different
users had to be careful
if somebody steals your bitcoins there
are no consumer protections sorry
they're gone you lost your bitcoins
they're gone and you're not going to get
them back
but after months of stagnation on the
exchanges the bitcoin price was on the
rise again the price of bitcoin today is
around seven dollars usd
which just had a nice little
bump this week
by the end of the year the blogging site
wordpress announced it would start
accepting bitcoin payments
and in early 2013 the discussion forum
reddit also announced bitcoin support
they were the first major sites to
incorporate bitcoin and these milestones
signaled the beginning of mainstream
acceptance
bitcoin is the most subversive
technology on the planet this is a
system that is growing around the entire
world so if it works if this experiment
continues to grow
it doesn't just help a few of us in this
state or in the country but it actually
helps everyone around the world
as the bitcoin price hovered around its
previous all-time high of 31
i visited a libertarian conference in
new hampshire it lost 20 and then it
gained 20 in 20 minutes
it was it was silly
libertarians are among the earliest
adopters of bitcoin its nature is a
currency that isn't controlled by
central banks makes it attractive to
this community once i was able to kind
of grok the basic concept it was just
like
this is the perfect money
this is what a bitcoin address looks
like
think of this long string of characters
as an account number where your bitcoins
are stored
when you send or receive bitcoins they
are sent to these addresses
the addresses are long and hard to
remember so using a phone to scan a qr
code is a fast and easy way to read them
another good thing to know is that
bitcoins can be broken down to eight
decimal places this means that you can
send fractions of a bitcoin so any
amount of money can be represented
with bitcoin every transaction is public
everyone can see the amount that's being
sent without necessarily knowing the
identity of the sender
these guys even have one of the first
bitcoin atms you just
scan your qr code on your phone
put in the dollar bills and press the
button
bam done
perfect
you now traded your worthless piece of
paper for real currency
it's like in the fed it's like
seriously if you're going to end the fed
you're not going to bed you're not going
to change anything about the entrance
and bypass them but
that's what you should do my concern
is how the governments will react
they can't kill or stop bitcoin but they
could impede it and they could
get in the way of its development
[Music]
a few weeks later across the ocean a
financial crisis was reaching a breaking
point on the island of cyprus
cyprus is on the brink of going bust the
rest of europe has agreed to a bailout
but only if cyprus raids people's bank
accounts for quick hard cash people
trying to get money out of the cash
machines but electronic transfers have
been stopped never did i think that they
would in a completely unprecedented
manner resort to stealing money from
people's bank accounts
the cypriots had placed their trust in
the banking system
and it had failed them
as news of the crisis spread around the
world bitcoin believers were quick to
point it out as an example of why a
currency free from government control is
needed there's actually bitcoin atms
apparently being set up in cyprus
all of a sudden bitcoin looks like an
attractive prospect
[Music]
while this was happening in cyprus
regulators at the u.s treasury weighed
in on bitcoin
the financial crimes enforcement network
known as fincen issued its first
regulatory guidance on virtual
currencies
the guidance implied that bitcoin in and
of itself was not illegal
[Music]
it was the perfect storm
the situation in cyprus suggested that
bitcoin could function as a financial
safe haven
and the approving nod of u.s regulators
was a green light for investors
the market agreed and the exchange price
continued to climb
it's moving from the the super super
early adopter phase to possibly the
early adopter phase bitcoin was getting
international exposure
and people were starting to pay
attention
this is actually a
live updated
map of the globe and the lines represent
uh bitcoin clients basically where the
bitcoin software is running
and uh
the length of the line determines how
long it's been online or how active it's
been and every time i look at this i
swear it gets it gets more and more
saturated you can almost see an outline
of the us now uh south america you're
starting to get it uh but the big news
in my opinion is this
china you used to see
one two three maybe
and this is all within the last you know
three weeks or so that's the most i've
ever seen in china
you look down here indonesia singapore
australia new zealand
[Music]
the following week it snowed in
pittsburgh
i was eagerly awaiting the delivery of
two avalon asics
state-of-the-art computers with chips
specifically designed for mining
bitcoins
ifuguo is at the forefront of the new
generation of hardware and is the first
to bring them to market everybody
including myself has severely
underestimated the mining market how big
it is when bitcoin began a standard
laptop was powerful enough to mine
hundreds of bitcoins in a matter of days
the technology evolved rapidly over the
past couple of years
a lot of people are getting into it
we're still trying to catch up
i was on vacation with my family when
the new miners were scheduled to arrive
the price of bitcoin had rocketed to 77
so i asked some friends to wait at my
house to get them running as soon as
possible
all right
i hope this is good that's worthwhile oh
definitely
these are uh new computer parts here
excellent from china
all right uh it's not officially simon
there we go
yeah we'll see maybe uh down the road
you guys will start accepting bitcoin
one day i bet that's cool a matter of
time good luck
all right
i notified dan and he has a little
response here
[Music]
welcome to the financial renaissance
255 192.168.1.140.25525 2550 192 168 1.1
that's the default gateway my first poll
is going to be
stratum.occ.ion port 3333. port 80 but i
can do 3333.
when everything's all said and done for
at least a little while i should be
pulling in like 10 to 12 coins a day
that's gonna change though after another
week it's gonna get dropped down to like
eight just because the difficulty is
just going through the roof because
everybody's firing these things up so
it's always a race to stay ahead try to
be the first guy with the hardware you
know
oh i'm getting pings woo
yep we're kicking
we are accepting shares it is live
[Music]
hey that looks like johan
okay i'm going to college because my dad
minds bitcoins
[Music]
so uh big day today huh big day look at
that 104 current bitcoin price broke 100
today um it is april fool's day
price
rising so insanely high is kind of a
little bit unprecedented so
i mean it's bound to pop a little bit
maybe i don't know maybe it'll be a 225
in a week and a half so who knows but
bitcoin styles could go up could go down
as the price passed 100 we took a trip
to visit gavin andreessen
he is known to have worked closely with
satoshi during bitcoin's early days
[Music]
here's the train tracks and he did say
that there would be train tracks maybe
passing through
here we go this is gavin's house
gavin is one of the last people to
communicate with satoshi before he
disappeared
morning
my brother nick and
his wife ashley hi nice to meet you
i found the place okay so good
we're very excited to be here
come in this is my humble house
that's where i work this is where i live
beautiful home
thanks
a little higher please right there's
great
got it
how did you first get into bitcoin tell
us a little bit of the story of how you
got involved i had been working at umass
as a staff programmer in the computer
science department research group my
wife's a professor at umass
i actually quit that job before going on
a six-month sabbatical in australia
i just happened to read a little blurb
online
in somebody's blog that mentioned this
bitcoin project which is an open source
attempt to do money
and it caught my interest
i basically just
spent a few days
read everything i could about it looked
at the source code downloaded the source
code thought about it and i really
couldn't convince myself that it would
not work it seemed like satoshi had
thought of everything
since
then
i've just been sucked down the rabbit
hole
bitcoin is open source software with
open source software the code is
publicly available anyone can look at it
and see how it runs and they can also
contribute their own changes programmers
like gavin were able to join satoshi to
work on bitcoin simply because they were
interested over time i think satoshi
learned to trust me he could see that i
didn't make very many stupid mistakes i
never had any personal connection with
satoshi it was always purely business
and i think that's because he was so
worried about people finding out his
identity
i don't know why
my last email to him was telling him
that i had
agreed to go visit the folks at the cia
so
whether that had something to do with
him deciding to cut off communication
with me entirely he had been pulling
away before then but the cia invited me
to come talk at the cia and i agreed to
do that
knowing it would surely spark conspiracy
theories gavin posted an announcement on
the bitcoin talk discussion forum to
head off any rumors
i think accepting their invitation and
being open about exactly what bitcoin is
will make it less likely they'll see it
as a threat
having taken on the lead developer
position since satoshi's disappearance
gavin found himself facing an increasing
number of responsibilities and public
scrutiny your neighbors know that you're
kind of at the center of one of the most
disruptive
technologies i think i think they know
that i do like this wacky bitcoin
project
i don't think they know quite how big it
is yet
right now
bitcoin's a billion dollar project when
i started it was this tiny little
experiment and as it gets bigger
the pressure
to not screw up
just gets bigger and bigger
two weeks later the price soared past
150
and some bitcoiners woke up to find out
they were bitcoin millionaires
23 year old charlie schrem is the ceo of
a company called bit instant
bit instant was one of the first
startups in the bitcoin space
in bitcoin's infancy people had to jump
through several hoops to buy them
one of the only ways was through the
mount gox exchange but this process
required transferring money through
several intermediaries and could take
weeks
charlie launched bid instant to
streamline this process and to help
people buy bitcoins quickly
yeah that's good great that's pretty
nice yeah sure
today charlie is being photographed for
an article in business week one of the
ideas they had was like that you're like
throwing stuff up in the air and they're
gonna add bitcoins in later on
yeah this bitcoin thing can actually
change the world
but for this thing to succeed you have
to figure out a way to get more money in
and out of the ecosystem
look out the window a bit totally yeah
and you can look yeah that's good it
does not show that i'm super stressed
out right now and
thousands of orders that are being
processed and i'm bugging out trying to
get the new site launched
no don't look like that
i'm trying not to but it's really hard
things have been insane
i haven't slept in days
the price is just rising so a lot of
people are putting money into it
normally charlie can get bitcoins to his
customers in about an hour
but with a recent flood of people trying
to purchase bitcoins
bit instant can't fill their orders fast
enough
when i pulled up our like customer
service interface
we have close to 2 000 open tickets and
that's just from saturday to this
morning nobody was ready for this kind
of volume so
we're trying to catch up uh with the
volume and keep everybody happy can you
just sort of describe quickly what the
last week or so has been like for you
guys
the last week or so saw our support
staff go from two people to five people
when someone offers you a seat on the
rocket you don't ask where the seat is
you just get on the rocket
further our volume has has basically
tripled in in the past two weeks
going from a few hundred transactions a
day to now two three thousand
transactions a day
you just came on board here right yeah i
did actually
today is kind of my first day how are we
doing yeah yeah how does it feel to be a
part of all this madness um well madness
yeah it's overwhelming
and uh what are you doing
i'm a cfo
can you give me like a daily estimate of
how much money is moving through your
system um it's in the in the six figures
every day
all right well thanks charlie i really
appreciate it thank you
i don't know how the government will
react to bitcoin
but i spend thousands of dollars on
lawyers every day just to make sure that
i'm not going to go to jail
it's super terrifying i mean i don't
want to go to jail
and i don't i don't want to become a
martyr either
[Music]
bitcoin was the talk of the town
charlie was in the limelight and could
barely keep up with media requests
within hours the price passed two
hundred dollars
first day of spring first day bitcoin is
over 200 the start of a new era hi nice
to meet you i'm the nice warm loving mom
that makes him
live at home because we can't uh
we can't apart without him yet
we love him too much
this is where it all started and this is
where it still goes down
i've been collecting money from all over
the world and it's just like something i
did way before bitcoin i've done this
since i was a kid so it's funny that
like i'm collecting all this
fee out it's not worth anything and then
all of a sudden i get into this bitcoin
thing
i realized during high school that i can
never work for anyone
i made up a term psychologically
unemployable
i started a bit instant while i was
still in my senior year of college
bitcoin currently is the largest social
economic experiment ever conducted in
the history of the world
2013
possibly 2014 will be the two years that
really make or break bitcoin
[Music]
bitcoin is a first product that's
digital but it's also scarce
i got some good news last night that
part of our licensing deals that we've
been trying to do for the past few
months are finally hopefully coming
through we got approved to be licensed
in 30 of the 48 states in money
transmission
i've been working very hard on trying to
be compliant in the legal realm
and with fincen's announcement setting
up a way for bitcoin companies to
legally exist that really changed the
whole game of bitcoin
and for us it helped us get that less
push that we needed from all the banks
and the regulators to finally hopefully
get that licensing that we need
[Music]
today charlie's meeting with a realtor
to talk about new office space hi
charlie hi i'm mitch waldman how are you
pleasure got a minute i have 10 minutes
for you
we're we're a company with no boss
essentially everyone has their
responsibilities and just one big
executive or it's one big executive
board one person doesn't do their job i
don't do my job these guys are all gonna
yell at me
so that's how we do it but we get things
done all right we're outgrowing the
space as you can see here that's a good
problem to have
yes
now rachel said there was a great
concern about security in this space
yeah we're regulated so we can't like
share an office with another company or
they have access to us
our asset is our software our software
is processing hundreds of thousands of
dollars a day really quickly and that's
on-site here
no this is on the cloud it's all in the
cloud but we monitor we have to monitor
everything from here and debug fix take
down upload more put up more we get a
lot of high volume data oriented very
very sensitive customer data if there
were not a doorman at the very least the
space would be designed in such a manner
that there'd be
a locked reception area if we want to
pursue like a guard at some point we
could have them in that
in that area
i absolutely think it it will be at some
point it's just a matter of time
the potential for theft is huge
it's like operating a bank essentially
that's pretty much it it's gotcha it's
basic stuff yep yep
all right any other words for me
okay we're good are you willing to
handle the task
sign me up captain
that night the price got as high as 266
dollars
every major news outlet had taken notice
bitcoin fever was at an all-time high it
is getting a lot of attention people are
fascinated by anything that makes new
highs every day for weeks on end which
bitcoin has done in terms of the total
number of the people using the currency
i'm not sure but you can see that
there's a huge amount of fluctuation in
the volume of trading
and then
the price crashed
bitcoin lost more than half of its value
in six hours
from craze to crash
it's the talk of many people in the
blogosphere
and it's certainly suffering some
growing pains the value of the virtual
currency bitcoin has plunged it's been a
crazy day today i haven't slept in like
40 hours
your order process i don't understand
why we're still having this conversation
we've refunded your order we sent you
extra bitcoins i don't care man when it
comes to my money i don't [ __ ] around i
know man you need your stuff i hear you
i hear you it processed your clicks are
there man
so charlie what's been going on today
crazy day huh yeah i have mount gox
their whole system pretty much failed
and their whole trading engine is is
broken
and pretty much caused
almost has to shut down for the day
further the bitcoin price has just been
wildly swinging up and down it was down
100 today
it's gaining back up but mostly because
people can't buy and sell and they can't
withdraw and they can't deposit because
the whole thing is just it's just a
fritz
so what we're trying to do is figure out
a way to mitigate orders somewhere else
for now
with mount gox stuck in a nosedive the
ripple effect is creating chaos in the
bitcoin markets
i'm trying to figure out why our orders
aren't going through
rachel am i allowed to take another
advil if i took one like an hour ago
they've been having problems ordering
anything off of you yeah i'm getting a
lot of customers emailing saying it says
executed but it's not showing in the
blockchain just got suspended trading
really yeah order this place suspended
until 2100 what time what's 2100.
it's 9pm oh my god
[Music]
if you bought at 150
and then you're at 260 and then you
watch it dip down back to 150. do you
panic so yeah absolutely i don't know
what a bitcoin is i just bought it
you see buy orders people buying
and selling at such a wide range it
doesn't make any sense
the api is just constantly failing
because what's going on we're not
getting any orders
don't care about the price
speculators can play musical chairs all
day long for all i care
i'm i'm long
i was focused on expanding my mining
operation
the only people that are going to be
shaken out by this drop
are
people that are new to bitcoin
here's the avalons spinning away
mining away
and if everything goes as planned uh
we'll have 18 more of these guys in uh a
couple of weeks
bitcoin is a complicated thing you have
to spend some time looking into it and
understanding it before you really care
and now there's droves of people that
you know are giving it more than just
that glance because the price has gone
so high and they have you know dollar
signs in their eyes like uncle scrooge
it's so much more than that and i think
that's why the people who are mining and
people who believe in it are just kind
of holding strong
when trading resumed at mount cox the
price fell even further to around
seventy dollars
71 on vtce
yeah bitcoin it's volatile it's going to
be a long time until we have stability
that's the nature of the beast price
discovery uh
can be violent and volatile and
there's going to be a lot of people that
come and go and people that scream wolf
but at the end of the day the only thing
that really kind of stinks right now is
that everybody's trading on one platform
that isn't doing the greatest job so
over time hopefully we'll see some more
exchanges pop up and some more options
and
people want to keep using bitcoin i'm
sure the infrastructure will come
[Music]
[Music]
[Applause]
it's just gotten ridiculously busy um
i get an email every two seconds now and
i'm pretty much
you know more email than i uh
i can keep up with
jared kenna is the ceo of trade hill
the first u.s based bitcoin exchange to
compete with mount cox
he's also on the list of bitcoin
millionaires
this is uh finnegan right here
jared runs trade hill out of a 41
bedroom residential hotel called 20
mission that he also owns
[Music]
mostly rent out rooms to tech people
startup people there's a lot of
bitcoiners i actually accept rent in
bitcoin which is great because we have a
lot of international people
[Music]
bitcoin
[Music]
came to us from the cryptogram
it came out of thin air
it saved us from those nasty dollars and
one and yen
bitcoin
that's all i got i'm done
[Laughter]
digital currency is gonna happen i mean
it's it's i mean it already is happening
and it will be
the future whether that's now 10 years
from now 100 years from now
we're going to be using digital
currencies that don't depend on fiat
government
jarrod originally launched trade hill
about two years ago but ran into
problems with a payment processor and
was forced to shut down
recently he met ryan singer and together
they are relaunching the exchange
the business we're in is helping people
speculate right
markets are price discovery mechanisms
that's what they're for people uh they
buy they sell there's the bid there's
the ask and the price moves
and when it levels out that's what the
market price is i can't even count the
amount of people that have said
bitcoin's not backed by anything at
least dollars are backed by gold i've
realized that a lot of people believe
that
my grandfather he got me into investing
when i was a kid i was five years old i
could explain a p e ratio and what a bid
and an ask was and difference between a
limit order and a market order and all
that stuff so for me i saw this as a way
that the average person could actually
take control their finances
i just grew up pretty nerdy i don't know
like 15 like
years old i decided i didn't want to be
a nerd anymore
which was a mistake
because
now i realize it's pretty awesome
in 1999 i joined the marines
i was originally with the engineering
unit
2005 i went over to afghanistan i was
mostly working with the afghan national
army
it changed me a lot as a person
i've always been interested in economics
and finance and technology and
cryptography
i was in a cryptography forum somebody i
never met who was anonymously in this
forum that i was chatting with sent me
10 000 bitcoins just as a way to test
the system out and see how it worked and
i got him and i'm like well that's cool
but uh what can i do with him and he
said
well nothing yet but uh
if people believe it has value it will
at the time there was really only one
bitcoin exchange it was mount gox i said
we need an alternative who cares if the
technology is decentralized and the
method of transfer is decentralized and
the people are decentralized if all the
trades are in the same location
i thought that building another exchange
that gave more people access to bitcoin
would be a key part of bitcoin's growth
the day we launched we got a quarter
million dollars in from user deposits
and we said like oh [ __ ] this is
this is real
we're all fans of the big lebowski so
we're going to have a big lebowski party
nice
very exciting day
30 gallons of white russian and hallway
bowling
we work hard but we party hard too
okay
okay i'm good
i'm good i'm not dead
yeah i'm the first one in the house
that opened the
trade hill account
and it took me a long time to buy the
bitcoins because it was the moment where
everything was going really really you
know ballistics uh they were buying
bitcoins all the time and it was hard to
buy it and it took me like 10 days to
get my bitcoins from my european
pentagon i got my euros over here to
open a 10k
account with trade hill at the moment
where they they were 255
bitcoin
and
within one hour they start plumbing down
and the same day they went down to 99 65
or something or 90
bitcoin hey stop smiling
[Laughter]
straight hill round two we optimized for
success we launched expecting to have to
do hundreds of thousands of transactions
a second
right now we've got about 15 people in
addition to that we've got about eight
attorneys externally
a lot of people are depositing dollars a
lot of people are passing bitcoin we're
getting more trading we're pushing that
from the business perspective also we're
talking to people who want to do more
automated trading on our platform get
robots trading against each other we've
stress tested this and we can handle you
know about
500 times as much volume as mount gox
was seeing so we'll see what happens
here the interest in us is pretty crazy
just the news with bitcoin has really
kind of validated everything now people
are like oh you're not this crazy person
i'm talking about some digital made up
currency it's like oh i've read about it
in the wall street journal the new york
times it's real
we had an investor come in and he said
hey i really appreciate your scrappy
nature and how you're hustling but i
think it's time for you guys to spend 30
grand a month on rent when you have you
know a billionaire client they want to
come check out your office before they
send you a multi-million dollar wire
asking them to walk past pawn shops not
always the right field
[Music]
so we're leaving the mission we're
driving into soma right now we're going
to go take a look at what may be our new
office space
pretty prestigious address one market
[Music]
right now we're trying to forge this
path and we're trying to comply with
existing laws and anticipate future laws
which is extremely expensive and
extremely difficult is there parking
here yes okay is that included with no
of course absolutely right what is that
how much how much does how much does
that cost from 450 to 600.
it's not terrible
that's pretty sexy
twitter was here for over a year amazon
comes and go every single year
i have my ics i have jcpenney all the
big ones they come over they're part of
the club
sounds good we'll be here tomorrow
business thank you appreciate it thanks
so much
we move in tomorrow
just like just like that huh just like
that that's how we roll it's pretty
surprising that that deal just happened
so quickly what was it you just liked
the space and you said hey there's no
point in waiting we like the space we
like the address
we don't have the time to spend either
we had all kinds of important stuff
we're working on and you know if we
spend a week trying to find an office
and he and i put 20 hours into it or 50
hours into it it's a huge waste of time
[Music]
so
[Music]
i thought they'd be
in multiple bags rather than one big one
but hey
[Music]
i believe that bitcoin will do to the
banking industry what email did to the
postal service
it didn't make it irrelevant
what it's forced the post office to do
is concentrate on their strengths
and
less so on their weaknesses
mike caldwell is the creator of physical
bitcoins known as cassatious coins
they are often featured in mainstream
media coverage of bitcoin
they're a novelty item collectibles that
basically act as physical carriers for
bitcoins
but they do something very important
they give bitcoin a face
come on in
sorry the kids are sleeping so i'm just
being quiet
each coin has its own bitcoin address
and the private key required to spend it
is hidden underneath the hologram this
is where you make the physical bitcoin
yeah
it's a random smattering of things but
pretty careful about the way i manage
you know the basically this is the
credential so this is the
hologram and the private keys i'm pretty
careful about those and don't keep them
here
i normally do them on this mirror
because that helps you know when we get
the fronts and backs right
there's so many things that cryptography
can do for us
that if the world just knew
so many social problems could be solved
cryptography
can bring fairness to elections
it's too difficult for people to
understand and someone
needs to bridge the gap
right now we're using bitcoin to send
money
but many believe it will revolutionize
much more
the technology behind bitcoin can be
used to build decentralized systems with
rules that can't be cheated
[Music]
now see this is my wife in my space this
is you know
awesome it is what it is
the more time goes by the more
legitimate bitcoin gets and the more
proud i am to be associated with it and
now what does your wife do
she does craft she's a lot like me we
just sit around and make things all day
it's just our obsession
no i'm not a drug dealer no i'm not a
criminal no i'm not a terrorist i
believe in the rule of law i believe in
structure that builds society i believe
in families i believe in corporations i
believe in all the essential elements
that a civilized society with law and
order need to be able to function
focal length matters
cryptography
is the basis for us being able to
implement the values we say we believe
in
this idea will never die
the technology that bitcoin brought to
the forefront the genie is out of the
bottle
[Music]
since the crash the bitcoin price has
been hovering around a hundred dollars
bitcoins seem to have weathered the
storm
but there's still much controversy
surrounding the currency
the same cryptography that ensures a
user's privacy
also allows it to be used anonymously
[Music]
my father decided to retire and he had
an old failing print shop
i basically took it over and i converted
into an internet place
we're the only place in la that supports
bitcoin right now
this is my linux system here it's a
system that also mines for bitcoins
it makes about a dollar a day i just do
it for fun
i was really really into the internet
like literally in 1990 1991 1992 and i
had the hardest time describing what the
internet was to people i was tell people
well it's like this network of computers
and the network of computers can talk
with other networks of computers and
then you can exchange information
and like people would have no idea what
it was
when people ask me what bitcoin is i
have the hardest time describing what it
is
and i'd surmise it as it's basically
money it's basically an anonymous paypal
it's one of those things that you have
to use before you understand
politically i'm not a very big fan of
either the banks or federal reserve and
bitcoin allows me to get around that one
of the programs we support is a protocol
called tor and basically what tor does
is it allows you to communicate to a
website anonymously tor is a program
that allows you to get on a silk road
and this is silk road
basically any drug you want is available
there's a lot of weed there's a lot of
cocaine there's a lot of ecstasy but
there's also unusual drugs like if you
want some sort of anabolic steroid
you can type steroid
you'll get all the different types of
steroids that are available
silk road itself is not selling the
drugs this is basically a matchmaker
between buyer and seller both the buyer
and seller don't know each other both
the buyer and seller are anonymous it
goes on this web of trust if you want to
let's say by this testosterone you click
on this
he has 99.3 positive feedback for more
than 300 transactions
so even though the contracts aren't
enforceable by law the reputation system
makes it so the
system works pretty well
oh there's a fireworks section now i
didn't know that
florida id
1.88 bitcoins which is around 150
something like that
a forged auto insurance card
forged passport
there was over 9000 entries for drugs
that's a lot
i would say there's around maybe five
customers that know about it and use it
it's a very small percentage of the
people that come in
but the people who do know about it
specifically come here to use it
what the customers do with the computers
is pretty much their business
another day in office
if you're going to do drug dealing of
any sort silk road is the place to go
how many people are selling cannabis
right now
it looks like 2011 people are selling
cannabis
they call me mr bitcoin
i probably have been dealing just cause
i was like
17.
right now i'm 26.
i think it's as a global thing when i'm
on the computer i'm doing business with
the world
[Music]
let's see they have blue drains hard
diesel
pineapple thai purple crush girl scout
cookies purple paste
when i first heard about it i was
laughing about it it took me a week to
just even think about this for real like
i can really make money off of internet
selling this type of stuff for me are
you sure about that
it's something i probably may buy right
here
it has to look like some good kush
some of these things only take like a
day to get here
with no harassment from nobody instead
of just being on the streets once you
get the hang of it it's actually kind of
fun just looking through different
things
mr bitcoin i'm running with it i like
the name you know what i mean i'm not
gonna lie i get booty off this i kind of
like talking about this stuff with girls
like girls like that [ __ ] hot
you're not on your street and you got a
little nerd knowledge this is great
i have like a lot of bitcoin saved up
already my business is doing good
it's a fun way of doing hustling these
days like the future bring a different
way to hustle
and i like it
[Music]
with so many people using bitcoin in so
many different ways
it's becoming apparent that it can't be
ignored
[Music]
today i'm visiting fincen a bureau of
the us department of the treasury
despite having released guidance on
virtual currencies there's still a lot
of uncertainty surrounding their outlook
on the future of bitcoin regulation
straight ahead in the big fish bowl
looking
okay great
[Music]
i'm not going to say we're going to have
every answer for you today but
i mean what i do want to say is that you
know we
we didn't want to shut down bitcoin
um you know we didn't want to attack
bitcoin we think uh
there's a lot of uh
social benefit
to it
you know kind of had the google alert on
my computer for bitcoin and
once a month once twice a month
something will pop up but now it's five
a day
jennifer shasky calvary came on board as
fincens director last year
during her career she spent 15 years at
the department of justice where she
specialized in fighting money laundering
and organized crime virtual currencies
have been on my radar for a while even
prior to coming to this
position because of unfortunately the
abuse of some of them
bitcoin on the other hand is one that
really didn't come on my radar probably
until i arrived at fincen depending on
who you speak to the issuance of our
guidance was either the best thing that
ever happened to bitcoin or the worst
thing that ever happened to bitcoin some
accusing us of trying to kill bitcoin
and others saying that it somehow
legitimized it of course neither of
those things i think is is probably true
and certainly neither of those things
was our intent
one of the clear lines is that if you're
a consumer who's using bitcoins to buy
goods and services the guidance doesn't
pertain to you we're focused more on the
places where we think we have risks to
the u.s financial system from money
laundering and terrorist financing and i
think that might be kind of a lot of the
bitcoin community has a little bit of a
fear that it you know bitcoin may be
characterized in a way so as to tie it
to some bad actor ruining it for
everyone when a lot of people that are
interested in bitcoin including myself
see it as just you know this technology
that we don't really don't want to see
it you know falling into the wrong
categorization
with all the potential that's there sure
so the
innovation
around bitcoin and and the virtual
economy um
is is really one of the more interesting
aspects i think of this story the idea
that it can be used to potentially serve
the unbanked out there just to provide
some really new services that are
convenient for consumers the flip side
of it though is that to be a part of the
financial system the u.s financial
system the global financial system also
comes with some responsibilities
and those responsibilities include not
allowing your institution to be used by
criminals and
by terrorists
there's always been a concern that the
government might try to stamp out
bitcoin
but perhaps they see the risk of being
left behind
in may 2013 the biggest gathering to
date of bitcoin enthusiasts and
entrepreneurs happened in san jose
california we're at bitcoin 2013 it's
the inaugural conference of the bitcoin
foundation
[Music]
bitcoin is worldwide and the vast
majority of people haven't even heard of
bitcoin yet it's more powerful than
every computer on the top 500 list
combined
it's an awfully big world
an awful lot of things could happen
really you know we've been on a roller
coaster ride
and i expect at least for the next few
years we're going to remain on a roller
coaster ride
i happen to enjoy roller coasters i
think they're fun
[Applause]
just a few weeks earlier cameron and
tyler winklevoss known for their
involvement in facebook announced that
they own a one percent stake of all
bitcoins in existence worth around 11
million dollars
they also made a 1.5 million dollar
investment in charlie's company bit
instant we started looking
seriously at it at the end of last
summer and started purchasing
around that time i think a light bulb
just went off and
said wow like the implications of this
could be enormous if everyone in the
world can have a bitcoin address and
everyone in the world can be banked
fairly quickly
and when you consider that it's a very
powerful idea and
bitcoin can make that happen we're going
all over the world we're going to the uk
we're going to australia we're going to
we're already in russia we're going to
south america we're already in brazil
now you can buy a bitcoin at any of our
locations it's fun to think that satoshi
might be here too
i always wonder if somebody is someone
here somewhere is uh yes
i was planning i was planning to hack
security cameras of the of the hotel and
try to trace the partner of walk of some
person who might be satoshi
what would he do what talks would he be
attending you know
we're seeing the bitcoin players in the
market meeting with the venture
capitalists and they're all beginning to
posture and that's very exciting because
it means that there's going to be a lot
more infrastructure built out a lot more
money flowing into the space and it's
really going to be a big bull market for
bitcoin
one of the companies best known for
making bitcoin accessible for commerce
is atlanta-based bitpay
they're pioneers in bitcoin and provide
a service that enables merchants to
accept bitcoin payments without dealing
with its complexities we've grown about
about a factor of 10 since the beginning
of the year we were doing about half a
million dollars a month around the turn
of the year and now we're doing about 5
million a month this is people using
bitcoins to buy real goods and services
they're not day trading they're not
exchanging they're actually buying
things i'm confident that bitcoin is the
most important invention in the entire
history of the world since the internet
roger vera is an investor in several
early bitcoin companies including bitpay
his passion and enthusiasm has earned
him the nickname bitcoin jesus it is
going to change everything and all of
you here in this room you're at the very
very forefront
[Applause]
lives in tokyo but travels the earth
spreading the good word of bitcoin
the last couple of days we've been
setting up a business per day to accept
bitcoin here in the bay area today's
business is going to be the super kilpo
korean supermarket
so for you like you accept credit cards
right now your credit card companies are
charging you two or three percent for
bitcoin you can do the same thing but
they'll only charge you one percent
you'll still get dollars in your bank
account if you want you can choose to
split some of the payments that you
receive into bitcoins and then some into
dollars in whatever ratio you want so
you can keep 99 in dollars and one
percent of bitcoin or 99 in bitcoin and
one percent dollars however you want you
can decide that
roger is describing the service provided
by bitpay
they take the volatility of bitcoin's
price out of the equation for merchants
by immediately converting bitcoins to
dollars at the time of sale so right now
we have it set to 100 dollars so anybody
that pays here with bitcoin they'll
deposit the money into your bank account
the very next day with only a one
percent fee and i guarantee you over the
next couple weeks you'll have lots of
computer nerds that love bitcoins will
be coming in here specifically to shop
at your supermarket so that they can pay
with bitcoin
the credit card companies just for
processing the payment they take
anywhere from
one point five percent to over three
percent and then
on certain cards there's even a per
transaction fee like 20 cents per
transaction plus the percentage of the
transaction one two percent is big we're
talking about eleven twelve thousand
dollars a month on the average that
they just take right out of our account
i honestly think that there's a really
good chance that bitcoins will be more
than a thousand dollars by the end of
the year because everybody who hears
about wait i can send money to and from
anyone i want it's impossible for anyone
to freeze your account it's impossible
for anyone to block you from sending or
receiving these bitcoins more polish
euros so you can see all these different
currency exchanges around the world that
exchange to and from bitcoins and you
can see there's i don't know maybe
between 50 and 100 exchanges now when i
first heard about bitcoin and started
telling everybody about it if you looked
at that same page there were less than
10.
and there's no central office that they
could raid or anything like that there's
no central it's amazing there's no
central office there's no central place
they could go to and say take steve's
bitcoins or give c's bitcoins to kevin
or do this or do that's the owner of
bitcoins
everybody that owns bitcoin yeah just
like who's the owner of gold whoever
whoever owned some gold
short of shutting down the entire
internet in the entire world there's no
way to stop bitcoin
and hit request payment
and that's a qr code for your bitcoin
address so i'm gonna scan that
so now i have your bitcoin address on my
phone i think this is two dollars
so i'm gonna send you two dollars
worth of bitcoins
there it is
you just received that many bitcoins
from me directly with no fee and if you
hit the little green square it'll show
you the equivalent amount in us dollars
so you just receive two dollars worth of
bitcoins directly from my phone to your
phone and you can send money just like
that anywhere in the world
you could have told me your bitcoin
address by email or post it on facebook
or twitter or anywhere
so i could print this and have it at the
register yep and you can you can check
right on your phone anytime that you
receive the
payment okay thank you steve all right
thank you for the t
one of the newest standouts in the
bitcoin space is a san francisco company
named coinbase
they operate a digital wallet service
that makes it simple to buy use and
accept bitcoin i would not be surprised
at all if google square paypal everybody
is looking at adding bitcoin in one or
two years by then we need to have 50
million wallets
if we can make this easy to use it's
going to be huge
my involvement in bitcoin is not
politically motivated yeah dude
people are realizing large capital gains
when professional investors enter the
realm the stakes definitely change
we raised five million dollars from
union square ventures fred wilson led
the round there i think bitcoin is still
actually a little bit under the radar i
think it's moved past the stage where
people dismiss it but i don't think that
it's totally gone mainstream either i
think we're in that middle stage right
now
at the end of the conference jared from
trade hill through a party to celebrate
how far things had come
you guys are hot right now
dude congratulations on the raise thank
you it's good money man it's well due
yeah i mean well
hopefully it's an advancement for the
community
i am
completely pro compliance like i think
like if you don't want to attach your
identity to this
i can't work with you yeah
i mean like the libertarian side of me
is like yeah whatever but like
from a business perspective if people
don't play by the rules
you're not gonna last yeah you're gonna
shut down you're gonna go to jail
noticeably absent from the conference
were representatives of bitcoin's
biggest exchange mount gox
just days earlier the department of
homeland security seized more than five
million dollars from their u.s accounts
the seizure warrant stated that mount
cox had failed to register as a money
transmitter putting them in violation of
the new fence and guidelines
i'm traveling to tokyo to meet mark
karpeles mount cox's reclusive ceo
[Music]
no bitcoins on here
not yet
sure that will make this completely
unnecessary
but for now it seems kind of primitive
that we're exchanging paper for paper
and losing
and losing that and someone's taking a
cut somebody's taking me
[Music]
mark and his business partner gonzaga
are french but they operate mount gox
from offices in japan
originally mount gox was in exchange for
trading cards used in a game called
magic the gathering
mtgox stood for magic the gathering
online exchange
in 2011 mark's company taban bought
mount cox and his focus has been bitcoin
ever since
one of the conditions of my visit is to
refrain from any discussion about the
dhs seizure due to the ongoing
investigation
we've arrived at mount gox
this is mount gox right here there's no
no big sign or anything no no
doesn't look like a
crazy commercial
establishment
despite their legal problems mount cox
still handles more volume than any other
exchange and is processing around six
million dollars worth of bitcoin trades
every day
we are last year on average of ten
thousand new customers a month january
was twenty thousand
then thirty thousand sixty thousand one
hundred fifty thousand with what's going
on
it's going down but we are reaching one
hundred thousand new customers uh for
may that's
a month in a month so it was like this
but still i was after what happened i
thought that a lot of people will go
away or or don't uh don't uh create a
new icon but still 100 000 new customers
it's uh wow
and here we've got the office
for with everyone uh working
hopefully
[Music]
mount gox employs 18 people
not only is mark the ceo he's also the
cfo the lead developer and performs all
technical operations to keep the
exchange running what's it written in
c plus
is that your main is that your main
programming language
i've got a lot of them in program
languages yeah what's your favorite
programming language really depends what
i need to do like if i need to cut
something really quick and i don't care
about performance i use php if i care
it's a bit about performance i will use
c plus plus with qt for example but if i
care a lot about performance i will use
asm
when we go in camera's down first until
we get to your servers
[Music]
getting ready to go into the mad cox
data center location
cameras down
[Music]
we were allowed to snap a few
photographs
one of the main issues we had during the
second mobile is that volume of trading
was too high compared to what our system
was designed to support
to prevent this is we optimized a lot of
the system
the old trading engine can reach a peak
speed of 70 to 100 orders per second
with a new trading engine it can handle
about 100 million orders possible
[Music]
if mount gox's new trading engine can
really support 100 million orders per
second it should be able to scale with
the demands of professional traders but
with complex legal problems and
increasing competition mark's attention
is pulled in many directions
[Music]
do you work seven days a week typically
yep
it seems that you do the majority of all
the heavy lifting
literally
you need to remove your shoes in the
entrance
mark is a talented man in one of the
world's biggest cities
but maybe he should stick to computer
keyboards
[Music]
okay
[Music]
[Music]
we are here in northern new hampshire
for the porcupine freedom festival and
this is an event put on each year by the
free state project
basically it's just a bunch of crazy
anarcho-capitalists libertarian types in
the woods
with freedom and families
pretty much all the vendors except
bitcoin
[Music]
tastes much better when bought with
bitcoin
thanks
guys salads and smoothies
i would say one third of our sales have
been in bitcoin
it's uh 20 bucks so you're paying
bitcoin
uh yeah all right
last year was our first year accepting
it
we did maybe 18 transactions 20
transactions the most and now we're up
to close to 120.
[Music]
this community is really one of the
largest groups of people in the us i
think that's truly adopting bitcoin and
using it as a currency because of what
it stands for because of what it enables
the world is seriously changing now and
it is changing in a very interesting
very radical decentralized and in my
opinion positive direction
here it is bryce breaks the all-time
high
vitalik is only 19 years old but he has
a profound understanding of the
complexities of bitcoin and a gift for
explaining them
as lead writer for bitcoin magazine he's
been traveling the world covering
bitcoin for the past year i'm a big fan
of the of the decentralization concept
in principle you know have have lots of
lots of uh different societies operating
according to whatever whatever people's
own beliefs are
bitcoin has unique properties that no
other system in the world has had before
it really seems like the the only
practical way forward
as you move away from cash into
your debit cards and your credit cards
you essentially are giving up a certain
degree of your privacy without even
really knowing it
it's important to understand that
bitcoin is not automatically perfectly
anonymous but what it does is it enables
you to be anonymous if you wish to
eric voorhees is the founder and part
owner of a hugely popular bitcoin
gambling site called satoshi dice
satoshi dice is the first of a new breed
of provably fair betting games that use
bitcoin
since all bets are public anyone can
verify the odds and payouts
at its peak satoshi dice was responsible
for more bitcoin transactions than all
other uses of bitcoin combined
it played an important role in bitcoin's
development as one of the first
applications to really test what the
bitcoin network could handle
recently eric moved his entire
operations out of the us and into panama
he started a company called coin a pulp
that lets you send bitcoin via sms and
i think most people at least in america
believe that when they put
a thousand dollars into their bank the
bank is holding a thousand dollars in
its vault for them and they don't
realize that 99 of all the dollars are
digital the fact that we have these
tokens called uh paper cash
is a is the exception to the rule
people see the cash and they think that
that's what the money is but it's all
digital and it's been that way for
decades you guys moved your business to
panama what was the primary driver in
that if you're a u.s company
you have to follow the arcane u.s
regulations for all of your customers
around the world so if you do business
with some rural farmer in africa you're
going to need to get a social security
number you're going to need to get all
this information that washington tells
you is important we did not want to have
to apply the u.s financial regulatory
scheme to customers in sub-saharan
africa i don't think the developed world
is going to be where bitcoin really
takes off long-term because our banking
systems work decently well
many people around the world don't have
any bank accounts whatsoever ultimately
those are the types of people who will
find the most value out of bitcoin
one month later eric announced that he
had sold satoshi dice to an anonymous
investor
the price
126
315 bitcoins
worth around 11.5 million dollars
most of the
new offices in the city are in this
condition all still what's called gray
not ready no internet no electricity
nothing but we actually got one that was
finished so we moved in and we are
super excited about it
you can see all the skyscrapers of new
banks and everything getting built up
here this is a financial center for
central america
so it was fitting that we
established ourselves here as well
still setting up the office we've been
here for
two weeks we're getting walls put in got
furniture and this is the brains of the
operation this is mr ira
he can program anything and you can see
all these books he's reading what do we
got here
we got cryptanalysis
we got everyday cryptography
introduction to mathematical
cryptography
i read all these of course when i was
much younger but i was trying to catch
up with me
the bitcoin phenomenon is trying to take
control of money away from the state and
return it to individuals it's trying to
separate money and state in the same way
and for the same reasons that it was
important to separate church and state
there's a wonderful quote from one of
the rothschilds
give me control of a nation's money and
i care not who makes its laws
so i'm trying to play my part in that
narrative
outside of the united states billions of
people don't have access to basic
banking services
bitcoin can level the playing field and
help bring developing nations into the
global economy
[Music]
eventually people are going to use a
currency that is as free as the internet
because people seek out freedom wherever
they can
and just as the government can't stop
the internet and the freedom of speech
can't stop bitcoin and the freedom of
money
so we're just gonna have to see how hard
they try to do it
it's scary but it's exciting because at
the other end freedom typically wins
we'll just have to see how long it takes
to get there
[Music]
[Music]
as summer rolled on the bitcoin industry
continued to flourish
it's hard to remember the days where i
was running this thing out of my
basement
and it was like one or two people and
like bit instant was just a domain name
charlie and bit instant moved into their
new offices i always wonder if satoshi
knew that he was going to build
something that would like foster
like companies like this where we're
actually like
company of jobs based on something that
someone we don't know wrote a paper on
it's kind of creepy if you think about
it like i wonder if he's like kind of
watching us right now or something
in san francisco jared and trade hill
had moved into their new space as well
it sounds funny it's not a 100 million
market anymore you know it's grown
beyond that
more professional people learning the
space and they're expecting to deal with
other professionals
but just as things were ramping up
regulators started taking a closer look
at bitcoin
so bad news for bitcoin or is it days of
glory could be ending at least two dozen
companies have been subpoenaed by new
york's department of financial services
can't be a good thing bit instant bitpay
coinbase and winklevoss capital were all
issued subpoenas
we want to make sure that as this
enterprise grows and if it does become a
place where a lot of people are engaging
in financial transactions that we have
sufficient protections in place
with increased pressure and banking
compliance issues
bid instant was forced to suspend
services
[Music]
jared faced similar battles
due to a lack of regulation many banks
decided to cut ties with bitcoin
companies
without a u.s bank account trade hill
can't operate and jared was forced to
pull the plug
[Music]
regulation
typically evolves much more slowly than
innovation and regulations cannot keep
pace with the pace of innovation
explaining bitcoin to a bank feels like
explaining amazon.com
to barnes and noble
until lawmakers catch up startups like
trade hill and bit instant are left out
on a limb
[Music]
banks do not want to bank bitcoin
companies when you have regulation you
can comply with it when you don't have
you know regulation they're not exactly
sure and if the banks aren't sure they
just default to no
new regulation takes at least one year
to develop propose and adopt and in many
cases it can take much longer than that
[Music]
i won't let this go
i'll fight till the end for a bitcoin
whether i have to work on the street or
sell lemonade bitcoin is going to
succeed one way or another and i'm going
to be a part of it
[Music]
over the past several months the bitcoin
mining landscape has changed
significantly
[Music]
when i started bitcoin mining was a
hobby for geeks
now it's big business
in order to continue mining and continue
playing in the game and be competitive
and be profitable i would have to spend
hundreds of thousands of dollars on gear
the 18 miners i ordered from avalon
never arrived
and the units from butterfly labs took
over a year to ship
by the time i got them bitcoin mining
was so competitive that i would never be
able to mine back all the coins i used
to buy them
see that computer that computer makes
bitcoins and this is
all the other computers that are making
bitcoins too
and it goes straight up in the line up
in the air and that's because there's a
lot of people that are making bitcoins
with computers like that
as my new units are arriving i'm selling
them for bitcoins to try to recoup what
i can you don't mind grabbing those
other cables i'm not coming back up okay
[Music]
i'm taking a pretty big hit
but overall the mining experience has
still been worth it
[Music]
my mining days may be over but i'm still
very involved with bitcoin with bitcoin
it's a money system where
it's backed by math it's backed by the
laws of mathematics and by the rules of
the protocol i keep thinking that
there's got to be an easier way to just
set up a secondary protocol to trade
private keys
every time i log on i see another dot on
china and i'm like this is why right now
the price is gone
the price is nearing 150 again
many attributed to the explosion of
bitcoin's popularity in china
what's happened recently is chinese
people have really come and adopted
bitcoin
as a culture as a nation chinese people
are keen to learn about things that are
on the internet things that involve math
and science
we think that china can really
contribute in the space and help bring
bitcoin to the mainstream
germany is another part of the world
where bitcoin has found a home
it's starting to get normal if one
person a day comes in and buys a coffee
with bitcoins people are looking for a
new way of paying and not through banks
and not with yours not with dollars
something new
the german ministry of finance even
became the first governing body to
officially classify bitcoin as private
money
i believe if we want to get some justice
back into our society we should reduce
the importance of the banks
bitcoin is banking without banks so here
we go
the fbi today shut down what it's
calling the most sophisticated internet
site in the business of selling hard
drugs including heroin cocaine and lsd
in the sci-fi section of a san francisco
public library undercover agents
surprised a young man quietly working on
his laptop
they arrested a 29 year old software
engineer named ross albrecht
and accused him of being the mastermind
behind the silk road
people have always tied the silk road to
it media has always tied the silk road
to it as if like silk road is bitcoin
but it's not
this may be a sign that bitcoin is
growing up
it's funny my friend just uh imed me and
said you know it's still crow crowd
rated and the government sees 3.6
million dollars in bitcoin is there a
way to invalidate bitcoins
i replied no
the government is now
invested in bitcoin
people are starting to finally realize
that bitcoin has nothing to do with how
people use it it's just money it's like
gold
of course not everyone thinks bitcoin is
the way of the future
bitcoin will not be able to survive or
thrive
without
becoming legitimate
i don't see it having a
serious place in our financial system
they're really good reasons why we have
central banks that have the power to put
out financial fires by printing money
i'm
worried about the technology
as darth vader once said don't put all
your faith in technology i think 10
years from now we'll look back on this
and just kind of chuckle at the bitcoin
fad
oh yeah remember bitcoin oh yeah i
remember that
it's financial freedom come on bro this
is the new world bro
others are more optimistic
i think within 10 years you're going to
have a lot of people using bitcoin but
they're not going to realize that
they're using it because it's going to
be a protocol that's embedded underneath
whatever financial service they're using
today and by bitcoin being open source
it's what can allow all these different
mobile wallets and all these financial
technologies to all talk to each other
especially around the world
whoever the hell satoshi was he should
go down in history as one of the
greatest people or groups of people that
ever existed this is a technology that
mankind has needed for thousands of
years people have been dealing with
monetary shenanigans since the roman
empire clipping gold coins
and finally people can escape it
i'm
cautious to try to predict the future we
don't really know
i tend to be a technological optimist i
see the democratization of technology as
being a really positive thing
and i think that's a really powerful
force that is really only just beginning
[Music]
not bad
[Music]
recently as the price has
been floating around 200 again you know
i have a lot of friends that have asked
me you know are you going to cash out
some of your bitcoins now you know the
price is really high you should you know
get some dollars out of it and
i kind of tell them no like don't you
see it
[Music]
i've met so many interesting people and
there seems to be one thing that kind of
binds a lot of them together and that is
that they're willing to face opposition
and follow through on the ideas that
they believe in
the people who try the crazy ideas often
fail and then everybody likes to point
their fingers and laugh and say that was
such a stupid idea but once in a while
it works out
i think bitcoin is proving to be one of
those things
[Music]
the decision to bring virtual currency
within the scope of our regulatory
framework should be viewed as a positive
development for this sector i'm here to
testify because i believe that digital
currency represents one of the most
important technical and economic
innovations of our time we are
enthusiastic
about the potential of virtual
currencies and the digital economy for
social good
this latest generation of technology
which we're talking about today
takes things to a whole new level
there's a
bit of a shared responsibility here in
trying to figure out how to make this
work
it is a little strange that
bitcoin we don't know who the creator is
and so um that often
conjures up the idea that there's some
risk here that we have not you don't
think it was al gore to you
[Laughter]
if you think a little broadly this could
again have huge huge implications
[Music]
[Music]
2013 was the year bitcoin first entered
the mainstream and 2014 got off to a
dramatic start
just as we were wrapping things up on
our film charlie shrem was arrested
after returning from a bitcoin
conference in amsterdam
he could be facing up to 30 years in
prison on charges related to his
activities at bit instant
in jfk you walk right off the plane
and you go straight to customs about
three agents in front of me and then
four agents behind me said mr charm
please come with us
they took me to an interrogating room
told me that i'm being arrested on
federal crimes money laundering running
an unlicensed money transmission
business and failing to file suspicious
activity reports
the indictment alleged that charlie had
sold bitcoins to a reseller that
operated on the silk road
what sucks is the house arrest you know
i have to pretty much be here all the
time every day can't even go outside
unless i'm going to my lawyer's office
which is once or twice a week
i pretty much lost my freedom lost
everything that i've built over the past
year
charlie's arrest wasn't the only bad
news that rocked the community in the
new year
for months there had been rumors that
mount cox had become insolvent
and in february the site went offline
i'm not touching you i have a question
the rumors turned out to be true
[Music]
[Music]
and nearly half a billion dollars worth
of bitcoin were missing
mark was forced to step down as ceo
and mount cox went into bankruptcy
a national magazine claims to have
identified the mysterious founder of the
worldwide digital currency called
bitcoin tonight he is speaking out but
he says he has nothing whatsoever to do
with bitcoin why did you create bitcoin
sir
okay no no questions
[Music]
i want big one
oh okay
yeah this would be good
oh jeez i have some honor
hey uh who's yours
newsweek claimed the creator of bitcoin
had not used a suit in him
they connected the dots to a 64 year old
japanese man living in los angeles
[Music]
named dorian prentiss satoshi nakamoto
nakamoto immediately denied the
allegations and said he'd tell a story
to the first reporter who agreed to buy
him lunch
the main reason i'm here is to declare
my name that i have nothing to do with
bitcoin nothing to do with developing
i was just an engineer doing something
else
as the media frenzy escalated
newsweek's claims started to unravel
holes in the story led many to believe
it was nothing more than sensational
journalism
there was no conclusive evidence tying
dorian to bitcoin
amidst the uncertainty
on that same day
a comment suddenly appeared on satoshi's
long dormant profile page which read
i am not dorian nakamoto
[Music]
maybe we'll never know who created
bitcoin
but the truth is it doesn't really
matter
[Music]
bitcoin belongs to everyone
and the future is ours to build
[Music]
so that hundred thousand dollars on
market orders right now
let's go come on come on
why what's going to happen buy 100k
worth of bitcoins right now why do it i
don't want to do it do it you owe me a
hundred thousand dollars do it i'll send
you a hundred thousand no you buy buy a
hundred i can't right now i need the
floating goggs for the volume
closing bell for satoshi
this is for bitcoin
t-shirt
pleasure sir great doing business with
you i'm gonna wear your shirt proudly do
it
that's one thing that's interesting
about bitcoin it's like how do you like
declare losses
you know you point to two transactions
that happen on the internet and you tell
the irs that you own that
you know oh i used to own that and i
lost the private key like you know and
then if you really do lose it how do you
write it off for taxes and stuff that's
gonna be interesting
[Music]
[Applause]
okay guys we're gonna play a special
version of hopscotch called bitcoin
blockchain hopscotch
oh you lost all your bitcoins
who's satoshi nakamoto
i dress i'm not telling but yeah
oh do you know oh
maybe not maybe oh
you know i have a bitcoin and a half
myself now which i think probably in 10
years means i'll be really rich
[Music]
when you think about it hard enough on a
global scale this is a net gain for
humanity