The technology I'm going to talk to you about today is about to change the world and will also change the internet itself. Bitcoin. An invention created on January 3rd, 2009 by an anonymous creator released this open source project built by a community of volunteers run as a peer to peer network. Ridiculed. Laughed at. Ignored for the first five, six years.
Not so much anymore. People are beginning to pay attention. Just like with the internet. Things that were previously unthinkable are now thinkable. People are beginning to notice that this is something more than what they are told, and what are they told? Drug dealers. Pornographers. Criminals. Guess what? That's what they said the first time someone in 1993 heard about the internet.
They were wrong then, they're wrong now and every time you meet someone that's a dentist that uses Bitcoin or hairdresser that uses Bitcoin, it undermines that silly narrative. Bitcoin is a protocol and what better stage to talk about a protocol?
The moment you start talking about Bitcoin and thinking about Bitcoin, it brings up a very difficult question. What is money? Most of us, it turns out from all of the conversations I've had with thousands of people around the world have no idea what money is and how it works. It's one of those technologies that is so deeply embedded in our culture that it has become completely invisible to us. In fact, we don't even need to think about money unless it stops working.
Some countries realize that it stops working and then everyone has interesting things to say about what money is. But what is money? At its very basic level, money isn't value. In fact, you use money to get things of value, products or services, but there is no value in the money itself. Money isn't a construct of authority. We seem to think that these days because all of our money comes from certain authoritative sources.
Some guy, with a crown, says that this is your money and that's the authority it comes from. But what if money could be created without authority? What if money could be created simply through use. It turns out what money is, is a language. Money is a language that human beings created to express value to each other. As a language is a fundamental construct of civilization that allows us to exceed what's known as the Dunbar number.
The Dunbar number is the maximum number of individuals who can operate in a tribe on the basis of kinship.
Of acquaintance. But if you want two tribes to work together, you need some common bond and these bonds have included culture, language, religion and yes, money. A fundamental construct that allows us to exceed the scale of a single tribe and engage in commerce with others on a greater scale. As our money has evolved, it has been able to evolve its scale to allow us to collaborate and engage in commerce on a greater level. Money is also, ironically, a system of control because controlling money conquers great power to those who control it, and as a result, kings and government have always held a very tight control over money.
Pretty much like how they used to hold over religion for pretty much the same reasons. Now that has changed. On January 3rd, 2009 the world changed because some person created a peer to peer protocol, a flat network with no servers, all clients that are able to express money as a content type. As internet professionals, you may understand what I mean by money as a content type. Money that is expressed purely as data, that can be transmitted using any kind of communication medium that can convey information. A Bitcoin transaction doesn't need to be transmitted over the Bitcoin network, although that is a convenient way to do it.
You can encode it in Skype emoji's, you can write it up and put it in a Craigslist ad, you can post it on Facebook in the background of a picture of kittens playing with yarn. Money, as pure information on an open network that is simultaneously uncensorable, open to anyone, neutral, and global. There are no borders on this new technology, just like there are no borders on the internet.
Everyone can access it because it is not a product, it is not a company. You do not need to register for an account. You simply download a client, and a Bitcoin client is very much like a web browser. It is the user interface that speaks the protocol to other Bitcoin clients out there.
As soon as you download that one application, you can join a global economy. That global economy is open to anyone, of any race, religion, creed, ethnicity, age, anywhere in the world. For most people, this concept hasn't yet quite sunk in. The children born today, will not know a world in which banks exist. They will not know a world in which paper money exists, any more than any of the young people in our industry have no idea what the world used to look like before the internet.
How many of you remember libraries and looking up reference cards? The children born today will never drive a car. They'll never have a world without an internet and they'll never know a world where banks control money where money is issued only by kings and nation states. Money will be an integral protocol of the internet, a content type that can be transmitted by anyone, anywhere. But that's not enough. Let's make it more fun.
Every form of money until today has to have a person behind it. Money can only be owned and managed by people, or by people together forming an association, a legal fiction called a corporation. Now with Bitcoin, it's a protocol, autonomous agents can own and manage money themselves, no people required. Imagine a corporation with no directors, no shareholders, no employees, running entirely based on scripted learning.
Machine learning or maybe just a few simple rules that operates autonomously of any human action and can manage budgets in the amounts of billions of dollars. At this point, we have a split. Some people are thinking, "Oh no, that sounds terrible! What if it's a virus? What if it's intelligent ransomware that self-propagates and buys Amazon web service systems so it can grow when it's successful?
What if it runs A/B testing by itself by hiring programmers to make itself better?" Yeah, all of that is going to happen. But what if it's a charity. What if it's an intelligent charity that can detect the emergence of a natural disaster and automatically and instantaneously give large funds directly to the people most in need without human intervention and unlike most charities today, 100% of the funds donated go to those in need.
The world is about to change. Self-driving cars? How about self-owning cars? Cars that are not owned by a corporation. Cars that are a corporation. That pay for their electricity, gas, maintenance and leasing fees by giving rides to human beings who pay them in cryptocurrency. Imagine software such as intelligent articles that propagate across the internet as content and expand their reach because people read them and as a result their ability to buy more hosting services so they can expand their reach. This is not your grandparent's money. It's not your parent's money. This is money that is fully programmable, scriptable, that has capabilities that can be finely tuned.
You can specify who can access it and when, how it can be dispersed. A whole new field has opened up which is called smart-contracts. This system allows people to program the behavior of entire systems that can also manage money. Money is such a narrow word to describe this because we use things that kind of look like money all of the time but aren't real money. What about royalty points? Tokens? Subway cards? Airline miles? What about all of the other brands that could be turned into tokens and made into a global exchangeable system directly on the internet through this internet protocol? On January 3rd, 2009 the world changed.
Since then, more than 1000 other cryptocurrencies have been created using the same recipe, almost all of them open sourced and they're expanding in old directions, exploring every possible niche of this ecosystem, every tiny variation of capabilities and features.
Creating new markets which are raising funds from thousands of startups around the world, thousands of software engineers and developers are training to use this new technology. The internet itself is changing very rapidly now we have autonomous agents that are using money on the internet and these are in many cases beyond the controls of any jurisdiction. What are the large corporations going to do with this new magical, open decentralized neutral, borderless censorship resistant network? They are going to say great, we'd like that, but can you take out the open, decentralized, borderless, neutral, censorship-resistant properties and package it with an SLA with a 12-month license and control.
Control for us. They will take the internet and make INTRA-nets. They will make closed gardens of boring stale content that is fundamentally insecure, that sits in the backyards of corporations adding a tiny bit of value but outside of the participation of the global community, isolated by the way of innovation that is happening all around us.
They will create these INTRA-nets, they will claim victory, they will turn around and say, we invented blockchain and they will be wrong and they will fail. Because of the real principle, the real exciting thing about this technology, it's not the blockchain which is a database artifact that is created with this protocol, it is the ability to achieve distributed consensus among parties that don't trust each other, across great distances without any central party. Without any authority. Without an intermediary and that consensus from the outside looks chaotic. It looks messy. It looks weird. Well, everyone that is reading this already knows something is open, flat, weird and is not understood by corporations. The internet!
We already did it once; we are going to do it again. This time, we are going to bring the entire world with us.
In the background of this grand story, there's another story that's playing out. After 25 years of the internet, it still takes 3-5 days to send money from here to a country that's not in North America. It will still cost you $30 - $50 dollars to send money. That's only if the country you're sending money to is not a poor country, in which it will cost far more and take far longer.
A giant network of centralized, closed, corrupt systems that are sucking money out the poorest people on this planet. In 2017, two and a half billion people do not have access to banking. That means they have zero access to banking, cash-based only and that's only counting heads of households, not their spouses, not their children. Clearly, they don't matter. That's according to the international monetary bank. Now, imagine what happens if you bring banking to an app, to a $20 android to everyone that has a smartphone.
Three and a half to four billion people are on the internet today. Just over 1 billion of those have banking, have full access to financial services. We are going to bring it to the other 6 billion, fast. This is going to change the world faster than the spread of cell phones. Imagine, a $20 android landing in a village in Kenya and it's no longer just a communications device. It's a bank. Not a bank account. A bank. It can wire and receive funds from anywhere in the world. It can do lending or receive lending for a mortgage to buy seeds for a field, to bring disaster relief. It can internationally connect every person on this planet and we can do this within the next 10 years.
The world will radically transform when you bring the capability of a broad economy inclusion to everyone in this world. Now you would think that banks want to do this, you'd be wrong. It's not really profitable serving people who have little money, little connectivity, no access to IT, in oppressed countries with terrible governments. Also, in most of those countries, the banks are criminals. They are criminal organizations, or really quite indistinguishable from the local mob. So how do we fix that? Up to now, the approach to all of these technologies whether it was PayPal or any of the other technologies emerge in financial technology very, very slowly was to carefully and politely ask for permission.
Bitcoin is not asking for permission. We forgot to do that. So we will proceed in banking the entire world without asking for anyone's permission. This protocol is now spreading and if this one gets shut down a 14-year-old with a copy of what's written on this page and can rebuild it in a weekend in any programming language and re-launch it again with its new name. And again, and again, and again, until we succeed. The world is now connected. Finance is now an application and money is now a content type.
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