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00:00:20Watch carefully, what is the similarity between us?
00:00:27You are living in any corner of the world.
00:00:32You need food, water, house and money.
00:00:37More than half of the transactions take place with money.
00:00:40Instead of goods or services,
00:00:42whether it is stocks, bread or illegal drugs,
00:00:46you will have to pay for everything.
00:00:48We spend most of our lives chasing money,
00:00:51to fulfill our dreams.
00:00:53But it is also a means of destruction.
00:00:56Some will call it bad,
00:00:58for which criminals can commit lies, theft and murder.
00:01:02This current banking system is very valuable for the society
00:01:06and people are very dependent on it.
00:01:09Money is a main source for bad deeds
00:01:12and good human efforts.
00:01:15Before civilization, we created currency.
00:01:19Money for war.
00:01:22A way to gain power.
00:01:25The player and the enemy of a new discovery.
00:01:28Money is an integral part of our society
00:01:31and of our global economy.
00:01:33And its true form is a secret for many people.
00:01:36So this is the story of money
00:01:38or perhaps its end, as we all know.
00:01:41Whether you have a lot of money in your account
00:01:44or very little money in your wallet,
00:01:46for us it is just cash.
00:01:48Many people want to finish it,
00:01:50want to get rid of it.
00:01:52They want to change your dollars, euros, yen
00:01:55and all your money.
00:01:58The web of digital currency
00:02:00has been handed over to the world by computers.
00:02:03Magic Internet Money.
00:02:05This is called Cryptocurrency.
00:02:08Bitcoin.
00:02:09With its invention, the world got a good gift.
00:02:13This is not just a currency,
00:02:15but actually a programmable money.
00:02:17A possible curse for bankers.
00:02:19There is nothing that big banks or politicians
00:02:21can do to stop it.
00:02:23It has broken the government's grip on money.
00:02:28The internet is doing Bitcoin for money.
00:02:33Can this be new gold?
00:02:35No.
00:02:36For this you will have to think far ahead.
00:02:38To find out what is the internal value of Bitcoin.
00:02:44Regulators, Federal Reserve and banking systems
00:02:47have to take this very seriously.
00:02:50This will change our economic culture.
00:02:52Bitcoin can be a micro-economic miracle worker
00:02:56or it can be a macro-economic wrecking ball.
00:03:01Is Bitcoin a future currency?
00:03:04A god for criminals?
00:03:07Or a remedy for financial crisis?
00:03:12If you trust your money so much,
00:03:16then listen to our little story.
00:03:32Once upon a time, there was a big party.
00:03:35Everyone was standing near the punch bowl.
00:03:38Drunk with sorrow.
00:03:40Politicians gave credit to their smart decisions
00:03:43for a strong economy.
00:03:45Businesses jumped into the markets
00:03:47ignoring the risks.
00:03:49In fact, experts also said that there were no risks.
00:03:53Then, with the numbers of small countries,
00:03:55there was chaos in the markets.
00:03:57Rumors spread.
00:03:58Bad news shook the house prices.
00:04:01A big bank went bankrupt in the center of this world.
00:04:05Investors and businessmen started running to other banks
00:04:08to withdraw their savings.
00:04:10The world's largest financial institutions
00:04:12were frozen.
00:04:14Wealth was seized.
00:04:16Banks shut down.
00:04:18This crisis put the entire world's financial system
00:04:20in crisis.
00:04:22And finally, the government intervened.
00:04:25The biggest bank bailout ever.
00:04:28The president's swift action
00:04:30saved everyone that day.
00:04:32Do you remember?
00:04:34You won't remember.
00:04:36Because this happened 2,000 years ago.
00:04:39Rome.
00:04:4033 years before Christ.
00:04:42This was the first time in history
00:04:44that there was a swift crisis
00:04:46and the government intervened.
00:04:48The world's largest empire
00:04:50had come to its knees
00:04:52due to a banking crisis.
00:04:54Emperor Tiberius used the national treasury
00:04:57to plunder the country's
00:04:59crisis-stricken banks and companies.
00:05:01History cannot repeat itself,
00:05:03but it can copy itself.
00:05:05And that too, a very bad copy.
00:05:07The people in power and their money
00:05:10have always been at the center of it all.
00:05:25The story of money is as old as its culture.
00:05:30When we lived in small tribes,
00:05:32it was easy to keep accounts of debts.
00:05:34Someone's burnt wood has been left on you.
00:05:37A neighbor has given you a piece of meat
00:05:39to eat.
00:05:40Debt and savings were in your mind,
00:05:42like a mental account.
00:05:44Currency is a language that allows us
00:05:46to express the value of a transaction
00:05:48among people.
00:05:50This technique is older than the wheel.
00:05:53It's even older than fire.
00:05:56When people wanted to do business
00:05:58outside their tribes or villages,
00:06:00they needed something that everyone
00:06:02could agree on.
00:06:04Something that could be seen.
00:06:06That's when Commodity Money was born.
00:06:09There were many types,
00:06:11but everyone needed the same five
00:06:13characteristics.
00:06:15Commodity Money, which is completely
00:06:17invisible, can be easily identified,
00:06:19can be cut into small pieces,
00:06:21you can change one piece from another
00:06:23of the same value,
00:06:25and you can take it anywhere
00:06:27without any hassle.
00:06:29In ancient Rome, it was salt.
00:06:31Aztecs used cacao beans.
00:06:34In Fiji, it was whale teeth.
00:06:36In Tibet, it was yak dung.
00:06:38In Africa and China, it was marbles.
00:06:46If there were five characteristics
00:06:48of Commodity Money,
00:06:50it would have probably been used
00:06:52as currency.
00:06:53And then you will ask,
00:06:55what was the value of these currencies?
00:06:57If you go to a primary school,
00:06:59you will see children changing
00:07:02Tamagotchi and Pokemon cards
00:07:04and sweets and candy
00:07:06and many other types of currencies.
00:07:08People look for currency
00:07:10when there is no other currency.
00:07:12Now they are going to look for
00:07:14digital currencies.
00:07:16But such things that are not durable
00:07:18but are cheap, like bad cacao crops
00:07:20or a big search for salt,
00:07:22can bring down your currency
00:07:24and economy.
00:07:26A more stable economy was needed.
00:07:28About 2500 years ago,
00:07:31the first copper coins were made
00:07:33in China and there,
00:07:35which is now called Turkey.
00:07:37These coins had the same
00:07:39five characteristics of Commodity Money.
00:07:41They were also very durable.
00:07:43In some cases,
00:07:45only their coins
00:07:47are left in the name of civilization.
00:07:52Money does not come from the government.
00:07:55In fact, money comes naturally
00:07:57as the market develops.
00:08:00And like the people who work hard
00:08:02found out that if I have eggs
00:08:04and you have a cow,
00:08:06we may need a means of
00:08:08trade that you give me
00:08:10the price of my eggs
00:08:12and I give you the price of your cow.
00:08:14Coins were a purpose
00:08:16and a global unit of finance.
00:08:18And they allowed people
00:08:20to trade in large areas.
00:08:22The market economy was born.
00:08:24Coins were useful,
00:08:26but only on the condition
00:08:28that the people who traded
00:08:30their coins believed
00:08:32their king or emperor
00:08:34that they were not being
00:08:36cheated on the material.
00:08:38The use of coins means
00:08:40that now an authority
00:08:42controls the supply of
00:08:44your currency.
00:08:46There was an unbreakable
00:08:48relationship between
00:08:50money and political power
00:08:52that was centralized.
00:08:54A stable and reliable
00:08:56Constantinople had a
00:08:58solidus of 700 years.
00:09:00But at that time,
00:09:02coins were not melted.
00:09:04They were flat.
00:09:06And it used to happen
00:09:08that as the coins
00:09:10would go from one
00:09:12to another, people would
00:09:14cut off a part of it.
00:09:16And in fact, some kings
00:09:18would take out the 8th part
00:09:20of the coin.
00:09:22The kings built palaces.
00:09:24They financed their interests.
00:09:26Soon, the royal treasury
00:09:28began to use cheap metals
00:09:30instead of gold and silver.
00:09:32This is called debasement.
00:09:34And the kings of Europe
00:09:36got used to it.
00:09:38The French currency began
00:09:40to be debased every 20 months
00:09:42for 200 years.
00:09:44If someone does not trust
00:09:46the gold or silver of your coins,
00:09:48then how will they trade
00:09:50in other countries?
00:09:52These traders came up
00:09:54with a solution.
00:09:56They believed that a person's
00:09:58debt was valuable.
00:10:00They could transfer it.
00:10:02When these IOUs came
00:10:04from established sources,
00:10:06they could be used
00:10:08as money.
00:10:10Paper money.
00:10:12This money was not based
00:10:14on hard objects or metals.
00:10:16Instead, it was based
00:10:18on someone's promise
00:10:20to pay Medici
00:10:22in exchange
00:10:24for 100 gold coins.
00:10:26This is how it works.
00:10:28An English trader
00:10:30gave Medici an order
00:10:32to ship Italian clothes
00:10:34in exchange
00:10:36for 100 gold coins.
00:10:38Medici's promise
00:10:40to pay Medici
00:10:42was put on paper.
00:10:44Meanwhile, Medici's
00:10:46100 gold coins
00:10:48were exchanged for
00:10:50100 gold coins.
00:10:52This was because
00:10:54everyone trusted Medici
00:10:56as a foreigner.
00:10:58Medici had created
00:11:00a paper money machine.
00:11:02Within a few generations,
00:11:04Medici reached the
00:11:06upper echelons of
00:11:08the economy.
00:11:10His wealth helped
00:11:12the Italian renaissance
00:11:14to flourish
00:11:16and to be elected
00:11:18as Pope.
00:11:20Relationships
00:11:22and influence
00:11:24to control money
00:11:26for power and politics
00:11:28were now
00:11:30through the church
00:11:32and the state.
00:11:34Goldsmiths
00:11:36were also
00:11:38taking an interest
00:11:40in paper money.
00:11:42If Goldsmiths saw
00:11:44that their owners
00:11:46did not need them,
00:11:48what would happen
00:11:50if they were
00:11:52given a loan?
00:11:54They would start
00:11:56giving loans
00:11:58of gold coins
00:12:00and realize
00:12:02that people
00:12:04do not even want
00:12:06gold coins.
00:12:08They just want
00:12:10a piece of paper.
00:12:12If people trust paper,
00:12:14they will trust paper.
00:12:16And effectively,
00:12:18Goldsmiths,
00:12:20the bankers of the early days,
00:12:22had gained the power
00:12:24to print money.
00:12:26The businessmen
00:12:28and banks
00:12:30manipulated the money
00:12:32and made them
00:12:34competitors
00:12:36of the king's coins.
00:12:38They could not
00:12:40pay the price
00:12:42of gold coins
00:12:44for themselves.
00:12:46Their business
00:12:48and empire
00:12:50had spread
00:12:52across the world.
00:12:54European countries
00:12:56built big cities
00:12:58and fought
00:13:00each other
00:13:02to rule the world.
00:13:04The government
00:13:06wanted to take
00:13:08Money and war go hand in hand.
00:13:12War is expensive.
00:13:14A year's income is not enough for it.
00:13:17Rulers had to borrow money in exchange for future loans.
00:13:21They needed a fundamental financial innovation, government bonds.
00:13:26This loan came from the rich business family and goldsmiths,
00:13:30who had become powerful financiers and bankers by now.
00:13:34The expenses of sovereign loans and deficits had begun.
00:13:50In 1694, the Bank of England was established to help in the war against France.
00:13:56The central bank of England was in the hands of the private sector.
00:14:00They were given a right to issue banknotes,
00:14:04which could be exchanged for gold in equal amounts from the government treasury.
00:14:09The central bank soon arranged for a full loan for the crown.
00:14:13Money has been a means of communication for centuries.
00:14:17You gained power because you were able to issue currency,
00:14:21but it also gave importance to monetary supply.
00:14:24By supporting the power of the state and the state loan.
00:14:30When the U.S. gained independence from Britain,
00:14:33the first draft of the new constitution gave Congress special rights to coin money.
00:14:38The value of this currency was tied to gold in the government treasury.
00:14:43From 1781 to the terror of 1907,
00:14:46the U.S. monetary system was a financial petri dish.
00:14:50Sustained central banks, state banks, private banks, private currency,
00:14:55government currency, disappointment, strong development,
00:14:58scarcity, regular inflation, and burst cycles.
00:15:15In 1913, bankers and politicians decided
00:15:18that the existence of a sustained central bank was in the best interest of the country,
00:15:23and for them as well.
00:15:25They formed the Federal Reserve.
00:15:27Their work involved the expansion or extension of a national currency,
00:15:32the Federal Reserve Note.
00:15:34The dollar was tied to gold,
00:15:36and its monetary control could be prevented from a burst,
00:15:40which leads to a bust.
00:15:42At least this was the plan.
00:15:44Then came 1929.
00:15:48The Great Depression had a profound effect on the monetary policy of the world.
00:16:10Soon, the Federal Reserve legally printed almost all the money,
00:16:15to breathe life into the monetary system again.
00:16:18To run the treasury, gold was needed.
00:16:21Therefore, in 1939, President Roosevelt issued a controversial executive order
00:16:27that forced all U.S. citizens to sell their gold to the Federal Reserve
00:16:33at a certain price or go to jail.
00:16:37The Federal Reserve offered much more money to the foreign governments for their gold.
00:16:43Many agreed to it.
00:16:45Gold began to arrive, and the dollar spread all over the world.
00:16:52World War II left the United States and destroyed almost every major economic system.
00:16:59The army and industrialized countries emerged as the world's most powerful.
00:17:05The dollar became the most stable and reliable currency in the world.
00:17:11Other countries converted their currency into dollars, which can still be used for gold.
00:17:17In fact, the U.S. had more than half the world's gold stock.
00:17:22In the next few decades, more and more dollars spread abroad.
00:17:27Governments began to put their coins in cheaper coins,
00:17:31and began printing more of their currency than gold.
00:17:35There was a gap between precious metals and paper currency.
00:17:41This coin is $0.50 from 1966.
00:17:44This was the last silver coin that was in circulation in Australia.
00:17:49It has 80% silver, so it was $0.50 in 1966.
00:17:54And today it costs only $8.
00:17:57And that too in silver.
00:18:00By 1966, foreign nations realized that the U.S. was printing more money than gold.
00:18:08And they had more valuable dollars than the coins in the U.S. treasury.
00:18:13They asked for gold in exchange for their paper dollars.
00:18:18In 1971, President Nixon settled the matter.
00:18:22He separated the United States currency from the gold currency.
00:18:37which is in the interest of monetary stability and the United States.
00:18:42Then no one could legally ask the U.S. government for gold in exchange for paper dollars.
00:18:49The dollar was now fully supported by the United States government's complete trust and credit.
00:18:55The world's richest country so far was about to put its future at stake with just one word.
00:19:02Trust.
00:19:04People believe that money is based on very few facts.
00:19:08And one good thing about Bitcoin is that it forces people to ask questions about the fundamentals of money.
00:19:18Bitcoin is an attempt to adopt an advanced computerized system that we have.
00:19:25Internet.
00:19:26To bring money back to life, as it used to be.
00:19:34I think our dollar policies, our monetary policies, our fiscal policies have made us a nation of donors.
00:19:49Not just personal debt, not just corporate debt, but government debt.
00:19:53You have to look at them all as one big thing.
00:19:56What is the nation's wealth?
00:19:58Well, the nation's wealth is a big hole in the money that we owe the rest of the world.
00:20:03Today, the United States pays its investors $400 billion in interest every year.
00:20:12When a government spends more than the money it receives from its creditors, it either takes more loans or makes more money.
00:20:21Once upon a time, every piece of paper money was supported by gold.
00:20:25Remember, every $20 bill had a $20 worth of gold.
00:20:30But not anymore.
00:20:32Today, governments make currency by making bonds or treasury bills.
00:20:36These bonds are sold in the market to generate funds for the government, which issued them.
00:20:43Big banks buy U.S. bonds to flip them, to sell them to the Federal Reserve for profit.
00:20:50This is a magic money machine.
00:20:52You see, the Federal Reserve is America's central bank.
00:20:56But it has neither money nor cash in its balance sheets.
00:21:00When a bank buys a bond and takes it to the Federal Reserve,
00:21:04it is said,
00:21:05Thank you, Mr. Banker, this is your principal and some profit.
00:21:09There is no transfer of new money,
00:21:11it is just shown in the bank account.
00:21:13Magic.
00:21:14For hundreds of years now,
00:21:16the exact mechanism of buying these bonds has been a secret.
00:21:22This is where it really gets interesting.
00:21:25The Federal Reserve is not a government agency.
00:21:28It is a private entity,
00:21:30and its shareholders are those banks that collect profits.
00:21:34Every year, up to $80 billion,
00:21:37some of these banks are paid by those who send government debt to the Federal Reserve.
00:21:42Which banks?
00:21:43Don't bother asking.
00:21:45This is also a secret.
00:21:48In other words, the magic money machine doesn't answer anyone.
00:21:53The Federal Reserve decides how much interest you have to pay on your car, house or business loan.
00:22:01The Federal Reserve has been given an impossible task
00:22:05to run the credit and monetary system,
00:22:08as if we were the Soviet Union.
00:22:11It is a central planner for the main aspect of accounting,
00:22:15how to distribute money and loans.
00:22:20It does not help the monetary system.
00:22:23On balance, it harms the monetary system.
00:22:26And it is bound to make mistakes,
00:22:29no matter how good your intentions are.
00:22:32The Federal Reserve should increase employment with low interest rates,
00:22:36by encouraging people and businesses to buy more goods and services.
00:22:41It is a good thing for governments to be involved in money,
00:22:45and it is also a bad thing.
00:22:47It is a good thing because money is the arteries of the monetary system,
00:22:52it is the blood supply of the monetary system.
00:22:55The market is going through a period of excitement and disappointment.
00:22:59And it is understandable to support the currency for the governments,
00:23:03and to interfere in it.
00:23:06To take the abundance of money up and down
00:23:10is the most powerful way to calm that boom and bust cycle.
00:23:16To take the abundance of money up and down
00:23:19is the most powerful way to calm that boom and bust cycle.
00:23:37The goal of central banks is to make new money,
00:23:41cautiously and strategically.
00:23:44Increasing money in the monetary system increases prices.
00:23:48Ideally, 2% every year.
00:23:51This increases economic growth.
00:23:54But 2% inflation means that today,
00:23:57you have a credit of one dollar in your pocket.
00:24:00Next year, it will be 98 cents,
00:24:03and it will be less every year.
00:24:07After 1913, when the Federal Reserve took over the United States dollar,
00:24:12we saw a 98% drop in the value of the US dollar.
00:24:16Inflation is a lot of tax,
00:24:18because you only pay it once on your income.
00:24:21If inflation is 2%,
00:24:23then you are paying 2% tax on your net worth every year.
00:24:28So, what does this mean?
00:24:33If you earned $1 in 1913,
00:24:35you could have bought 16 bread loaves.
00:24:38But today, you will hardly be able to buy one.
00:24:42It is not a strange notion that things used to be so cheap.
00:24:46This is proof that the value of your money is slowly declining.
00:24:53The $1 invested in 1913 will now be $7.24.
00:24:58Approximately 600% more return than the total loss.
00:25:05The value of the US dollar is now about 4% lower than the value of $1.
00:25:11This is 96% of its original value.
00:25:14And this is a clear result of government regulation.
00:25:18Governments don't just make money.
00:25:21You play an important role in the magic money machine.
00:25:37The central bank is not a problem.
00:25:39It is a part of the problem.
00:25:41But the real problem is that we have given the banks the power to make money,
00:25:45which has created a financial crisis.
00:25:47We deposit our money and budget in a bank account
00:25:50and withdraw it as needed.
00:25:52The bank is the guardian of our money.
00:25:55Right?
00:25:56Wrong.
00:25:58This is now the property of the bank.
00:26:00On their balance sheet.
00:26:02They can do whatever they want with it.
00:26:04For example, making new money.
00:26:07Your bank account shows $100.
00:26:10But the bank has only $3.
00:26:12$97 gives Bob a loan to buy something.
00:26:17Your bank account still has $100 in it.
00:26:21But Bob's account has a new $97 in cash.
00:26:25The computer screen has only numbers.
00:26:27There is no cash, gold or anything else supporting the new amount in Bob's account.
00:26:34It is just a promise to repay him.
00:26:37This is the new money made in the form of a loan.
00:26:42When that $97 is spent, like in a shop,
00:26:45the shopkeeper deposits it in another bank.
00:26:48And it is lent again and again.
00:26:51Each of them has a number in their account that they own this money.
00:26:57So your original $100 is now multiplied.
00:27:00Now the system has more than $3,300.
00:27:04This process of lending much more money than the actual cash of a bank is called Fractional Reserve Banking.
00:27:1397% of the money in Britain is just numbers in the computer system.
00:27:18And those numbers were made by banks.
00:27:22Banks get billions of interest by making virtual money and lending it every year.
00:27:28More than that, banks don't even need your deposit to make new money.
00:27:33If they consider someone eligible for a loan,
00:27:36they can put new magic money in their account and start collecting interest.
00:27:42So we understand reports as if they are the first digital currency.
00:27:46But nothing has changed.
00:27:48Actually, we use digital currency every time.
00:27:51Like internet banking or bank cards.
00:27:54Actually, it's not just a digital currency.
00:27:56It's a digital currency made by a bank.
00:27:59In other words, all new money is a loan.
00:28:03This money is a part of creation, which is not taught in the class of economics.
00:28:09Payment money, bank accounts, Bob's loan, credit card loan, your home loan.
00:28:15All of them got life in the form of virtual money, which was made by banks.
00:28:21The whole process is based on trust.
00:28:23Trust in the bank's solvency.
00:28:25Trust in the lender's ability to repay a loan.
00:28:29If all bank customers ask for only 3% of their deposits in cash,
00:28:35the truth of the banks will be revealed.
00:28:40Almost no paper currency is present in banks, as you think.
00:28:45It never was.
00:28:49Do you remember the Sharabi Party?
00:28:54All our financial crisis was related to virtual dollars.
00:28:57A lot of people with very little income borrowed a lot of money,
00:29:01which they could never repay.
00:29:03But the banks didn't care.
00:29:05They quickly sold unstable loans to someone else for some money.
00:29:09And I approved all of them.
00:29:12Apply now.
00:29:15Apply now.
00:29:17Selling unstable loans was a good business,
00:29:20until a global financial crisis shook everyone.
00:29:3030 million jobs were lost from the magic money machine.
00:29:37The United States alone lost $16 trillion in household assets.
00:29:42And the banks shut down more than a million homes.
00:29:58Selling subprime loans and thinking they'll go bankrupt is probably not right.
00:30:03But it's attractive.
00:30:05Because a quarter of our best and most prominent population
00:30:10is being exploited by the money machine.
00:30:14Instead of science, engineering or medicine,
00:30:17they chose a career in betting.
00:30:20To play with other people's money and become rich quickly.
00:30:24Very rich.
00:30:26And sometimes they take shortcuts.
00:30:41In Greece, my ancestors talked about the destructive effects of power.
00:30:45And nothing has changed in the last 3000 years.
00:30:49When you give money to a few people in large quantities,
00:30:53they will take advantage of that control.
00:31:00The banks are paying attention to fines, money laundering and all those rules,
00:31:04which are changing their way of doing business.
00:31:08J.P. Morgan is saying that Bitcoin is not the only way to do business.
00:31:13Banks are now in a system that takes money from the global economy
00:31:18and puts it in the hands of very few people.
00:31:28The current banking system is very good.
00:31:30It has taken over the rules.
00:31:33It takes a lot of value out of society without doing anything in return.
00:31:37And it is no less than a parasite.
00:31:41Banks play a very important role in an economy.
00:31:45If you look at any successful economy, they have successful banks.
00:31:48They have a close relationship.
00:31:50In medieval Europe, the banker was hanged for not paying the money.
00:31:55Today, the same banker will get bail.
00:31:58He will get a bonus and some tax benefit as well.
00:32:02To date, no senior U.S. banking executive has been accused of selling bad loans.
00:32:08Because of this, the Great Recession began.
00:32:16In December 2014, just six years after the last banking crisis,
00:32:21a congressman changed a last-minute proposal written by Citigroup
00:32:26into an important funding bill.
00:32:29This bill allows the largest banks in the U.S.
00:32:32to make risky derivative bets with bank deposits again.
00:32:41But there is no need to worry.
00:32:43If the banks implement it again,
00:32:45U.S. taxpayers will pay back the lost money.
00:33:00Today's financial innovators package their assets in very complex ways.
00:33:05Slicing, dicing, securitizing.
00:33:08They always use other people's money.
00:33:11They sell loans.
00:33:13They take risks.
00:33:15This is called innovation.
00:33:18Slicing, dicing, securitizing.
00:33:20They always use other people's money.
00:33:23They sell loans.
00:33:25They take risks.
00:33:27This is called innovation.
00:33:30When you talk about financial innovation,
00:33:33Bitcoin is a good example of innovation.
00:33:36But there are other innovations as well,
00:33:39where people who are a little closer to the world of finance
00:33:42will become a good example.
00:33:44A good example of this would be the original swap market,
00:33:47which is moving towards the default swap.
00:33:49This is a great example of financial innovation.
00:33:52But if it is misused,
00:33:54there can be a lot of problems.
00:33:57History shows that the most revolutionary and disruptive innovation
00:34:01almost always comes from the fringe,
00:34:04not from the corporate cubicle.
00:34:06True innovators look at the world differently.
00:34:09They think big.
00:34:11They create new products and systems
00:34:14and take them to new industries.
00:34:16Steve Jobs has called them
00:34:18square cogs in round holes.
00:34:21It is not surprising that new innovations
00:34:24always come from a large group of initial adopters.
00:34:27Because naturally,
00:34:29it is very difficult for many people to understand the benefits of new technologies.
00:34:33In 2011, most of the people in the Bitcoin community
00:34:37were either technology space,
00:34:40geeks and hackers,
00:34:42or people from the traditional financial industry.
00:34:45Even at that time,
00:34:47some bankers and fund traders were using Bitcoin,
00:34:50which was really surprising to me.
00:34:54A radical new idea
00:34:56often faces doubts, ridicule,
00:34:58and people's hostility.
00:35:00People who are most afraid of its success.
00:35:04A clear example of this is
00:35:06automobile.
00:35:11In the 19th century,
00:35:13Carl Benz and others
00:35:15built the first cars.
00:35:17A machine that could pose a threat
00:35:19to the stagecoach and railroad industries.
00:35:22These self-propelled vehicles
00:35:24or road trains
00:35:26can definitely scare horses,
00:35:28injure people,
00:35:30and damage roads.
00:35:32To protect people,
00:35:34they passed a law in 1865
00:35:36using their own strength.
00:35:39For this, every automobile in England
00:35:41had to follow a speed limit of 4 miles per hour.
00:35:45And three people,
00:35:46a driver,
00:35:47an engineer,
00:35:48and a flagman
00:35:49had to drive it.
00:35:51This brave flagman
00:35:53would go in front of the car
00:35:54and warn the passengers
00:35:56about the imminent danger.
00:35:58Railroad tycoons,
00:35:59lawmakers,
00:36:00and self-propelled gatekeepers
00:36:02used regulation
00:36:04to suppress innovation.
00:36:06But they didn't invent the flagman.
00:36:09He was here for a long time.
00:36:12For centuries,
00:36:13very few people could read.
00:36:15They used to copy books by hand.
00:36:18The regulators,
00:36:19politicians,
00:36:20and religious leaders
00:36:21wanted to keep it the way it was.
00:36:23They implemented the Law of License
00:36:25on the printing press of Johann Gutenberg.
00:36:28They banned it.
00:36:30In some parts of the world,
00:36:31printing was a crime.
00:36:33People were sentenced to death.
00:36:34In the end,
00:36:35they were saving us
00:36:36from dangerous thoughts.
00:36:39Before the printing press,
00:36:40there were about 30,000 books
00:36:41in Europe.
00:36:4450 years later,
00:36:45there are 10 million.
00:36:47As Gutenberg's invention flourished,
00:36:49darkness fell.
00:36:51Progress was not stopped.
00:36:53But the flagman never stopped trying.
00:36:56His owners gave him
00:36:57a slackness over innovation
00:37:00because he was afraid
00:37:01of losing someone's benefit
00:37:02and control.
00:37:07But remember,
00:37:09this is a story about money.
00:37:11What would happen
00:37:12if a technological innovation
00:37:14allowed someone in the world
00:37:15to have their own bank?
00:37:18To make money
00:37:19free of tax and banking fees?
00:37:23The American Constitution
00:37:25prohibits citizens
00:37:27from competing with the American dollar
00:37:29or reducing it.
00:37:32In 1998,
00:37:34Bernard von Nathaus
00:37:36decided to test
00:37:38the federal government's resolution.
00:37:41The federal government
00:37:43was to ban
00:37:45the use of foreign currency
00:37:47in the United States.
00:37:51Liberty dollars were available
00:37:53in gold, silver, platinum and copper.
00:37:56They were available in three forms.
00:37:58Both in species,
00:37:59in other words,
00:38:00in gold and silver.
00:38:02In paper,
00:38:03as a warehouse receipt
00:38:04and in digital form.
00:38:06Obviously, the government
00:38:07did not like this.
00:38:08They arrested me
00:38:10and accused me
00:38:12of counterfeiting,
00:38:13fraud and conspiracy.
00:38:16I am now waiting
00:38:17for a 22-year sentence
00:38:19in federal jail.
00:38:21The lesson was learned.
00:38:24In the Netherlands,
00:38:25at a hacker meeting,
00:38:27there was a young hacker
00:38:29who used a nickname
00:38:32and his name was
00:38:33Satoshi Nakamoto.
00:38:37He talked to a friend of mine
00:38:39and he was inspired
00:38:40by the Liberty dollar
00:38:41and me
00:38:42and suggested
00:38:43making a new currency.
00:38:46To make personal money,
00:38:47the arrest of Bernard von Nothaus
00:38:49must have inspired
00:38:50the inventor of Bitcoin
00:38:52to keep a low profile.
00:38:55He published an invention
00:38:57under a nickname
00:38:58and disappeared.
00:39:01I am interested to know
00:39:03who Satoshi is.
00:39:05Maybe this is a part
00:39:06of the mystery of this story.
00:39:08This is completely unrelated
00:39:10to the work of Bitcoin
00:39:12because we have the code
00:39:14to read it.
00:39:15But it would be interesting
00:39:16to know this.
00:39:20Who is he?
00:39:21Archimedes.
00:39:23Who is he?
00:39:25Euclid.
00:39:27We don't know.
00:39:29We don't know
00:39:30if Euclid was a person
00:39:31or many people.
00:39:33And do you know
00:39:34this doesn't matter.
00:39:36Euclidean geometry works
00:39:38whether I know Euclid or not.
00:39:40Whether Euclid was an ethical
00:39:43and good person
00:39:45or a corrupt plutocrat
00:39:47or a fool.
00:39:49Science and mathematics
00:39:51have essential truths
00:39:53that stand alone
00:39:55despite their investors
00:39:57and their goals.
00:39:59Bitcoin is a system
00:40:01based on mathematical truths
00:40:03and these mathematical truths
00:40:05are standing alone.
00:40:07We can read the source code
00:40:09in Bitcoin
00:40:11and understand it.
00:40:12And the truth will be
00:40:14whether Satoshi Nakamoto
00:40:16is a man or a woman
00:40:18or a group of people.
00:40:20Is he a government agency
00:40:22or an alien from the future?
00:40:25Bitcoin is a digital currency
00:40:27and a computer software.
00:40:29Capital B, Bitcoin
00:40:31is a shared code
00:40:33that uses computers
00:40:34connected to the internet
00:40:36to create a global payment network.
00:40:38Bitcoin is a virtual currency.
00:40:40Digital money creation,
00:40:42storage and exchange
00:40:44is done on this network.
00:40:46But unlike a virtual dollar
00:40:48created by a banker,
00:40:50this new currency is created
00:40:52by an unknown inventor
00:40:54using math.
00:40:56Bitcoin is an open house
00:40:58software protocol
00:41:00that supports the internet
00:41:02and email.
00:41:04Open source means
00:41:06that anyone can use
00:41:08and no one can control.
00:41:10Every change in the software
00:41:12is public, open and transparent.
00:41:16Satoshi developed the code
00:41:18for the first time.
00:41:20After that, dozens of programmers
00:41:22are continuously working
00:41:24to improve the features
00:41:26and security of Bitcoin.
00:41:28So what makes
00:41:30Bitcoin successful?
00:41:32It solves an ancient human problem
00:41:34and a computer science problem.
00:41:36Any shared information
00:41:38or data can be
00:41:40harmful, corrupt
00:41:42or fake.
00:41:46How do we know
00:41:48what we are getting
00:41:50can be trusted?
00:41:52In our traditional mentality,
00:41:54it is important to know
00:41:56who is behind this currency
00:41:58because their reputation is important
00:42:00to know that our money
00:42:02is really safe in real money.
00:42:04Banks, credit card companies
00:42:06and remittance services
00:42:08trust third parties.
00:42:10They keep track of money
00:42:12as if it goes from one account
00:42:14to another.
00:42:16They charge us for it.
00:42:18We trust their digital ledgers,
00:42:20credit and debit balances.
00:42:22A financial system
00:42:24that can cut these poor people
00:42:26fast, cheap and safe.
00:42:28But Bitcoin is digital.
00:42:30Music and movies
00:42:32are easily pirated, copied and stolen.
00:42:34So how can a digital currency
00:42:36keep its value?
00:42:38What if someone makes 10 lakh copies of it?
00:42:40The answer lies in the core
00:42:42of Satoshi's invention.
00:42:44Bitcoin is not a computer file.
00:42:46It is an entry in a publicly
00:42:48distributed database
00:42:50known as blockchain.
00:42:52Just like Medici
00:42:54had a credit and debit account.
00:42:56Today's banks record
00:42:58every transaction in their ledgers
00:43:00as a digital wallet.
00:43:02We call it a database.
00:43:04The bank account is replaced
00:43:06by a digital wallet,
00:43:08which you manage alone.
00:43:10Bitcoin's ledger is a blockchain.
00:43:12It records the existence of every
00:43:14bitcoin and its transactions.
00:43:16It is always balanced
00:43:18because no bitcoin goes anywhere.
00:43:20When a bitcoin is sent
00:43:22from a digital wallet to another,
00:43:24it is actually sending the control
00:43:26of that part of the database.
00:43:28As soon as the network
00:43:30starts a transaction,
00:43:32it continuously synchronizes
00:43:34a ledger in the global network.
00:43:36Every computer or bitcoin
00:43:38miner has a complete
00:43:40and identical copy.
00:43:42And because blockchain is public,
00:43:44it cannot be controlled
00:43:46by a single person or computer.
00:43:48The owners of bitcoin mining computers
00:43:50are given new bitcoin rewards
00:43:52to keep the transactions process
00:43:54and network safe.
00:43:58In other words,
00:44:00the bitcoin network
00:44:02has replaced banks and bankers.
00:44:04Today, the combined computing power
00:44:06of this global network
00:44:08is more than 500
00:44:10large supercomputers
00:44:12multiplied by 10,000 times.
00:44:14And because every transaction
00:44:16is verified and recorded
00:44:18by the network,
00:44:20it cannot be tricked by bitcoin.
00:44:22It cannot be debased
00:44:24with cheap currencies.
00:44:26It cannot be bought
00:44:28or made at will.
00:44:30A lot of money is like a demon.
00:44:32A sky-high price.
00:44:34A trillion-dollar bill
00:44:36that cannot even buy a loaf of bread.
00:44:38There is a big movement in America
00:44:40to audit the Federal Reserve
00:44:42so that we can find out
00:44:44what they are doing.
00:44:46No one really knows
00:44:48how many dollars are in existence.
00:44:50For example,
00:44:52Ben Bernanke has made
00:44:54a statement that
00:44:56for any reason,
00:44:58central banks can print
00:45:00as much money as they want.
00:45:02This is called quantitative easing.
00:45:04And when they do this,
00:45:06the value of dollars, euros,
00:45:08and yen becomes very low.
00:45:10If the world uses bitcoin
00:45:12as its currency,
00:45:14then it cannot be controlled
00:45:16by central banks or politicians.
00:45:18Remember,
00:45:20central banks make money
00:45:22to increase their profits
00:45:24with the help of bitcoin.
00:45:26Bitcoin is completely opposite.
00:45:28It is completely transparent.
00:45:30Do you know how much is there?
00:45:32Behind bitcoin,
00:45:34there is a break pedal
00:45:36in the creation of a computer code
00:45:38that reduces the creation
00:45:40of bitcoin every four years.
00:45:42This ensures a transparent,
00:45:44controlled scarcity
00:45:46and ultimately limits
00:45:48the total number of bitcoins
00:45:50in the world.
00:45:52It can neither create
00:45:54nor change mathematical rules.
00:45:56Moving forward,
00:45:58this is something that
00:46:00is exciting about bitcoin
00:46:02and the technology behind it.
00:46:04Because it is not like
00:46:06it will reduce the dollar
00:46:08or make the government unstable.
00:46:10But it is a competition
00:46:12for the government.
00:46:14And the government needs
00:46:16to pay more attention
00:46:18to how much bitcoin
00:46:20can be bought online
00:46:22or in cash.
00:46:24And it has five main
00:46:26characteristics of money.
00:46:28But is it worth it?
00:46:30Is it stable?
00:46:32Or will it decrease
00:46:34over time,
00:46:36like a thing goes bad
00:46:38or a crop goes bad?
00:46:40The ultimate power
00:46:42of a cryptocurrency
00:46:44is used by the increasing
00:46:46number of people.
00:46:48Bitcoin is being made
00:46:50at a very slow rate
00:46:52compared to other currencies
00:46:54and its effect is that
00:46:56they turn it into a
00:46:58temporary asset.
00:47:00If you ask a lot of
00:47:02bitcoin enthusiasts
00:47:04if they can spend it,
00:47:06they will say that
00:47:08they are waiting
00:47:10for the price of bitcoin
00:47:12to rise.
00:47:14So you have to understand
00:47:16that most people are happy
00:47:18with this money system.
00:47:20If most people are happy
00:47:22with money,
00:47:24they love plastic.
00:47:26In America, two-thirds of
00:47:28individual sales are done
00:47:30with a debit or credit card.
00:47:32Plastic is a 60-year-old
00:47:34technique.
00:47:36It was made by a middleman.
00:47:38It was not designed for the internet.
00:47:40For every transaction,
00:47:42a credit card is required
00:47:44like your name and address.
00:47:46The credit card database
00:47:48is regularly hacked
00:47:50by buying from a fraudster
00:47:52in your account.
00:47:54Criminals buy and sell
00:47:56stolen credit cards.
00:47:58In some parts of London,
00:48:00one-third of all online
00:48:02credit card transactions
00:48:04are of fraudsters.
00:48:06Card issuers do not hold
00:48:08you responsible for fraud
00:48:102-4% interest
00:48:12is $50 billion
00:48:14every year.
00:48:16From a businessman's perspective,
00:48:18a credit card is a huge risk.
00:48:20If they take a credit card,
00:48:22it can be a chargeback
00:48:24or fraudulent purchases.
00:48:26In fact, hundreds of billions
00:48:28of dollars are spent
00:48:30on fraud every year.
00:48:32A bitcoin purchase is done
00:48:34with money, but there is
00:48:36no security.
00:48:38If you lose your password
00:48:40or pay the wrong person,
00:48:42you can never get your money back.
00:48:44It's like digital cash.
00:48:46For a trader,
00:48:48it's not a chargeback risk.
00:48:50For e-commerce companies
00:48:52like Expedia or Overstock,
00:48:54a credit card cutout
00:48:56will double their profit margin.
00:48:58As a currency and payment network,
00:49:00you can't think of bitcoin
00:49:02as something
00:49:04that will make
00:49:06your life easier.
00:49:08Bitcoin is everywhere.
00:49:10You can't deny it.
00:49:14There are 2.5 billion people
00:49:16who don't have bank accounts.
00:49:18For bitcoin,
00:49:20a mobile phone
00:49:22is a bank
00:49:24that can reach the global market.
00:49:26What will happen
00:49:28when bitcoin services,
00:49:30infrastructure,
00:49:32wallets and payment processors
00:49:34reach the global market?
00:49:36They will be able to
00:49:38make money
00:49:40and send it home.
00:49:42International remittance
00:49:44is one of the
00:49:46major problems
00:49:48of the current financial system.
00:49:50If I send $100 here,
00:49:52it will give me 20%
00:49:54with the banks,
00:49:5610% with the Western Union
00:49:58and 5%
00:50:00with the rest of the
00:50:02world.
00:50:04If you are sending it
00:50:06in remote areas,
00:50:08it will be 15-30%.
00:50:10Bitcoin will be a game-changer
00:50:12when it comes to sending money.
00:50:14You don't need a bank account.
00:50:16You just need an internet
00:50:18connection and a wallet
00:50:20to set it up.
00:50:22It is a tool
00:50:24to give people access
00:50:26to the global ecosystem
00:50:28and a promising future.
00:50:30It is a tool
00:50:32to give people access
00:50:34to the global ecosystem
00:50:36and a promising future.
00:50:38It is a tool
00:50:40to give people access
00:50:42to the global ecosystem
00:50:44and a promising future.
00:51:00an international wire transfer
00:51:02can last for 4 days,
00:51:04but the internet
00:51:06allows us
00:51:08to share text,
00:51:10pictures,
00:51:12videos and
00:51:14anything digitally.
00:51:16Why not money?
00:51:18Money is just a part
00:51:20of our database.
00:51:22And it would be no good
00:51:24if you can do bitcoin transactions
00:51:26with just one tweet.
00:51:28You will say, at the rate, end of money, $1 worth bitcoin.
00:51:32And for this we have made this, all you have to do is hashtag it with tippercoin and our
00:51:40twitterbot will process the transactions, with the help of which you can withdraw your bitcoin
00:51:45or send it to someone else.
00:51:47You can send bitcoin anywhere in the world for $1 or $10 lakh, you can do it for free
00:51:54or you can pay for the bitcoin network fee, which is just around a penny, big banks or
00:51:58politicians can't stop it.
00:52:00A cryptocurrency that can only be made and transferred with a computer network, can be
00:52:06the next step of the digital revolution.
00:52:10The emergence of machines, self-driving cars, drones, robots, which will depend on humans
00:52:17as little as possible.
00:52:18I often feel that the future of bitcoin or digital currency is about machine-to-machine
00:52:30payments.
00:52:31So when you sit in an unmanned taxi, which will drive you around New York, and then when
00:52:38you go to an unmanned power station for power or go to an unmanned auto shop to repair,
00:52:44then you will be able to see machine-to-machine payments with some kind of digital currency.
00:53:14You will be able to see it with your own eyes, you will be able to see it with your own eyes,
00:53:21you will be able to see it with your own eyes, you will be able to see it with your own eyes,
00:53:26you will be able to see it with your own eyes, you will be able to see it with your own eyes,
00:53:31you will be able to see it with your own eyes, you will be able to see it with your own eyes,
00:53:35you will be able to see it with your own eyes, you will be able to see it with your own eyes,
00:53:39you will be able to see it with your own eyes.
00:53:41But we will have to try and do it, with our own minds and not with any magical thinking.
00:54:12This is a free float, pure demand and supply driven.
00:54:18So clearly this is not a currency.
00:54:21Currencies do not behave like this.
00:54:23But this is a high-risk speculative commodity.
00:54:27That's why for entrepreneurs, bankers, governments and anyone else who studies and watches Bitcoin,
00:54:34I just have to say that there will be a lot of instability to go up.
00:54:42Criminals, scam artists, bad actors.
00:54:45They are attracted to money like a kite is attracted to a torch.
00:54:51Now this market has allowed people to sell things that were illegal for the governments.
00:54:57And this is not right at all.
00:55:00Fake ID, pirated music, North Korea's Bible.
00:55:05Is cryptocurrency inherently bad?
00:55:08Or is it just a new way to buy illicit things?
00:55:12What will happen when Bitcoin services and infrastructure and Bitcoin wallets and payment processors
00:55:17start going to these countries?
00:55:19Will all these people be able to send money home?
00:55:25Actually, for the past few years, I have been using TOR and Bitcoin in the online drug marketplace
00:55:31and trying to make illicit drug transactions available.
00:55:35Because I think it is very important.
00:55:38We did a global survey of drug users,
00:55:42in which more than 20,000 people were answering this question.
00:55:46And most of those people were traditionally buying illegal drugs.
00:55:52Ecstasy, Cannabis.
00:55:54The FBI stopped everything in Silk Road.
00:55:57Definitely illegal drug trafficking has not been stopped online.
00:56:02Many people want to criticize Bitcoin for the use of illicit things.
00:56:07But if you look at it, the most popular currency in the world is the US dollar.
00:56:18If you think of Bitcoin as a platform instead of a currency,
00:56:22then you will actually start seeing its potential.
00:56:26A ledger that cannot be forged, cannot be changed,
00:56:29and has been universally accepted is a genius.
00:56:32Bitcoin technology will always be there, and there will be applications for it in the coming years.
00:56:36The creation of a secure global payment system is just the beginning.
00:56:41Patents, contracts, land tiles, ownership certificates can be baked in Bitcoin,
00:56:47safely in a public ledger.
00:56:51I read more about Bitcoin, used the source code,
00:56:54I created some things that made me realize that this is actually a very powerful protocol.
00:56:59It's not just a currency, it's a programmable money.
00:57:04The digital age has changed the world.
00:57:06We have adopted digitized music, films, medical records, communications, and the internet.
00:57:13The free payment of information and currency can help in revolutions and disasters.
00:57:19But our money has been found in the 20th century.
00:57:23It has been manipulated by governments and banks.
00:57:26The champions of Bitcoin say that we should imagine payments without a middleman,
00:57:32without a broker's investment,
00:57:35without a bank's loan,
00:57:37without an underwriter's insurance,
00:57:40without a trustee's charity,
00:57:42without an agent's escrow,
00:57:44without a bookie's betting,
00:57:46without an accountant's record,
00:57:48global, secure, almost immediate, and free.
00:57:52Is this an imagination or the future of money and currency?
00:58:23I like Bitcoin. I'm hooked on Bitcoin.
00:58:36If you don't know what Bitcoin is, people usually call it digital cash.
00:58:41This money is for the internet.
00:58:53Yes, I love my bank.
00:58:55You can ask your banker what 2 plus 2 is.
00:58:58I can tell you, but it will cost you.
00:59:09You know, when I stand in line and buy a pair of socks,
00:59:14if I do business with a credit card, I'm only buying socks.
00:59:23When I do online shopping and if I have to buy socks,
00:59:27if I buy them with a credit card, they're nothing special.
00:59:31But if I buy those socks with Bitcoin,
00:59:35it's a revolution.
00:59:38You should really do the same.
00:59:53People are not always ready to adopt new technology.
00:59:57You know, when the internet came, people used to say,
01:00:00it's not going to be famous.
01:00:04And when email came, people used to say,
01:00:06people won't use it.
01:00:09And now Bitcoin has come.
01:00:11They say, why do I always think wrong?
01:00:15I have complete faith in it.