Video - A Bitcoin MKE LIVE Hangout

Andreas M. Antonopoulos himself. He wanted to come to Milwaukee and talk to us, and we were fine with that. How fine? So fine that we are going to share it with YOU. LIVE. Why? Because we can't keep him all to ourselves. That would be selfish.

TRANSCRIPT

Male: Welcome everybody to the Bitcoin Milwaukee meet-up featuring Andreas Antonopoulos. We're going to get started here, so take a minute or two and find a seat or a nice comfortable spot to stand and we'll get started here, shortly. We're going to hear from the Hudson Staff and then we will introduce our special guest. So take a moment, find a seat, get settled in and in about two or three minutes we will get started.

Male1: Check, check, check, check, check. Test, test one, two, three, four.

Male: All right, we're going to get started now. Thanks so much everybody for coming. I know a lot of you made a long trip, we've got some folks from Chicago, we got some folks from Madison. Do we have anybody from anywhere other than Madison and Chicago, who made a long trip?

Male2: *0:43:05.7

Male: Yeah, this is our largest showing yet, not surprising and I'm really glad that everybody made it out. I see majority new faces here and a lot of the old faithful as well. So I'm going to have Kate, from the Hudson Business Lounge which is the venue we're using for those of you who are watching online, introduce the venue and tell you a bit about the Hudson here in Milwaukee.

Female: Thanks, *0:43:33.6. Thank you so much for bringing this incredible community to our Hudson Community. My name is Kate Gorman, I'm the community and member relations curator here. How many of you have been to the Hudson before? Quick raise of hand. Okay, so we have some new friends here, well, welcome. We offer so much more than workspace, a membership at the Hudson is an invitation take -- to take part in something greater than your day to day work and to collide with people in our community and have meaningful conversations just like what's happening in this room right now. So what we have is the shared workspace like you see here and on the other side and then we also have solo offices, partner offices and multiple conference rooms, for you to make the most of your work and then we also provide a community, a community of several hundred members who are here to focus on the same goal that you all are is to be successful and to connect along the way. So if you would like membership information or are interested in holding a meeting or an event, we have information right at the front desk and you can always contact me for any questions. I hope you enjoy your night, learn a lot and thanks again for being here.

Male: Thank you, Kate, and thank you Hudson staff. We feel very grateful to have this space to share one amazing mind with you guys tonight. I'm going to allow Torick Fairs who is a co-organiser of this meet-up with me, he's responsible for reaching out to Andreas and communicating with him via Twitter during his Joe Rogan Firestorm when he was being recruited for Joe Rogan as well. So Torick is going to introduce our special guest tonight. Here you go, Torick.

Torick: Hey, guys, I see a lot of new faces. A little bit about myself, I've been part of this meet-up since it was just a handful of us meeting in a small office, just talking about Bitcoin and this is just amazing to see the -- this is what we've made out of the community and there has been huge support, a lot of media attention, a lot of businesses have been talking to us, and it's just great to see huge passion from everyone in the group, everyone in the community that's been willing to give us the time of day that's not turning us down, giving -- giving us the opportunity to teach them some -- about something that we think is going to positively impact our lives in one way or another. I thank everyone that's in attendance tonight. I want to thank everyone that help make this happen. Thank you to the Hudson for having us. Yeah, I hope everyone -- sorry, I hope everyone has good time tonight, I hope everyone met -- you know, met a lot of people. Sorry about that. I hope everyone that works meet a lot of people that are at least someone interesting if not absolutely inspire you to do something that no one would ever imagine could happen here. All right, I think we'll just have Andreas for the rest of the time, everyone let's -- let's welcome Bitcoin Jesus himself, bit -- Andreas Antonopoulos.

Antonopoulos: All right. So yeah, I'm not Bitcoin Jesus, thank you. For those of you who know the community that's *0:47:12.7 over there. Okay. So welcome everyone, thank you so much for coming out. It's a -- it's a great pleasure and an honor to be here with Bitcoin Milwaukee meet-up group and I -- I make a point of visiting meet-up groups and in every city where I go for professional engagements and conferences in order to speak to the community and trust me, I'm going to get as much out of this or more than you will and hopefully learn so much from the local community. Find out about how you guys were using Bitcoin and what you're doing here with Bitcoin. So let's start, first of all, with how many people in this room are new to Bitcoin? Wow! okay, great. We're seeing exponential growth in every meet-up and every country and every city and I'm not surprise to see the same here in Milwaukee. How many of you do not have Bitcoin? All right. So one of the things I have discussed with the organizers today is to make sure that people who want to leave tonight with Bitcoin can get to do so. So at the end of this meet-up what we're going to do is get organized, set up four, five stations, help you set up more wallets on your mobile or smartphones and then we're going to give you some Bitcoin, not a lot, not a whole Bitcoin, a few mili-bits each, you know, a couple of dollars each, just so you can experience it, see how it works when we transfer money to use through the Bitcoin network and then be able to make some transactions yourself. I can talk about Bitcoin all day but it's much better to experience Bitcoin. It's one of those things that really hits home when you see it happen for the first time and when you see just the simplicity and the speed with which it works and then when you transfer your first Bitcoin to someone who is standing next to you and you pay forty cents or thirty cents to transfer Bitcoin and it takes three seconds and then you suddenly realized that you could have done the same thing with someone who's standing in Kuala Lumpur and it would have taken forty cents in three seconds to transfer even if you sent them a hundred and fifty million dollars and then suddenly you realized that there is something different and something special about what we're doing here. Bitcoin is an invention. Bitcoin is a currency. Bitcoin is a network. It's all of those things. It's based on an invention that was introduced in 2008 by Satoshi Nakamoto, an invention that allows for distributed consensus on the network. That's a fancy way of saying we can now make a network that's trusted without having to have a central party that must be trusted. And that something unique because if you look around at all of the financial institutions and systems we have in society, the system that provide trust rely on central actors, they require an organization or person, a key holder, an authority to sit at the central of the network and provide trust for the network. And Bitcoin has no center and Bitcoin has no authority and Bitcoin has no trusted party and that's important because it changes things in a couple of major ways. You see, when you have a network where trust depends on a central authority you have to be very careful who you give access to. Traditional financial systems depend on access control, that means that you can only trust once you vet someone and you can allow access to the network once you vet it and trust them. Essentially when you have an access control based system of trust you have to trust everyone who has access and that means very few people can have access to the network. That's why I can't connect to the visa network programmatically unless I'm properly vetted as a merchant. That's why I can't use the MasterCard network or the SWIFT banking network to send money from my PC because I cannot be trusted and they need to trust everyone who is on the network because that's how their trust model works. So trust based on everyone who has access, so very few people have access. Bitcoin uses trust through computation. It uses trust through a mathematical algorithm and trust your computation means that you trust no one and everyone can have access. So where as in the traditional system you have to trust everyone who has access so very few people can have access. In Bitcoin you trust no one and everyone is welcome to join. And that is a radical and revolutionary technological system because that creates an open network. We're using an open network, the internet. The internet is a system of open access based on common standards and conventions. A network where you do not need access to communicate, you don't -- do not need access to communicate, you do not need permission to access and most importantly you do not need permission to innovate on the network. You can write an application, connected it to the edge of the network and launch it on the network. Innovation without a permission. Bitcoin allows you to do that for money. When is the last time you saw someone build a bank out of their garage and disrupt the financial services system to its core, never, why? Because they are not given access because access has to be trusted. On Bitcoin, anyone can creates an application and can innovate and create new financial instruments and that is pretty radical. So you don't need to trust everyone on Bitcoin because you can trust in the mathematical algorithm at the center of it and you don't really need to understand that in order to use Bitcoin. So what is Bitcoin? At it’s very basic level, it's currency, it's a form of money. It's a form of money that's digital in nature, that is created at a very fixed and predictable rate. Every ten minutes twenty-five Bitcoin are created on the Bitcoin network and in order to create that twenty-five Bitcoin, more than a hundred thousand computers collaborate and compete in solving a very difficult mathematical problem. It takes more than ten pedahashes of computing power to solve this problem and that sounds like a very funny word and it doesn't really mean much but basically what it means is that's more computing power than the six hundred largest super computers in the world. There is not a single government on this planet that has enough computing power to compete with the Bitcoin network and the reason for that is because it doesn't take one computer, it takes a hundred thousand computers all around the world to do this. This creates trust, this collaborative mechanism means that no one can put more computation to beat the system and because you are able to create Bitcoin through this mechanism, Bitcoin can be trusted not to create more than twenty-five Bitcoin every ten minutes. In fact, the rate of creation of Bitcoin is reduced over times so that in total the Bitcoin network is guarantee to have twenty-one million Bitcoin ever. So it has a limited monetary supply, a monetary supply that decreases overtime very similar to how precious metals work. So the first people who dig for gold, find a lot of gold until that gold is dug up and then there is less gold and it gets harder and harder and more expensive to dig up gold and the Bitcoin network works the same. If in 2010 if you were mining for Bitcoin, if you are trying to find solutions to problem to get Bitcoin it was rather easy, it's getting harder. By 2140 it will get infinitely hard and at that point no more Bitcoin. Now, this is all some complex mathematics and some weird ideas but basically this is the idea behind the economic concept of sound money, which means that if you have a limited supply of money that's predictable than the value of that money cannot be inflated. That means that the government can't print money. Why do we care about that? Because when government print money that means that the money that's in your pocket is worthless. And governments have been doing this for hundreds of years as a way to do hidden taxation, as a way to make money devalue in your pockets while they can create as much as they want to spend. Now, some people will say that's exactly what's happening in the US, things are terrible here and those people have not been to Argentina. Where the monetary supply has been inflating at more than thirty percent a year on the best of -- in the best off years and recently had a twenty percent inflation event or devaluation event in a single day. In Argentina, if you go to a grocery store not only will the prices changes on a daily basis, not only will the prices be thirty percent higher next week, you can't buy anything because the store owners are unwilling to sell you things because they are not sure if the price has already gone up and they could actually be charging more for what they are about to sell you. So the economy grinds to a halt. So Bitcoin is a currency that depends on math, not people, on math not governments and on math not institutions or organizations and that's important because people, governments, institutions and organizations are corruptible and they are most corruptible when they're handling money because money is power and power corrupts and absolute power corrupts absolutely and we've known this since the Greek times. Bitcoin works on math and you don't need to understand the math, you don't need to believe in the math, the math just is and that provide a basis for financial trust that we've never seen before. So the Bitcoin network creates money and the form of money you have on Bitcoin is a form of money that can use on your smartphone and it works like a simple email. I can sent money to someone else just by having their Bitcoin address and like an email address you can give me your Bitcoin address and I can send you money. And when I send you that money a few seconds later you'll receive it and it doesn't matter which country you're in and it doesn't matter what your government thinks about it and it doesn’t matter who you are. I can send money from one person to another person directly. So this creates a whole new environment for financial transactions between people. Now, we have it easy in this country. We are among the elite, we are among the people who have access to international financial markets, access to credit, access to the ability to wire money across borders without currency controls. There are about a billion people in the world who have that kind of international finance at their finger prints -- at their fingertips and then there is the other six billion and some of these people are already on the internet and they do not have access to international banking, some of them have no banking at all, and some of them live in cash based societies where the average salary is less than a dollar a day. Bitcoin is important to me for what I can do for the other six billion. It's great for us. We can do some amazing things with technology. We are igniting a new technology and industry revolution here in the United States and in other Western Nations that is going to create jobs and innovation and already has hundreds of start-ups and thousands of people getting new jobs omits the stagnant economy. But for the other six billion, this is far more important. Let me give you just one example. Every year, developed nations send a hundred and seventy-five billion dollars in foreign aid to the third world and the second world. And at the same time, people in this country and in other Western nations who work as migrant workers as immigrants and work harder than most of us can ever imagine sent money home to their families and when they do so, they get charged anywhere from eight percent to up to thirty percent to transmit money abroad. If you work in this country and you're a Somalian immigrant, you will get charged more than thirty percent to send money home and every week because Somalian immigrant is sending a hundred-dollar home and only seventy dollar is getting there. And certain companies in this country are making a killing and I mean that quite literally. Now, imagine what would happen if seventy-four billion dollar that currently go for fees to send money abroad actually went to the poorest people in the world instead of going as financial aid to the richest and hoping we trickle them down in places like Somalia, in India, in Bangladesh, in Mexico, in Indonesia. Imagine what would happen if we could create payment systems that allows us to transmit money instantly without a cut for the middlemen. And suddenly remittances enable a billion people to live themselves out of poverty with their own money. That's what excites me about Bitcoin. But it's also a really cool technology. It's a technology that allows us to unleashed a torrent of innovation in an industry that has been absolutely stagnant for fifty years. Here we are at the dawn of the age of the internet using credit cards, a technology from the 1950s, a technology that requires you every time you make an online payments to enter your address, your name, your information and then to provide the credit card information that is a pull based authorization system, a system that can not only be used to charge you for that item but to keep charging you again and again and again and again, and if that information is stolen, you're screwed because that information can be used to authorize future transactions on your money. That technology is broken. Credit cards were never made for the internet. Bitcoin is perfect for the internet. Bitcoin is a push payment system, that means that every time you do a Bitcoin transaction you create a piece of data that authorizes the amount you want to send and only that amount without revealing any of your identity, without giving access to any of your finances and without authorizing any future payments, you push just the amount you want to send directly and digitally and within a few seconds it's receives by a merchant. A merchant who no longer faces the risk of charge backs, who no longer faces extravagant fees from the credit card processing companies, who no longer has to carry the risk of all of those credit card numbers that can be stolen and then will create a liability for that merchant. A merchant who no longer has to invest millions of dollars in doing regulatory compliance with the payment systems PCI, or encrypt all of their networks because with Bitcoin, you don't even need to encrypt it, you can just send it, you can broadcast it, you could write it on this whiteboard and if I write it on this whiteboard the person who is allowed to collect the payment will collect that payment and nothing else, and the rest of you could look at it and that's all you can do but you could look at it on the blockchain which is the distributed ledger of accounts. You don't have to look at it on the whiteboard. I can broadcast my transaction over Wi-Fi, over Bluetooth, I can shout it from the rooftops, I can write it on a napkin. Money is now a content type, money is three hundred and fifty bytes of data that can be transmitted by the simple expedient of injecting at anywhere in the Bitcoin network and that transaction will be processed. When I hear the regulator say that they're going to stop Bitcoin, I find that very amusing. I've heard those things before. I've heard them when they talked about Napster and all they achieved with Napster was to create Kazaa and then Gnutella and then gradually break every single system until they created BitTorrents and BitTorrent is unbreakable because you cannot stop information from propagating on the internet. Information propagates, that's what it does. That's why we build the internet and now we turn money into a content type and you cannot stop money from being transmitted on the internet once that ID exists. Bitcoin has an exchange rate, a price to determines how many dollars it takes to buy Bitcoin, and I really don't give a damn about the exchange rate, and the reason I don't give a damn about the exchange rate is because it's meaningless. It's meaningless because Bitcoin is a lot more than just a currency, it's a revolutionary invention, it's an idea, it's a technology. It's a technology that now that it has been invented cannot be un-invented. It, in fact, can be replicated a thousand different ways and spreads like wild fire from person to person. It can now be recreated by a teenager in their basement who can launch a new currency. In fact there is no website that allows you to create a cryptocurrency using a web based interface which means that pretty soon, five year olds will create currencies. Get ready for a world where Joe is launching a cryptocurrency in fourth grade to compete against Maria coin which is launch by another fourth grader in order to generate popularity and reputation. Get ready for a world not of hundreds but of thousands of cryptocurrencies and then hundreds of thousands of cryptocurrencies and then millions of cryptocurrencies. Hang on a second, what gives these things value? What does it mean to talk about value in a world where currency can be created by anyone in minutes and where inevitably millions of currencies will be created? There was a time when opinion and commentary and ideas were evaluated by who published them. There was a time when if you wanted to have authority for your idea you had to own a four football field long three story press and have a big name like the New York times. And then we invented the internet and suddenly anyone could have an opinion and suddenly anyone could express that opinion with equal power of voice as the New York Times and spread that opinion around the globe and that challenge the very basis of our understanding of what gives value to an opinion. We had to radically re-envision the source of authority and opinion. We had to understand that opinion depends on the content of the idea not the size of the printing press and we survive that world and now we have a world in which an Egyptian blogger can talk about the revolution they're launching on their street from the front lines with more authority than the New York Times because they are right there and we have grown as a society to understand that the value of that opinion is not equal, it is greater than that of the large publishers. Now, we have a world in which cryptocurrencies can be launch by anyone and that means that the monetary value of a currency does not depend on who issues it. It depends on who uses it. A cryptocurrency that is used by few has little value, a cryptocurrency that is used by many has value no matter what anyone thinks. Because it is useful, because it becomes a means of exchange. In fact the very idea of issuance and value has now diverged completely. One day we might see a weird mean based, fan based currency like a Kayne West coin or doggy coin or kitty coin, being used in an African nation as the main currency of exchange even though they have no idea what that mean came from or what it means but all of their neighbors accept it as valid currency. Now, that -- that sounds kind of crazy doesn't it. We have a parallel, this has happened before. In the early part of the 2000s a telecommunication company in Kenya created a facility by which Kenyans who had cell phones could transfer cell phone minutes directly by SMS. This was originally designed as a means for family members to share cell phone minutes. One day, I imagine, someone went to a shop and said, hey, I need some eggs but I don't have any money but I do have three minutes on my phone, can I give you two minutes for some eggs and at that very moment a currency was born. Fast forward eleven years later, M-Pesa the currency based on SMS minute transfer in Kenya is now forty percent of the GDP of the Kenyan nation. Is M-Pesa a currency, if you ask a Kenyan that is, does M-Pesa have intrinsic value, no, it has value in exchange for eggs and eggs have intrinsic value because you can eat them and it doesn't matter what anybody thinks about whether M-Pesa is a currency or not, it is a currency in use, and use is all that matters. Cryptocurrencies launch anywhere where monetary value derives directly from the number of people using a currency regardless of what governments thinks, regardless of what bank say and right now, they're laughing at us, I hope they keep laughing for another couple of years. I hope they convene a couple of committees to decide on how to create a commission to talk about it for two years because we've built a technology that is useful, a technology that allows safe fast and cheap transfer of money anywhere in the world among individuals. So as they sit on the beach sipping their mai tais, discussing the fact that this tide seems to be receding and they'd keep discussing that. I know why the tide is receding, it's because there is a tsunami coming and they have no idea it's coming because Bitcoin and the cryptocurrencies that it creates are so much more than just digital money. So in conclusion we start with a simple idea, one that gives trust through computation, on that we built a currency but currency is just the first step. This is money for the internet. In fact, it's the perfect money for the internet because it's safe, it's instant and it's cheap and it will enable an incredible amount of innovation on the internet. It is already building a vibrant economy of hundreds of start-ups and thousands of jobs and creating innovation and growth inside a stagnant economy built around war and derivatives and people are making the right choice but just because it's money for the internet don't miss the bigger point, this is the internet of money and Bitcoin, the currency, is just the first application on a network that can support hundreds of different of applications for financial instruments, for structured contracts, for stocks, for peer to peer lending, for distributed bond issuance, for peer to peer crowd funding, for peer to peer IPOs and then for smart contracts and smart property, and the encoding of legal contracts within transactions scripts that are mathematically verifiable. Bitcoin is the expression of decentralization. It is what happen with the internet to information now happening with money and contract law and that idea is bigger than a currency. So with that I'd like to take questions from the audience, thank you. Thank you. All right, I'll try and do quick questions because there's -- there's a lot of people here and I want to give everybody the opportunity. So I'm going to answer them. Let's start please first with if you have an advance question, a technical question hold it to the end, we have a lot of new people in the currency today. So I want to hear the -- start-off with a question that you are just coming to if you're new to this currency. Yes, thank you, gentleman in the back.

Male: (inaudible)

Antonopoulos: Word cryptocurrency is not based on Bitcoin. Well, the underlying system is called a blockchain and that is the system of distributed consensus through proof of work on a distributed assets ledger. The blockchain is the technology, Bitcoin is the first implementation of that. Probably ninety-nine percent of the currencies you see out there are based on that basic technology. That's what enabled crypto-currencies. The only one that's not at the moment is RIPO and there's probably a few other things that are overlaying networks like open transactions that are not directly blockchain based. But it's a pretty big ego system, so there are probably things I don't know about. Right. Next? Yes.

Male: (inaudible)

Antonopoulos: So I started using Bitcoin in 2012 and when I first started it was worth about fifteen -- no, actually seven dollars and then it went up and then it crashed. In fact, the biggest crash we saw in Bitcoin was when it went from thirty dollars to seventy-five cents. Compared to that crush, this one is nothing. Bitcoin has volatility and the reason it has volatility is because at the moment it's a ten billion dollar market capitalization currency. That is just slightly larger than the economy of Bermuda and slightly smaller than the economy of Belize. As a currency it is tiny and what happens with the currency that is both tiny and global in nature is that it has a small pool of liquidity. Think of it like a kitty pool and an et al just jump in and created a big, big splash and all of the liquidity slashes around. Does that change the underlying technology? Not really. Does it matter? Not really. The price goes up and down. Part of the reason the price goes and up and down is because there are very few financial mechanism and exchanges that can absorb the volatility and create broad based stable liquidity. But the vitality this year is less than last year which was less than the year before, which was less than the year before, which was less than the year before and it keeps going down. We had a broad based attack against the Bitcoin network that started unfolding on Tuesday. I got to see this first hand kind of in the front lines of this as I was involved in some of the discussions and what I can tell you is that something very interesting happened. This was an attack which formed a denial of service attack. And it effected some of the implementations on the exchanges that were not particularly well implemented. I'll try to describe this in simple terms. Couple of weeks ago someone figured out a way to cheat one of the exchanges and get withdrawals in an unauthorized fashion. This have nothing to do with Bitcoin. It wasn't an effect on the Bitcoin network, it wasn't a part of the Bitcoin trust system, all of that hasn't been touched, they're working perfectly well. Think about it this way, if you go into a department store and you show up with a receipt and you say here I bought this pair of shoes, here's my receipt can I have a refund. They will not just hand you the money, and the reason they will not just hand you the money is because long ago, they figured out that people know how to photocopy receipts and Photoshoped receipts and buy a twenty dollar pair of shoes and come back with a receipt that says two hundred dollars and try to get their money. So most department stores have a process by which they are going to look at your receipt and then they're going to look at their internal systems to check that there's actually a credit card transaction and they're going to check the shoes you bought were for that price and that -- they're going to check that you didn't just get a refund from the other branch just down the street ten minutes ago. All of these checks are part of an operational process and this exchange was not doing those things. So people showed up with photocopied receipts in a way that we all knew what's going to happen. In fact the specific exchange had been worn for months that their policy for withdrawals was subject to defrauding, and this have nothing to do with Bitcoin itself. It was just poor policy. So they got taken for bit of a ride, and they lost a bit of money, but not much and now they're fixing their systems and I expect eventually they're going to get it right again and then they are probably going to mess it up again because they have incompetent management, that's a whole other discussion. Here's what happen the very next morning, as soon as this hit the news media, the very next morning, think of it like this, hundred thousand people show up in every department store in the country with shoe boxes full of photocopied receipts, and now it doesn't matter if your department store is actually smart enough to check all of the receipts, you still have a line out the door and you still have to stop everything and retrain everyone to make sure that someone doesn't slip through the cracks. So several exchanges temporarily shut down withdrawals and said let's fix our system and make sure nothing slips through the cracks and that cause the denial of service. No money was lost, no money was effected but it did slow people down from withdrawing. I make a prediction that by this time next week all of these exchanges will have fixed their implementations and what was a known issue will become a non-issue because the network becomes stronger in an open network that exhibits anti-fragile properties when you attack the network and then survive it, the network becomes more resilient then it was before and it gradually gets stronger. We've seen this happen again and again and again on the internet and every year, every time there's a denial service of attack on the internet, do you hear journalist going, oh, that's it, the internet's done it was fun while it lasted. When the New York stock exchange has a flash crash, does everybody go, oh, that's it the U.S. Dollar is done. Well, that's what happening right now and I've been in this long enough to know that the obituaries for Bitcoin have been written and re-written many, many times. And the one thing that keeps happening that's a really annoying to all these journalists is that they wake up a week from now and Bitcoin is still around. And we have a saying in this community which is the Bitcoin is the honey badger of money, because it doesn't give a bit, but I -- I think what's you're going to see is that by next week the exchanges will be back to dealing withdrawals. All of these will be -- will have been a big load of nothing and then the price will start creeping up again because what has happened in the meantime is half a million more people just heard about Bitcoin and back in November million people heard about Bitcoin because of the China events in the increasing price and all of these people they hear about Bitcoin the first time and like I did the first time, they go, nerd money and then they hear about Bitcoin the second time and then the third time they open an account on an exchange and then the fourth time they buy Bitcoin. So it takes three or four months from the moment you have a big media event until you see Bitcoin adoption increased and then you see the Bitcoin price start reflecting that. I work for a company called Blockchain.info which is the world's largest web wallet for Bitcoin and we have seen explosive growth in the number of wallets. In the last month the rate of growth has rapidly escalated from about four thousand new wallets a day to seven thousand new wallets a day and it's increasing exponentially. It has been increasing exponentially for the last two years. There is one thing about exponential growth that is really tricky to understand. If you look at an exponential curve when it's still in the early stages it looks linear, then you hit the elbow and then it looks vertical and it's kind of hard to see when that happens but I can guarantee you Bitcoin is going nowhere because nothing change in the fundamentals. All right, let's take another question since that was a big topic for this week. Yes.

Male: (inaudible)

Antonopoulos: What is the theory on the creator? Satoshi Nakamoto first appeared in early 2008, first as an anonymous poster on a crypto-mailing list and then gradually under the pseudonyms Satoshi Nakamoto. We now know that he/she or they first build the software in order to test the idea because even they were unsure that this would work. Then they wrote probably one of the most amazing scientific papers I've ever read and if you have a chance go and read the Satoshi paper it's nine pages and it is absolutely stunning in it's clarity and genius. And then finally they launched it on a crypto-mailing list and everybody on the list went, yeah, nerd money. That will never work. Some of those of people actually had a chance to buy Bitcoin when it was worth a million of a cent, they're kicking themselves now, but anyway Satoshi Nakamoto build the system and then collaborated with other people and they built an open source software based. And then at some point in 2010, Bitcoin started succeeding and it's started getting a lot of attention and heat and at that point Satoshi Nakamoto gradually started withdrawing from public view, handed over the, you know, kind of the development effort and then step away and disappeared. Today we have no idea who Satoshi Nakamoto is and it doesn't matter, and here's why it doesn't matter because Bitcoin is not based on a centralized authority. This is a thing that is very difficult to describe and explain to journalist and financial media people and people from the traditional financial world because every system in finance they ever know has had a central authority. So the very first question you ask is can the central authority be trusted? What are the motives of the central authority? When you present them with a system that has no central authority what did they ask, yeah, yeah, okay, I understand there is no central in Bitcoin so who runs it, no one, it works by math. Yeah, okay, but who controls it then? Well, well, no one it's -- it's kind of a distributed system that works through math. Yes, but couldn't someone like control it? Well, no, because there is no central to take over and control. So we keep having the *1:25:16.1 conversation. It doesn’t matter who Satoshi Nakamoto is. You know what I don't know who Euclid is. Euclid lived about two thousand three hundred years ago and we have no idea if Euclid was one person or many people, we have no idea if Euclid in geometry was invented in Sicily, Greece or Italy. I can use Euclidian geometry to predict the location of an object in space and I don't care who Euclid is. Euclidian geometry works regardless, the invention by Satoshi Nakamoto is based on an elliptic curve, a self adjusting algorithm and some nifty math with hashing algorithms. I can read the code, there's no magic person, there's no curtain, there's no one behind the curtain, we can all read the code it's open source and you can understand how it works and then you can trust in the math without caring about who the person is. Satoshi Nakamoto doesn't control anything. I have as much control as Satoshi Nakamoto. So let me tell you why Satoshi Nakamoto disappeared because right now if we knew who Satoshi Nakamoto was I can guarantee you that Satoshi Nakamoto in the media would be a drug dealing, pedophile, lesbian, Muslim terrorist. Now, half of those words were incompatible with each other but that doesn’t matter. In ancient Greek mythology, we have a myth that talks about the Hubers of the gods and that's the myth of Prometheus. Prometheus was the one who stole fire from the gods and give it to men and the gods were pissed. So they tied him to a rock and had him suffer eternal torment by having his liver eaten by an eagle. Satoshi Nakamoto disappeared because he was smarter than Prometheus. All right. Next question, yes.

Male: (inaudible)

Antonopoulos: Okay. So -- so why is the price not relevant? What happens if the price is free floating? Can it go to any level? Can it go up? Can it go down and how do you relate that to purchasing power? One of the interesting things about talking about Bitcoin and trying to understand Bitcoin, and this happen to me too, is that when I started reading about Bitcoin I realized I didn't understand money. So a lot of people don't really understand money. So what gives the dollar value and how is the price of the dollar determine versus the yen, exactly the same way that Bitcoin's price is determine versus the yen and that is the price of Bitcoin is the price at which two individuals decided to trade Bitcoin for yen most recently. The price of Bitcoin in dollars is the market price of the last order at which some one agreed to buy Bitcoin at that price or sell Bitcoin at that price. That is the price of Bitcoin. That is the price of the dollar versus the yen. That is the price of the dollar versus the euro. What is stopping someone from driving the dollar price up or down, nothing, purchasing power, that's all. What's behind the dollar and before you say gold, that is the wrong answer. Debt, that's the right answer. Debt is behind the dollar. Other than that there is no intrinsic value. In economic terms intrinsic value is a meaningless term. Water and food have intrinsic value only if they do not occur in abundance. If they're occur in abundance even water and food have no intrinsic value. Nothing has intrinsic value unless it is rare. Scarcity gives intrinsic value. And Bitcoin is the first system that achieves digital scarcity. It is a digital thing that is rare. The reason dollars have value is because there is a limited amount of dollars and the reason that dollars is decreasing in value is because the Fed is printing an enormous amount of dollars and handing it over to the bank in the biggest form of cooperate welfare ever seen. And that means that the dollar won't have value for very long. In fact, if you're an average person, you go to the store you already know this because the headline inflation is three percent and that is not what you're seeing at a store because they've made sure that the things you are buying are not part of the headline inflation metric. Meet -- so right now, dollars are being inflated, Euros are being inflated, in fact every single currency in the world is being inflated out of value in a race to the bottom because every central bank is printing money with an unprecedented rate. Interest rates are at the lowest level they have been in almost a thousand years across the world, think about that for a second. So what gives value to a Bitcoin, the fact that it's rare. What defines the price of a Bitcoin? The market price at which someone's able to buy or sell it. It's a free floating currency. Let me change that question around, what give value to the Bitcoin, is the number of people using it and that is increasing exponentially and the reason it's increasing exponentially is because Bitcoin has value. It has value because it has utility. It has value because it is useful money. It is money that's useful because it does things that no other money has ever done before. When JP Morgan came out recently with a study that said that Bitcoin is inferior to traditional money and credit card systems, I found that quite amusing. I get tips everyday on Bitcoin. Tips ranging from fifty cents to several dollars. I get this anonymously from people all around the world transmitted instantaneously to my wallet. So if visa can build a system like that why haven't they built it. They can't build a system like that because no traditional system of money can do what Bitcoin does. It's as simple as that. And that makes it useful and that means the people will choose it and adopt it and that gives it value. All right. Let's take another question, yes.

Male: (inaudible)

Antonopoulos: So I have what's called the vanity address. It's a bit like a vanity number plates on your car. So my -- one of my Bitcoin addresses start with 1Andreas, okay. So that's my vanity address and I only post that address for donations and tips. So every time I see a payment come into that I know it's someone who is tipping me and by the way thank you so much.

Male: (inaudible)

Antonopoulos: Yes.

Male: (inaudible)

Antonopoulos: Very good question. So for all of the other creative uses of the -- of the idea of the blockchain of distributed consensus etcetera. Do you need another set of miners? An alternative blockchain, another set of technologies. In some cases, yes, in some cases, no. We are already seeing some technologies being developed which I think are going to be pretty big in 2014 which are overlay protocols. So what these are -- are technologies that allow you to build new things on top of the existing Bitcoin blockchain that enable alternative currencies and other things, digital notarizations, stock issuance, bound issuance, distributed lending, distributed exchanges, autonomous co-operations, etcetera, etcetera, all of the cool funky things, smart property, smart contracts, all of the things that we want to do with a blockkchain you can now build in overlay protocols on top of Bitcoin. Some uses are not going to be able to do like that. Those will develop as -- in each application they will need their own blockchain and if they are useful enough that blockchain will be big and used and mined and will grow. However, one thing that people underestimate is the network effect of Bitcoin. Getting to ten pedahashes of hashing power is hard. Building a currency that can bootstrap to that level is hard and once you have one it grows exponentially because the first one wins, not the best one. We've seen this already on the internet. The internet was not the best protocol. TCPIP was not the best protocol. In fact, at first they were severely flawed and everyone said you won't be able to do voice on this, and it won't scale and you can't do quality of service and you can't do video and then we did and all of those things. And then the internet became so big that now we can upgrade it, and that's kind of weird because IPV4 the original protocol is kind of clunky and we've built this new thing called IPV6. I'm a network professional by -- by trade originally, so I've watch this happened. An IPV6 was much better version of IP and we can't deploy it. Why can't we deploy it? Because there are now hundreds of millions of devices that speak IPV4 and changing all of them is very hard. Bitcoin is exhibiting network affect and network effect is the exponential growth that occurs in the exponential increase in value that occurs in a network where the addition of each new participant makes the rest of the network more valuable for everyone else because it increases the complexity and connectivity of the network. If you have two phones and someone brings a third phone into the conversation not only is the person who just joined getting value, but the two people who had the two original phones now have one more person to call with them. So the network gets better for them too because it's more interconnected. Bitcoin is doing that for currency and so therefore, it's going to be very difficult for other blockchains to justify their needs to exist, to justify the value and the effort to create them unless they implement a feature that is impossible to do on Bitcoin and there are some features like that. All right, let's take some more questions. Let's see who have I not pick yet.

Male: (inaudible)

Antonopoulos: Yeah.

Male: (inaudible)

Antonopoulos: That's -- that's a great question. So considering the network effect that means that there are set of parameters in the network. What happens when we want to upgrade Bitcoin itself? Well, this is the funny conundrum because people think right now that the network is -- is susceptible to compromise or co-option or take over, like, if somebody comes along with a lot of money or a lot of computing could they take over Bitcoin and the answer really is no, because efforts to take it over actually inflate its value putting it further and further out of reach take over. But what they're not thinking about is the opposite problem and the problem is it consensus the mechanism by which upgrades are done on Bitcoin is getting more and more difuse -- defused and decentralized. Consensus used to be primarily developers and miners, it's now developers, miners, merchants, users and web wallets and to do a major change to Bitcoin network you have to get everyone in those categories to agree and that's only getting more decentralized. My prediction is that within probably no more than a couple of years, any changes we make or done and after that the changes are going to have to be made either at the edge as services or in layers above as overlay protocols, very much like what happened to the internet. We started changing things at the edge with CIDR and NAT, Network address translation and we started creating overlay protocol. So we push all of the innovation up into HTTP and port 80 and stop messing with IP and TCP. And that's something we seen happen in technologies before. Bitcoin has much less chance of being taken over than it has of becoming immutable and then it will serve as a long term transaction layer for all of the things that are going to be built on top. Great question, thank you. Yes.

Male: (inaudible)

Antonopoulos: Uh-huh.

Male: (inaudible)

Antonopoulos: Uh-huh.

Male: (inaudible)

Antonopoulos: Okay, great, yes. There's -- what are the resources to share with new users who are not interested in the math and, you know, you don't really need to understand the math to use it. Most people don't understand the TCP IP protocol or how email works or how Skype -- how Skype works. My mom doesn't understand Skype, she loves it and it works for her. So that's the nice thing, you don't really need to understand it to use it because we're making it easier and easier to use. There's a couple of sites bitcoins.com, easy to remember and we use coins.com, are two community sites that have instructive videos and links. Bitcoin.org is the location where you can download the clients in order to get -- get it on your desktop computer and use Bitcoin. So those three locations provide information for new users and there are a lot of others. Yes.

Female: (inaudible)

Antonopoulos: If the what?

Female: Grid went down.

Antonopoulos: What would happen if the grid went down? In Milwaukee, we would all freeze to death. At which point Bitcoin would be the least of our problems. In fact, in general Bitcoin is a massively decentralized network for Bitcoin to have problems, the grid would have to go down everywhere. If the grid went down everywhere -- there are actually some really interesting books about that, they're in the genre of apocalyptic scenarios because if the grid went down everywhere we'd be much worried about eating than Bitcoin. So the nice thing about Bitcoin is that the dependence on technologies, the failure of which bring ends to civilization so at that point Bitcoin becomes a small consideration. Bitcoin can work off grid. We have seen examples of people encoding Bitcoin into physical tokens. You can create numismatic tokens basically bits of metals stamp with serial numbers that can be exchange and handed to someone else and then redeem for the equivalent amount of Bitcoin and if you know that at some point in the future you can redeem something for the equivalent of amount of Bitcoin nobody actually redeems it, they keep trading the physical token and it acquires value in itself, and that's how paper money works, right? The idea is that eventually that paper money will be given to someone in return for the debt those created in the first place but nobody cares about that because the money acquires value in itself. So they're physical representation of Bitcoin and I expect to see more of that in the future. Yeah, we have one, is that a Casascius coins?

Male: (inaudible)

Antonopoulos: Litecoin version. If you don't mind passing that around for people to look at that would be great, excellent. And then place please pass it back to the gentleman who gave it to you because -- because as I said it does have value, yes.

Male: (inaudible)

Antonopoulos: So is Bitcoin doing anything to stop terrorist from using Bitcoin because all of the big bangs are despite all of their problem doing something to stop terrorist from using their network.

Male: (inaudible)

Antonopoulos: Well, I would actually question that because if you look at the reality many of the large bangs have been repeatedly caught funding money into terrorist knowingly and the end result is they don't get punish. We seem to think that we need rules to help protect us from these things and my question is how is that working for you. We have rules to protect financial fraud and mortgage fraud and the rigging of interest rates and the rigging of gold markets. How is that working for you? We have rules to prevent banks from stealing the fortunes of nations, how is that working for you? We have rules that say that if the bankers do those things they will go to jail, how's that working for you? Bitcoin has -- Bitcoin has a distributed assets ledger which is a record of all of the transactions that happen on the Bitcoin network within that asset ledger you can create a range of anonymity from strong end anonymity to strong transparency where everything is visible. It's actually easier to do strong transparency on Bitcoin and it's actually very, very hard to strong anonymity. Law enforcement organizations that have tried to track things down in Bitcoin have found that it's actually pretty easy to do because in order to preserve strong anonymity you have to execute perfects operational security across the entire network of transaction that are involved in a conspiracy and conspiracies are things that happen with groups of people. Usually law enforcement catches one of them and guess them to flip and then you grab that little thread of Bitcoin transactions and you pull and the entire anonymity system unravels. And now you don't even need to go to fifteen different financial institutions with subpoenas over months to try to unravels this because you have the entire ledger right there. Bitcoin is actually easier for law enforcement to track. It's very hard to do ubiquitous surveillance on Bitcoin but it's very easy to do targeted warrant based due process probable cause law enforcement. A quant idea created in the 17th century and since abandoned. But I think Bitcoin will force a return to quant ideas like probable cause, warrants and due process because it makes it harder to do ubiquitous surveillance and even though there's a lot of pressure to enable ubiquitous surveillance through regulations and orders and rules, how's that working for you? All right, yes.

Male: (Inaudible)

Antonopoulos: So other than banking and financial institutions, is there anything else I'd like to see decentralize? Yes, absolutely. I believe that decentralization is the central theme of the century. I believe decentralization is the central result of the technologies that we have invented as a society. And I believe the central -- decentralization is one of the most powerful forces for liberty that we have. Decentralization divest power from the few and gives it to the many. It empowers individuals to make their own choices about how they interact with the world. Well, we know about hierarchal systems is that initially they are created to spread equality. Surprisingly enough banks were one of the great measures of equality, they allowed for the first time individual entrepreneurs to have currency and financial transactions, a thing that only kings had before and then they got corrupted. Like every hierarchal system in society the first to reach the top of the pyramid pulled the letter up behind them and then corrupt the system to work to their own means. Decentralized systems are less susceptible to corruption, they're less susceptible to co-option. They diffuse power across the system and empower individuals against the center. I'd like to see a lot of things decentralized. One of the things that's interesting is that blockchain based technologies allows us to do contract law, contract law encoded as a transaction script. Let me give you just a simple example. If you want to leave something to your children and you write that as a contract in a will, the moment you die the rest of your family can contest that and change it all around. You're only guaranteed that that won't happen is hoping that the system of law and judges and the process that you've processed will protect you from that. If you encode a will as a transactional contract in the blockchain that will be adjudicated by mathematical verification through decentralized cryptographic proof of work. Suddenly you can create a will that cannot be contested. If you think about that from the perspective of a lawyer that's a really powerful idea, it's an idea that people will spent millions of dollars to implement. Law is a religion. Law is funny incantations in Latin that we give through the high priest of law, the lawyers to chant in front of judges so that they may issue their rulings. Decentralized law is like hammering a proclamation of reformation on the door that says we don't need the interpretation of your Latin incantations we can use the blockchain, and the blockchain will verify that transaction or it will not and that's the end of the discussion. So yes, payment systems come first but there's a lot more to decentralized blockchain systems than just currency. Thank you for that question. Sir.

Male: (inaudible)

Antonopoulos: Yeah, I mean there's a lot of things that could go wrong. I mean at this time we're talking about a technology that's in its infancy and it's growing. I'd like to separate concepts for a second. I think a lot of things can go wrong with Bitcoin, the currency, and potentially a few things could go wrong with Bitcoin, the network implementation, however, I don't think much can go wrong with the cryptocurrency decentralized proof of work concept, the invention. That survives the network and the networks survives the currency, right? We can have a failing currency that's still on an operating network with minimal value. We can have a failing network that still survives the idea that gets copied again and again. What can happen to the currency? Lots of things can happen to the currency. We're currently being buffeted by sentiment, there will be in some countries active efforts to not only discredit but to violently fight Bitcoin. In some countries you will get shot for holding Bitcoin. How do I know that? Because today you can get shot for holding dollars in North Korea and parts of Syria and Venezuela. You can get shot for holding hard currency. So yes, you will be subject to violence for having Bitcoin and that can put a crimp in a lot of people's adoption of Bitcoin. We can have bucks and implementations. Now, I think that's highly unlikely because the system is subject to immense scrutiny. Think about it this way, one of the things we do in security is we create a buck bounty. That's basically the idea that I'm going to put out say like google does. Ten thousand dollars if you give us a buck that is a security vulnerability. Bitcoin has a ten billion dollar buck bounty that has gone unclaimed for five years because if you break it you can start stealing some of the money that's on the network and you won't be able to redeem the ten billion because you're actually cause it to collapse and value as you're stealing from it but you can still make a pretty nice winning and so far, you know, some of the smartest hackers in the world are trying to break Bitcoin, why, because Bitcoin is the ultimate currency. Currency comes from the word to flow, it flows. You can take a Bitcoin transaction and you can make it go places in seconds and disappear into the network in a way that cannot easily be track down and even if you track it down cannot be recovered easily, right? So people are trying to steal Bitcoin and people are succeeding in stealing Bitcoin not by violating the protocol but by stealing people's individual keys that control their access to their money. You can't break all of Bitcoin but you can attack some Bitcoiners and mug them. You can have the best cryptography in the world and I can undo it with a five dollars pipe ranch. What's your password? Boom.

Male: (inaudible)

Antonopoulos: What did you say? And you will give me your password. You know technology is not infallible and the technology behind Bitcoin is heavily tested. It's open source. It's subject to a lot of scrutiny but it's not infallible. There are some other scenarios that make Bitcoin difficult. I hope that we don't see some kind of major crime financed by Bitcoin because that would give an excuse to smear the currency, right? Like, you know, there are a lot of technologies out there that criminal use. 99.999% of the criminals in the world use shoes, that make shoes an integral part of all criminal conspiracies. Now, that kind of crap won't fly if you try it in the media but you replace the word shoes with Bitcoin and suddenly people start thinking this is evil when it's not, it's a tool. One thing I know about crime in Bitcoin is that they are more vast than they are *0:25:17 just like on the internet. When we first started working on the internet and I've been on the internet since 1989, I saw some of the early days and guess what, the internet in those days was a dent of thieves, pornographers, terrorist and pedophiles. It sounded like a very dangerous technology and many people went to senate hearings and they said, "Wouldn't somebody please think of the children?" Fortunately, people quickly realized that as a tool it was more powerful and empowering for good because like many tools in society, a powerful tool when used by both good and bad actors becomes good because there are more good actors. Bitcoin is a powerful tool that will be used by good and bad actors but there is more vast than there are of them. So we just need to stay focus on that. I worry about reputation of risk for Bitcoin but I hope that by now we've reach the level of adoption and we see the impact Bitcoin can have in charitable donation, in the ability to battle poverty directly and the ability to finance speed and expression, these are good things. These are things that empower people and there are some really shitty governments out there. Some really oppressive governments, governments where the use of Bitcoin is an enormously powerful tool for liberty. Last time I checked we believe in that in this country. So I hope we don't have a reaction that throws out the baby with a bath water because Bitcoin is a tool that if used properly is extremely powerful and liberating for everyone. All right, let me get some more questions. Yes.

Male: (Inaudible)

Antonopoulos: If I was trying to introduce someone to the internet, I would not suggest that they install a class A BGP router at home. I would not suggest that they install a wreck mounted virtual web server at home to run Diaspora so they can -- so they can understand social networking. I would not suggest that they read about the structure of a TCP packets and learn how to calculate checks sums by hand. All of the things that I learnt as a network professional. Mining is a professional occupation. Its serves a purpose. It serves the purpose of securing the network through distributed computation but it is a highly specialized activity. It is also a very risky activity, risky in terms of financial risk. If you invest in mining equipment, you are competing in an open and free market. Free markets have risk. I know that's a radical thing to say in this country nowadays. We try to de-risk everything and pretend that sweeping attempt to the carpet doesn't or makes it go away but free markets have risk and if you are engage in mining you are in one of the purest free markets, one that works through a feedback algorithm that dynamically adjusted the difficulty of mining and does so very quickly. In fact, it is one of the most efficient markets we have. It's really interesting because you can track the average price of a kilowatt of electricity just by looking at the price of Bitcoin and the difficulty of the network, because that's how you know if it's profitable for the miners and they only mine if it's profitable because they have to convert electricity into Bitcoin. So mining is a highly specialized operation, it's like running a BGP router on the internet and if you're into that kind of thing enjoy but otherwise, no. I've never mined. I've own Bitcoin, I earn Bitcoin, I enjoy Bitcoin and I haven't mined. I mine some of the alt coins just to learn mining but that's about it. All right, let me take some more questions. Yes.

Male: (Inaudible)

Antonopoulos: Yes. So some people are afraid of talking about Bitcoin because it's related to illegal activities and you know I mean this is the exact same *1:58:14 we heard on the internet in the early days. It's a den of thieves etcetera, etcetera, etcetera, etcetera. First of all, if the government decides to ban cryptocurrencies, they're going to discover something interesting. Cryptocurrencies are now owned by corporations and corporations with money are the last entity in this country that has due process of law. The rest of us lost it a long time ago but corporation still have it. So when they try to ban it they're going to get sued and that law suit is going to progress. One of the big companies in San Francisco has investment of twenty-five million dollars by one of the biggest franchise, capital or firms and so it can value. If Bitcoin was ban, do you think they'd sue? I think they'd sue. How many lawyers can you buy with five billion dollars of capital under management? A lot of lawyers. And so they sue, and they take it to the State Court and then finally they take it to the Supreme Court and then the Supreme Court, currency has already been declared a means of speech under citizens united and the Supreme Court actually pays attention given enough money in really good case to the constitution which actually says things about expression and freedom of speech that they have directly related in precedent to currency. So the government at that point risk something really bad and that is that they lose at the Supreme Court and if they lose at the Supreme Court after trying to make cryptocurrency illegal, that means by precedent that it is now legally protected speech and they will not take that risk because that would be a terrible precedent to set because out of that flow a lot of other rights. So they would rather have cryptocurrencies in a somewhat grey area for a few more years until they can decide what to do about it. One of the things I love is that I've noticed that churches are now taking Bitcoin. Churches have one distinct advantage, they're mentioned twice in the first amendment, first under speech and then under establishments. Freedom of religion and freedom of speech in the form of money is very heavily protected for churches. So if Bitcoin were banned I would collect a bunch of churches and a bunch of ECs and I'd create a nice class action law suit with standing and I take that all the way to the Supreme Court. So I don't think it's going to get ban. Now, it does get banned in countries where the rule of law is the rule of Putin and something strange happens in those countries. When the rule of law is the rule of Putin, people don't pay attention to the law. They have no respect for the law. At some point in Russia, dollar ownership was banned and at that point every member of the pallet bureau was stuffing suitcases with dollars and every member of the Russia armed forces was stuffing suitcases with dollars and every financial regulator was stuffing suitcases with dollars and everyone who could bribe someone who had power with stuffing suitcases with dollars. So Bitcoins been banned. I expect right now a lot of very important people in Russia are stuffing wallets with Bitcoin. Here is another funny thing that happens when you try to ban a cryptocurrency. Alt coins and currencies express biological evolution properties. They operate a species in an environment defined by regulatory compliance in geography. In an evolutionary environment when things are stable, evolution slows down. When you introduce disruption evolution speeds up. If a country bans a cryptocurrency what they do is they cut it off from the other cryptocurrencies. Guess what happens when you do that, diversion evolution, it splits and morphs and evolves. You ban Bitcoin in Russia what you're likely to do is create Russia coin, a coin that is uniquely suited to the new environmental nation which you isolated it, one that speaks Russian, one that's stealthier, one that's design to evade exactly the regulations that Russia has put in place to ban Bitcoin. So before you had Bitcoin and now you have a much harder to control version of it and if you try to stop that then you get five more. We've already seen this happened. It happened with peer to peer. Peer to peer started with Napster, and Napster was the salamander of peer to peer networking and they squish it on their foot and so Kazaa evolves and then Gnutella and then open box and then eventually BitTorrent. Compare to Napster, the little salamander of peer to peer networking, BitTorrent is a Komodo dragon and it's got a big scaly armor and it can bite the head off a chicken. Now, in evolutionary terms when you cut of an environment, species evolve to fit that environment perfectly. Billions of years ago the continent of Australia separated from the rest of the world and the species that were isolated on that continent found themselves in an arid waste land with very few resources. They were banned from competing freely. They were limited in their ability to operate. So what did they do, they evolved. They evolved in this incredible burst of evolution where they developed venom and they develop fangs and they developed armor and today ninety percent of the venomous species in the world live in Australia and they're pretty nasty. So what happens when Russia bans Bitcoin, they get a localize Russian speaking venomous version of Bitcoin growing right inside their country and if they stomp on it they get five more that are much worse. So the nice thing about cryptocurrencies is that they exhibit biological evolution and are resistant to regulation. So I'm looking forward to how this plays out. In the end a lot of the people who try to stop Napster probably look back in retrospect and think, you know, if we add a bit -- added a bit of licensing and try to make money of it, Napster would have been a hell of a lot nicer to live with than BitTorrent. In a decade people will look back and say, you know, what Bitcoin was kind of benign, we should have stock with that instead of creating all these venomous cryptocurrencies that grew out of trying to ban Bitcoin. All right, the other thing to remember is that when a country bans a cryptocurrency, a global cryptocurrency -- what they do is they isolate themselves from the benefits of jobs and innovation and growth that cryptocurrency creates. I remember back in the 90s there was a massive storm in the English Channel and some of the English tabloids came out with this fantastically hubristic headline Atlantic storm Europe cut off from Britain. So when Russia bans Bitcoin, who loses Bitcoin? Yeah, I don't think so. Russia loses, because what they just lost is the ability to have legitimate businesses, create real jobs and economic activity around one of the most exciting technologies since the internet right in their own country and to have some growth in an economy that's stagnant, Bitcoin survives. Bitcoin continues as if nothing happened, because there are lot more places than Russia. I'm going to take the last question for today. Who's got a question? No one, and okay, yes.

Male: What do you think about like, you know, contracts *02:07:22

Antonopoulos: All right, that's a nice --

Male: *02:07:25

Antonopoulos: You know I hope we stick with relatively useful benign cryptocurrencies like Bitcoin because they exhibit some of the best characteristics of cryptocurrency. Their primary focus is ease of transaction, liquidity and flexibility. They are about enabling economic activity. They're not designed to evade, right? That's not what they are supposed to do. So I hope we don't go to Stealthcoin and Anoncoin and you know cryptocoins that are much, much harder. There's a new platform called Ethereum and Ethereum is really interesting because it's not actually a currency, it's a blockchain based platform for contract law. It's a platform on which you can use a programming language to define self executing contracts. Some of those contracts can be currencies, in fact, you can write many of the cryptocurrencies in about five lines of code on Ethereum. Some of those contracts can be distributed contracts that allow for exchanges where you can change one currency to another, also very easy to implement. And here is one of the interesting things they can do, you can build something called the distributed autonomous corporation. A distributed autonomous corporation is a digital corporation without a board of directors. It's a digital corporation that is governed by an algorithm instead of a board and that had shareholders who buy shares in it just like they buy a cryptocurrency and then they depend on the corporation acting in accordance with the algorithm that they can see right in the recipe that creates the corporation. Let me give you an example. A digital autonomous corporation could be used to do digital autonomous altruism or digital autonomous charity. Imagine a contract script that advertises and collects funds and then distribute some automatically in countries where there are natural disaster and tracks that all through contributions by individual members in cryptocurrency from all around the world and provides complete transparency in its operations by publishing everything on an open transparent ledger. You can run an NGO that is not only a non-governmental organization, it is a non-human organization, it is an algorithm make organization whose sole purpose is both visible and executed by its governance algorithm. Imagine a distributed altruistic cooperation that collects fund raising amounts and then when it sees the event of a hurricane in a developing nation, funds recovery and aid efforts directly by sending cryptocurrencies to that nation. Bitcoin is actually one of the first digital autonomous corporations if you think about it. Bitcoin isn't just the currency, it's also an IPO. It's an IPO for the tax sectors of cryptocurrencies and everyone who owns Bitcoin is a shareholder in this IPO. By owning a piece of Bitcoin you own the entire cryptocurrency sector as it grows and one of the reason people have seen really nice returns with Bitcoin is because by acting as autonomous corporation because Bitcoin is governed by an algorithm and you can see how it works. You can trust that its governance will follow a predictable path. Twenty-five Bitcoins every ten minutes. Twenty-one million Bitcoins in total and everyone can be a shareholder simple by adopting and buying Bitcoin or earning Bitcoin. So Bitcoin is also a distributed autonomous corporation where all shareholders and so far the IPO is going great. So with that I'd like to wrap it up. Thank you so much. I appreciate you coming and thank you.

Male: Let him hear it. Just a couple of brief announcements, those of you that raised your hands and would like to take home a piece of Bitcoin, if you don't already own any, please stick around. Anyone else who is willing to hand out a couple milibits to those folks please raise your hand. Please raise your hand if you're willing to hand out some milibits to some new users. So new users look at the hands in the air please track those people down and ask for some. We'll help you out. Also in the back of the house we have Bitcoin magazine for sale, the proceeds go to support our group Bitcoin Milwaukee in putting on more events like this among other things. That's one way you can donate to the group by taking home a Bitcoin magazine. Talk to Chris in the back. Another way please visit our website bitcoinmke.org and there is a donate button there. Folks who are watching on the internet or anyone here in the house today, please, if you're feeling generous send us your love and we'll make sure to produce more events like this for you. I just want to say thank you again to the Hudson. Thank you so much to Andreas for making the trip, for Pamela for bringing him and everyone who helped me make this happen. This was not something I did alone at all. So there are too many members of our group to thank one by one, you all know who you are. Thank you for the Chicago crew for making the trip up, lots of exciting things coming out of there. Thank you guys and please come back every Thursday until jazz in the park starts we will meet at 6:00 p.m. at Bad Genie upstairs. Every Thursday 6:00 p.m. at Bad Genie, there will be a lot to learn. That will be the -- the newbie meet-ups. So very educational, bring you up to speed. Let -- let us help speed your learning curve for this and get secure using it, get confident using it so that you know you guys can -- can enjoy this awesome invention and then we're going to also start having additional meet-ups for certain niche interest like developers meet-up, traders meet-up and so on, so keep an eye out on our meet up page, meetup.com/bitcoinmke for updates there. You can join the group there for those of you who haven't yet. That's all. Make it -- you can go to Bad Genie later tonight too, there'll be a group of us hanging out there. So Bad Genie is right near Cathedral Square Park, come visit us there, spend your Bitcoins there and thank you to Hudson and thank you Andreas. Come back next Thursday guys.