Video - The Future Of Crypto-Currency

Andreas Antonopoulos shares what he believes will be the evolution of Bitcoin and other crypto-currencies and what it could mean for the future. He shared to the audience the way to become part of the crusade and become part of the pioneers of those who uses digital currency.


Male: Andreas Antonopoulos.

Antonopoulos: Yeah, good afternoon, everyone. Hope you can hear me well in the back. Everybody hear me?

Audience: Yeah.

Antonopoulos: All right. Great, so I'm usually with very high energy but I've spent the last three days really enjoying this conference a lot and I am exhausted. I'm sure many of you are too. So you will forgive me if this is not my usual high energy presentation. I've been thinking for two days about what I'm going talk about during this keynote. I left it purposely vague because I like to try to assimilate some of the ideas that come from the conference that I experiences and try to put it together into a bit of a narrative. This is going to be a bit more of a philosophical talk about the future of crypto-currency is what I've learned here at this event. So, first of all, thank you all for coming. I think this has been a spectacular even. I have a lot of fun.

If you come to this event, it's called the Bitcoin Expo 2014, it might have been called the Bitcoin and the Thorium Expo 2014, I don’t know if you notice but thorium had a pretty big presence here. And an interesting question comes up, which is -- actually quite a few people asked me, does thorium threaten the future of Bitcoin? Does it steal some of its thunder? And that's a question that I've heard several times and I’ve heard people referred to that issue in trying to understand old coins, and wandering whether the old coins essentially threaten the dominance of Bitcoin, or if they made Bitcoin weaker or if they distribute the value of the network too broadly.

I've been thinking about this question for quite a while, and I think fundamentally it's a question that involves the old paradigm of currencies. We've all grown up in a world where currencies are forced upon us in a monopolistic fashion, where currencies are defined strictly by the geographies in which they occur and where the choice off currency is not yours and it’s an accident of birth, just like many other things in our lives. As an accident of birth, I was born into an upper middle-class family in Greece, fully-loaded with the lottery of privilege in my life. And I also acquired the *00:02:31. I didn't chose the *00:02:32. It happened to me any more than I chose to be a white male, any more than I chose to be born into a family of educated people. Those things simply happened to me.

Currency as we understand it is an artifact of the nation state and it imposes upon certain constraints. We don't choose our currency, it chooses us. And we are forced to us our currency in all of our interactions. We don't have a choice, until 2008 that is. And so now, we live in a slightly different world. But a lot of the old paradigm still persists in our thinking. In a world where your currency is a monopolistic nation state artifact that is constrained by geography, it's a zero sum game. The currency is the flag. It is the nation state. It is the expression of the economic value of your state and it defines your interactions in the world of geo-politics and the global struggle for domination among nations. It’s not up to individual choice. It has nothing to do with the individual except for that one individual whose face is on the currency, you know, up till recently here in Canada, some old white lady called Elizabeth, and that's the only person who really has control over the currency.

And now we live in a new world, a world in which currency is a choice and not just a choice in terms of use, it's not just a matter of being able to choose which currency we use as individuals but it's also a means of expression. This is one of the things that crystallized in my mind a few months ago, as I thought about the evolution of old currencies are circled. If you haven't seen it, there's a website called And it allows you to use a web form to create a currency.

Up to that point, I was thinking how many currencies will there be? How many old coins will there be? And how will old coins compete in a world of crypto-currencies as we move into the future? Will there be hundreds of old coins? And if there are hundreds of old coins, what does that mean for the value of each of the old coins? How do they compete? And that was the wrong way of thinking about it because I saw currency as a zero sum game, just like it had been imposed in my worldview from the nations state that created currency.

And then I started thinking of currency as an application, and then I started thinking of currency as a means of expression. You see, money at the very root of it, is a language. It's a language we use to express value to each other. When I give you a dollar bill, I am saying that I want to hand you the equivalent value. I'm communicating my desire to exchange value with you because I appreciate something you can do or something you can give to me. So I'm using this as a token of language.

And this thing happens in human societies whether you have currency or not. And if you don't have a currency with a stamped face on it, you invent it and you can see this. One of the things that really captivated me was understanding that if you have a primary school environment and you watch children in their natural habitat, a very unnatural habitat in most schools but in any case, they don't have currency. Young children don't have currency and they don't understand currency. So what they do is they invent currency. They started trading rubber bands, Pokémon cards, tamagochi, tokens of affection, tokens of popularity. Humans create currency as a means of expressing their desires, of expressing their individuality.

So, I thought what happens when a five-year-old in a primary school can use a website to create Joe coin to compete against Marie coin in a game of popularity within their school? And then it dawned on me to ask the question how many currencies will exist is equivalent to asking a question, how many lovers will there be on the internet and the answer is simple, all of us. Currency is now a means of expression but if everyone can create a currency, how does it derive value and what does it mean? What is the difference between currency as an expression of popularity, as an expression of desire, as a means, a fact, a brand? Down there, right now, Canadian teen idol is running. One of those contestants, Amur has a big fan group. Maybe he wants to create Amar coin so that his fans can express their desire to watch more of his dancing, why not? People have talked about me doing Andreas coin. I think it's a bit silly but, why not? I think at some point, we're going to see things like that happen.

So, we're not going to have hundreds of old coins. We're not going to have thousands of old coins. We're going to have hundreds of thousands and then millions of old coins. And then there’ll be thousands of old coins being created every day to organize all the communities to express bands to create popularity contests, for short term, for fast, to codified the latest internet mean, to create the latest fad.

How the hell do you tell which ones have value and which ones don't have value? That's a very different world from the one we live in today. And I'm looking for parallels to understand what this means. And I often go back to looking at the emergence of the first decentralized system in my lifetime, the internet and what it did for understanding information, information scarcity, opinion and authority of opinion and what it did to us as a society as the internet emerged into our global scene.

So there used to be a time that if you wanted to read authorities of opinion, you bought a piece of paper from the organization that had a printing press that was three stories high and four football fields long and had a really great name like, the New York Times. And that organization could buy inkpad barrel. And through that ownership of this enormous manufacturing facility, they had the weight of authority. And so we impute authority into this institutions and we use that authority to decide which opinions mattered and which opinion didn't. We use them as gatekeepers of authority to give us guidance in understanding opinion.

And then, the internet destroyed all of that because suddenly anyone could print and anyone could publish. And I remember in the early days, people talked about well, how the hell will we know which opinions matter if anyone can have an opinion? The world will come to an end, surely. A funny thing happened. We shifted from a world in which authority of opinion came from the issuer, from the authority of the publisher by proxy, into a world where we have to look at opinion on its own merits, on the content of that opinion. And we arrived in a world where Judith Miller of the New York Times prints bull shit that sends an entire nation into a war, and an Egyptian blogger on the front line of revolution prints the truth that nobody wants to hear. And suddenly the world is upside down. Authority is no longer the person who owns the printing press but it is now the person who has the content that matters.

And we just did this to currency because now the authority is not derived from the sovereignty of the issuer, from the printing press of a nation's state that can declare through monopoly and use of force that this is the currency you will use. Now, we can chose currency, and a five-year-old can create currency. And maybe the currency that the five-year-old created has monetary value, maybe it doesn't. Most likely it doesn't, some will. And so we need to get use to a world where we have to judge currency not by who issued it but by who uses it or rather how many people use it and what they use it for.

So, let's imagine a world in which currency is being used in a widespread fashion and no one remembers who created the currency or why? They only know that within their local community it has purchasing power. As a little fanciful thought, imagine a decade from now in a rural village, far detached from our developed nation and civilization, villagers exchanging two currencies, one that has a Shiba Inu, a Japanese breed of dog on the front and is pronounce doggy coin or Dogecoin or Dogcoin and I'm not quite sure but it doesn’t really matter, but you can buy half a dozen eggs with it. And other villages are trading in other currency that has an old white lady called Elizabeth on it and they have no idea who Elizabeth is, and they don't know why she got her picture on the coin. Maybe she wrote a nice song. Maybe she won Canadian Teen Idol. Nobody remembers anymore but you can buy six eggs with it.

And to those people, it doesn't matter who issued the currency. What matters is whether it has purchasing power or not. The currency is now evaluated purely on its monetary basis because of adoption because of use. And there is one fundamental difference between those two currencies. One has a predictable, stable, algorithmic monetary supply, and the other has an old white lady called Elizabeth on it. So, in fact one of them has some real intrinsic value because it's removed some of the uncertainty of the monetary system from it. The other one doesn't really. 

We need to get ready to live in a world where multiple currencies will co-exist. So currency as a means of expression, currency as a tool of language, is no longer up to the issuer. It is up to us as individuals making the choice to use that currency and we give it value through our use, we give it value through adoption. And we’ll be surprised by some of the currencies that will emerge from the fad, that will emerge from the joke, perhaps even a sick joke, and will explode into viral consciousness on the internet and then become real monetary powers in use across the broad population surprising all of us.

How the hell do we operate in that kind of world? And what does it mean to have competition between currencies if there are millions, if digital scarcity really applies but only on a local basis and only within the context of each one of these currencies, if scarcity is not derived from the issuer but is derived in terms of adoption and in terms of the token itself? We're going to have currencies for different uses. Already you have Bitcoin that provides a very specific monetary policy. You have the Thorium that can provide a contract platform. There's a Namecoin for a distributed name in conventions.

And there's many others and there will be many others that will solve other problems, protein folding, search for extraterrestrial life. Maybe we'll have currencies that are better for micro-transactions and micro-payments with very fast resolution. Maybe we'll have currencies that are better for larger transactions like real estate, who knows. If you think of currency as an application then you'll realize that it doesn't really matter.

On the internet, email was the granddaddy of them all or the grandma of them all, and email like Bitcoin was the killer app that allows us all to see the power of decentralized communications and adopt this new platform, and it was enough to create utility to spread this network all around the world, but it was only the first step. And then instant messaging and forums and bulletin boards and Facebook and Twitter, do you worry that Twitter will destroy email? Do you worry that Facebook will destroy instant messaging? Do you worry that the value of email is eroded somehow by the existence of Twitter? We don't worry about these things because we understand that each one serves a different purpose. Some allow us to express a modality of instantaneous real time communications. Some allow us to have asymmetric communications. Whereas using Twitter, I can address an audience of thousands and receive real time feedback without having to have a bidirectional synchronized communication. Some like email allow us to have more long-term asynchronized communication between people.

And what we do is we build interfaces. We build obstructions. We built unifying tools that allow us to use all of these modalities from a single interface and fluently move from one to the other so that we can start transmitting a short text message to someone, get into a conversation, convert that to an audio conversation, decide if we want to show them our dog, turn on the video camera, convert it into a video conference. And when we're finished with the conversation, follow up with an email to summarize what we agreed on. And now we've gone through five different modalities of communication in a single unified interface.

I think that one's going to happen with currency. We're going to start treating currency as an application. And in order to that, we're going to need interfaces that allow us a unified currency experience, that allow us to have a single wallet with perhaps a 150 different currencies in it. And because of inventions like Sidechains and decentralized exchanges and fluid and liquid systems, and the complete absence of monopoly, of login, of hostage situations around the currency, we will be able to instantaneously and at very low cost convert from Bitcoin to Namecoin, to Dogecoin, to a Thorium.

And if we can do that then it doesn't matter because we won’t do that. Our unified wallet interface will do that by trying to see what we're trying to achieve with our currency. If I'm buying a house, it might express my transactional will in the modality of Bitcoin because that's the most suitable currency. When I try to name the domain for that house, it will convert some to Namecoin. The contract itself will be paid for in Ether, and when I tip the bartender for the cup of coffee they gave me when I got up that morning, I'll tip them in Doge. My interface won't hide all these differences. I can see a world in which we can smoothly move between currencies in a multi-model way. That's one of the things that comes out of this, which is the very real possibility that we will extract value and exchange rate from the actual currency.

If we have a multi-modal communication system, we no longer need to look at the individual values and exchange rate of all of these commodities or assets or currencies or call them whatever you want. There's a very real possibility we're going to have an index currency, a currency that is not in itself tradable that has no intrinsic uses of transactional commodity but instead is only used to extract the purchasing power vis-à-vis, the various coins in our wallets. I may have a 1,000 unified currency units. You can't buy unified currency units. You can buy a Bitcoin and you can tell me how many unified currency units that is, and I price everything in unified currency units and then I pay in Doge or a Namecoin or a Bitcoin or Ether depending on how I want to use it. We already do this in financial markets.

In fact, you can trade S&P 500, you know, buying a single company. What you're buying into is the aggregation of all of the different things that are in the stock market as an expression of the total value of the market. And you can then use that matter instrument in order to price transactions. For example, the London Interbank overnight rate is used as a matter interest rates to contractually tie things to a global set of interest rates. And so you don't need to say, I will buy this at whatever the Bundes Bank says. You say I'll buy this as LIBOR plus two, and then you have a stable point of reference with which you can do transactions.

I expect we're going to see much of the same with currency in all of our wallets from all of our currencies and allow us to understand value as an extraction that exists independently of the currencies in which it's expressed. So that's a slightly philosophical perspective and that's why I think it doesn't matter. An Ether is not competing with Bitcoin. Bitcoin is not competing with Litecoin. They are all means to express the transactional modality we want to use at any point in time to achieve the goals we want.

With this comes a very -- very important and powerful tool. In the choices we make with these currencies, we are also choosing to align ourselves with the community. Adoption is not simply the act of using the currency. It’s also attaching oneself to a community that has also chosen to adopt that currency. When I choose to adopt Bitcoin, I am a believer in monetary policy of 21 million old coins as a stable source of value. If I choose to adopt Freicoin, I am a believer and an inflationary basis to Marscoin that has a negative interest rate that enforces consumption and discourages hoarding. I am choosing my politics through my currency. And through that choice I am associating myself with the global community that has made the same choice as me and that is expressing that choice through currency.

Just like, when I choose an application on the internet to communicate with, I'm also aligning myself with the corresponding community. I don't use Twitter just because it is the convenient communication mechanism. I use Twitter because I also agree with many of the concepts and philosophies of the community of other people who choose to use Twitter. But with currency that choice is a much more powerful political choice. We have entered the realm of metro politics, a politics by algorithm of the ability for global communities to form around a common consensus of politics through the choice of currency.

You want inflation, use an inflationary currency. You're a gold bug, use a deflationary currency. You want a currency that creates a guaranteed minimal income from the poor, use the currency that expresses that politics. You want a currency that puts aside tokens for carbon sequestration use that currency that expresses your green politics. We're going to start seeing communities, politics and currencies converge and allow us to make these choices, just like I can support Joe Coin in order to say that Joe is in fact the coolest kid among the five-year-olds.

I can support green coin because I care about the global warming or not, right? I can support meat coin, if I really, really like red meats, whatever. Worldwide wrestling coin, no problem, there'll be one of those too, absolutely. So really all of these things are forms of expression and that comes back to the original point that currency in the end is really a form of language. It's a language by which we communicate our expectations and desire as a value. And now that we can do it on such a massive scale, now that everyone can create currency, our choice is what really matter.

We're past the zero sum game. This isn't about nation states anymore. This isn't about who adopts Bitcoin first or who adopts crypto-currencies first because the internet is adopting crypto-currencies and the internet is the world’s largest economy, and it is the world’s most populous economy, and it is the first transnational economy and it needs a transnational currency.

To summarize, what we've really done is we've inverted the very basic and was fundamental equation of currency, which is that for millennia until the year 2008, sovereignty defined currency. Sovereignty was the basis upon which currency could be created and that currency allowed that sovereignty to be expressed. The monopolistic control of currency is the basis of sovereignty. And now the internet has a currency and the internet is going to use that currency to create sovereignty. After 2008, currency creates sovereignty and the internet has its own currency, which means the internet has purchasing power, which means the internet has economic freedom, which means the internet can exert that economic freedom in a post-nationalist way, in a way that ignore borders and makes the nations state not obsolete but simply less relevant.

Because when an Egyptian blogger can not only blog about the revolution but also fund that revolution in Bitcoin, and they can connect with people from all around the world who share their ideals for self-determination and freedom, they are expressing their own sovereignty as an individual, and they are expressing the sovereignty of their community through the use of that currency. So this is the world we now live in, a world in which currencies can co-exist and where currency and its user adoption create sovereignty. That's basically what I wanted to talk about today. Thank you.

Written by Andreas M. Antonopoulos on April 16, 2014.