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<i> ( Whirring )</i>

2
00:00:19,552 --> 00:00:21,120
Don't be filming
my passwords.

3
00:00:24,824 --> 00:00:26,792
<i> I used to have</i>
<i> a shirt in high school</i>

4
00:00:26,794 --> 00:00:31,363
<i> that said</i>
<i> "technology must be used</i>
<i> to liberate the individual."</i>

5
00:00:31,365 --> 00:00:33,265
<i> And I didn't really know</i>
<i> what it meant for years,</i>

6
00:00:33,267 --> 00:00:35,634
<i> 'cause I didn't</i>
<i> really think about it.</i>

7
00:00:35,636 --> 00:00:38,670
<i> But today I look back</i>
<i> and I'm like, "oh man,</i>
<i> hell yeah, I like that shirt."</i>

8
00:00:38,672 --> 00:00:41,774
<i> I'm glad I wore that shirt,</i>
<i> 'cause it's how I really</i>
<i> feel today.</i>

9
00:00:41,776 --> 00:00:43,709
My name is Daniel mross.

10
00:00:43,711 --> 00:00:48,047
Today is may 3rd, 2012.

11
00:00:49,849 --> 00:00:51,984
<i> I go through college</i>
<i> and watch the Internet come</i>

12
00:00:51,986 --> 00:00:54,286
<i> and all these</i>
<i> different things.</i>
<i> And now, like, bitcoin,</i>

13
00:00:54,288 --> 00:00:57,489
<i> it's just a single</i>
<i> technology built on top</i>
<i> of the Internet,</i>

14
00:00:57,491 --> 00:00:59,124
<i> but it's so fascinating</i>
<i> because there's so many</i>

15
00:00:59,126 --> 00:01:01,660
<i> freaking things</i>
<i> you can do with it.</i>

16
00:01:01,662 --> 00:01:03,162
<i> It's also just</i>
<i> a big experiment.</i>

17
00:01:03,164 --> 00:01:04,663
<i> There's no guarantees</i>
<i> with it.</i>

18
00:01:06,299 --> 00:01:08,434
<i> We might just all be</i>
<i> wasting our time...</i>

19
00:01:09,903 --> 00:01:11,437
<i> Exploring concepts</i>
<i> and ideas.</i>

20
00:01:11,439 --> 00:01:13,739
<i> It's at this crossroads</i>
<i> of technology</i>

21
00:01:13,741 --> 00:01:16,341
<i> and philosophy</i>
<i> and politics and everything.</i>

22
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<i> Just be a part of it.</i>
<i> It's fun.</i>

23
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<i> It's crazy though,</i>
<i> but it's fun.</i>

24
00:01:24,918 --> 00:01:26,452
Nick mross:
<i> Um, first question is</i>

25
00:01:26,454 --> 00:01:28,587
<i> what is bitcoin?</i>

26
00:01:28,589 --> 00:01:30,722
- ( Chuckles )
-<i> ( Dramatic music playing )</i>

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Daniel:
<i> I can't tell you</i>
<i> what bitcoin is</i>

28
00:01:34,995 --> 00:01:36,428
<i> in just a few sentences.</i>

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<i> It takes time</i>
<i> to understand it,</i>

30
00:01:39,433 --> 00:01:41,667
<i> the same way it took</i>
<i> people time to understand</i>

31
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<i> what the Internet was</i>

32
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<i> back in 1994.</i>

33
00:01:45,005 --> 00:01:48,140
That little mark with the "a"
and then the ring around it.

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00:01:48,142 --> 00:01:50,109
- "At"?
- See, that's what I said.

35
00:01:50,111 --> 00:01:52,811
- Mm-hmm.
- Katie said she thought
it was "about."

36
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- Katie:<i> Yeah. </i>
- Elizabeth vargas:
<i> Oh, Internet is...</i>

37
00:01:56,183 --> 00:01:58,283
-<i> That massive</i>
<i> computer network... </i>
- Katie:<i> Right.</i>

38
00:01:58,285 --> 00:02:00,452
<i> ...the one that's becoming</i>
<i> really big now.</i>

39
00:02:00,454 --> 00:02:02,955
Allison, can you explain
what Internet is?

40
00:02:04,657 --> 00:02:06,492
Daniel:
<i> When the Internet</i>
<i> was taking off,</i>

41
00:02:06,494 --> 00:02:08,327
<i> I was in college</i>
<i> at Virginia tech</i>

42
00:02:08,329 --> 00:02:10,229
<i> studying computer science.</i>

43
00:02:10,231 --> 00:02:13,165
<i> Looking back,</i>
<i> it's amazing to think about</i>

44
00:02:13,167 --> 00:02:15,167
<i> how much the world</i>
<i> was changing.</i>

45
00:02:15,169 --> 00:02:16,802
<i> Hey, Dan,</i>
<i> ready for the game?</i>

46
00:02:16,804 --> 00:02:18,971
I'm just finishing up here
with my new kayaking friends.

47
00:02:18,973 --> 00:02:20,239
Kayaking friends
on your computer?

48
00:02:20,241 --> 00:02:22,674
Yeah, I just got
America online.

49
00:02:22,676 --> 00:02:25,210
Daniel:
<i> That same type of innovation</i>
<i> is happening again</i>

50
00:02:25,212 --> 00:02:26,812
<i> with bitcoin.</i>

51
00:02:26,814 --> 00:02:28,514
It's the smartest people
in the room

52
00:02:28,516 --> 00:02:31,450
that are
the most excited about this.
So what are they seeing?

53
00:02:31,452 --> 00:02:34,887
Daniel:
<i> The Internet changed</i>
<i> the way the world communicates</i>

54
00:02:34,889 --> 00:02:37,756
<i> bitcoin changes</i>
<i> the way money works.</i>

55
00:02:37,758 --> 00:02:41,527
You can basically put
a bank in your pocket.

56
00:02:41,529 --> 00:02:42,794
Psst!

57
00:02:42,796 --> 00:02:44,463
Wanna buy some
secret stuff?

58
00:02:44,465 --> 00:02:46,131
There is now a new note

59
00:02:46,133 --> 00:02:47,432
that people are starting
to talk about--

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00:02:47,434 --> 00:02:48,600
the bitcoin.

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The money of the future.

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Daniel:
<i> Bitcoin was created to provide</i>

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<i> an alternative</i>
<i> to the banking system.</i>

64
00:02:58,012 --> 00:02:59,011
George w. Bush:
<i> We're in the midst</i>

65
00:02:59,013 --> 00:03:01,146
<i> of a serious financial crisis</i>

66
00:03:01,148 --> 00:03:02,681
and the federal government
is responding

67
00:03:02,683 --> 00:03:04,116
with decisive action.

68
00:03:07,654 --> 00:03:09,788
Daniel:
<i> Unlike most currencies,</i>

69
00:03:09,790 --> 00:03:12,958
<i> bitcoins are issued according</i>
<i> to a set of fixed rules.</i>

70
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<i> The idea was to create</i>
<i> money whose value</i>

71
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<i> couldn't be manipulated</i>
<i> by a central authority.</i>

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The government, no matter
how many guns they draw,

73
00:03:21,435 --> 00:03:24,336
cannot change
a mathematical problem.

74
00:03:24,338 --> 00:03:26,939
<i> They can point their guns</i>
<i> at "two plus two,"</i>

75
00:03:26,941 --> 00:03:28,006
<i> but it's always</i>
<i> gonna equal four.</i>

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Daniel:
<i> It's fascinating to imagine</i>

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00:03:34,381 --> 00:03:37,115
<i> what it means to have</i>
<i> global decentralized money.</i>

78
00:03:38,785 --> 00:03:40,018
<i> And that's what's happening.</i>

79
00:03:48,795 --> 00:03:50,529
<i> ( Instrumental music playing )</i>

80
00:04:09,148 --> 00:04:12,818
( Babbles )

81
00:04:12,820 --> 00:04:15,454
My five-year-old's birthday.

82
00:04:15,456 --> 00:04:17,089
First round
of burgers is ready.

83
00:04:17,091 --> 00:04:19,091
Second round is
going on in a second.

84
00:04:20,159 --> 00:04:22,261
First round
of burgers is ready!

85
00:04:22,263 --> 00:04:23,729
( People chattering )

86
00:04:23,731 --> 00:04:25,130
First round.

87
00:04:26,733 --> 00:04:29,167
Eliza mross:
<i> Dan has always been</i>
<i> an idea guy.</i>

88
00:04:29,169 --> 00:04:31,436
<i> Bitcoin is the perfect</i>
<i> combination</i>

89
00:04:31,438 --> 00:04:33,905
of how can
I change the world
and make it better,

90
00:04:33,907 --> 00:04:36,141
but how can
I also be a nerd?

91
00:04:36,143 --> 00:04:38,510
<i> So mostly I've just been</i>
<i> supporting him</i>

92
00:04:38,512 --> 00:04:41,013
<i> in this craziness.</i>

93
00:04:44,117 --> 00:04:45,851
Daniel:
<i> Eliza and I met in college,</i>

94
00:04:45,853 --> 00:04:48,086
<i> and we've been married</i>
<i> for seven years.</i>

95
00:04:48,088 --> 00:04:50,355
<i> We live in Pittsburgh,</i>
<i> where I'm from,</i>

96
00:04:50,357 --> 00:04:52,324
<i> and we have three boys,</i>

97
00:04:52,326 --> 00:04:53,925
<i> I've spent most of my career</i>

98
00:04:53,927 --> 00:04:56,628
<i> as a database administrator.</i>

99
00:04:56,630 --> 00:04:59,831
<i> But for the past</i>
<i> two years, I've been</i>
<i> consumed with bitcoin.</i>

100
00:05:01,768 --> 00:05:05,671
<i> Bitcoins come</i>
<i> into existence through</i>
<i> a process called mining.</i>

101
00:05:05,673 --> 00:05:08,507
<i> I build computers</i>
<i> to mine for bitcoins.</i>

102
00:05:10,643 --> 00:05:13,011
I'm glad that
it's finally getting
a little bit cooler out.

103
00:05:13,013 --> 00:05:15,781
My wife won't be as angry
that the basement is so hot.

104
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I've still got a bunch of mining
rigs running right now.

105
00:05:20,954 --> 00:05:23,121
Actually they're
right down here, if you
wanna go take a look.

106
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Here they are.

107
00:05:36,703 --> 00:05:38,937
<i> So what is bitcoin?</i>

108
00:05:38,939 --> 00:05:41,773
<i> Bitcoin is</i>
<i> a revolutionary technology</i>

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00:05:41,775 --> 00:05:44,609
<i> that enables</i>
<i> a new way to send payments</i>
<i> over the Internet.</i>

110
00:05:44,611 --> 00:05:47,679
- ( Beeps )
-<i> You can think of it as</i>
<i> an open accounting system</i>

111
00:05:47,681 --> 00:05:50,182
<i> where thousands of computers</i>
<i> all over the world</i>

112
00:05:50,184 --> 00:05:54,119
<i> work together to track</i>
<i> ownership of digital tokens</i>
<i> called bitcoins.</i>

113
00:05:54,121 --> 00:05:56,355
<i> When you send</i>
<i> someone bitcoins,</i>

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00:05:56,357 --> 00:05:59,424
<i> the transaction is broadcast</i>
<i> to the entire network.</i>

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00:05:59,426 --> 00:06:01,626
<i> After it's verified,</i>

116
00:06:01,628 --> 00:06:03,161
<i> it's recorded</i>
<i> in a public ledger</i>

117
00:06:03,163 --> 00:06:04,863
<i> called the blockchain.</i>

118
00:06:04,865 --> 00:06:06,431
<i> The blockchain</i>
<i> contains a record</i>

119
00:06:06,433 --> 00:06:08,600
<i> of every bitcoin</i>
<i> transaction that has occurred</i>

120
00:06:08,602 --> 00:06:10,202
<i> since the system began,</i>

121
00:06:10,204 --> 00:06:12,170
<i> and it's shared</i>
<i> and maintained on the network,</i>

122
00:06:12,172 --> 00:06:14,172
<i> so everyone keeps the books,</i>
<i> so to speak.</i>

123
00:06:15,675 --> 00:06:17,943
<i> Most currencies are issued</i>
<i> by a central authority</i>

124
00:06:17,945 --> 00:06:20,278
<i> that controls</i>
<i> the money supply.</i>

125
00:06:20,280 --> 00:06:22,280
<i> Bitcoin is</i>
<i> a peer-to-peer system,</i>

126
00:06:22,282 --> 00:06:24,282
<i> so there is</i>
<i> no central authority.</i>

127
00:06:24,284 --> 00:06:27,352
<i> Instead bitcoins are</i>
<i> issued to users</i>

128
00:06:27,354 --> 00:06:29,855
<i> who help process transactions</i>
<i> in the network.</i>

129
00:06:29,857 --> 00:06:33,125
<i> This is known</i>
<i> as bitcoin mining.</i>

130
00:06:33,127 --> 00:06:35,627
<i> Bitcoin miners are</i>
<i> specialized computers</i>

131
00:06:35,629 --> 00:06:37,295
<i> that do the work</i>
<i> required to verify</i>

132
00:06:37,297 --> 00:06:39,765
<i> and record transactions</i>
<i> in the blockchain.</i>

133
00:06:39,767 --> 00:06:41,533
<i> As a reward for their work,</i>

134
00:06:41,535 --> 00:06:43,502
<i> the miners earn bitcoins,</i>

135
00:06:43,504 --> 00:06:46,805
<i> and this is how new bitcoins</i>
<i> are released into circulation.</i>

136
00:06:46,807 --> 00:06:48,373
<i> The system is programmed</i>

137
00:06:48,375 --> 00:06:51,209
<i> so that only</i>
<i> 21 million bitcoins</i>
<i> will ever exist.</i>

138
00:06:51,211 --> 00:06:52,778
<i> And as time goes by,</i>

139
00:06:52,780 --> 00:06:54,446
<i> the mining reward decreases.</i>

140
00:06:54,448 --> 00:06:56,915
<i> The result is</i>
<i> a predictable supply</i>

141
00:06:56,917 --> 00:06:58,617
<i> that's governed</i>
<i> by scarcity,</i>

142
00:06:58,619 --> 00:07:02,087
<i> making bitcoins</i>
<i> somewhat like a digital gold.</i>

143
00:07:02,089 --> 00:07:04,756
<i> It's the first currency</i>
<i> of the Internet.</i>

144
00:07:04,758 --> 00:07:06,591
<i> And everyone</i>
<i> is free to use it.</i>

145
00:07:06,593 --> 00:07:09,694
<i> With bitcoin, you can send</i>
<i> any amount of money</i>

146
00:07:09,696 --> 00:07:11,963
<i> to anyone anywhere</i>
<i> in the world</i>

147
00:07:11,965 --> 00:07:13,865
<i> as easily</i>
<i> as sending an email.</i>

148
00:07:18,004 --> 00:07:20,472
<i> My brother Nick</i>
<i> is a filmmaker.</i>

149
00:07:20,474 --> 00:07:23,608
<i> After hearing me</i>
<i> talk about bitcoin</i>
<i> incessantly for months,</i>

150
00:07:23,610 --> 00:07:26,111
<i> we decided to start</i>
<i> documenting things.</i>

151
00:07:26,113 --> 00:07:28,980
Nick:
<i> Hey, I don't think</i>
<i> we'll need the small camera.</i>

152
00:07:28,982 --> 00:07:31,750
- It can't hurt.
- Nick:<i> No, I'd rather</i>
<i> just leave it behind.</i>

153
00:07:31,752 --> 00:07:33,819
I have so much equipment.
Do you mind?

154
00:07:33,821 --> 00:07:35,654
Damn, you really
cramped it up, huh?

155
00:07:35,656 --> 00:07:36,955
Not that bad.
What do you mean?

156
00:07:36,957 --> 00:07:39,491
- Jeez.
- Dude, they're right there.

157
00:07:39,493 --> 00:07:41,293
Right in the back.
Right there.

158
00:07:41,295 --> 00:07:43,962
Daniel:
<i> I was convinced that bitcoin</i>
<i> was going to be huge,</i>

159
00:07:43,964 --> 00:07:46,598
<i> and I knew there were a lot</i>
<i> of others like me out there.</i>

160
00:07:46,600 --> 00:07:49,167
Zipped my keys in my pocket,
so I don't forget 'em later.

161
00:07:54,073 --> 00:07:58,243
Bitcoin was created
by what's believed
to be a pseudonym,

162
00:07:58,245 --> 00:08:00,779
a guy named
satoshi nakamoto.

163
00:08:00,781 --> 00:08:03,648
Invented in '09
by a fictitious person

164
00:08:03,650 --> 00:08:05,784
named satoshi nakamoto...

165
00:08:05,786 --> 00:08:07,786
Daniel:
<i> On Halloween 2008,</i>

166
00:08:07,788 --> 00:08:10,255
<i> someone using the name</i>
<i> satoshi nakamoto.</i>

167
00:08:10,257 --> 00:08:12,090
<i> Posted on a cryptography</i>
<i> mailing list...</i>

168
00:08:17,797 --> 00:08:20,265
<i> The post contained</i>
<i> a link to a white paper</i>

169
00:08:20,267 --> 00:08:23,702
<i> in which satoshi proposed</i>
<i> a new type of payment system</i>
<i> for the Internet.</i>

170
00:08:23,704 --> 00:08:26,638
<i> It described a protocol that</i>
<i> used peer-to-peer networking,</i>

171
00:08:26,640 --> 00:08:29,241
<i> proof of work</i>
<i> and public key cryptography.</i>

172
00:08:31,344 --> 00:08:34,346
<i> For years, computer scientists</i>
<i> had been experimenting</i>

173
00:08:34,348 --> 00:08:37,349
<i> with these technologies</i>
<i> to create digital money.</i>

174
00:08:37,351 --> 00:08:39,718
<i> But satoshi discovered</i>
<i> a way to combine them</i>

175
00:08:39,720 --> 00:08:41,353
<i> that had never</i>
<i> been done before.</i>

176
00:08:41,355 --> 00:08:44,789
<i> In doing so,</i>
<i> he invented bitcoin.</i>

177
00:08:44,791 --> 00:08:47,726
<i> There are no records</i>
<i> of nakamoto's existence</i>

178
00:08:47,728 --> 00:08:49,427
<i> prior to the creation</i>
<i> of bitcoin.</i>

179
00:08:49,429 --> 00:08:51,029
<i> On his profile page,</i>

180
00:08:51,031 --> 00:08:52,964
<i> he claimed to be</i>
<i> a 34-year-old man</i>

181
00:08:52,966 --> 00:08:54,699
<i> living in Japan.</i>

182
00:08:54,701 --> 00:08:57,536
<i> Although satoshi nakamoto</i>
<i> is a Japanese name,</i>

183
00:08:57,538 --> 00:09:00,405
<i> he wrote in perfect English</i>
<i> when communicating online</i>

184
00:09:00,407 --> 00:09:02,841
<i> and went through great lengths</i>
<i> to keep his identity unknown.</i>

185
00:09:04,143 --> 00:09:06,611
<i> Nonetheless,</i>
<i> programmers and cryptographers</i>

186
00:09:06,613 --> 00:09:09,948
<i> all across the world</i>
<i> recognized the brilliance</i>
<i> of satoshi's design.</i>

187
00:09:09,950 --> 00:09:13,585
<i> And began collaborating</i>
<i> with him to further</i>
<i> develop bitcoin.</i>

188
00:09:13,587 --> 00:09:15,820
<i> In October of 2009,</i>

189
00:09:15,822 --> 00:09:17,589
<i> the first exchange rate</i>
<i> was published.</i>

190
00:09:17,591 --> 00:09:22,294
<i> Listing the value</i>
<i> of 1,309 bitcoins at $1.</i>

191
00:09:22,296 --> 00:09:24,863
<i> Bitcoins were cheap,</i>
<i>and through the following year,</i>

192
00:09:24,865 --> 00:09:27,032
<i> they continued to trade</i>
<i> for fractions of a cent.</i>

193
00:09:28,301 --> 00:09:29,734
<i> In the spring of 2010,</i>

194
00:09:29,736 --> 00:09:31,503
<i> a Florida man named laszlo</i>

195
00:09:31,505 --> 00:09:33,939
<i> decided to try</i>
<i> using his bitcoins</i>
<i> to purchase something.</i>

196
00:09:33,941 --> 00:09:36,241
<i> He offered 10,000 bitcoins</i>

197
00:09:36,243 --> 00:09:38,276
<i> to anyone who would</i>
<i> buy him pizza.</i>

198
00:09:38,278 --> 00:09:40,011
<i> A man in London accepted</i>

199
00:09:40,013 --> 00:09:41,680
<i> and placed</i>
<i> a long-distance phone call,</i>

200
00:09:41,682 --> 00:09:44,015
<i> ordering him two pizzas</i>
<i> from papa John's.</i>

201
00:09:44,017 --> 00:09:45,951
<i> This is generally acknowledged</i>

202
00:09:45,953 --> 00:09:49,020
<i> as the first</i>
<i> bitcoin transaction</i>
<i> for a tangible good.</i>

203
00:09:49,022 --> 00:09:50,989
<i> Bitcoin was</i>
<i> gaining momentum,</i>

204
00:09:50,991 --> 00:09:52,824
<i> but in order</i>
<i> for it to thrive</i>

205
00:09:52,826 --> 00:09:55,160
<i> the coins needed to be</i>
<i> more widely accessible.</i>

206
00:09:55,162 --> 00:09:58,430
<i> A Tokyo-based exchange</i>
<i> named mt. Gox was</i>

207
00:09:58,432 --> 00:10:00,832
<i> the first on the scene</i>
<i>to take hold of the marketplace</i>

208
00:10:00,834 --> 00:10:02,634
<i> and trading volume</i>
<i> started to pick up.</i>

209
00:10:02,636 --> 00:10:04,636
<i> By November 2010,</i>

210
00:10:04,638 --> 00:10:07,138
<i> already 4 million bitcoins</i>
<i> had been mined.</i>

211
00:10:07,140 --> 00:10:10,408
<i> And the exchange price</i>
<i>briefly spiked to 50¢ per coin.</i>

212
00:10:10,410 --> 00:10:13,812
<i> The market awoke and bitcoin</i>
<i> was starting to look like</i>

213
00:10:13,814 --> 00:10:16,815
<i> it might have real potential</i>
<i> as a currency.</i>

214
00:10:16,817 --> 00:10:19,651
His name is Julian Assange.

215
00:10:19,653 --> 00:10:21,586
<i> Assange and his colleagues</i>

216
00:10:21,588 --> 00:10:24,189
<i> collect confidential</i>
<i> information and then</i>
<i> make it public.</i>

217
00:10:24,191 --> 00:10:27,459
The release of 250,000
state department documents

218
00:10:27,461 --> 00:10:30,495
no doubt presents a serious
dilemma for this country.

219
00:10:30,497 --> 00:10:32,497
Daniel:
<i> Following a massive release</i>

220
00:10:32,499 --> 00:10:34,499
<i> of secret</i>
<i> U.S. diplomatic cables,</i>

221
00:10:34,501 --> 00:10:37,068
<i> donations to wikileaks</i>
<i> were blocked</i>

222
00:10:37,070 --> 00:10:39,671
<i> by bank of America,</i>
<i> visa, mastercard,</i>

223
00:10:39,673 --> 00:10:42,173
<i> PayPal and Western union.</i>

224
00:10:42,175 --> 00:10:45,043
<i> An article in "pc world"</i>
<i> suggested that bitcoin</i>

225
00:10:45,045 --> 00:10:46,611
<i> could be used</i>
<i> as a workaround</i>

226
00:10:46,613 --> 00:10:48,413
<i> to send donations</i>
<i> to wikileaks.</i>

227
00:10:48,415 --> 00:10:50,949
<i> One of satoshi's</i>
<i> last known posts</i>

228
00:10:50,951 --> 00:10:52,851
<i> was in response</i>
<i> to the article and stated...</i>

229
00:11:01,293 --> 00:11:02,994
<i> Shortly after that</i>

230
00:11:02,996 --> 00:11:04,829
<i> satoshi disappeared</i>
<i> from the forums</i>

231
00:11:04,831 --> 00:11:07,732
<i> and was never</i>
<i> heard from again.</i>

232
00:11:07,734 --> 00:11:11,569
<i> Two months later</i>
<i> the silk road anonymous</i>
<i> marketplace was launched.</i>

233
00:11:11,571 --> 00:11:13,938
<i> It functioned</i>
<i> as an online black market</i>

234
00:11:13,940 --> 00:11:15,840
<i> for drugs</i>
<i> and other illicit goods</i>

235
00:11:15,842 --> 00:11:17,742
<i> and used bitcoin</i>
<i> exclusively,</i>

236
00:11:17,744 --> 00:11:19,077
<i> because it made</i>
<i> the money trail</i>

237
00:11:19,079 --> 00:11:21,079
<i> nearly impossible</i>
<i> to trace.</i>

238
00:11:21,081 --> 00:11:23,148
<i> The silk road</i>
<i> caught the attention</i>

239
00:11:23,150 --> 00:11:25,150
<i> of New York senator</i>
<i> Charles schumer</i>

240
00:11:25,152 --> 00:11:26,985
<i> who was outraged</i>
<i> and publicly called</i>

241
00:11:26,987 --> 00:11:29,254
<i> for a crackdown</i>
<i> on the site.</i>

242
00:11:29,256 --> 00:11:32,190
Heroin, opium,
cannabis, ecstasy,

243
00:11:32,192 --> 00:11:33,825
- psychedelics, stimulants.
-<i> ( Camera clicks )</i>

244
00:11:33,827 --> 00:11:35,160
It's unbelievable.

245
00:11:35,162 --> 00:11:36,961
Daniel:
<i> Throughout all this,</i>

246
00:11:36,963 --> 00:11:38,797
<i> the exchange price</i>
<i> continued to climb.</i>

247
00:11:38,799 --> 00:11:41,099
<i> By February of 2011,</i>

248
00:11:41,101 --> 00:11:43,468
<i> bitcoin reached parity</i>
<i> with the U.S. dollar.</i>

249
00:11:43,470 --> 00:11:46,538
<i> Sparking an influx</i>
<i> of new users and speculators.</i>

250
00:11:46,540 --> 00:11:50,608
<i> By June the price had soared</i>
<i> to a peak of $31</i>

251
00:11:50,610 --> 00:11:52,811
<i> before it came</i>
<i> crashing down.</i>

252
00:11:52,813 --> 00:11:56,347
<i> As the market tanked,</i>
<i> the mt. Gox exchange</i>
<i> was hacked,</i>

253
00:11:56,349 --> 00:11:58,149
<i> further shaking</i>
<i> the confidence of investors</i>

254
00:11:58,151 --> 00:11:59,884
<i> and hammering the price</i>
<i> all the way down</i>

255
00:11:59,886 --> 00:12:01,986
<i> to the $2 range</i>
<i> by October.</i>

256
00:12:01,988 --> 00:12:04,923
<i> While bitcoin enthusiasts</i>
<i> kept hope,</i>

257
00:12:04,925 --> 00:12:07,092
<i> skeptics were quick</i>
<i> to share their hindsights</i>

258
00:12:07,094 --> 00:12:09,661
<i> and rants on blogs</i>
<i> and in news articles.</i>

259
00:12:09,663 --> 00:12:11,596
<i> Many thought that</i>
<i> the party was over</i>

260
00:12:11,598 --> 00:12:14,632
<i> and that bitcoin was</i>
<i> on its way out.</i>

261
00:12:14,634 --> 00:12:17,235
I went online and I bought
one bitcoin last night.

262
00:12:17,237 --> 00:12:20,171
Really? It's the future.

263
00:12:20,173 --> 00:12:21,172
I don't know.

264
00:12:21,174 --> 00:12:22,173
It didn't feel real.

265
00:12:22,175 --> 00:12:24,175
No. Real's gonna change.

266
00:12:25,177 --> 00:12:27,746
Just watch.

267
00:12:27,748 --> 00:12:30,081
Today I sent
a total of...

268
00:12:31,350 --> 00:12:33,685
2700 bitcoins

269
00:12:33,687 --> 00:12:35,120
to butterfly labs.

270
00:12:35,122 --> 00:12:38,590
<i> I purchased, basically,</i>
<i> a custom-designed</i>

271
00:12:38,592 --> 00:12:41,493
<i> bitcoin-mining</i>
<i> supercomputer.</i>

272
00:12:41,495 --> 00:12:43,228
If bitcoin fails...

273
00:12:44,497 --> 00:12:46,231
Everything I have
is worthless.

274
00:12:46,233 --> 00:12:48,800
( Stammers )
The bitcoins I have,

275
00:12:48,802 --> 00:12:50,568
the computers,
the mining system

276
00:12:50,570 --> 00:12:52,170
was all a waste of money.

277
00:12:55,508 --> 00:12:57,575
But if it succeeds, then...

278
00:12:59,812 --> 00:13:02,313
It will have been worth it,
I think.

279
00:13:02,315 --> 00:13:05,650
- ( Beeps )
-<i> The bitcoin economy was</i>
<i> a wild west in cyberspace</i>

280
00:13:05,652 --> 00:13:08,853
<i> that was very attractive</i>
<i> to hackers and scammers.</i>

281
00:13:08,855 --> 00:13:12,323
<i> Over the years,</i>
<i> tens of thousands of coins</i>
<i> had been stolen</i>

282
00:13:12,325 --> 00:13:14,626
<i> and 2012 proved no different.</i>

283
00:13:14,628 --> 00:13:17,295
<i> Users had to be careful.</i>

284
00:13:17,297 --> 00:13:20,098
If somebody steals
your bitcoins, there are
no consumer protections.

285
00:13:20,100 --> 00:13:22,300
Sorry, they're gone.
You lost your bitcoins?
They're gone

286
00:13:22,302 --> 00:13:24,102
and you're not going
to get them back.

287
00:13:24,104 --> 00:13:27,005
<i> But after months of stagnation</i>
<i> on the exchanges,</i>

288
00:13:27,007 --> 00:13:29,474
<i> the bitcoin price was</i>
<i> on the rise again.</i>

289
00:13:29,476 --> 00:13:32,844
The price of bitcoin today
is around $7 u.S.D.,

290
00:13:32,846 --> 00:13:36,347
which just had a nice
little bump this week.

291
00:13:36,349 --> 00:13:39,350
<i> By the end of the year,</i>
<i> the blogging site wordpress</i>

292
00:13:39,352 --> 00:13:42,320
<i> announced it would start</i>
<i> accepting bitcoin payments.</i>

293
00:13:42,322 --> 00:13:45,089
<i> And in early 2013,</i>
<i> the discussion forum reddit</i>

294
00:13:45,091 --> 00:13:46,925
<i> also announced</i>
<i> bitcoin support.</i>

295
00:13:46,927 --> 00:13:50,228
<i>They were the first major sites</i>
<i> to incorporate bitcoin,</i>

296
00:13:50,230 --> 00:13:52,463
<i> and these milestones</i>
<i> signaled the beginning</i>

297
00:13:52,465 --> 00:13:53,898
<i> of mainstream acceptance.</i>

298
00:14:01,540 --> 00:14:05,109
Bitcoin is the most subversive
technology on the planet.

299
00:14:05,111 --> 00:14:08,046
This is a system
that is growing around
the entire world.

300
00:14:08,048 --> 00:14:11,282
So if it works,
if this experiment
continues to grow,

301
00:14:11,284 --> 00:14:14,652
it doesn't just help
a few of us in this state
or in the country,

302
00:14:14,654 --> 00:14:16,621
but it actually helps
everyone around the world.

303
00:14:19,425 --> 00:14:20,825
( People chattering )

304
00:14:20,827 --> 00:14:22,493
Daniel:
<i> As the bitcoin price</i>
<i> hovered around</i>

305
00:14:22,495 --> 00:14:25,396
<i> it's previous</i>
<i> all-time high of $31,</i>

306
00:14:25,398 --> 00:14:28,099
<i> I visited</i>
<i> a libertarian conference</i>
<i> in New Hampshire.</i>

307
00:14:28,101 --> 00:14:30,602
It lost 20% and then it
gained 20%

308
00:14:30,604 --> 00:14:32,437
in 20 minutes.

309
00:14:32,439 --> 00:14:34,005
It is--
they're silly.

310
00:14:35,074 --> 00:14:36,674
Daniel:
<i> Libertarians are among</i>

311
00:14:36,676 --> 00:14:38,276
<i> the earliest adopters</i>
<i> of bitcoin.</i>

312
00:14:38,278 --> 00:14:40,845
<i> Its nature as a currency</i>
<i> that isn't controlled</i>

313
00:14:40,847 --> 00:14:43,815
<i> by central banks</i>
<i> makes it attractive</i>
<i> to this community.</i>

314
00:14:43,817 --> 00:14:46,150
Once I was able to kind
of grok the basic concept,

315
00:14:46,152 --> 00:14:48,853
it was like, "this is
the perfect money. "

316
00:14:48,855 --> 00:14:51,522
Daniel:
<i> This is what</i>
<i> a bitcoin address looks like.</i>

317
00:14:51,524 --> 00:14:53,825
<i> Think of this long string</i>
<i> of characters</i>

318
00:14:53,827 --> 00:14:56,294
<i> as an account number where</i>
<i> your bitcoins are stored.</i>

319
00:14:56,296 --> 00:14:58,329
<i> When you send</i>
<i> or receive bitcoins,</i>

320
00:14:58,331 --> 00:15:00,798
<i> they are sent</i>
<i> to these addresses.</i>

321
00:15:00,800 --> 00:15:02,834
<i> The addresses are</i>
<i> long and hard to remember</i>

322
00:15:02,836 --> 00:15:05,637
<i> so using a phone</i>
<i> to scan a q.R. Code</i>

323
00:15:05,639 --> 00:15:07,805
<i> is a fast and easy way</i>
<i> to read them.</i>

324
00:15:07,807 --> 00:15:09,540
<i> Another good thing to know</i>

325
00:15:09,542 --> 00:15:10,975
<i> is that bitcoins</i>
<i> can be broken down</i>

326
00:15:10,977 --> 00:15:12,677
<i> to eight decimal places.</i>

327
00:15:12,679 --> 00:15:15,280
<i> This means that you can send</i>
<i> fractions of a bitcoin.</i>

328
00:15:15,282 --> 00:15:18,683
<i> So any amount of money</i>
<i> can be represented.</i>

329
00:15:18,685 --> 00:15:21,920
<i> With bitcoin,</i>
<i> every transaction is public.</i>

330
00:15:21,922 --> 00:15:24,422
<i> Everyone can see the amount</i>
<i> that is being sent</i>

331
00:15:24,424 --> 00:15:27,892
<i> without necessarily knowing</i>
<i> the identity of the sender.</i>

332
00:15:27,894 --> 00:15:30,929
<i> These guys even have one</i>
<i> of the first bitcoin a.T.M.S.</i>

333
00:15:30,931 --> 00:15:34,132
You just scan
your q.R. Code
on your phone,

334
00:15:34,134 --> 00:15:36,401
<i> put in the dollar bills</i>
<i> and press the button.</i>

335
00:15:36,403 --> 00:15:38,937
Bam. Done.
Perfect.

336
00:15:38,939 --> 00:15:41,306
<i> You now traded</i>
<i> your worthless piece</i>
<i> of paper</i>

337
00:15:41,308 --> 00:15:43,274
<i> for real currency.</i>

338
00:15:43,276 --> 00:15:45,310
It's like, "end the fed?"
It's like, seriously,
you think

339
00:15:45,312 --> 00:15:46,744
you're gonna end the fed?
You're not gonna end the fed.

340
00:15:46,746 --> 00:15:48,079
You're not gonna change
anything about the fed.

341
00:15:48,081 --> 00:15:50,114
- Transcend the fed.
- Bypass the fed.

342
00:15:50,116 --> 00:15:51,916
- Right, yeah. ( Chuckles )
- That's what you should do.

343
00:15:51,918 --> 00:15:54,919
My concern is how
the governments will react.

344
00:15:54,921 --> 00:15:57,255
They can't kill
or stop bitcoin,

345
00:15:57,257 --> 00:16:00,658
but they could impede it
and they could get in the way
of its development.

346
00:16:04,430 --> 00:16:06,931
Daniel:
<i> A few weeks later</i>
<i> across the ocean,</i>

347
00:16:06,933 --> 00:16:09,167
<i> a financial crisis was</i>
<i> reaching a breaking point</i>

348
00:16:09,169 --> 00:16:10,802
<i> on the island of Cyprus.</i>

349
00:16:10,804 --> 00:16:13,137
Cyprus is on the brink
of going bust.

350
00:16:13,139 --> 00:16:15,273
The rest of Europe
has agreed to a bailout,

351
00:16:15,275 --> 00:16:19,277
but only if Cyprus raids
people's bank accounts
for quick hard cash.

352
00:16:19,279 --> 00:16:21,779
Woman:
<i> People tried to get money</i>
<i> out of the cash machines</i>

353
00:16:21,781 --> 00:16:24,115
<i> but electronic transfers</i>
<i> have been stopped.</i>

354
00:16:24,117 --> 00:16:26,351
- Never did I think
that they would...
- ( People chanting )

355
00:16:26,353 --> 00:16:28,119
...in a completely
unprecedented manner

356
00:16:28,121 --> 00:16:29,954
resort to stealing money

357
00:16:29,956 --> 00:16:32,323
from people's
bank accounts.

358
00:16:32,325 --> 00:16:34,225
Daniel:
<i> The Cypriots had</i>
<i> placed their trust</i>

359
00:16:34,227 --> 00:16:37,996
<i> in the banking system</i>
<i> and it had failed them.</i>

360
00:16:37,998 --> 00:16:41,332
<i> As news of the crisis</i>
<i> spread around the world,</i>

361
00:16:41,334 --> 00:16:43,468
<i> bitcoin believers</i>
<i> were quick to point it out</i>

362
00:16:43,470 --> 00:16:45,436
<i> as an example</i>
<i> of why a currency</i>

363
00:16:45,438 --> 00:16:47,505
<i> free from government control</i>
<i> was needed.</i>

364
00:16:47,507 --> 00:16:49,941
There's actually
bitcoin atms

365
00:16:49,943 --> 00:16:52,310
apparently being
set up in Cyprus.

366
00:16:52,312 --> 00:16:54,312
Man:
<i> All of a sudden,</i>
<i> bitcoin looks</i>

367
00:16:54,314 --> 00:16:56,014
<i> like an attractive prospect.</i>

368
00:16:57,983 --> 00:16:59,817
Daniel:
<i> While this was</i>
<i> happening in Cyprus,</i>

369
00:16:59,819 --> 00:17:01,586
<i> regulators</i>
<i> at the U.S. treasury</i>

370
00:17:01,588 --> 00:17:04,222
<i> weighed in on bitcoin.</i>

371
00:17:04,224 --> 00:17:07,692
<i> The financial crimes</i>
<i> enforcement network,</i>
<i> known as fincen,</i>

372
00:17:07,694 --> 00:17:10,762
<i> issued its first</i>
<i> regulatory guidance</i>
<i> on virtual currencies.</i>

373
00:17:11,964 --> 00:17:13,965
<i> The guidance implied</i>
<i> that bitcoin,</i>

374
00:17:13,967 --> 00:17:16,200
<i> in and of itself,</i>
<i> was not illegal.</i>

375
00:17:20,372 --> 00:17:22,573
<i> It was the perfect storm.</i>

376
00:17:22,575 --> 00:17:25,043
<i> The situation</i>
<i> in Cyprus suggested</i>

377
00:17:25,045 --> 00:17:27,912
<i> that bitcoin could function</i>
<i> as a financial safe haven.</i>

378
00:17:27,914 --> 00:17:30,481
<i> And the approving nod</i>
<i> of U.S. regulators</i>

379
00:17:30,483 --> 00:17:32,583
<i> was a green light</i>
<i> for investors.</i>

380
00:17:32,585 --> 00:17:34,252
<i> The market agreed</i>

381
00:17:34,254 --> 00:17:36,421
<i> and the exchange</i>
<i> price continued to climb.</i>

382
00:17:36,423 --> 00:17:38,656
( Beeps )

383
00:17:38,658 --> 00:17:41,926
It's moving from the super
super-early-adopter phase

384
00:17:41,928 --> 00:17:43,661
to possibly
the early-adopter phase.

385
00:17:43,663 --> 00:17:44,962
Daniel:
<i> Bitcoin was getting </i>

386
00:17:44,964 --> 00:17:46,664
<i> international exposure</i>

387
00:17:46,666 --> 00:17:48,633
<i> and people were starting</i>
<i> to pay attention.</i>

388
00:17:51,303 --> 00:17:55,473
<i> This is actually a live,</i>
<i> updated map of the globe</i>

389
00:17:55,475 --> 00:17:59,343
<i> and the lines represent</i>
<i> bitcoin clients.</i>

390
00:17:59,345 --> 00:18:01,646
<i> Basically where the bitcoin</i>
<i> software is running.</i>

391
00:18:01,648 --> 00:18:05,483
And the length
of the line determines

392
00:18:05,485 --> 00:18:07,819
how long it's been online
or how active it's been.

393
00:18:07,821 --> 00:18:09,654
And every time
I look at this,

394
00:18:09,656 --> 00:18:11,923
I swear it gets more
and more saturated.

395
00:18:11,925 --> 00:18:14,258
You can almost see
an outline of the U.S. now.

396
00:18:14,260 --> 00:18:16,260
South America--
you're starting to get it.

397
00:18:16,262 --> 00:18:18,029
But the big news,
in my opinion,

398
00:18:18,031 --> 00:18:19,864
<i> is this-- China.</i>

399
00:18:19,866 --> 00:18:23,301
<i> You used to see one,</i>
<i> two, three, maybe.</i>

400
00:18:23,303 --> 00:18:27,638
<i> And this is all within</i>
<i> the last three weeks or so.</i>

401
00:18:27,640 --> 00:18:30,007
<i> That's the most</i>
<i> I've ever seen in China.</i>

402
00:18:30,009 --> 00:18:32,176
Look down here.
Indonesia, Singapore,

403
00:18:32,178 --> 00:18:33,744
Australia, New Zealand.

404
00:18:41,286 --> 00:18:44,255
<i> The following week</i>
<i> it snowed in pittsburg.</i>

405
00:18:44,257 --> 00:18:47,725
<i> I was eagerly</i>
<i> awaiting the delivery</i>
<i> of two avalon asics,</i>

406
00:18:47,727 --> 00:18:49,494
<i> state of the art computers</i>

407
00:18:49,496 --> 00:18:52,597
<i> with chips</i>
<i> specifically designed</i>
<i> for mining bitcoins.</i>

408
00:18:52,599 --> 00:18:54,298
<i> Yifu guo is</i>
<i> at the forefront</i>

409
00:18:54,300 --> 00:18:56,267
<i> of the new generation</i>
<i> of hardware,</i>

410
00:18:56,269 --> 00:18:57,735
<i> and is the first</i>
<i> to bring them to market.</i>

411
00:18:57,737 --> 00:18:59,670
Everybody,
including myself,

412
00:18:59,672 --> 00:19:00,972
had severely
underestimated

413
00:19:00,974 --> 00:19:02,907
the mining market
and how big it is.

414
00:19:02,909 --> 00:19:04,275
Daniel:
<i> When bitcoin began,</i>

415
00:19:04,277 --> 00:19:06,410
<i> a standard laptop</i>
<i> was powerful enough</i>

416
00:19:06,412 --> 00:19:09,113
<i> to mine hundreds of bitcoins</i>
<i> in a matter of days.</i>

417
00:19:09,115 --> 00:19:12,817
<i> The technology evolved rapidly</i>
<i> over the past couple of years.</i>

418
00:19:12,819 --> 00:19:14,652
A lot of people
are getting into it

419
00:19:14,654 --> 00:19:16,154
or still trying
to catch up.

420
00:19:18,957 --> 00:19:20,992
Daniel:
<i> I was on vacation</i>
<i> with my family</i>

421
00:19:20,994 --> 00:19:23,161
<i> when the new miners were</i>
<i> scheduled to arrive.</i>

422
00:19:23,163 --> 00:19:26,430
<i> The price of bitcoin</i>
<i> had rocketed to $77</i>

423
00:19:26,432 --> 00:19:28,966
<i> so I asked some friends</i>
<i> to wait at my house</i>

424
00:19:28,968 --> 00:19:30,501
<i> to get them running</i>
<i> as soon as possible.</i>

425
00:19:30,503 --> 00:19:34,138
Mancini:
<i> All right!</i>
<i> ( Laughs )</i>

426
00:19:34,140 --> 00:19:36,474
- I hope this is good.
I hope it's worthwhile.
- Oh, definitely.

427
00:19:37,943 --> 00:19:39,477
These are
new computer parts here...

428
00:19:39,479 --> 00:19:41,445
- Excellent, excellent.
- ...Fresh in from China.

429
00:19:41,447 --> 00:19:44,315
- ( Laughs )
- All right, it's not
official until you sign.

430
00:19:44,317 --> 00:19:46,017
There we go.

431
00:19:48,287 --> 00:19:50,421
Nick:
<i> Yeah, we'll see.</i>
<i> Maybe down the road</i>

432
00:19:50,423 --> 00:19:51,956
<i> you guys will start</i>
<i> accepting bitcoin</i>
<i> one day, I bet.</i>

433
00:19:51,958 --> 00:19:53,591
- That's cool.
-<i> Just a matter of time.</i>

434
00:19:53,593 --> 00:19:55,193
Driver:
<i> Good luck to you guys.</i>
<i> All right.</i>

435
00:19:56,728 --> 00:19:57,929
Mancini:
<i> I notified Dan</i>

436
00:19:57,931 --> 00:19:59,063
<i> and he has</i>
<i> a little response here.</i>

437
00:20:11,376 --> 00:20:13,511
Welcome to
the financial renaissance.

438
00:20:14,746 --> 00:20:16,781
192.168.1.140.

439
00:20:16,783 --> 00:20:18,683
255.255.255.0.

440
00:20:18,685 --> 00:20:20,685
192.168.1.1.

441
00:20:20,687 --> 00:20:22,520
That's the default gateway.

442
00:20:22,522 --> 00:20:26,591
My first pull is gonna be
stratum.Ozc.In, port 3333.

443
00:20:26,593 --> 00:20:29,026
Port 80,
but I can do 3333.

444
00:20:29,028 --> 00:20:31,596
<i> And when everything's all</i>
<i> said and done, for at least</i>
<i> a little while,</i>

445
00:20:31,598 --> 00:20:34,932
it should be pulling in
10 to 12 coins a day.

446
00:20:34,934 --> 00:20:37,368
That's gonna change though,
after another week.

447
00:20:37,370 --> 00:20:39,303
It's gonna get
dropped down to, like, eight,

448
00:20:39,305 --> 00:20:41,606
- just because the difficulty's
just going through the roof.
- Yeah.

449
00:20:41,608 --> 00:20:43,040
Everybody's firing
these things up,

450
00:20:43,042 --> 00:20:44,742
so it's always
a race to stay ahead

451
00:20:44,744 --> 00:20:48,112
<i> and try to be the first guy</i>
<i> with the hardware, you know?</i>

452
00:20:48,114 --> 00:20:50,214
Oh, I'm getting pings.
Whoo!

453
00:20:50,216 --> 00:20:51,916
Mancini:
<i> Yup, we're kicking.</i>

454
00:20:51,918 --> 00:20:53,317
We are accepting shares.

455
00:20:53,319 --> 00:20:54,418
It is live.

456
00:20:54,420 --> 00:20:56,754
<i> We've got the Merlot!</i>

457
00:20:56,756 --> 00:20:58,723
( Both laugh )

458
00:20:58,725 --> 00:21:01,993
( Mumbles )

459
00:21:03,829 --> 00:21:05,463
<i> Hey, that looks</i>
<i> like johan.</i>

460
00:21:05,465 --> 00:21:08,633
Say, "I'm going
to college 'cause
my dad mines bitcoins."

461
00:21:08,635 --> 00:21:11,435
Dad going bitcoins.

462
00:21:11,437 --> 00:21:13,037
( Laughs )

463
00:21:17,676 --> 00:21:20,311
Nick:
<i> So, big day today, huh?</i>

464
00:21:20,313 --> 00:21:22,847
Big day.
Look at that. 104.

465
00:21:22,849 --> 00:21:25,182
Current bitcoin price.
Broke 100 today.

466
00:21:25,184 --> 00:21:28,819
It is April fool's day.

467
00:21:28,821 --> 00:21:32,089
The price rising
so insanely high

468
00:21:32,091 --> 00:21:34,425
is kind of
a little bit unprecedented,

469
00:21:34,427 --> 00:21:37,628
so-- I mean, it's bound
to pop a little bit.

470
00:21:37,630 --> 00:21:39,730
Maybe.
I don't know.

471
00:21:39,732 --> 00:21:41,932
Maybe it'll be at 225
in a week and a half,

472
00:21:41,934 --> 00:21:45,236
so who knows?
Bitcoin styles--

473
00:21:45,238 --> 00:21:47,038
could go up,
could go down.

474
00:21:53,412 --> 00:21:55,146
Daniel:
<i> As the price passed 100,</i>

475
00:21:55,148 --> 00:21:57,648
<i> we took a trip to visit</i>
<i> Gavin andresen.</i>

476
00:21:59,451 --> 00:22:01,919
<i> He is known to have</i>
<i> worked closely with satoshi</i>

477
00:22:01,921 --> 00:22:03,321
<i> during bitcoin's early days.</i>

478
00:22:10,996 --> 00:22:12,763
Here's the train tracks,
and he did say

479
00:22:12,765 --> 00:22:14,565
there would be train tracks
maybe passing through.

480
00:22:17,402 --> 00:22:19,470
Here we go.
This is Gavin's house.

481
00:22:25,477 --> 00:22:27,078
<i> Gavin is one</i>
<i> of the last people</i>

482
00:22:27,080 --> 00:22:29,447
<i> to communicate with satoshi</i>
<i> before he disappeared.</i>

483
00:22:32,617 --> 00:22:36,087
Morning.
This is my brother Nick

484
00:22:36,089 --> 00:22:38,122
- and his wife Ashley.
- Nice to meet you.

485
00:22:38,124 --> 00:22:39,623
- Ashley:
<i> Hi, nice to meet you. </i>
- Nice to meet you.

486
00:22:39,625 --> 00:22:41,926
- Daniel: Found the place
okay, so--
- good.

487
00:22:41,928 --> 00:22:44,128
We're very excited
to be here.

488
00:22:44,130 --> 00:22:46,263
Come in.
This is my humble house.

489
00:22:46,265 --> 00:22:49,333
-<i> ( Door closes ) </i>
- That's where I work.
This is where I live.

490
00:22:52,471 --> 00:22:55,406
- Beautiful home.
- Well, thanks.

491
00:22:55,408 --> 00:22:57,975
Nick:
<i> A little higher, please.</i>
<i> Right there. </i> Great.

492
00:22:57,977 --> 00:23:00,077
-<i> Got it. </i>
- ( Daniel chuckles )

493
00:23:00,079 --> 00:23:02,313
<i> How did you first</i>
<i> get into bitcoin?</i>

494
00:23:02,315 --> 00:23:04,248
<i> Tell us a little bit</i>
<i> of the story of how</i>
<i> you got involved.</i>

495
00:23:04,250 --> 00:23:06,484
I had been working at umass

496
00:23:06,486 --> 00:23:07,818
as a staff programmer

497
00:23:07,820 --> 00:23:09,153
in the computer science

498
00:23:09,155 --> 00:23:10,654
department research group.

499
00:23:10,656 --> 00:23:12,990
<i> My wife's</i>
<i> a Professor at umass.</i>

500
00:23:12,992 --> 00:23:14,792
<i> I actually quit</i>
<i> that job before going</i>

501
00:23:14,794 --> 00:23:17,228
<i> on a six-month sabbatical</i>
<i> in Australia.</i>

502
00:23:17,230 --> 00:23:19,997
I just happened
to read a little blurb

503
00:23:19,999 --> 00:23:22,133
<i> online in somebody's blog</i>

504
00:23:22,135 --> 00:23:24,268
that mentioned
this bitcoin project,

505
00:23:24,270 --> 00:23:27,037
which is an open-source
attempt to do money.

506
00:23:27,039 --> 00:23:29,039
And it caught my interest.

507
00:23:29,041 --> 00:23:32,943
<i> I basically</i>
<i> just spent a few days</i>

508
00:23:32,945 --> 00:23:34,945
<i> read everything</i>
<i> I could about it</i>

509
00:23:34,947 --> 00:23:37,348
<i> looked at the source code,</i>
<i> downloaded the source code,</i>

510
00:23:37,350 --> 00:23:40,050
thought about it
and I really couldn't
convince myself

511
00:23:40,052 --> 00:23:41,919
that it would not work.

512
00:23:41,921 --> 00:23:43,854
<i> It seemed like satoshi</i>
<i> had thought of everything.</i>

513
00:23:45,424 --> 00:23:46,657
Since then...

514
00:23:48,126 --> 00:23:50,261
I've just been sucked down
the rabbit hole.

515
00:23:50,263 --> 00:23:53,030
Daniel:
<i> Bitcoin is</i>
<i> open-source software.</i>

516
00:23:53,032 --> 00:23:54,632
<i> With open-source software,</i>

517
00:23:54,634 --> 00:23:56,400
<i> the code is</i>
<i> publicly available.</i>

518
00:23:56,402 --> 00:23:59,103
<i> Anyone can look at it</i>
<i> and see how it runs.</i>

519
00:23:59,105 --> 00:24:01,639
<i> And they can also contribute</i>
<i> their own changes.</i>

520
00:24:01,641 --> 00:24:05,276
<i> Programmers like Gavin</i>
<i> were able to join satoshi</i>
<i> to work on bitcoin</i>

521
00:24:05,278 --> 00:24:07,278
<i> simply because</i>
<i> they were interested.</i>

522
00:24:07,280 --> 00:24:10,748
Over time, I think
satoshi learned to trust me.

523
00:24:10,750 --> 00:24:14,118
<i> He could see</i>
<i> that I didn't make</i>
<i> very many stupid mistakes.</i>

524
00:24:14,120 --> 00:24:16,720
I never had any personal
connection with satoshi.

525
00:24:16,722 --> 00:24:18,489
It was always
purely business.

526
00:24:18,491 --> 00:24:21,225
And I think that's because
he was so worried about

527
00:24:21,227 --> 00:24:22,960
people finding out
his identity.

528
00:24:22,962 --> 00:24:26,564
I don't know why.
My last email to him

529
00:24:26,566 --> 00:24:28,265
was telling him that I had

530
00:24:28,267 --> 00:24:30,734
agreed to go visit
the folks at the c.I.A.,

531
00:24:30,736 --> 00:24:32,736
so... ( Laughs )

532
00:24:32,738 --> 00:24:34,472
Whether that had something
to do with him

533
00:24:34,474 --> 00:24:37,174
deciding to cut off
communication with me
entirely--

534
00:24:37,176 --> 00:24:39,510
<i> he had been</i>
<i> pulling away before then,</i>

535
00:24:39,512 --> 00:24:42,580
but the c.I.A. Invited me
to come talk at the c.I.A.

536
00:24:42,582 --> 00:24:44,348
And I agreed to do that.

537
00:24:46,117 --> 00:24:47,651
Daniel:
<i> Knowing it would surely spark</i>

538
00:24:47,653 --> 00:24:50,120
<i> conspiracy theories,</i>
<i> Gavin posted an announcement</i>

539
00:24:50,122 --> 00:24:52,122
<i> on the bitcoin talk</i>
<i> discussion forum</i>

540
00:24:52,124 --> 00:24:53,691
<i> to head off any rumors.</i>

541
00:25:01,366 --> 00:25:03,467
<i> Having taken on</i>
<i> the lead developer position</i>

542
00:25:03,469 --> 00:25:05,636
<i> since satoshi's</i>
<i> disappearance,</i>

543
00:25:05,638 --> 00:25:08,939
<i> Gavin found himself</i>
<i> facing an increasing number</i>
<i> of responsibilities</i>

544
00:25:08,941 --> 00:25:10,608
<i> and public scrutiny.</i>

545
00:25:10,610 --> 00:25:13,043
Do your neighbors
know that you're kind of
at the center

546
00:25:13,045 --> 00:25:15,913
of one of the most
disruptive technologies?

547
00:25:15,915 --> 00:25:20,050
I think-- I think
they know that I do
this wacky bitcoin project.

548
00:25:21,953 --> 00:25:24,588
I don't think they know
quite how big it is yet.

549
00:25:24,590 --> 00:25:26,624
Right now,

550
00:25:26,626 --> 00:25:29,393
bitcoin's
a billion-dollar project.

551
00:25:29,395 --> 00:25:31,896
<i> When I started it was</i>
<i> this tiny little experiment.</i>

552
00:25:31,898 --> 00:25:33,931
And as it gets bigger,

553
00:25:33,933 --> 00:25:37,134
the pressure
to not screw up

554
00:25:37,136 --> 00:25:39,503
just gets
bigger and bigger.

555
00:25:43,808 --> 00:25:45,075
Daniel:
<i> Two weeks later</i>

556
00:25:45,077 --> 00:25:47,144
<i> the price soared past 150.</i>

557
00:25:47,146 --> 00:25:48,913
<i> And some bitcoiners woke up</i>

558
00:25:48,915 --> 00:25:51,415
<i> to find out they were</i>
<i> bitcoin millionaires.</i>

559
00:25:51,417 --> 00:25:53,284
<i> 23-year-old Charlie shrem</i>

560
00:25:53,286 --> 00:25:55,920
<i> is the c.E.O. Of a company</i>
<i> called bitinstant.</i>

561
00:25:55,922 --> 00:26:00,090
<i> Bitinstant was one</i>
<i> of the first startups</i>
<i> in the bitcoin space.</i>

562
00:26:00,092 --> 00:26:02,259
<i> In bitcoin's infancy,</i>
<i> people had to jump</i>

563
00:26:02,261 --> 00:26:04,261
<i> through several hoops</i>
<i> to buy them.</i>

564
00:26:04,263 --> 00:26:05,729
<i> One of the only ways</i>

565
00:26:05,731 --> 00:26:07,431
<i> was through</i>
<i> the mt. Gox exchange,</i>

566
00:26:07,433 --> 00:26:09,466
<i> but this process required</i>
<i> transferring money</i>

567
00:26:09,468 --> 00:26:10,801
<i> through several</i>
<i> intermediaries</i>

568
00:26:10,803 --> 00:26:12,770
<i> and could take weeks.</i>

569
00:26:12,772 --> 00:26:15,973
<i> Charlie launched bitinstant</i>
<i> to streamline this process.</i>

570
00:26:15,975 --> 00:26:18,709
<i> And to help people buy</i>
<i> bitcoins quickly.</i>

571
00:26:18,711 --> 00:26:21,078
- Man:<i> Yeah,</i>
<i> that's good. That's great. </i>
-<i> ( Camera beeping )</i>

572
00:26:21,080 --> 00:26:22,746
-<i> That's pretty nice. </i>
- You go like that.

573
00:26:22,748 --> 00:26:24,481
<i> Yeah, sure.</i>

574
00:26:24,483 --> 00:26:26,150
Daniel:
<i> Today Charlie is</i>
<i> being photographed</i>

575
00:26:26,152 --> 00:26:27,885
<i> for an article</i>
<i> in "businessweek."</i>

576
00:26:27,887 --> 00:26:29,587
Man:
<i> One of the ideas they had</i>

577
00:26:29,589 --> 00:26:31,488
<i> was that you're going--</i>
<i> throwing stuff up in the air</i>

578
00:26:31,490 --> 00:26:33,524
<i> and they were gonna add</i>
<i> bitcoins in later on.</i>

579
00:26:33,526 --> 00:26:35,259
- Going like that?
-<i> Yeah.</i>

580
00:26:35,261 --> 00:26:38,929
Shrem:
<i> This bitcoin thing</i>
<i> can actually change the world.</i>

581
00:26:38,931 --> 00:26:41,098
<i> But for this thing</i>
<i> to succeed,</i>

582
00:26:41,100 --> 00:26:42,700
we have to figure out
a way to get more money

583
00:26:42,702 --> 00:26:44,735
in and out
of the ecosystem.

584
00:26:44,737 --> 00:26:47,705
Look out the window a bit.
Totally-- yeah.

585
00:26:47,707 --> 00:26:49,406
Then you can look--
yeah, that's good.

586
00:26:49,408 --> 00:26:51,508
And not show that
I'm super stressed out
right now

587
00:26:51,510 --> 00:26:54,244
and we have thousands of orders
that are being processed

588
00:26:54,246 --> 00:26:56,947
and I'm bugging out,
trying to get the new
site launched.

589
00:26:56,949 --> 00:26:59,183
-<i> No, don't look like that. </i>
- It's crazy.

590
00:26:59,185 --> 00:27:00,918
I'm trying not to,
but it's really hard.

591
00:27:06,024 --> 00:27:07,992
Shrem:
<i> Things have been insane.</i>

592
00:27:09,094 --> 00:27:10,728
<i> ( Mouse clicking )</i>

593
00:27:10,730 --> 00:27:13,764
<i> I haven't slept in days.</i>

594
00:27:13,766 --> 00:27:15,866
<i> The price is just rising,</i>
<i> so a lot of people</i>

595
00:27:15,868 --> 00:27:17,001
<i> are putting</i>
<i> money into it.</i>

596
00:27:18,470 --> 00:27:19,970
Daniel:
<i> Normally, Charlie can</i>
<i> get bitcoins</i>

597
00:27:19,972 --> 00:27:22,239
<i> to his customers</i>
<i> in about an hour.</i>

598
00:27:22,241 --> 00:27:23,774
<i> But with the recent flood</i>
<i> of people</i>

599
00:27:23,776 --> 00:27:25,442
<i> trying</i>
<i> to purchase bitcoins,</i>

600
00:27:25,444 --> 00:27:28,946
<i> bitinstant can't fill</i>
<i> their orders fast enough.</i>

601
00:27:28,948 --> 00:27:31,749
When I pulled up our
customer service interface,

602
00:27:31,751 --> 00:27:34,418
<i> we have close</i>
<i> to 2,000 open tickets.</i>

603
00:27:34,420 --> 00:27:37,321
And that's just
from Saturday to this morning.

604
00:27:37,323 --> 00:27:38,622
Nobody was ready

605
00:27:38,624 --> 00:27:39,757
for this kind
of volume,

606
00:27:39,759 --> 00:27:42,426
so we're trying
to catch up

607
00:27:42,428 --> 00:27:45,396
with the volume
and keep everybody happy.

608
00:27:45,398 --> 00:27:47,464
Man on phone:
<i> Can you just sort of</i>
<i> describe quickly</i>

609
00:27:47,466 --> 00:27:50,734
<i> what the last week or so</i>
<i> has been like for you guys?</i>

610
00:27:50,736 --> 00:27:53,604
The last week or so saw
our support staff

611
00:27:53,606 --> 00:27:55,639
go from two people
to five people.

612
00:27:55,641 --> 00:27:56,740
When someone
offers you

613
00:27:56,742 --> 00:27:57,941
a seat
on the rocket,

614
00:27:57,943 --> 00:27:59,309
you don't ask
where the seat is.

615
00:27:59,311 --> 00:28:00,978
You just
get on the rocket.

616
00:28:00,980 --> 00:28:04,481
Further, our volume has
basically tripled

617
00:28:04,483 --> 00:28:06,750
in the past two weeks,

618
00:28:06,752 --> 00:28:09,219
<i> going from a few hundred</i>
<i> transactions a day</i>

619
00:28:09,221 --> 00:28:12,289
to now two, three thousand
transactions a day.

620
00:28:12,291 --> 00:28:13,791
- Nick:<i> You just came</i>
<i> onboard here, right? </i>
- Yeah, I did.

621
00:28:13,793 --> 00:28:15,959
Actually, today is
kinda my first day.

622
00:28:15,961 --> 00:28:17,561
-<i> Oh really? </i>
- Yeah.

623
00:28:17,563 --> 00:28:19,430
<i> How does it feel to be</i>
<i> a part of all this madness?</i>

624
00:28:19,432 --> 00:28:21,899
Um, well, madness, yeah.

625
00:28:21,901 --> 00:28:23,967
<i> It's overwhelming.</i>

626
00:28:23,969 --> 00:28:26,070
<i> And what do you do</i>
<i> for bitinstant?</i>

627
00:28:26,072 --> 00:28:28,038
I'm the c.F.O.
( Chuckles )

628
00:28:28,040 --> 00:28:30,441
Man on phone:
<i> Can you give me</i>
<i> a daily estimate</i>

629
00:28:30,443 --> 00:28:32,609
<i> of how much</i>
<i> money you're moving</i>
<i> through your system?</i>

630
00:28:32,611 --> 00:28:34,712
Um, it's in the--

631
00:28:34,714 --> 00:28:37,047
in the six figures
every day.

632
00:28:37,049 --> 00:28:38,515
<i> All right.</i>
<i> Well, thanks, Charlie.</i>

633
00:28:38,517 --> 00:28:40,451
-<i> I really appreciate it. </i>
- Thank you.

634
00:28:40,453 --> 00:28:44,088
<i> I don't know how</i>
<i> the government will</i>
<i> react to bitcoin,</i>

635
00:28:44,090 --> 00:28:47,291
<i> but I spend thousands</i>
<i>of dollars on lawyers every day</i>

636
00:28:47,293 --> 00:28:49,126
<i> just to make sure that</i>
<i> I'm not gonna go to jail.</i>

637
00:28:51,096 --> 00:28:53,697
It's super terrifying.
I mean, I don't wanna
go to jail.

638
00:28:53,699 --> 00:28:55,799
( Stammers )

639
00:28:55,801 --> 00:28:57,301
I don't wanna become
a martyr either.

640
00:29:06,277 --> 00:29:09,113
( People chattering )

641
00:29:09,115 --> 00:29:11,248
Daniel:
<i> Bitcoin was the talk</i>
<i> of the town.</i>

642
00:29:11,250 --> 00:29:13,150
<i> Charlie was</i>
<i> in the limelight</i>

643
00:29:13,152 --> 00:29:15,953
<i> and could barely keep up</i>
<i> with media requests.</i>

644
00:29:15,955 --> 00:29:19,089
<i> Within hours,</i>
<i> the price passed $200.</i>

645
00:29:25,130 --> 00:29:26,563
Shrem:
<i> First day of spring,</i>

646
00:29:26,565 --> 00:29:28,198
<i> first day</i>
<i> bitcoin is over 200.</i>

647
00:29:28,200 --> 00:29:29,633
<i> The start of a new era.</i>

648
00:29:29,635 --> 00:29:30,968
Nick:
<i> Hi. Nice to meet you.</i>

649
00:29:30,970 --> 00:29:32,703
I'm the nice
warm loving mom

650
00:29:32,705 --> 00:29:35,072
that makes him
live at home.

651
00:29:35,074 --> 00:29:39,209
'Cause we can't--
we can't part from him yet.

652
00:29:39,211 --> 00:29:40,778
( Laughter )

653
00:29:40,780 --> 00:29:43,080
Mother:
<i> We love him too much.</i>

654
00:29:43,082 --> 00:29:44,915
This is where
it all started

655
00:29:44,917 --> 00:29:46,150
and this is where
it still goes down.

656
00:29:47,886 --> 00:29:50,420
I've been collecting money
from all over the world.

657
00:29:50,422 --> 00:29:52,556
And it's just something
I did way before bitcoin.

658
00:29:52,558 --> 00:29:54,024
I've been doing it
since I was a kid.

659
00:29:54,026 --> 00:29:55,893
So it's funny that
I'm collecting all this...

660
00:29:55,895 --> 00:29:57,761
Fiat that's
not worth anything

661
00:29:57,763 --> 00:29:59,930
and then all of a sudden
I get into this bitcoin thing.

662
00:30:01,900 --> 00:30:03,934
<i> I realized</i>
<i> during high school that</i>

663
00:30:03,936 --> 00:30:06,203
<i> I could never work</i>
<i> for anyone.</i>

664
00:30:06,205 --> 00:30:07,604
<i> I made up a term--</i>

665
00:30:07,606 --> 00:30:09,573
psychologically unemployable.

666
00:30:09,575 --> 00:30:11,842
<i> I started bitinstant</i>
<i> while I was still</i>

667
00:30:11,844 --> 00:30:13,844
<i> in my senior year of college.</i>

668
00:30:13,846 --> 00:30:18,182
<i> Bitcoin currently is</i>
<i> the largest social-</i>
<i> economic experiment</i>

669
00:30:18,184 --> 00:30:20,184
<i> ever conducted</i>
<i> in the history of the world.</i>

670
00:30:20,186 --> 00:30:23,287
<i> 2013, possibly 2014,</i>

671
00:30:23,289 --> 00:30:25,622
<i> will be the two years</i>
<i> that really make </i>
<i> or break bitcoin.</i>

672
00:30:27,859 --> 00:30:30,894
<i> Bitcoin is the first product</i>
<i> that's digital,</i>

673
00:30:30,896 --> 00:30:32,262
<i> but it's also scarce.</i>

674
00:30:35,466 --> 00:30:38,302
<i> I got some good news</i>
<i> last night that</i>

675
00:30:38,304 --> 00:30:40,571
<i> part of our licensing deals</i>
<i> that we've been trying to do</i>

676
00:30:40,573 --> 00:30:42,039
<i> for the past</i>
<i> few months are finally,</i>

677
00:30:42,041 --> 00:30:43,540
<i> hopefully,</i>
<i> coming through.</i>

678
00:30:43,542 --> 00:30:45,809
We got approved
to be licensed

679
00:30:45,811 --> 00:30:48,345
in 30 of the 48 states
in money transmission.

680
00:30:50,281 --> 00:30:52,449
I've been working very hard
on trying to be compliant

681
00:30:52,451 --> 00:30:53,951
in the legal realm

682
00:30:53,953 --> 00:30:56,787
and with fincen's
announcement,

683
00:30:56,789 --> 00:30:59,923
setting up a way
for bitcoin companies
to legally exist,

684
00:30:59,925 --> 00:31:02,292
that really changes
the whole game of bitcoin.

685
00:31:02,294 --> 00:31:06,230
And for us,
it helped us get
that last push

686
00:31:06,232 --> 00:31:07,898
that we needed
from all the banks

687
00:31:07,900 --> 00:31:09,867
and the regulators
to finally, hopefully,

688
00:31:09,869 --> 00:31:11,335
get that licensing
that we need.

689
00:31:14,405 --> 00:31:17,040
Daniel:
<i> Today, Charlie's meeting</i>
<i> with a realtor</i>

690
00:31:17,042 --> 00:31:18,742
<i> to talk about</i>
<i> new office space.</i>

691
00:31:18,744 --> 00:31:20,911
Hi, Charlie,
nice to meet you.

692
00:31:20,913 --> 00:31:22,746
- Hi, I'm Mitch waldman.
How are you?
- A pleasure.

693
00:31:22,748 --> 00:31:25,249
- Got a minute?
- I have 10 minutes for you.

694
00:31:25,251 --> 00:31:27,918
We're-- we're a company
with no boss, essentially.

695
00:31:27,920 --> 00:31:29,553
Everyone has
their responsibilities.

696
00:31:29,555 --> 00:31:31,388
It's just
one big executive board.

697
00:31:31,390 --> 00:31:32,923
- It's just one big
executive board.
- Okay.

698
00:31:32,925 --> 00:31:35,859
If I don't do my job,
these guys are all
gonna yell at me.

699
00:31:35,861 --> 00:31:38,362
-<i> So that's how we do it,</i>
<i> but we get things done. </i>
- Waldman:<i> All right.</i>

700
00:31:38,364 --> 00:31:40,297
We're outgrowing this space,
as you can see here.

701
00:31:40,299 --> 00:31:42,933
- That's a good problem to have.
- Shrem: Yes. ( Sighs )

702
00:31:42,935 --> 00:31:44,935
Now Rachel said
there was a great concern

703
00:31:44,937 --> 00:31:47,070
- about security
in this space.
- Shrem:<i> Yeah.</i>

704
00:31:47,072 --> 00:31:49,673
<i> We're regulated,</i>
<i> so we can't share an office</i>

705
00:31:49,675 --> 00:31:51,675
- with another company
if they have access to us.
- I get that.

706
00:31:51,677 --> 00:31:54,077
<i> Our asset is our software.</i>

707
00:31:54,079 --> 00:31:56,847
Our software is processing
hundreds of thousands
of dollars a day

708
00:31:56,849 --> 00:31:58,448
instantly.
Really quickly.

709
00:31:58,450 --> 00:32:00,684
And that's on-site here?
Or is it in the cloud?

710
00:32:00,686 --> 00:32:02,552
No, this is in the cloud.
It's all in the cloud,
but we monitor--

711
00:32:02,554 --> 00:32:04,288
we have to monitor
everything from here...

712
00:32:04,290 --> 00:32:06,790
- Right.
- ...And debug, fix,
take down, upload more--

713
00:32:06,792 --> 00:32:09,760
- put up more workers.
- We deal with high-volume
data-oriented stuff every day.

714
00:32:09,762 --> 00:32:11,295
Very very sensitive
customer data.

715
00:32:11,297 --> 00:32:13,764
Waldman:
<i> If there were not</i>
<i> a doorman,</i>

716
00:32:13,766 --> 00:32:16,099
at the very least
the space would be
designed in such a manner

717
00:32:16,101 --> 00:32:19,036
that there'd be
a locked reception area.

718
00:32:19,038 --> 00:32:21,204
If we want to pursue
a guard at some point,

719
00:32:21,206 --> 00:32:23,874
we could have them
in that area.

720
00:32:23,876 --> 00:32:25,709
-<i> ( Waldman speaks ) </i>
- I absolutely think

721
00:32:25,711 --> 00:32:28,045
- it will be at some point.
It's just a matter of time.
-<i> Really?</i>

722
00:32:29,280 --> 00:32:30,948
<i> The potential</i>
<i> for theft is huge.</i>

723
00:32:30,950 --> 00:32:33,383
It's like operating
a bank, essentially.

724
00:32:33,385 --> 00:32:34,785
Shrem:
<i> That's pretty much it.</i>

725
00:32:34,787 --> 00:32:36,420
- Gotcha.
- It's basic stuff.

726
00:32:36,422 --> 00:32:38,522
Yup yup. All right.

727
00:32:38,524 --> 00:32:40,123
Any other words for me?

728
00:32:42,694 --> 00:32:44,995
- Okay.
- Are you willing
to handle the task?

729
00:32:48,032 --> 00:32:49,967
- Sign me up, captain.
- ( Laughs )

730
00:32:52,603 --> 00:32:57,007
Daniel:
<i> That night, the price</i>
<i> got as high as $266.</i>

731
00:32:57,009 --> 00:32:59,776
<i> Every major news outlet</i>
<i> had taken notice.</i>

732
00:32:59,778 --> 00:33:01,845
<i> Bitcoin fever was</i>
<i> at an all-time high.</i>

733
00:33:01,847 --> 00:33:03,613
It is getting
a lot of attention.

734
00:33:03,615 --> 00:33:05,682
People are fascinated
by anything that
makes new highs

735
00:33:05,684 --> 00:33:08,085
every day for weeks on end,
which bitcoin has done.

736
00:33:08,087 --> 00:33:09,353
In terms of the total number
of the people

737
00:33:09,355 --> 00:33:11,088
using the currency,
I'm not sure,

738
00:33:11,090 --> 00:33:12,589
but you can say
that there's a huge amount

739
00:33:12,591 --> 00:33:15,492
of fluctuation
in the volume of trading.

740
00:33:15,494 --> 00:33:17,928
Daniel:
<i> And then the price crashed.</i>

741
00:33:23,835 --> 00:33:25,902
<i> Bitcoin lost more</i>
<i> than half of its value</i>

742
00:33:25,904 --> 00:33:27,537
<i> in six hours.</i>

743
00:33:27,539 --> 00:33:30,207
From craze to crash.

744
00:33:30,209 --> 00:33:33,243
It's the talk of many people
in the blogosphere,

745
00:33:33,245 --> 00:33:36,246
and it's certainly suffering
some growing pains.

746
00:33:36,248 --> 00:33:40,017
The value of the virtual
currency bitcoin has plunged.

747
00:33:40,019 --> 00:33:41,118
It's been
a crazy day today.

748
00:33:41,120 --> 00:33:43,253
I haven't slept
in like 40 hours.

749
00:33:45,857 --> 00:33:48,125
<i> Your order processed.</i>
<i> I don't understand</i>

750
00:33:48,127 --> 00:33:49,526
<i> why we're still having</i>
<i> this conversation.</i>

751
00:33:49,528 --> 00:33:52,062
<i> We refunded your order.</i>
<i> We sent you extra bitcoins.</i>

752
00:33:52,064 --> 00:33:53,397
Man on phone:
<i> I don't care, man.</i>

753
00:33:53,399 --> 00:33:55,565
<i> When it comes to my money,</i>
<i> I don't fuck around.</i>

754
00:33:55,567 --> 00:33:56,900
Shrem:
<i> I know, man.</i>
<i> You need your stuff.</i>

755
00:33:56,902 --> 00:33:58,635
<i> I hear ya, I hear ya.</i>
<i> It processed.</i>

756
00:33:58,637 --> 00:34:00,203
<i> Your bitcoins</i>
<i> are there, man.</i>

757
00:34:02,440 --> 00:34:04,041
Nick:
<i> So, Charlie, what's been</i>
<i> going on today?</i>

758
00:34:04,043 --> 00:34:06,410
-<i> Crazy day, huh? </i>
- Yeah, mt. Gox--

759
00:34:06,412 --> 00:34:09,212
their whole system
pretty much failed

760
00:34:09,214 --> 00:34:11,448
and their whole
trading engine is broken.

761
00:34:11,450 --> 00:34:15,619
Pretty much caused-- almost--
us to shut down for the day.

762
00:34:15,621 --> 00:34:17,754
<i> Further, the bitcoin price</i>
<i> has just been</i>

763
00:34:17,756 --> 00:34:19,056
<i> wildly swinging up and down</i>

764
00:34:19,058 --> 00:34:21,358
it was down $100 today.

765
00:34:21,360 --> 00:34:24,394
It's gaining back up,
but mostly because people
can't buy and sell

766
00:34:24,396 --> 00:34:26,196
and they can't withdraw
and they can't deposit.

767
00:34:26,198 --> 00:34:28,899
'Cause the whole thing
is just-- it's just a Fritz.

768
00:34:28,901 --> 00:34:31,201
So what we're trying
to do is figure out a way

769
00:34:31,203 --> 00:34:33,770
<i> to mitigate orders</i>
<i> somewhere else for now.</i>

770
00:34:33,772 --> 00:34:36,106
Daniel:
<i> With mt. Gox stuck</i>
<i> in a nosedive,</i>

771
00:34:36,108 --> 00:34:39,376
<i> the ripple effect</i>
<i> is creating chaos</i>
<i> in the bitcoin markets.</i>

772
00:34:39,378 --> 00:34:42,012
<i> ( Man mutters )</i>

773
00:34:43,414 --> 00:34:44,848
Shrem:
<i> I'm trying to figure out</i>

774
00:34:44,850 --> 00:34:47,117
<i> why our orders</i>
<i> aren't going through.</i>

775
00:34:47,119 --> 00:34:48,718
Rachel, am I allowed
to take another advil

776
00:34:48,720 --> 00:34:50,554
if I took one
an hour ago?

777
00:34:50,556 --> 00:34:53,623
They've been having problems
ordering anything off of gox.

778
00:34:53,625 --> 00:34:55,859
Yeah, I'm getting a lot
of customers emailing,

779
00:34:55,861 --> 00:34:58,028
saying "it says 'executed,'
but it's not showing
in the blockchain."

780
00:34:58,030 --> 00:34:59,563
Shrem:
<i> Dude, gox suspended trading.</i>

781
00:34:59,565 --> 00:35:00,831
- Really?
- Yeah.

782
00:35:00,833 --> 00:35:02,732
"Orders placed
suspended until 2100."

783
00:35:02,734 --> 00:35:04,167
What time--
what's 2100?

784
00:35:04,169 --> 00:35:06,503
What? That's 9:00 P.M.
oh my God.

785
00:35:06,505 --> 00:35:08,305
( Sighs )

786
00:35:16,914 --> 00:35:18,915
<i> ( People chattering )</i>

787
00:35:20,718 --> 00:35:21,985
If you bought at 150...

788
00:35:23,054 --> 00:35:25,288
And then you're at 260,

789
00:35:25,290 --> 00:35:28,225
and then you watch it
dip down back to 150,

790
00:35:28,227 --> 00:35:30,227
do you panic some?
Yeah, absolutely.

791
00:35:30,229 --> 00:35:32,095
I don't know what a bitcoin is.
I just bought it.

792
00:35:32,097 --> 00:35:33,897
( Exasperated sigh )

793
00:35:33,899 --> 00:35:35,732
Fuck.

794
00:35:35,734 --> 00:35:37,234
You see buy orders,
people buying

795
00:35:37,236 --> 00:35:40,537
and selling
at such a wide range.

796
00:35:40,539 --> 00:35:42,372
It doesn't make
any sense.

797
00:35:42,374 --> 00:35:44,574
Shrem:
<i> The a.P.I. Is just</i>
<i> constantly failing?</i>

798
00:35:44,576 --> 00:35:46,910
<i> Is that what's going on?</i>
<i> Or are we're not getting</i>
<i> any orders.</i>

799
00:35:53,551 --> 00:35:55,919
<i> ( Bird chirping )</i>

800
00:35:55,921 --> 00:35:58,021
Daniel:
<i> Don't care about the price.</i>

801
00:35:58,023 --> 00:35:59,856
Speculators can play
musical chairs

802
00:35:59,858 --> 00:36:01,558
all day long
for all I care.

803
00:36:01,560 --> 00:36:03,660
I'm-I'm-- I'm long.

804
00:36:05,963 --> 00:36:08,932
<i> I was focused on expanding</i>
<i> my mining operation.</i>

805
00:36:10,868 --> 00:36:13,069
<i> The only people that</i>
<i> are gonna be shaken out</i>

806
00:36:13,071 --> 00:36:14,905
<i> by this drop</i>

807
00:36:14,907 --> 00:36:17,340
<i> are people that</i>
<i> are new to bitcoin.</i>

808
00:36:17,342 --> 00:36:20,177
Here's the avalons,
spinning away,

809
00:36:20,179 --> 00:36:21,711
mining away.

810
00:36:21,713 --> 00:36:23,847
And if everything
goes as planned,

811
00:36:23,849 --> 00:36:25,749
we'll have 18 more
of these guys

812
00:36:25,751 --> 00:36:28,084
<i> in a couple of weeks.</i>

813
00:36:28,086 --> 00:36:30,053
<i> Bitcoin is</i>
<i> a complicated thing.</i>

814
00:36:30,055 --> 00:36:31,588
You have to spend
some time looking into it

815
00:36:31,590 --> 00:36:33,557
and understanding it
before you really care.

816
00:36:33,559 --> 00:36:36,092
Now there's droves
of people that--

817
00:36:36,094 --> 00:36:38,028
you know, are giving it more
than just that glance,

818
00:36:38,030 --> 00:36:40,230
because the price
has gone so high.

819
00:36:40,232 --> 00:36:43,066
And they have
dollar signs in their eyes
like Uncle scrooge.

820
00:36:43,068 --> 00:36:45,335
<i> It's so much more than that,</i>

821
00:36:45,337 --> 00:36:47,337
<i> and I think that's why</i>
<i> the people who are mining</i>

822
00:36:47,339 --> 00:36:49,072
<i> and the people</i>
<i> who believe in it</i>

823
00:36:49,074 --> 00:36:50,674
<i> are just</i>
<i> kind of holding strong.</i>

824
00:36:53,878 --> 00:36:56,213
<i> When trading resumed</i>
<i> at mt. Gox,</i>

825
00:36:56,215 --> 00:36:59,416
<i> the price fell</i>
<i> even further, to around $70.</i>

826
00:36:59,418 --> 00:37:01,851
71 on b.T.C.-E.

827
00:37:05,456 --> 00:37:07,357
Yeah, bitcoin--
it's volatile.

828
00:37:07,359 --> 00:37:10,794
It's gonna be a long time
until we have stability.

829
00:37:10,796 --> 00:37:12,062
That's the nature
of the beast.

830
00:37:12,064 --> 00:37:16,199
Price discovery can be
violent and volatile.

831
00:37:16,201 --> 00:37:19,436
There's gonna be a lot
of people that come and go,

832
00:37:19,438 --> 00:37:21,638
and people
that scream wolf.

833
00:37:21,640 --> 00:37:23,406
<i> But at the end of the day,</i>

834
00:37:23,408 --> 00:37:26,243
<i> the only thing</i>
<i> that really kind of</i>
<i> stinks right now</i>

835
00:37:26,245 --> 00:37:28,878
<i> is that everybody is</i>
<i> trading on one platform</i>

836
00:37:28,880 --> 00:37:30,780
that isn't doing
the greatest job, so...

837
00:37:30,782 --> 00:37:34,784
Over time, hopefully
we'll see some more
exchanges pop up

838
00:37:34,786 --> 00:37:36,419
and get
some more options in.

839
00:37:36,421 --> 00:37:38,288
People wanna keep
using bitcoin,

840
00:37:38,290 --> 00:37:40,590
I'm sure the infrastructure
will come.

841
00:37:49,400 --> 00:37:51,401
<i> ( Bird chirping )</i>

842
00:38:01,379 --> 00:38:02,946
It's just gotten
ridiculously busy.

843
00:38:04,515 --> 00:38:06,416
I get an email
every two seconds now

844
00:38:06,418 --> 00:38:09,552
- and pretty much
more email than I--
-<i> ( Lock buzzes )</i>

845
00:38:09,554 --> 00:38:11,521
--Than I can keep up with.

846
00:38:11,523 --> 00:38:14,691
Daniel:
<i> Jered kenna is</i>
<i> the c.E.O. Of tradehill.</i>

847
00:38:14,693 --> 00:38:16,760
<i> The first U.S.-based</i>
<i> bitcoin exchange</i>

848
00:38:16,762 --> 00:38:18,762
<i> to compete with mt. Gox.</i>

849
00:38:18,764 --> 00:38:20,930
<i> He's also on the list</i>
<i> of bitcoin millionaires.</i>

850
00:38:22,433 --> 00:38:24,367
- ( Barks )
- This is finnegan right here.

851
00:38:24,369 --> 00:38:26,369
Guard dog.
Hey, finnegan.

852
00:38:26,371 --> 00:38:28,171
( Mimics growl )

853
00:38:28,173 --> 00:38:30,006
Daniel:
<i> Jered runs tradehill</i>

854
00:38:30,008 --> 00:38:32,042
<i> out of a 41-bedroom</i>
<i> residential hotel</i>

855
00:38:32,044 --> 00:38:34,411
<i> called 20 mission</i>
<i> that he also owns.</i>

856
00:38:34,413 --> 00:38:36,413
( Whirring )

857
00:38:41,419 --> 00:38:44,020
We mostly rent out rooms
to tech people,
startup people.

858
00:38:44,022 --> 00:38:45,522
There's a lot
of bitcoiners.

859
00:38:45,524 --> 00:38:47,190
<i> I actually accept rent</i>
<i> in bitcoin,</i>

860
00:38:47,192 --> 00:38:49,192
which is great,
because we have a lot
of international people.

861
00:38:49,194 --> 00:38:52,095
<i> ( Acoustic guitar playing )</i>

862
00:38:52,097 --> 00:38:54,931
- ¶ Bitcoin! ¶
- ( Laughs )

863
00:38:56,200 --> 00:38:59,769
¶ Came to us
from the cryptogram ¶

864
00:38:59,771 --> 00:39:03,340
¶ it came out of thin air ¶

865
00:39:03,342 --> 00:39:06,710
¶ it saved us
from those nasty dollars ¶

866
00:39:06,712 --> 00:39:08,311
¶ and won and yen ¶

867
00:39:10,281 --> 00:39:12,282
¶ bitcoin. ¶

868
00:39:12,284 --> 00:39:14,384
- that's all I got.
I'm done.
- ( Mutters )

869
00:39:14,386 --> 00:39:15,919
( Laughter )

870
00:39:17,221 --> 00:39:19,089
Digital currency
is gonna happen.

871
00:39:19,091 --> 00:39:21,558
I mean, it's--
it already is
happening,

872
00:39:21,560 --> 00:39:24,594
and it will be
the future,

873
00:39:24,596 --> 00:39:26,363
whether that's now,

874
00:39:26,365 --> 00:39:28,498
10 years from now,
a hundred years from now.

875
00:39:28,500 --> 00:39:30,667
We're going to be using
digital currencies

876
00:39:30,669 --> 00:39:32,635
that don't depend
on fiat government.

877
00:39:32,637 --> 00:39:37,006
Daniel:
<i> Jered originally launched</i>
<i> tradehill about two years ago,</i>

878
00:39:37,008 --> 00:39:38,842
<i> but ran into problems</i>
<i> with a payment processor</i>

879
00:39:38,844 --> 00:39:40,443
<i> and was forced</i>
<i> to shut down.</i>

880
00:39:42,012 --> 00:39:44,047
<i> Recently</i>
<i> he met Ryan singer</i>

881
00:39:44,049 --> 00:39:46,583
<i> and together they are</i>
<i> relaunching the exchange.</i>

882
00:39:46,585 --> 00:39:47,717
The business
we're in is

883
00:39:47,719 --> 00:39:49,185
helping people
speculate, right?

884
00:39:49,187 --> 00:39:50,754
Markets are

885
00:39:50,756 --> 00:39:52,422
price discovery mechanisms.

886
00:39:52,424 --> 00:39:53,690
That's what they're for.

887
00:39:53,692 --> 00:39:55,825
People--
they buy, they sell,

888
00:39:55,827 --> 00:39:57,394
there's the bid,
there's the ask

889
00:39:57,396 --> 00:40:00,363
and the price moves.
And when it levels out,

890
00:40:00,365 --> 00:40:02,265
then that's what
the market price is.

891
00:40:02,267 --> 00:40:04,534
I can't even count the amount
of people that have said,

892
00:40:04,536 --> 00:40:06,069
"bitcoin's not backed
by anything.

893
00:40:06,071 --> 00:40:07,937
At least dollars
are backed by gold."

894
00:40:07,939 --> 00:40:10,240
<i> I've realized that a lot</i>
<i> of people believe that.</i>

895
00:40:11,876 --> 00:40:13,610
<i> My grandfather,</i>
<i> he got me into investing</i>

896
00:40:13,612 --> 00:40:14,944
<i> when I was a kid.</i>
<i> I was five years old.</i>

897
00:40:14,946 --> 00:40:16,780
<i> I could explain a p/e ratio,</i>

898
00:40:16,782 --> 00:40:19,115
<i> and what a bid</i>
<i> and an ask was,</i>

899
00:40:19,117 --> 00:40:20,884
and the difference
between a limit order
and a market order

900
00:40:20,886 --> 00:40:22,285
and all that stuff,
so for me,

901
00:40:22,287 --> 00:40:24,220
I saw this as a way
that the average person

902
00:40:24,222 --> 00:40:25,955
could actually take control
of their finances.

903
00:40:25,957 --> 00:40:28,358
<i> I just grew up</i>
<i> pretty nerdy.</i>

904
00:40:28,360 --> 00:40:31,428
I don't know.
Then like at 15 years old,

905
00:40:31,430 --> 00:40:33,129
I decided I didn't want
to be a nerd anymore,

906
00:40:33,131 --> 00:40:36,366
which was a mistake...
'Cause...

907
00:40:38,102 --> 00:40:39,669
'Cause now I realize
it's pretty awesome.

908
00:40:41,472 --> 00:40:44,073
<i> In 1999</i>
<i> I joined the marines.</i>

909
00:40:44,075 --> 00:40:46,443
<i> I was originally</i>
<i> with an engineering unit.</i>

910
00:40:47,845 --> 00:40:49,712
<i> 2005, I went over</i>
<i> to Afghanistan.</i>

911
00:40:49,714 --> 00:40:52,182
<i> I was mostly working</i>
<i> with the Afghan national army.</i>

912
00:40:52,184 --> 00:40:54,317
<i> It changed me a lot</i>
<i> as a person.</i>

913
00:40:56,987 --> 00:40:58,755
I've always been interested
in economics

914
00:40:58,757 --> 00:41:00,924
and finance and technology
and cryptography.

915
00:41:02,159 --> 00:41:03,927
<i> I was</i>
<i> in a cryptography forum</i>

916
00:41:03,929 --> 00:41:06,095
<i> and somebody I'd never met--</i>
<i> who was anonymously</i>

917
00:41:06,097 --> 00:41:07,597
<i> in this forum</i>
<i> that I was chatting with--</i>

918
00:41:07,599 --> 00:41:09,065
<i> sent me 10,000 bitcoins</i>

919
00:41:09,067 --> 00:41:11,267
<i> just as a way to test</i>
<i> the system out</i>

920
00:41:11,269 --> 00:41:12,836
and see how it worked,
and I got 'em.

921
00:41:12,838 --> 00:41:14,571
I'm like, "that's cool,
but what can I do with them?"

922
00:41:14,573 --> 00:41:17,040
And he said,
"well, nothing yet, but...

923
00:41:17,042 --> 00:41:19,442
If people believe
it has value, it will."

924
00:41:19,444 --> 00:41:22,412
<i> At the time, there was really</i>
<i> only one bitcoin exchange</i>

925
00:41:22,414 --> 00:41:25,014
<i> it was mt. Gox.</i>
<i> I said, "we need</i>
<i> an alternative.</i>

926
00:41:25,016 --> 00:41:27,016
Who cares if the technology
is decentralized

927
00:41:27,018 --> 00:41:28,551
and the method of transfer
is decentralized

928
00:41:28,553 --> 00:41:30,186
and the people are
decentralized

929
00:41:30,188 --> 00:41:32,155
if all the trades are
in the same location?"

930
00:41:32,157 --> 00:41:34,657
<i> I thought that building</i>
<i> another exchange</i>

931
00:41:34,659 --> 00:41:36,092
<i> to give more people</i>
<i> access to bitcoin</i>

932
00:41:36,094 --> 00:41:39,028
<i> would be a key part</i>
<i> of bitcoin's growth.</i>

933
00:41:39,030 --> 00:41:42,098
The day we launched,
we got a quarter-million
dollars in from user deposits.

934
00:41:42,100 --> 00:41:45,368
And we said,
"oh shit, this is--
this is real.

935
00:41:45,370 --> 00:41:46,569
Yeah.

936
00:41:47,605 --> 00:41:49,072
Hey.

937
00:41:50,941 --> 00:41:53,009
We're all fans
of "the big lebowski,"

938
00:41:53,011 --> 00:41:55,445
so we're gonna have
a "big lebowski" party.

939
00:41:55,447 --> 00:41:56,980
Nice!

940
00:41:58,616 --> 00:42:02,085
It's a...
Very exciting day.

941
00:42:02,087 --> 00:42:05,855
<i> 30 gallons of white Russian</i>
<i> and hallway bowling.</i>

942
00:42:05,857 --> 00:42:09,225
- ( Man shouts )
- Yeah!

943
00:42:09,227 --> 00:42:11,594
Kenna:
<i> We work hard,</i>
<i> but we party hard too.</i>

944
00:42:11,596 --> 00:42:14,163
Okay.
Okay, I'm good.

945
00:42:14,165 --> 00:42:16,266
- Woman:<i> All right. </i>
- I'm good. I'm not dead.

946
00:42:16,268 --> 00:42:18,234
<i> - ( Rock music playing )</i>
<i> - ( People chattering )</i>

947
00:42:21,872 --> 00:42:23,673
Yeah, I'm
the first one
in the house...

948
00:42:25,042 --> 00:42:27,844
That opened
a tradehill account.

949
00:42:51,802 --> 00:42:53,403
Woman:
<i> What happened?</i>

950
00:42:55,873 --> 00:42:57,574
In the same day
they went down to 90--

951
00:42:57,576 --> 00:43:00,710
$65 or something,
or $90 a bitcoin.

952
00:43:00,712 --> 00:43:03,947
I stopped smiling.
( Laughs )

953
00:43:12,356 --> 00:43:15,024
Kenna:
<i> Tradehill, round two,</i>
<i> we optimized for success.</i>

954
00:43:15,026 --> 00:43:16,993
<i> We launched expecting</i>
<i> to have to do</i>

955
00:43:16,995 --> 00:43:18,795
hundreds of thousands
of transactions a second.

956
00:43:20,397 --> 00:43:22,599
<i> Right now we've got</i>
<i> about 15 people</i>

957
00:43:22,601 --> 00:43:25,535
<i> in addition to that,</i>
<i> we've got about eight</i>
<i> attorneys externally.</i>

958
00:43:25,537 --> 00:43:27,737
A lot of people are
depositing dollars.

959
00:43:27,739 --> 00:43:29,706
A lot of people
are depositing bitcoin.
We're getting more trading.

960
00:43:29,708 --> 00:43:31,608
We're pushing that
from a business perspective.

961
00:43:31,610 --> 00:43:33,276
<i> Also, we're talking to people</i>

962
00:43:33,278 --> 00:43:35,678
<i> who want to do more automated</i>
<i> trading on our platform.</i>

963
00:43:35,680 --> 00:43:37,747
Get robots trading
against each other.

964
00:43:37,749 --> 00:43:39,082
We've stress tested this

965
00:43:39,084 --> 00:43:43,419
and we can handle about
500 times as much volume

966
00:43:43,421 --> 00:43:45,054
<i> as mt. Gox was seeing.</i>

967
00:43:45,056 --> 00:43:46,956
So we'll see
what happens here.

968
00:43:46,958 --> 00:43:49,892
The interest in us
is pretty crazy.

969
00:43:49,894 --> 00:43:52,729
<i> Just the news</i>
<i> with bitcoin</i>

970
00:43:52,731 --> 00:43:55,398
<i> has really kind</i>
<i> of validated everything.</i>

971
00:43:55,400 --> 00:43:57,600
Now people are like,
"oh, you're not this
crazy person

972
00:43:57,602 --> 00:43:59,736
talking about some
digital made-up currency."

973
00:43:59,738 --> 00:44:02,605
It's like,
"oh, I've read about it
in 'the wall street journal'

974
00:44:02,607 --> 00:44:04,273
and 'the New York times.'
It's real."

975
00:44:04,275 --> 00:44:06,409
Kenna:
<i> We had an investor come in</i>

976
00:44:06,411 --> 00:44:08,311
<i> and he said,</i>
<i> "hey, I really appreciate</i>

977
00:44:08,313 --> 00:44:10,647
<i> your scrappy nature</i>
<i> and how you're hustling,</i>

978
00:44:10,649 --> 00:44:13,383
but I think it's time
for you guys to spend
30 grand a month on rent.

979
00:44:13,385 --> 00:44:15,985
When you have
a billionaire client

980
00:44:15,987 --> 00:44:17,387
and they want to come
check out your office

981
00:44:17,389 --> 00:44:19,589
before they send you
a multi-million dollar wire,

982
00:44:19,591 --> 00:44:21,691
asking them
to walk past pawn shops

983
00:44:21,693 --> 00:44:23,660
- is not always the right feel.
-<i> ( Laughter )</i>

984
00:44:27,731 --> 00:44:30,667
So we're leaving
the mission. We're driving
into soma right now.

985
00:44:30,669 --> 00:44:34,504
We're gonna go
take a look at what
may be our new office space

986
00:44:34,506 --> 00:44:36,906
pretty prestigious address--
one market.

987
00:44:42,680 --> 00:44:45,248
<i> Right now we're trying</i>
<i> to forge this path,</i>

988
00:44:45,250 --> 00:44:47,417
<i> and we're trying to comply</i>
<i> with existing laws</i>

989
00:44:47,419 --> 00:44:49,018
<i> and anticipate</i>
<i> future laws,</i>

990
00:44:49,020 --> 00:44:52,255
<i> which is extremely expensive</i>
<i> and extremely difficult.</i>

991
00:44:52,257 --> 00:44:53,690
- Is there parking here?
- Man:<i> Yes.</i>

992
00:44:53,692 --> 00:44:55,224
Okay, is that
included with--

993
00:44:55,226 --> 00:44:57,160
( chuckles )
Of course.

994
00:44:57,162 --> 00:44:59,562
- Right, what does that--
how much does--
- ( Laughs )

995
00:44:59,564 --> 00:45:00,596
How much does that cost?

996
00:45:03,534 --> 00:45:04,333
That's not terrible.

997
00:45:05,903 --> 00:45:07,437
Whoa.

998
00:45:07,439 --> 00:45:09,338
That's pretty sexy.

999
00:45:12,009 --> 00:45:13,676
Twitter was here
for over a year.

1000
00:45:13,678 --> 00:45:16,145
- Yeah.
- Amazon comes and go
every single year.

1001
00:45:16,147 --> 00:45:18,381
- Oh, fantastic.
- I have Macy's, I have
j.C. Penney.

1002
00:45:18,383 --> 00:45:20,349
All the big ones,
they come over.

1003
00:45:20,351 --> 00:45:21,084
They are part
of the club.

1004
00:45:26,490 --> 00:45:28,224
Kenna:
Sounds good.
We'll be here tomorrow.

1005
00:45:28,226 --> 00:45:29,325
- Picking it up.
- Thank you for the business.

1006
00:45:29,327 --> 00:45:30,259
- Thank you.
- I appreciate it.

1007
00:45:30,261 --> 00:45:32,161
Thanks so much.

1008
00:45:32,163 --> 00:45:33,830
- We move in tomorrow.
- Nick:<i> Just like--</i>

1009
00:45:33,832 --> 00:45:35,398
-<i> just like that, huh? </i>
- Just like that.

1010
00:45:35,400 --> 00:45:36,933
- That's how we roll.
- Nick:<i> It's pretty surprising</i>

1011
00:45:36,935 --> 00:45:38,234
<i> that that deal</i>
<i> just happened so quickly.</i>

1012
00:45:38,236 --> 00:45:39,836
<i> What was it?</i>
<i> You just liked the space</i>

1013
00:45:39,838 --> 00:45:40,970
<i> and decided, "hey,</i>
<i> there's no point in waiting"?</i>

1014
00:45:40,972 --> 00:45:43,039
We like the space,
we like the address.

1015
00:45:43,041 --> 00:45:44,741
We just don't have
the time to spend either.

1016
00:45:44,743 --> 00:45:46,342
We've got all kinds
of important stuff
we're working on

1017
00:45:46,344 --> 00:45:49,011
and if we spend a week
trying to find an office,

1018
00:45:49,013 --> 00:45:50,780
and he and I put
20 hours into it

1019
00:45:50,782 --> 00:45:53,049
or 50 hours into it,
it's a huge waste of time.

1020
00:46:11,869 --> 00:46:14,670
I thought they'd be
in multiple bags

1021
00:46:14,672 --> 00:46:16,739
rather than one big one,
but hey...

1022
00:46:22,479 --> 00:46:26,015
<i> I believe that bitcoin</i>
<i>will do to the banking industry</i>

1023
00:46:26,017 --> 00:46:27,650
what email did
to the postal service.

1024
00:46:28,685 --> 00:46:30,253
<i> It didn't make it irrelevant,</i>

1025
00:46:30,255 --> 00:46:32,889
<i> what it's forced</i>
<i> the post office to do</i>

1026
00:46:32,891 --> 00:46:34,757
<i> is concentrate</i>
<i> on their strengths</i>

1027
00:46:34,759 --> 00:46:37,593
and less so
on their weaknesses.

1028
00:46:37,595 --> 00:46:39,662
Daniel:
<i> Mike Caldwell is the creator</i>

1029
00:46:39,664 --> 00:46:40,730
<i> of physical bitcoins,</i>

1030
00:46:40,732 --> 00:46:42,732
<i> known as casascius coins.</i>

1031
00:46:42,734 --> 00:46:44,267
<i> They're often featured</i>

1032
00:46:44,269 --> 00:46:46,602
<i> in mainstream media</i>
<i> coverage of bitcoin.</i>

1033
00:46:46,604 --> 00:46:48,404
<i> They're a novelty item,</i>

1034
00:46:48,406 --> 00:46:50,106
<i> collectables</i>
<i> that basically act</i>

1035
00:46:50,108 --> 00:46:52,608
<i> as physical carriers</i>
<i> for bitcoins.</i>

1036
00:46:52,610 --> 00:46:54,577
<i> But they do something</i>
<i> very important.</i>

1037
00:46:54,579 --> 00:46:57,413
<i> They give bitcoin a face.</i>

1038
00:46:57,415 --> 00:46:59,115
Come on in.

1039
00:47:01,752 --> 00:47:03,186
Sorry, the kids
are sleeping,

1040
00:47:03,188 --> 00:47:06,122
so I'm just being quiet
so we don't-- you know.

1041
00:47:06,124 --> 00:47:09,158
Daniel:
<i> Each coin has</i>
<i> its own bitcoin address.</i>

1042
00:47:09,160 --> 00:47:11,060
<i> And the private key</i>
<i> required to spend it</i>

1043
00:47:11,062 --> 00:47:13,229
<i> is hidden</i>
<i> underneath the hologram.</i>

1044
00:47:13,231 --> 00:47:15,398
This is where you make
the physical bitcoin.

1045
00:47:15,400 --> 00:47:18,067
Yeah. It's a random
smattering of things,

1046
00:47:18,069 --> 00:47:20,236
but I'm pretty careful
about the way I manage--

1047
00:47:20,238 --> 00:47:21,404
you know, the--

1048
00:47:21,406 --> 00:47:23,406
basically,
this is the credentials.

1049
00:47:23,408 --> 00:47:26,342
This is the hologram
and the private keys.

1050
00:47:26,344 --> 00:47:28,511
I'm pretty careful
about those and don't
keep them here.

1051
00:47:28,513 --> 00:47:30,546
I normally do them
on this mirror

1052
00:47:30,548 --> 00:47:34,183
'cause that helps me get
the fronts and backs right.

1053
00:47:34,185 --> 00:47:37,553
<i> There's so many things</i>
<i> that cryptography</i>
<i> can do for us,</i>

1054
00:47:37,555 --> 00:47:39,722
that if the world
just knew,

1055
00:47:39,724 --> 00:47:42,592
<i> so many social problems</i>
<i> could be solved.</i>

1056
00:47:42,594 --> 00:47:46,963
Cryptography can bring
fairness to elections.

1057
00:47:46,965 --> 00:47:49,966
<i> It's too difficult</i>
<i> for people to understand</i>

1058
00:47:49,968 --> 00:47:53,069
<i> and someone needs</i>
<i> to bridge the gap.</i>

1059
00:47:53,071 --> 00:47:56,339
Daniel:
<i> Right now we're using</i>
<i> bitcoin to send money.</i>

1060
00:47:56,341 --> 00:47:59,175
<i> But many believe it will</i>
<i> revolutionize much more.</i>

1061
00:47:59,177 --> 00:48:02,011
<i> The technology</i>
<i> behind bitcoin</i>

1062
00:48:02,013 --> 00:48:04,513
<i> can be used to build</i>
<i> decentralized systems</i>

1063
00:48:04,515 --> 00:48:06,582
<i> with rules</i>
<i> that can't be cheated.</i>

1064
00:48:13,023 --> 00:48:15,324
Now see, this is
my wife and my space.

1065
00:48:15,326 --> 00:48:16,993
- This is, you know--
- awesome.

1066
00:48:16,995 --> 00:48:18,661
It is what it is.

1067
00:48:18,663 --> 00:48:19,896
<i> The more time goes by,</i>

1068
00:48:19,898 --> 00:48:21,397
<i> the more legitimate</i>
<i> bitcoin gets</i>

1069
00:48:21,399 --> 00:48:23,666
<i> and the more proud I am</i>
<i> to be associated with it.</i>

1070
00:48:23,668 --> 00:48:25,468
Now what does
your wife do?

1071
00:48:25,470 --> 00:48:27,136
She does crafts.

1072
00:48:27,138 --> 00:48:28,671
She's a lot like me.

1073
00:48:28,673 --> 00:48:30,306
We just sit around
and make things all day.

1074
00:48:30,308 --> 00:48:32,575
<i> It's just our obsession.</i>

1075
00:48:32,577 --> 00:48:35,044
No, I'm not a drug dealer.
No, I'm not a criminal.

1076
00:48:35,046 --> 00:48:36,812
No, I'm not a terrorist.

1077
00:48:36,814 --> 00:48:38,180
<i> I believe</i>
<i> in the rule of law.</i>

1078
00:48:38,182 --> 00:48:40,082
I believe in structure
that builds society.

1079
00:48:40,084 --> 00:48:41,384
I believe in families.

1080
00:48:41,386 --> 00:48:42,919
<i> I believe</i>
<i> in corporations.</i>

1081
00:48:42,921 --> 00:48:45,655
<i> I believe in all</i>
<i> the essential elements</i>

1082
00:48:45,657 --> 00:48:48,691
that a civilized society
with law and order

1083
00:48:48,693 --> 00:48:50,426
need to be able
to function.

1084
00:48:50,428 --> 00:48:52,528
Focal length matters.

1085
00:48:52,530 --> 00:48:54,563
( Whirring )

1086
00:48:54,565 --> 00:48:57,500
Cryptography is the basis

1087
00:48:57,502 --> 00:49:00,136
for us being able
to implement the values
we say we believe in.

1088
00:49:03,974 --> 00:49:05,675
Caldwell:
<i> This idea will never die,</i>

1089
00:49:05,677 --> 00:49:09,712
<i> the technology that bitcoin</i>
<i> brought to the forefront.</i>

1090
00:49:09,714 --> 00:49:11,013
The genie is
out of the bottle.

1091
00:49:22,693 --> 00:49:24,660
Daniel:
<i> Since the crash,</i>
<i> the bitcoin price</i>

1092
00:49:24,662 --> 00:49:26,762
<i> has been hovering</i>
<i> around $100.</i>

1093
00:49:28,165 --> 00:49:30,466
<i> Bitcoins seem to have</i>
<i> weathered the storm,</i>

1094
00:49:30,468 --> 00:49:33,803
<i> but there's still</i>
<i> much controversy </i>
<i> surrounding the currency.</i>

1095
00:49:33,805 --> 00:49:36,906
<i> The same cryptography that</i>
<i> insures a user's privacy</i>

1096
00:49:36,908 --> 00:49:39,642
<i> also allows it</i>
<i> to be used anonymously.</i>

1097
00:49:48,819 --> 00:49:51,153
Steve:
<i> My father decided to retire</i>

1098
00:49:51,155 --> 00:49:53,255
<i> and he had an old</i>
<i> failing print shop.</i>

1099
00:49:53,257 --> 00:49:54,924
<i> I basically took it over</i>

1100
00:49:54,926 --> 00:49:56,425
<i> and I converted it</i>
<i> into an Internet place.</i>

1101
00:49:58,061 --> 00:49:59,161
We're the only place
in L.A.

1102
00:49:59,163 --> 00:50:00,496
That supports
bitcoin right now.

1103
00:50:07,237 --> 00:50:09,772
This is
my linux system here.

1104
00:50:09,774 --> 00:50:13,342
It's a system that
also mines for bitcoins.

1105
00:50:13,344 --> 00:50:15,611
<i> Makes about a dollar a day.</i>
<i> I just do it for fun.</i>

1106
00:50:17,180 --> 00:50:18,848
I was really really
into the Internet,

1107
00:50:18,850 --> 00:50:22,251
literally in 1990,
1991, 1992,

1108
00:50:22,253 --> 00:50:24,353
and I had
the hardest time describing

1109
00:50:24,355 --> 00:50:26,522
what the Internet was
to people.

1110
00:50:26,524 --> 00:50:28,824
<i> I would tell people,</i>
<i> "well, it's like this</i>
<i> network of computers.</i>

1111
00:50:28,826 --> 00:50:31,060
And the network
of computers

1112
00:50:31,062 --> 00:50:32,995
can talk with other
networks of computers

1113
00:50:32,997 --> 00:50:34,997
and then you could
exchange information."

1114
00:50:34,999 --> 00:50:37,333
And people would have
no idea what it was.

1115
00:50:37,335 --> 00:50:40,669
- ( Beeps )
-<i> When people ask me</i>
<i> what bitcoin is</i>

1116
00:50:40,671 --> 00:50:42,905
<i> I have the hardest time</i>
<i> describing what it is.</i>

1117
00:50:42,907 --> 00:50:46,042
<i> And I'd surmise it as,</i>
<i> "it's basically money.</i>

1118
00:50:46,044 --> 00:50:47,643
<i> It's basically</i>
<i> an anonymous PayPal.</i>

1119
00:50:49,212 --> 00:50:51,347
<i> It's one of those things</i>
<i> that you have to use</i>

1120
00:50:51,349 --> 00:50:52,882
<i> before you understand.</i>

1121
00:50:54,384 --> 00:50:56,252
<i> Politically, I'm not</i>
<i> a very big fan</i>

1122
00:50:56,254 --> 00:50:58,788
<i> of either the banks</i>
<i> or federal reserve,</i>

1123
00:50:58,790 --> 00:51:00,990
and bitcoin allows me
to get around that.

1124
00:51:00,992 --> 00:51:04,193
One of the programs we support
is a protocol called "Tor."

1125
00:51:04,195 --> 00:51:07,229
And basically what Tor does is
it allows you to communicate

1126
00:51:07,231 --> 00:51:09,165
to a website anonymously.

1127
00:51:09,167 --> 00:51:11,233
<i> Tor is a program</i>
<i> that allows you to get on</i>
<i> the silk road.</i>

1128
00:51:12,569 --> 00:51:14,070
And this is silk road.

1129
00:51:14,072 --> 00:51:17,406
<i> Basically, any drug</i>
<i> you want is available.</i>

1130
00:51:17,408 --> 00:51:19,675
There's a lot of weed.
There's a lot of cocaine.

1131
00:51:19,677 --> 00:51:20,976
<i> There's a lot of ecstasy.</i>

1132
00:51:20,978 --> 00:51:22,978
<i> But there's also</i>
<i> unusual drugs,</i>

1133
00:51:22,980 --> 00:51:24,580
like if you want some sort
of anabolic steroid,

1134
00:51:24,582 --> 00:51:26,816
you can type "steroid."

1135
00:51:26,818 --> 00:51:28,250
You'll get
all the different types

1136
00:51:28,252 --> 00:51:30,019
<i> of steroids</i>
<i> that are available.</i>

1137
00:51:30,021 --> 00:51:32,321
Silk road itself is
not selling the drugs.

1138
00:51:32,323 --> 00:51:34,090
<i> This is basically</i>
<i> a matchmaker</i>

1139
00:51:34,092 --> 00:51:35,658
<i> between buyer and seller.</i>

1140
00:51:35,660 --> 00:51:37,393
Both the buyer and seller
don't know each other.

1141
00:51:37,395 --> 00:51:39,528
Both the buyer
and seller are anonymous.

1142
00:51:39,530 --> 00:51:41,897
<i> It goes</i>
<i> on this web of trust.</i>

1143
00:51:41,899 --> 00:51:44,633
If you want to, let's say,
buy this testosterone,

1144
00:51:44,635 --> 00:51:46,235
<i> you'd click on this.</i>

1145
00:51:47,971 --> 00:51:49,905
He has
99.3 positive feedback

1146
00:51:49,907 --> 00:51:52,408
from more
than 300 transactions.

1147
00:51:52,410 --> 00:51:55,511
So even though the contracts
aren't enforceable by law,

1148
00:51:55,513 --> 00:51:57,680
the reputation system
makes it so that

1149
00:51:57,682 --> 00:52:00,249
the system works
pretty well.

1150
00:52:00,251 --> 00:52:02,318
Oh, there's
a fireworks section now.
I didn't know that.

1151
00:52:03,720 --> 00:52:07,156
<i> Florida I.D.,</i>
<i> 1.88 bitcoins,</i>

1152
00:52:07,158 --> 00:52:10,559
which is around $150,
something like that.

1153
00:52:10,561 --> 00:52:12,962
<i> A forged</i>
<i> auto insurance card,</i>

1154
00:52:12,964 --> 00:52:15,664
<i> forged passport.</i>

1155
00:52:15,666 --> 00:52:17,733
There is over
9,000 entries for drugs.

1156
00:52:19,469 --> 00:52:20,669
That's a lot.

1157
00:52:22,672 --> 00:52:24,273
I would say there's around
maybe five customers

1158
00:52:24,275 --> 00:52:25,875
that know about it
and use it.

1159
00:52:25,877 --> 00:52:27,877
It's a very small percentage
of the people that come in.

1160
00:52:27,879 --> 00:52:29,512
But the people
who do know about it,

1161
00:52:29,514 --> 00:52:31,147
specifically
come here to use it.

1162
00:52:31,149 --> 00:52:34,316
<i> ( Rock music playing )</i>

1163
00:52:34,318 --> 00:52:36,152
<i> What the customers do</i>
<i> with the computers</i>

1164
00:52:36,154 --> 00:52:38,554
<i> is pretty much</i>
<i> their business.</i>

1165
00:52:38,556 --> 00:52:40,856
Another day in the office.

1166
00:52:40,858 --> 00:52:43,826
You gonna do
drug dealing of any sort,

1167
00:52:43,828 --> 00:52:45,127
silk road is
the place to go.

1168
00:52:45,129 --> 00:52:48,297
How many people are
selling cannabis right now?

1169
00:52:48,299 --> 00:52:51,534
<i> It looks like 2,011 people</i>
<i> are selling cannabis.</i>

1170
00:52:51,536 --> 00:52:53,135
They call me
Mr. bitcoin.

1171
00:52:53,137 --> 00:52:55,004
<i> I probably been</i>
<i> dealing drugs</i>

1172
00:52:55,006 --> 00:52:57,540
since I was like 17.

1173
00:52:57,542 --> 00:52:59,909
<i> Right now I'm 26.</i>

1174
00:53:01,411 --> 00:53:03,179
<i> I think of it</i>
<i> as a global thing</i>

1175
00:53:03,181 --> 00:53:04,380
<i> when I'm on the computer.</i>

1176
00:53:04,382 --> 00:53:06,916
<i> I'm doing business</i>
<i> with the world.</i>

1177
00:53:06,918 --> 00:53:08,517
Let's see,
they have blue dream,

1178
00:53:08,519 --> 00:53:11,353
sour diesel,
pineapple thai,

1179
00:53:11,355 --> 00:53:14,390
purple kush,
girl scout cookies.
Purple pays.

1180
00:53:14,392 --> 00:53:16,225
When I first
heard about it,

1181
00:53:16,227 --> 00:53:17,893
I was laughing about it.
It took me a week

1182
00:53:17,895 --> 00:53:19,895
to just even think
about this for real.

1183
00:53:19,897 --> 00:53:21,830
"I can really make money
off the Internet?

1184
00:53:21,832 --> 00:53:23,832
Selling this type
of stuff on the Internet?
You sure about that?"

1185
00:53:26,036 --> 00:53:28,170
This something I probably
may buy right here.

1186
00:53:28,172 --> 00:53:31,307
<i> They have looks like</i>
<i> some good kush.</i>

1187
00:53:31,309 --> 00:53:33,809
<i> And some of these things</i>
<i> only take a day to get here</i>

1188
00:53:33,811 --> 00:53:35,811
<i> with no harassment</i>
<i> from nobody</i>

1189
00:53:35,813 --> 00:53:37,513
instead of just being
on the streets.

1190
00:53:37,515 --> 00:53:39,415
<i> Once you get the hang of it,</i>
<i> it's actually kinda fun</i>

1191
00:53:39,417 --> 00:53:40,950
<i> just looking through</i>
<i> different things.</i>

1192
00:53:42,552 --> 00:53:44,853
"Mr. bitcoin."
I'm running with it.

1193
00:53:44,855 --> 00:53:46,355
I like the name.
You know what I mean?

1194
00:53:46,357 --> 00:53:48,190
I'm not gonna lie.
I get Booty off this.

1195
00:53:48,192 --> 00:53:50,025
I kinda like talking
about this stuff with girls.

1196
00:53:50,027 --> 00:53:52,161
Girls like that shit hot.
( Laughs )

1197
00:53:52,163 --> 00:53:55,364
"Oh, you're street, and you got
a little nerd knowledge?

1198
00:53:55,366 --> 00:53:56,966
This is great."

1199
00:53:58,368 --> 00:54:00,402
<i> I have a lot of bitcoins</i>
<i> saved up already.</i>

1200
00:54:00,404 --> 00:54:02,404
<i> My business is doing good.</i>

1201
00:54:02,406 --> 00:54:05,307
It's a fun way of doing
hustling these days.

1202
00:54:05,309 --> 00:54:07,343
The future brung
a different way to hustle

1203
00:54:07,345 --> 00:54:08,811
and I like it.

1204
00:54:22,058 --> 00:54:24,026
Daniel:
<i> With so many people</i>
<i> using bitcoin</i>

1205
00:54:24,028 --> 00:54:25,828
<i> in so many different ways,</i>

1206
00:54:25,830 --> 00:54:28,230
<i> it's becoming apparent</i>
<i> that it can't be ignored.</i>

1207
00:54:32,902 --> 00:54:34,403
- Let me see
your driver's license.
- Oh sure.

1208
00:54:34,405 --> 00:54:37,139
This stays at the desk
until you leave the building.

1209
00:54:37,141 --> 00:54:39,174
Daniel:
<i> Today I'm visiting fincen,</i>

1210
00:54:39,176 --> 00:54:41,377
<i> a bureau</i>
<i> of the U.S. department</i>
<i> of the treasury.</i>

1211
00:54:41,379 --> 00:54:45,080
<i> Despite having</i>
<i> released guidance</i>
<i> on virtual currencies,</i>

1212
00:54:45,082 --> 00:54:47,549
<i> there's still</i>
<i> a lot of uncertainty</i>
<i> surrounding their outlook</i>

1213
00:54:47,551 --> 00:54:49,718
<i> on the future</i>
<i> of bitcoin regulation.</i>

1214
00:54:49,720 --> 00:54:52,321
Straight ahead
and in the big
fishbowl-looking--

1215
00:54:52,323 --> 00:54:54,356
<i> okay, great.</i>

1216
00:54:54,358 --> 00:54:56,992
<i> ( Beeping )</i>

1217
00:54:56,994 --> 00:54:58,494
I'm not gonna say
we're gonna have

1218
00:54:58,496 --> 00:54:59,828
every answer
for you today,

1219
00:54:59,830 --> 00:55:02,064
but I mean...

1220
00:55:24,220 --> 00:55:26,422
- ( Snapping fingers )
- Ashley:<i> Oh yeah.</i>

1221
00:55:26,424 --> 00:55:27,756
( Laughs )

1222
00:55:30,193 --> 00:55:32,194
Daniel:
<i> Jennifer shasky calvery</i>
<i> came onboard</i>

1223
00:55:32,196 --> 00:55:34,463
<i> as fincen's</i>
<i> director last year.</i>

1224
00:55:34,465 --> 00:55:36,865
<i> During her career,</i>
<i> she spent 15 years</i>

1225
00:55:36,867 --> 00:55:38,667
<i> at the department</i>
<i> of justice</i>

1226
00:55:38,669 --> 00:55:40,469
<i> where she specialized</i>
<i> in fighting money laundering</i>

1227
00:55:40,471 --> 00:55:42,204
<i> and organized crime.</i>

1228
00:55:42,206 --> 00:55:43,672
Virtual currencies
have been on my radar

1229
00:55:43,674 --> 00:55:45,641
for a while,
even prior to coming

1230
00:55:45,643 --> 00:55:48,877
to this position,
because of,

1231
00:55:48,879 --> 00:55:51,313
unfortunately, the abuse
of some of them.

1232
00:55:51,315 --> 00:55:53,048
Bitcoin,
on the other hand,

1233
00:55:53,050 --> 00:55:55,984
is one that really
didn't come on my radar

1234
00:55:55,986 --> 00:55:57,886
probably until
I arrived at fincen.

1235
00:55:57,888 --> 00:55:59,888
<i> Depending on</i>
<i> who you speak to,</i>

1236
00:55:59,890 --> 00:56:01,390
<i> the issuance</i>
<i> of our guidance was</i>

1237
00:56:01,392 --> 00:56:03,892
either the best thing
that ever happened to bitcoin

1238
00:56:03,894 --> 00:56:06,061
or the worst thing that
ever happened to bitcoin.

1239
00:56:06,063 --> 00:56:08,697
<i> Some accusing us</i>
<i> of trying to kill bitcoin</i>

1240
00:56:08,699 --> 00:56:11,667
<i> and others saying that</i>
<i> it somehow legitimized it.</i>

1241
00:56:11,669 --> 00:56:15,337
Of course, neither
of those things I think
is probably true.

1242
00:56:15,339 --> 00:56:17,706
And certainly
neither of those things
was our intent.

1243
00:56:17,708 --> 00:56:21,210
<i> One of the clear lines is</i>
<i> that if you're a consumer</i>

1244
00:56:21,212 --> 00:56:24,146
<i> who's using bitcoins</i>
<i> to buy goods and services,</i>

1245
00:56:24,148 --> 00:56:26,081
<i> the guidance</i>
<i> doesn't pertain to you.</i>

1246
00:56:26,083 --> 00:56:29,017
We're focused more
on the places where we think

1247
00:56:29,019 --> 00:56:32,054
we have risks
to the U.S. financial system

1248
00:56:32,056 --> 00:56:33,889
from money laundering
and terrorist financing.

1249
00:56:33,891 --> 00:56:35,991
And I think
that might be kind of--

1250
00:56:35,993 --> 00:56:39,428
a lot of the bitcoin community
has a little bit of a fear

1251
00:56:39,430 --> 00:56:42,464
that bitcoin
may be characterized

1252
00:56:42,466 --> 00:56:46,368
in a way so as to tie it
to some bad actor ruining it
for everyone,

1253
00:56:46,370 --> 00:56:48,404
<i> when a lot of people that</i>
<i> are interested in bitcoin,</i>

1254
00:56:48,406 --> 00:56:52,107
including myself, see it
as just this technology
that we don't--

1255
00:56:52,109 --> 00:56:54,143
really don't wanna
see it falling

1256
00:56:54,145 --> 00:56:56,044
into the wrong
categorization

1257
00:56:56,046 --> 00:56:58,280
with all the potential
that's there.

1258
00:56:58,282 --> 00:57:02,484
Sure. So that innovation
around bitcoin

1259
00:57:02,486 --> 00:57:05,154
and the virtual economy

1260
00:57:05,156 --> 00:57:08,524
is really one of the more
interesting aspects,

1261
00:57:08,526 --> 00:57:10,859
I think, of this story--
the idea that

1262
00:57:10,861 --> 00:57:14,163
<i> it can be used</i>
<i> to potentially serve</i>

1263
00:57:14,165 --> 00:57:15,964
<i> the unbanked out there,</i>

1264
00:57:15,966 --> 00:57:18,567
<i> just to provide</i>
<i> some really new services</i>

1265
00:57:18,569 --> 00:57:20,602
<i> that are convenient</i>
<i> for consumers.</i>

1266
00:57:20,604 --> 00:57:22,004
The flip side of it
though

1267
00:57:22,006 --> 00:57:24,506
is that to be a part
of the financial system--

1268
00:57:24,508 --> 00:57:27,810
the U.S. financial system,
the global financial system--

1269
00:57:27,812 --> 00:57:29,711
also comes
with some responsibilities.

1270
00:57:29,713 --> 00:57:32,347
And those
responsibilities include

1271
00:57:32,349 --> 00:57:35,617
<i> not allowing</i>
<i> your institution to be used</i>

1272
00:57:35,619 --> 00:57:39,621
by criminals
and by terrorists.

1273
00:57:44,627 --> 00:57:46,195
Daniel:
<i> There's always</i>
<i> been a concern</i>

1274
00:57:46,197 --> 00:57:48,464
<i> that the government might try</i>
<i> to stamp out bitcoin.</i>

1275
00:57:50,400 --> 00:57:53,435
<i> But perhaps they see the risk</i>
<i> of being left behind.</i>

1276
00:57:58,174 --> 00:58:01,276
<i> In may 2013,</i>
<i> the biggest gathering to-date</i>

1277
00:58:01,278 --> 00:58:03,512
<i> of bitcoin enthusiasts</i>
<i> and entrepreneurs</i>

1278
00:58:03,514 --> 00:58:05,781
<i> happened in San Jose,</i>
<i> California.</i>

1279
00:58:05,783 --> 00:58:07,850
Lindsay Holland:
<i> We're at bitcoin 2013.</i>

1280
00:58:07,852 --> 00:58:10,786
It's the inaugural conference
of the bitcoin foundation.

1281
00:58:14,157 --> 00:58:16,825
Roger ver:
<i> Bitcoin is worldwide</i>
<i>and the vast majority of people</i>

1282
00:58:16,827 --> 00:58:19,194
haven't even heard
of bitcoin yet.

1283
00:58:19,196 --> 00:58:21,830
It's more powerful
than every computer

1284
00:58:21,832 --> 00:58:23,565
on the top-500 list
combined.

1285
00:58:25,668 --> 00:58:27,002
It's an awfully
big world,

1286
00:58:27,004 --> 00:58:29,104
an awful lot
of things
could happen.

1287
00:58:29,106 --> 00:58:32,040
<i> Really, we've been</i>
<i> on a roller-coaster ride</i>

1288
00:58:32,042 --> 00:58:35,177
<i> and I expect, at least</i>
<i> for the next few years,</i>

1289
00:58:35,179 --> 00:58:37,746
<i> we're gonna remain</i>
<i> on a roller-coaster ride.</i>

1290
00:58:37,748 --> 00:58:40,249
I happen to enjoy
roller coasters.

1291
00:58:40,251 --> 00:58:42,084
- I think they're fun.
- ( Applause )

1292
00:58:43,453 --> 00:58:44,620
Daniel:
<i> Just a few weeks earlier</i>

1293
00:58:44,622 --> 00:58:46,255
<i> Cameron and Tyler winklevoss,</i>

1294
00:58:46,257 --> 00:58:48,257
<i> known for their involvement</i>
<i> in Facebook,</i>

1295
00:58:48,259 --> 00:58:50,192
<i> announce that</i>
<i> they own a 1% stake</i>

1296
00:58:50,194 --> 00:58:51,994
<i> of all bitcoins</i>
<i> in existence.</i>

1297
00:58:51,996 --> 00:58:54,096
<i> Worth around $11 million.</i>

1298
00:58:54,098 --> 00:58:56,698
- How's it going? How are you?
- Nice to meet you.

1299
00:58:56,700 --> 00:58:59,668
Daniel:
<i> They also made</i>
<i> a $1.5 million investment</i>

1300
00:58:59,670 --> 00:59:01,837
<i> in Charlie's company,</i>
<i> bitinstant.</i>

1301
00:59:01,839 --> 00:59:04,339
We started looking
seriously at it

1302
00:59:04,341 --> 00:59:05,874
at the end
of last summer

1303
00:59:05,876 --> 00:59:08,510
and started purchasing
around that time.

1304
00:59:08,512 --> 00:59:11,179
I think a light bulb just
went off and we said, "wow.

1305
00:59:11,181 --> 00:59:13,515
The implication of this
could be enormous.

1306
00:59:13,517 --> 00:59:15,651
Tyler:
<i> If everyone in the world</i>
<i> could have a bitcoin address,</i>

1307
00:59:15,653 --> 00:59:18,620
everyone in the world
could be banked
fairly quickly.

1308
00:59:18,622 --> 00:59:20,522
<i> And when you consider that,</i>

1309
00:59:20,524 --> 00:59:22,357
it's a very powerful idea.

1310
00:59:22,359 --> 00:59:25,160
And bitcoin can
make that happen.

1311
00:59:25,162 --> 00:59:26,395
We're going
all over the world.

1312
00:59:26,397 --> 00:59:27,529
We're going
to the u.K.

1313
00:59:27,531 --> 00:59:28,797
We're going to Australia.

1314
00:59:28,799 --> 00:59:30,799
We're going to--
we're already in Russia.

1315
00:59:30,801 --> 00:59:32,868
<i> We're going</i>
<i> to South America.</i>

1316
00:59:32,870 --> 00:59:34,403
We're already
in Brazil now.

1317
00:59:34,405 --> 00:59:36,538
You can buy bitcoin
at any of our locations.

1318
00:59:36,540 --> 00:59:39,341
Daniel:
<i> It's fun to think that</i>
<i> satoshi might be here too.</i>

1319
00:59:39,343 --> 00:59:40,976
I always wonder
if somebody is--

1320
00:59:40,978 --> 00:59:43,345
if someone here
somewhere is...

1321
00:59:43,347 --> 00:59:44,713
- Yes. I was planning--
- ...Standing in
the corner going--

1322
00:59:52,488 --> 00:59:53,956
( both laugh )

1323
00:59:53,958 --> 00:59:55,157
What would he do?

1324
00:59:55,159 --> 00:59:58,493
What talks would he
be attending, you know?

1325
00:59:58,495 --> 01:00:01,163
Trace Mayer:
<i> We're seeing the bitcoin</i>
<i> players in the market</i>

1326
01:00:01,165 --> 01:00:02,998
<i> meeting with</i>
<i> the venture capitalists</i>

1327
01:00:03,000 --> 01:00:04,700
<i> and they're all</i>
<i> beginning to posture</i>

1328
01:00:04,702 --> 01:00:05,801
and that's
very exciting,

1329
01:00:05,803 --> 01:00:07,169
because
it means that

1330
01:00:07,171 --> 01:00:08,470
there's gonna be
a lot more

1331
01:00:08,472 --> 01:00:09,972
infrastructure
built out,

1332
01:00:09,974 --> 01:00:11,673
and lot more money
flowing into the space,

1333
01:00:11,675 --> 01:00:15,344
and it's really gonna be
a big bull market for bitcoin.

1334
01:00:15,346 --> 01:00:17,679
Daniel:
<i> One of the companies</i>
<i> best known for making</i>

1335
01:00:17,681 --> 01:00:21,350
<i>bitcoin accessible for commerce</i>
<i> is Atlanta-based bitpay.</i>

1336
01:00:21,352 --> 01:00:23,652
<i> They are pioneers</i>
<i> in bitcoin</i>

1337
01:00:23,654 --> 01:00:25,487
<i> and provide a service</i>
<i> that enables merchants</i>

1338
01:00:25,489 --> 01:00:26,855
<i> to accept</i>
<i> bitcoin payments</i>

1339
01:00:26,857 --> 01:00:29,191
<i> without dealing</i>
<i> with its complexities.</i>

1340
01:00:29,193 --> 01:00:30,993
We've grown about
a factor of 10

1341
01:00:30,995 --> 01:00:33,161
since the beginning
of the year.

1342
01:00:33,163 --> 01:00:34,830
We were doing about half
a million dollars a month...

1343
01:00:34,832 --> 01:00:36,198
- Yeah.
- ...Around the turn
of the year,

1344
01:00:36,200 --> 01:00:38,000
and now we're doing
about $5 million a month.

1345
01:00:38,002 --> 01:00:41,269
<i> This is people using bitcoins</i>
<i>to buy real goods and services.</i>

1346
01:00:41,271 --> 01:00:42,871
<i> They're not day trading.</i>
<i> They're not exchanging.</i>

1347
01:00:42,873 --> 01:00:44,272
They're actually
buying things.

1348
01:00:44,274 --> 01:00:47,309
I'm confident that bitcoin is
the most important invention

1349
01:00:47,311 --> 01:00:49,044
in the entire history
of the world since the Internet.

1350
01:00:49,046 --> 01:00:50,879
Daniel:
<i> Roger ver is an investor</i>

1351
01:00:50,881 --> 01:00:52,514
<i> in several</i>
<i> early bitcoin companies,</i>

1352
01:00:52,516 --> 01:00:54,216
<i> including bitpay.</i>

1353
01:00:54,218 --> 01:00:55,984
<i> His passion and enthusiasm</i>

1354
01:00:55,986 --> 01:00:58,687
<i> has earned him</i>
<i> the nickname "bitcoin Jesus."</i>

1355
01:00:58,689 --> 01:01:00,155
Ver:
<i> It is going</i>
<i> to change everything.</i>

1356
01:01:00,157 --> 01:01:01,490
And all of you here
in this room

1357
01:01:01,492 --> 01:01:03,492
you're at the very
very forefront of that.

1358
01:01:03,494 --> 01:01:06,995
( Cheers, applause )

1359
01:01:06,997 --> 01:01:09,131
Daniel:
<i> Roger lives in Tokyo</i>

1360
01:01:09,133 --> 01:01:12,367
<i> but travels the earth,</i>
<i> spreading the good word</i>
<i> of bitcoin.</i>

1361
01:01:12,369 --> 01:01:14,369
Ver:
<i> The last couple of days</i>
<i> we've been setting up</i>

1362
01:01:14,371 --> 01:01:16,705
<i> a business per day</i>
<i> to accept bitcoin here</i>
<i> in the bay area.</i>

1363
01:01:16,707 --> 01:01:18,006
<i> Today's business</i>
<i> is going to be</i>

1364
01:01:18,008 --> 01:01:20,008
<i> this super kyo-po</i>
<i> Korean supermarket.</i>

1365
01:01:20,010 --> 01:01:23,011
So for you-- you accept
credit cards right now?

1366
01:01:23,013 --> 01:01:25,347
- Right.
- The credit card companies
are charging you 2% or 3%?

1367
01:01:25,349 --> 01:01:27,382
- Right.
- For bitcoin,
you can do the same thing,

1368
01:01:27,384 --> 01:01:28,950
but they'll
only charge you 1%

1369
01:01:28,952 --> 01:01:30,886
and you'll still get dollars
in your bank account.

1370
01:01:30,888 --> 01:01:32,387
If you want,
you can choose to split

1371
01:01:32,389 --> 01:01:34,156
some of the payments
that you receive

1372
01:01:34,158 --> 01:01:36,191
into bitcoins
and then some into dollars

1373
01:01:36,193 --> 01:01:38,760
in whatever ratio you want,
so you can keep 99% in dollars

1374
01:01:38,762 --> 01:01:41,930
and 1% in bitcoin or 99%
in bitcoin and 1% in dollars.

1375
01:01:41,932 --> 01:01:43,699
-<i> Okay. </i>
- However you want.
You can decide that.

1376
01:01:45,201 --> 01:01:46,768
Daniel:
<i> Roger is describing</i>
<i> the service</i>

1377
01:01:46,770 --> 01:01:48,403
<i> provided by bitpay.</i>

1378
01:01:48,405 --> 01:01:50,839
<i> They take the volatility</i>
<i> of bitcoin's price</i>

1379
01:01:50,841 --> 01:01:52,607
<i> out of the equation</i>
<i> for merchants</i>

1380
01:01:52,609 --> 01:01:54,676
<i> by immediately converting</i>
<i> bitcoins to dollars</i>

1381
01:01:54,678 --> 01:01:56,078
<i> at the time of sale.</i>

1382
01:01:56,080 --> 01:01:58,113
So right now we have
it set to 100% dollars,

1383
01:01:58,115 --> 01:02:00,248
so anybody that
pays here with bitcoin,

1384
01:02:00,250 --> 01:02:01,850
they'll deposit the money
into your bank account

1385
01:02:01,852 --> 01:02:04,152
the very next day
with only a 1% fee.

1386
01:02:04,154 --> 01:02:05,687
And I guarantee you
over the next couple of weeks

1387
01:02:05,689 --> 01:02:07,022
you'll have
lots of computer nerds

1388
01:02:07,024 --> 01:02:08,990
that love bitcoins
will be coming in here

1389
01:02:08,992 --> 01:02:10,992
specifically to shop
at your supermarket,

1390
01:02:10,994 --> 01:02:12,094
so that they can pay
with bitcoin.

1391
01:02:14,297 --> 01:02:17,199
The credit card companies,
just for processing the payment,

1392
01:02:17,201 --> 01:02:19,534
they take anywhere from...

1393
01:02:19,536 --> 01:02:22,637
1.5% to over 3%

1394
01:02:22,639 --> 01:02:24,840
and then on certain cards

1395
01:02:24,842 --> 01:02:26,641
there's even
a per-transaction fee,

1396
01:02:26,643 --> 01:02:28,844
like 20¢ per transaction

1397
01:02:28,846 --> 01:02:31,012
plus the percentage
of the transaction.

1398
01:02:33,983 --> 01:02:36,017
...$11,000, $12,000 a month

1399
01:02:36,019 --> 01:02:39,454
on the average
that they just take
right out of our account.

1400
01:02:39,456 --> 01:02:40,622
I honestly think that

1401
01:02:40,624 --> 01:02:41,723
there's a really good chance

1402
01:02:41,725 --> 01:02:43,458
that bitcoins will be
more than $1,000

1403
01:02:43,460 --> 01:02:45,627
by the end of the year,
because everybody who
hears about--

1404
01:02:45,629 --> 01:02:47,729
"wait, I can send money
to and from anyone I want?"

1405
01:02:47,731 --> 01:02:50,465
It's impossible for anyone
to freeze your account,

1406
01:02:50,467 --> 01:02:53,568
it's impossible for anyone
to block you from sending
or receiving these bitcoins.

1407
01:02:53,570 --> 01:02:55,403
<i> ...Euros,</i>
<i> so you can see</i>

1408
01:02:55,405 --> 01:02:57,739
all these different currency
exchanges around the world

1409
01:02:57,741 --> 01:02:59,674
that exchange
to and from bitcoins.

1410
01:02:59,676 --> 01:03:03,178
You can see there's
maybe between 50 and 100
exchanges now.

1411
01:03:03,180 --> 01:03:05,814
When I first heard
about bitcoin and started
telling everybody about it,

1412
01:03:05,816 --> 01:03:07,983
if you looked
at that same page,
there were less than 10.

1413
01:03:07,985 --> 01:03:11,052
And there's no central
office that they could raid
or anything like that?

1414
01:03:11,054 --> 01:03:12,554
There's no central--
it's amazing.

1415
01:03:12,556 --> 01:03:13,855
There's no central office,

1416
01:03:13,857 --> 01:03:15,290
<i> there's no central place</i>
<i> they could go to</i>

1417
01:03:15,292 --> 01:03:17,125
and say,
"take Steve's bitcoins,"

1418
01:03:17,127 --> 01:03:19,127
or, "give Steve's
bitcoins to Kevin."
Do this or do that.

1419
01:03:19,129 --> 01:03:20,862
So who's the owner
of bitcoins?

1420
01:03:20,864 --> 01:03:23,498
- Everybody that owns bitcoins?
- Yeah yeah.

1421
01:03:23,500 --> 01:03:26,134
Just like who's
the owner of gold?
It's whoever owns some gold.

1422
01:03:26,136 --> 01:03:28,203
Short of shutting down
the entire Internet

1423
01:03:28,205 --> 01:03:30,338
in the entire world,
there's no way to stop bitcoin.

1424
01:03:36,179 --> 01:03:38,213
And hit "request payment."

1425
01:03:38,215 --> 01:03:40,816
And that's the q.R. Code
for your bitcoin address.

1426
01:03:40,818 --> 01:03:42,184
So I'm gonna scan that...

1427
01:03:44,253 --> 01:03:46,321
So now I have your bitcoin
address on my phone.

1428
01:03:46,323 --> 01:03:48,290
I think this is $2,

1429
01:03:48,292 --> 01:03:50,425
so I'm going
to send you $2

1430
01:03:50,427 --> 01:03:51,993
worth of bitcoins.

1431
01:03:56,833 --> 01:03:59,000
There it is.
You just received
that many bitcoins

1432
01:03:59,002 --> 01:04:00,302
from me,
directly with no fee

1433
01:04:00,304 --> 01:04:02,204
and if you hit
the little green square

1434
01:04:02,206 --> 01:04:04,139
it'll show you
the equivalent amount
in U.S. dollars.

1435
01:04:04,141 --> 01:04:06,975
<i> So you just received</i>
<i> $2 worth of bitcoins</i>

1436
01:04:06,977 --> 01:04:08,276
<i> directly from my phone</i>
<i> to your phone.</i>

1437
01:04:08,278 --> 01:04:10,312
And you can send
money just like that
anywhere in the world.

1438
01:04:10,314 --> 01:04:12,480
You could've told me
your bitcoin address

1439
01:04:12,482 --> 01:04:14,349
by email or posted
on Facebook

1440
01:04:14,351 --> 01:04:16,117
or Twitter or anywhere.

1441
01:04:16,119 --> 01:04:18,720
So I could print this
and have it at the register.

1442
01:04:18,722 --> 01:04:21,156
Yeah. Yup, and you can
check right on your phone

1443
01:04:21,158 --> 01:04:22,791
any time that you
received the payment.

1444
01:04:22,793 --> 01:04:24,693
- ( Laughs )
-<i> Okay. Thank you, Steve.</i>

1445
01:04:24,695 --> 01:04:25,994
- Steve:<i> All right. Thanks. </i>
- Thank you for the tea.

1446
01:04:25,996 --> 01:04:27,996
( Chatting )

1447
01:04:32,869 --> 01:04:35,303
Daniel:
<i> One of the newest standouts</i>
<i> in the bitcoin space</i>

1448
01:04:35,305 --> 01:04:38,139
<i> is a San Francisco company</i>
<i> named coinbase.</i>

1449
01:04:38,141 --> 01:04:40,508
<i> They operate</i>
<i> a digital wallet service</i>

1450
01:04:40,510 --> 01:04:44,179
<i> that makes it simple to buy,</i>
<i> use and accept bitcoin.</i>

1451
01:04:44,181 --> 01:04:45,947
Brian Armstrong:
<i>I would not be surprised at all</i>

1452
01:04:45,949 --> 01:04:47,949
if Google, square, PayPal--
everybody--

1453
01:04:47,951 --> 01:04:49,451
is looking at adding bitcoin
in one or two years.

1454
01:04:49,453 --> 01:04:51,953
<i> By then we need to have</i>
<i> 50 million wallets.</i>

1455
01:04:51,955 --> 01:04:53,288
<i> If we can make this</i>
<i> easy to use,</i>

1456
01:04:53,290 --> 01:04:55,357
<i> it's gonna be huge.</i>

1457
01:04:55,359 --> 01:04:58,493
Fred ehrsam:
<i> My involvement in bitcoin</i>
<i> is not politically motivated.</i>

1458
01:04:58,495 --> 01:05:02,764
- Yeah, dude.
- Ehrsam:<i> People are realizing</i>
<i> large capital gains.</i>

1459
01:05:02,766 --> 01:05:05,467
When professional
investors enter the realm,

1460
01:05:05,469 --> 01:05:07,068
the stakes
definitely change.

1461
01:05:07,070 --> 01:05:09,804
<i> We raised $5 million</i>
<i> from union square ventures.</i>

1462
01:05:09,806 --> 01:05:11,740
<i> Fred Wilson led</i>
<i> the round there.</i>

1463
01:05:11,742 --> 01:05:13,341
I think bitcoin is still

1464
01:05:13,343 --> 01:05:15,977
actually a little bit
under the radar.

1465
01:05:15,979 --> 01:05:20,015
<i> I think it's moved</i>
<i> past the stage where</i>
<i> people dismiss it,</i>

1466
01:05:20,017 --> 01:05:21,816
<i> but I don't think</i>
<i> that it's totally</i>

1467
01:05:21,818 --> 01:05:23,485
<i> gone mainstream either.</i>

1468
01:05:23,487 --> 01:05:26,087
I think we're in that
middle stage right now.

1469
01:05:26,089 --> 01:05:28,089
Daniel:
<i> At the end of the conference,</i>

1470
01:05:28,091 --> 01:05:30,125
<i> jered from tradehill</i>
<i> threw a party</i>

1471
01:05:30,127 --> 01:05:32,294
<i> to celebrate</i>
<i> how far things had come.</i>

1472
01:05:32,296 --> 01:05:34,296
- You guys
are hot right now.
- ( Chattering )

1473
01:05:34,298 --> 01:05:35,931
- Yup.
- Congratulations
on the raise.

1474
01:05:35,933 --> 01:05:37,499
- Thank you.
- It's good money, man.

1475
01:05:37,501 --> 01:05:39,501
- Swell do.
- Yeah.

1476
01:05:39,503 --> 01:05:43,438
- I mean--
- hopefully it's an advancement
for the community.

1477
01:05:43,440 --> 01:05:46,341
I am completely
pro-compliance.

1478
01:05:46,343 --> 01:05:48,977
I think if you don't want
to attach your identity to this,

1479
01:05:48,979 --> 01:05:52,147
- just can't work with you.
- Yeah, so I thought
I just need to--

1480
01:05:52,149 --> 01:05:54,950
I mean the libertarian side
of me is like, "ehh.
Yeah, whatever,"

1481
01:05:54,952 --> 01:05:57,152
but like,
from a business perspective,

1482
01:05:57,154 --> 01:05:59,554
if people don't play
by the rules,

1483
01:05:59,556 --> 01:06:03,058
- you're not gonna last.
- Yeah, I completely agree.

1484
01:06:03,060 --> 01:06:04,459
- You're gonna just shut down
or you're gonna go to jail.
- Yeah.

1485
01:06:06,162 --> 01:06:08,196
Daniel:
<i> Noticeably absent</i>
<i> from the conference</i>

1486
01:06:08,198 --> 01:06:09,798
<i> were representatives</i>
<i> of bitcoin's</i>

1487
01:06:09,800 --> 01:06:12,500
<i> biggest exchange, mt. Gox.</i>

1488
01:06:12,502 --> 01:06:15,971
<i> Just days earlier</i>
<i> the department of homeland</i>
<i> security</i>

1489
01:06:15,973 --> 01:06:18,873
<i> seized more than $5 million</i>
<i> from their U.S. accounts.</i>

1490
01:06:20,376 --> 01:06:22,877
<i> The seizure warrant stated</i>
<i> that mt. Gox had failed</i>

1491
01:06:22,879 --> 01:06:24,779
<i> to register</i>
<i> as a money transmitter,</i>

1492
01:06:24,781 --> 01:06:27,615
<i> putting them in violation</i>
<i> of the new fincen guidelines.</i>

1493
01:06:28,818 --> 01:06:30,685
( People chattering )

1494
01:06:34,090 --> 01:06:37,292
<i> I'm traveling to Tokyo</i>
<i> to meet mark karpeles,</i>

1495
01:06:37,294 --> 01:06:39,227
<i> mt. Gox's reclusive c.E.O.</i>

1496
01:06:42,465 --> 01:06:44,165
No bitcoins on here.

1497
01:06:45,167 --> 01:06:47,836
Not yet.

1498
01:06:47,838 --> 01:06:50,138
<i> That will make this</i>
<i> completely unnecessary.</i>

1499
01:06:50,140 --> 01:06:51,840
<i> But for now it seems</i>
<i> kind of primitive</i>

1500
01:06:51,842 --> 01:06:53,608
that we're exchanging
paper for paper.

1501
01:06:53,610 --> 01:06:54,976
<i> - ( Clicking )</i>
<i> - ( Coins clinking )</i>

1502
01:06:54,978 --> 01:06:58,013
- Nick:<i> And losing. </i>
- And losing value.

1503
01:06:58,015 --> 01:07:00,915
Someone's taking a cut.
Someone's taking
a little percent.

1504
01:07:00,917 --> 01:07:04,252
<i> Mark and his</i>
<i> business partner gonzague</i>

1505
01:07:04,254 --> 01:07:08,356
<i> are French but they operate</i>
<i> mt. Gox from offices in Japan.</i>

1506
01:07:08,358 --> 01:07:12,327
<i> Originally mt. Gox was</i>
<i> an exchange for trading cards</i>

1507
01:07:12,329 --> 01:07:15,196
<i> used in a game called</i>
<i> "magic: The gathering."</i>

1508
01:07:15,198 --> 01:07:17,699
<i> M.T.G.O.X. Stood for</i>

1509
01:07:17,701 --> 01:07:20,602
<i> "magic: The gathering</i>
<i> online exchange."</i>

1510
01:07:20,604 --> 01:07:23,805
<i> In 2011</i>
<i> mark's company tibanne</i>

1511
01:07:23,807 --> 01:07:27,442
<i> bought mt. Gox,</i>
<i> and his focus has been</i>
<i> bitcoin ever since.</i>

1512
01:07:31,013 --> 01:07:32,981
<i> One of the conditions</i>
<i> of my visit</i>

1513
01:07:32,983 --> 01:07:34,349
<i> is to refrain</i>
<i> from any discussion</i>

1514
01:07:34,351 --> 01:07:35,784
<i> about the d.H.S. Seizure,</i>

1515
01:07:35,786 --> 01:07:37,519
<i> due to the ongoing</i>
<i> investigation.</i>

1516
01:07:39,655 --> 01:07:42,357
<i> We've arrived at mt. Gox.</i>

1517
01:07:42,359 --> 01:07:44,092
This is
mt. Gox right here.

1518
01:07:44,094 --> 01:07:47,362
There's no big sign
or anything, no-- no--

1519
01:07:47,364 --> 01:07:51,699
it doesn't look like
a crazy commercial
establishment.

1520
01:07:51,701 --> 01:07:54,169
<i> Despite</i>
<i> their legal problems</i>

1521
01:07:54,171 --> 01:07:57,272
<i> mt. Gox still</i>
<i> handles more volume</i>
<i> than any other exchange</i>

1522
01:07:57,274 --> 01:07:59,107
<i> and is processing around</i>

1523
01:07:59,109 --> 01:08:02,277
<i> $6 million worth</i>
<i> of bitcoin trades every day.</i>

1524
01:08:02,279 --> 01:08:04,846
We had, last year,
an average of 10,000
new customers a month.

1525
01:08:04,848 --> 01:08:06,748
January, it was 20,000.

1526
01:08:06,750 --> 01:08:08,683
Then 30,000, 60,000,

1527
01:08:08,685 --> 01:08:10,351
150,000.

1528
01:08:10,353 --> 01:08:13,054
With what's going on,
we go down,

1529
01:08:13,056 --> 01:08:15,890
but we are reaching
100,000 new customers

1530
01:08:15,892 --> 01:08:17,992
- for may.
- That's amazing.

1531
01:08:17,994 --> 01:08:19,561
- In a month?
- In a month.

1532
01:08:19,563 --> 01:08:20,829
- Wow.
- So it was like this...

1533
01:08:20,831 --> 01:08:21,996
Zip, bup!

1534
01:08:21,998 --> 01:08:23,832
But still,
after what happened

1535
01:08:23,834 --> 01:08:25,800
I thought that a lot
of people will go away

1536
01:08:25,802 --> 01:08:28,736
or don't create
a new account.

1537
01:08:28,738 --> 01:08:30,405
But still,
100,000 new customers

1538
01:08:30,407 --> 01:08:31,806
it's... wow.

1539
01:08:31,808 --> 01:08:33,541
And here we've got
the office.

1540
01:08:38,180 --> 01:08:39,914
<i> ( Laughs )</i>

1541
01:08:42,585 --> 01:08:45,253
Daniel:
<i> Mt. Gox employs 18 people</i>

1542
01:08:45,255 --> 01:08:47,622
<i> not only is mark the c.E.O.,</i>

1543
01:08:47,624 --> 01:08:50,492
<i> he's also the c.F.O.,</i>
<i> the lead developer</i>

1544
01:08:50,494 --> 01:08:54,162
<i> and performs</i>
<i> all technical operations</i>
<i> to keep the exchange running.</i>

1545
01:08:54,164 --> 01:08:55,330
<i> ( Daniel speaks )</i>

1546
01:08:55,332 --> 01:08:56,965
- C++.
-<i> C++.</i>

1547
01:08:56,967 --> 01:08:58,633
<i> Is that your main--</i>
<i> is that your main</i>

1548
01:08:58,635 --> 01:08:59,868
-<i> programming language? </i>
- No.

1549
01:08:59,870 --> 01:09:02,203
I've got a lot of main
programming languages.

1550
01:09:02,205 --> 01:09:03,972
<i> Yeah? What's your favorite</i>
<i> programming language?</i>

1551
01:09:03,974 --> 01:09:05,540
Really depend
on what I need to do.

1552
01:09:05,542 --> 01:09:06,941
I create a good something
really quick

1553
01:09:06,943 --> 01:09:08,810
and I don't care
about performance,

1554
01:09:08,812 --> 01:09:10,011
I use p.H.P.

1555
01:09:10,013 --> 01:09:11,846
If I care a little bit
about performance,

1556
01:09:11,848 --> 01:09:14,149
I will use c++
with q.T. Available.

1557
01:09:14,151 --> 01:09:17,085
And if I care
a lot about performance,
I will use axum.

1558
01:09:21,524 --> 01:09:23,892
When we go in,
cameras down first,

1559
01:09:23,894 --> 01:09:26,060
- until we get to your servers
and then back up.
- Exactly.

1560
01:09:26,062 --> 01:09:27,562
Okay.

1561
01:09:34,103 --> 01:09:37,939
Getting ready
to go into the mt. Gox
data center location.

1562
01:09:37,941 --> 01:09:39,407
Okay, cameras down.

1563
01:09:43,245 --> 01:09:45,513
<i> We were allowed</i>
<i> to snap a few photographs</i>

1564
01:09:47,583 --> 01:09:50,218
<i> ( karpeles speaking )</i>

1565
01:10:13,142 --> 01:10:15,310
( Speaking Japanese )

1566
01:10:15,312 --> 01:10:17,045
<i> ( Man speaking</i>
<i> Japanese )</i>

1567
01:10:22,952 --> 01:10:24,485
Daniel:
<i>If mt. Gox's new trading engine</i>

1568
01:10:24,487 --> 01:10:27,689
<i> can really support</i>
<i> 100 million orders per second,</i>

1569
01:10:27,691 --> 01:10:30,758
<i> it should be able</i>
<i> to scale with the demands</i>
<i> of professional traders.</i>

1570
01:10:30,760 --> 01:10:34,162
<i> But with complex</i>
<i> legal problems and</i>
<i> increasing competition,</i>

1571
01:10:34,164 --> 01:10:36,364
<i> mark's attention is pulled</i>
<i> in many directions.</i>

1572
01:10:47,176 --> 01:10:49,277
Do you work seven days
a week, typically?

1573
01:10:49,279 --> 01:10:51,946
- Karpeles: Yup.
- It seems that you do

1574
01:10:51,948 --> 01:10:53,848
the majority
of all the heavy lifting.

1575
01:10:53,850 --> 01:10:56,751
- ( Laughs ) Literally.
- Karpeles: Yeah.

1576
01:10:56,753 --> 01:11:00,288
You need to remove
your shoes in the entrance.

1577
01:11:03,292 --> 01:11:05,126
Daniel:
<i> Mark is a talented man</i>

1578
01:11:05,128 --> 01:11:07,428
<i> in one of the world's</i>
<i> biggest cities...</i>

1579
01:11:07,430 --> 01:11:10,498
<i> But maybe he should stick</i>
<i> to computer keyboards.</i>

1580
01:11:11,767 --> 01:11:13,735
( Classical music playing )

1581
01:11:22,478 --> 01:11:24,212
( Scoffs )
Okay, I messed it up.

1582
01:11:30,719 --> 01:11:32,253
- ( Chuckles ) Awesome.
-<i> ( Nick claps ) Yay.</i>

1583
01:11:32,255 --> 01:11:33,655
Yeah.

1584
01:11:49,605 --> 01:11:51,806
Erik voorhees.
<i> We are here in northern</i>
<i> New Hampshire</i>

1585
01:11:51,808 --> 01:11:53,508
for the porcupine
freedom festival.

1586
01:11:53,510 --> 01:11:55,510
And this is an event
put on each year

1587
01:11:55,512 --> 01:11:56,878
<i> by the free state project.</i>

1588
01:11:58,681 --> 01:12:01,816
<i> Basically it's just a bunch</i>
<i> of crazy anarcho-capitalists,</i>

1589
01:12:01,818 --> 01:12:03,751
<i> libertarian types</i>
<i> in the woods,</i>

1590
01:12:03,753 --> 01:12:06,120
<i> with freedom</i>
<i> and families.</i>

1591
01:12:06,122 --> 01:12:08,890
<i> Pretty much</i>
<i> all of the vendors</i>
<i> accept bitcoin.</i>

1592
01:12:12,161 --> 01:12:14,262
- ( People chattering )
- Ahh!

1593
01:12:14,264 --> 01:12:16,264
It tastes much better
when bought with bitcoin.

1594
01:12:16,266 --> 01:12:17,565
Thanks, guys.

1595
01:12:18,934 --> 01:12:21,602
Soups, salads and smoothies.
( Chuckles )

1596
01:12:21,604 --> 01:12:23,604
I would say one-third
of our sales

1597
01:12:23,606 --> 01:12:25,306
have been in bitcoin.

1598
01:12:25,308 --> 01:12:27,375
It's 20 bucks.
So you're gonna pay
in bitcoin?

1599
01:12:27,377 --> 01:12:30,111
- Uh, yeah.
- All right.

1600
01:12:30,113 --> 01:12:32,213
<i> Last year was</i>
<i> our first year accepting it</i>

1601
01:12:32,215 --> 01:12:35,783
we did maybe 18 transactions,
20 transactions at the most.

1602
01:12:35,785 --> 01:12:37,785
And now we're
up to close to 120.

1603
01:12:37,787 --> 01:12:40,388
- ( Sizzling )
-<i> ( Folk music playing )</i>

1604
01:12:49,331 --> 01:12:52,333
Daniel:
<i> This community is really</i>
<i> one of the largest groups</i>

1605
01:12:52,335 --> 01:12:54,135
<i> of people</i>
<i> in the U.S., I think,</i>

1606
01:12:54,137 --> 01:12:56,971
<i> that is truly adopting bitcoin</i>
<i> and using it as a currency,</i>

1607
01:12:56,973 --> 01:12:59,240
<i> because of what it stands for</i>
<i>and because of what it enables.</i>

1608
01:12:59,242 --> 01:13:00,742
<i> ( People chatter )</i>

1609
01:13:00,744 --> 01:13:03,144
The world is
seriously changing now

1610
01:13:03,146 --> 01:13:05,747
and it is changing
in a very interesting,

1611
01:13:05,749 --> 01:13:07,949
<i> very radical,</i>
<i> decentralized,</i>

1612
01:13:07,951 --> 01:13:09,384
and, in my opinion,
positive direction.

1613
01:13:10,853 --> 01:13:12,787
Shoot.
Here it is.

1614
01:13:12,789 --> 01:13:14,155
"Price breaks
the all-time high."

1615
01:13:15,858 --> 01:13:17,792
Daniel:
<i> Vitalik is only 19 years old,</i>

1616
01:13:17,794 --> 01:13:19,660
<i> but he has a profound</i>
<i> understanding</i>

1617
01:13:19,662 --> 01:13:21,262
<i> of the complexities</i>
<i> of bitcoin</i>

1618
01:13:21,264 --> 01:13:23,231
<i> and a gift</i>
<i> for explaining them.</i>

1619
01:13:23,233 --> 01:13:26,167
<i> As lead writer</i>
<i> for "bitcoin magazine,"</i>

1620
01:13:26,169 --> 01:13:29,837
<i> he's been traveling</i>
<i> the world, covering bitcoin</i>
<i> for the past year.</i>

1621
01:13:29,839 --> 01:13:33,608
I'm a big fan
of the decentralization
concept, in principle.

1622
01:13:33,610 --> 01:13:37,512
You know, have lots--
lots of different societies

1623
01:13:37,514 --> 01:13:41,949
operating according
to whatever people's
own beliefs are.

1624
01:13:41,951 --> 01:13:44,085
Bitcoin has unique properties

1625
01:13:44,087 --> 01:13:46,921
that no other system
in the world has had before.

1626
01:13:46,923 --> 01:13:50,691
It really seems like
the only practical way forward.

1627
01:13:50,693 --> 01:13:53,094
As you move away
from cash

1628
01:13:53,096 --> 01:13:55,663
into your debit cards
and your credit cards,

1629
01:13:55,665 --> 01:13:56,631
you essentially
are giving up

1630
01:13:56,633 --> 01:13:58,433
a certain degree
of your privacy

1631
01:13:58,435 --> 01:14:00,067
without even
really knowing it.

1632
01:14:00,069 --> 01:14:01,769
<i> It's important to understand</i>
<i> that bitcoin is not</i>

1633
01:14:01,771 --> 01:14:04,071
automatically,
perfectly anonymous.

1634
01:14:04,073 --> 01:14:07,675
But what it does is it
enables you to be anonymous
if you wish to.

1635
01:14:07,677 --> 01:14:10,578
Daniel:
<i> Erik voorhees is</i>
<i> the founder and part owner</i>

1636
01:14:10,580 --> 01:14:12,513
<i> of a hugely popular</i>
<i> bitcoin gambling site</i>

1637
01:14:12,515 --> 01:14:13,981
<i> called satoshi dice.</i>

1638
01:14:15,250 --> 01:14:17,485
<i> Satoshi dice is</i>
<i> the first of a new breed</i>

1639
01:14:17,487 --> 01:14:18,853
<i> of provably fair</i>
<i> betting games</i>

1640
01:14:18,855 --> 01:14:20,421
<i> that use bitcoin.</i>

1641
01:14:20,423 --> 01:14:22,490
<i> Since all bets are public,</i>

1642
01:14:22,492 --> 01:14:25,726
<i> anyone can verify</i>
<i> the odds and payouts.</i>

1643
01:14:25,728 --> 01:14:28,463
<i> At its peak,</i>
<i> satoshi dice was responsible</i>

1644
01:14:28,465 --> 01:14:30,064
<i> for more bitcoin transactions</i>

1645
01:14:30,066 --> 01:14:33,501
<i> than all other uses</i>
<i> of bitcoin combined.</i>

1646
01:14:33,503 --> 01:14:36,537
<i> It played an important role</i>
<i> in bitcoin's development</i>

1647
01:14:36,539 --> 01:14:38,372
<i> as one</i>
<i> of the first applications</i>

1648
01:14:38,374 --> 01:14:41,309
<i> to really test</i>
<i> what the bitcoin network</i>
<i> could handle.</i>

1649
01:14:41,311 --> 01:14:45,313
<i> Recently Erik moved</i>
<i> his entire operations</i>
<i> out of the U.S.</i>

1650
01:14:45,315 --> 01:14:46,948
<i> And into Panama.</i>

1651
01:14:46,950 --> 01:14:49,116
<i> He started a company</i>
<i> called coinapult</i>

1652
01:14:49,118 --> 01:14:52,386
<i> that lets you send bitcoin</i>
<i> via s.M.S. And email.</i>

1653
01:14:52,388 --> 01:14:54,388
Voorhees:
I think most people,

1654
01:14:54,390 --> 01:14:55,990
at least in America,

1655
01:14:55,992 --> 01:14:59,327
believe that when they put
$1,000 into their bank,

1656
01:14:59,329 --> 01:15:02,563
the bank is holding $1,000
in its vault for them.

1657
01:15:02,565 --> 01:15:06,000
And they don't realize
that 99% of all the dollars
are digital.

1658
01:15:06,002 --> 01:15:08,736
The fact that
we have these tokens
called paper cash

1659
01:15:08,738 --> 01:15:11,672
is the exception
to the rule.

1660
01:15:11,674 --> 01:15:14,775
<i> People see the cash</i>
<i> and they think that</i>
<i> that's what the money is,</i>

1661
01:15:14,777 --> 01:15:16,944
but it's all digital
and it's been that way
for decades.

1662
01:15:16,946 --> 01:15:18,913
You guys moved
your business to Panama.

1663
01:15:18,915 --> 01:15:20,982
<i> What was the primary driver</i>
<i> in that?</i>

1664
01:15:20,984 --> 01:15:22,517
Voorhees:
<i> If you're a U.S. company,</i>

1665
01:15:22,519 --> 01:15:25,686
you have to follow
the arcane U.S. regulations

1666
01:15:25,688 --> 01:15:27,421
for all of your customers
around the world.

1667
01:15:27,423 --> 01:15:29,490
So if you do business
with some rural farmer
in Africa,

1668
01:15:29,492 --> 01:15:31,626
you're gonna need to get
his social security number,

1669
01:15:31,628 --> 01:15:33,027
you're gonna need to get
all this information

1670
01:15:33,029 --> 01:15:34,762
that Washington tells you
is important.

1671
01:15:34,764 --> 01:15:36,030
<i> We did not want</i>
<i> to have to apply</i>

1672
01:15:36,032 --> 01:15:38,666
<i> the U.S. financial</i>
<i> regulatory scheme</i>

1673
01:15:38,668 --> 01:15:41,369
<i> to customers</i>
<i> in sub-saharan Africa.</i>

1674
01:15:41,371 --> 01:15:42,803
<i> I don't think</i>
<i> the developed world's</i>

1675
01:15:42,805 --> 01:15:45,106
gonna be where bitcoin
really takes off, long-term,

1676
01:15:45,108 --> 01:15:47,208
because our banking system's
worked decently well.

1677
01:15:47,210 --> 01:15:48,809
<i> Many people around the world</i>

1678
01:15:48,811 --> 01:15:50,611
<i> don't have any</i>
<i> bank accounts whatsoever.</i>

1679
01:15:50,613 --> 01:15:51,979
Ultimately, those are
the types of people

1680
01:15:51,981 --> 01:15:53,814
who will find
the most value out of bitcoin.

1681
01:15:59,187 --> 01:16:01,088
Daniel:
<i> One month later</i>
<i> Erik announced</i>

1682
01:16:01,090 --> 01:16:03,958
<i> he had sold satoshi dice</i>
<i> to an anonymous investor.</i>

1683
01:16:03,960 --> 01:16:05,593
<i> The price?</i>

1684
01:16:05,595 --> 01:16:09,564
<i> 126,315 bitcoins,</i>

1685
01:16:09,566 --> 01:16:13,334
<i> worth around</i>
<i> $11.5 million.</i>

1686
01:16:13,336 --> 01:16:16,771
Most of the new
offices in this city
are in this condition,

1687
01:16:16,773 --> 01:16:18,472
all still
what's called "gray."

1688
01:16:18,474 --> 01:16:20,942
Not ready, no Internet,
no electricity-- nothing.

1689
01:16:20,944 --> 01:16:22,910
But we actually got one
that was finished,

1690
01:16:22,912 --> 01:16:25,880
<i> so we moved in and we are</i>
<i> super excited about it.</i>

1691
01:16:26,949 --> 01:16:29,050
You can see
all the skyscrapers

1692
01:16:29,052 --> 01:16:31,619
of new banks and everything
getting built up here.

1693
01:16:31,621 --> 01:16:34,589
This is the financial center
for central America.

1694
01:16:34,591 --> 01:16:37,959
So it was fitting
that we establish
ourselves here as well.

1695
01:16:40,262 --> 01:16:41,329
Still setting up the office.

1696
01:16:41,331 --> 01:16:43,431
We've been here
for two weeks.

1697
01:16:43,433 --> 01:16:44,832
We're getting
walls put in.

1698
01:16:44,834 --> 01:16:46,567
We've got furniture.

1699
01:16:46,569 --> 01:16:48,836
Voorhees:
<i> This is the brains</i>
<i> of the operation.</i>

1700
01:16:48,838 --> 01:16:51,305
-<i> This is Mr. ira. </i>
- Howdy.

1701
01:16:51,307 --> 01:16:54,241
He can program anything,
and you can see all these
books he's reading.

1702
01:16:54,243 --> 01:16:57,645
What have we got here?
We've got "cryptanalysis."

1703
01:16:57,647 --> 01:16:59,647
We've got
"everyday cryptography,"

1704
01:16:59,649 --> 01:17:03,351
"introduction
to mathematical cryptography."

1705
01:17:03,353 --> 01:17:05,753
I read all of these,
of course, when I was
much younger,

1706
01:17:05,755 --> 01:17:07,722
but ira's trying
to catch up with me.

1707
01:17:13,328 --> 01:17:15,329
<i> The bitcoin phenomenon</i>
<i> is trying</i>

1708
01:17:15,331 --> 01:17:17,331
<i> to take control</i>
<i> of money away</i>

1709
01:17:17,333 --> 01:17:19,767
<i> from the state and return it</i>
<i> to individuals.</i>

1710
01:17:19,769 --> 01:17:21,335
It's trying to separate
money and state

1711
01:17:21,337 --> 01:17:23,337
in the same way
and for the same reasons

1712
01:17:23,339 --> 01:17:25,439
<i> that it was important</i>
<i> to separate church and state.</i>

1713
01:17:25,441 --> 01:17:29,076
<i> There's a wonderful quote</i>
<i> from one of the rothschilds--</i>

1714
01:17:29,078 --> 01:17:30,811
<i> "give me control</i>
<i> of a nation's money</i>

1715
01:17:30,813 --> 01:17:32,913
<i> and I care not</i>
<i> who makes its laws."</i>

1716
01:17:32,915 --> 01:17:35,216
<i> So I'm trying to play</i>
<i> my part in that narrative.</i>

1717
01:17:36,785 --> 01:17:38,319
Daniel:
<i> Outside of the United States,</i>

1718
01:17:38,321 --> 01:17:40,287
<i> billions of people</i>
<i> don't have access</i>

1719
01:17:40,289 --> 01:17:42,256
<i> to basic banking services.</i>

1720
01:17:42,258 --> 01:17:44,158
<i> Bitcoin can level</i>
<i> the playing field</i>

1721
01:17:44,160 --> 01:17:45,459
<i> and help bring</i>
<i> developing nations</i>

1722
01:17:45,461 --> 01:17:46,861
<i> into the global economy.</i>

1723
01:17:50,699 --> 01:17:52,667
( Chattering )

1724
01:17:54,803 --> 01:17:56,270
Cheers, cheers.

1725
01:17:59,141 --> 01:18:01,542
Voorhees:
<i> Eventually people are</i>
<i> going to use a currency</i>

1726
01:18:01,544 --> 01:18:03,310
<i> that is as free</i>
<i> as the Internet</i>

1727
01:18:03,312 --> 01:18:05,813
<i> because people</i>
<i> will seek out freedom</i>
<i> wherever they can.</i>

1728
01:18:05,815 --> 01:18:07,948
<i> And just as</i>
<i> the government can't</i>
<i> stop the Internet</i>

1729
01:18:07,950 --> 01:18:11,285
<i> and the freedom of speech,</i>
<i> it can't stop bitcoin and</i>
<i> the freedom of money.</i>

1730
01:18:11,287 --> 01:18:14,121
<i> So we're just gonna</i>
<i> have to see how hard</i>
<i> they try to do it.</i>

1731
01:18:14,123 --> 01:18:15,923
It's scary
but it's exciting,

1732
01:18:15,925 --> 01:18:18,659
because at the other end
freedom typically wins.

1733
01:18:18,661 --> 01:18:20,961
<i> We just have see how long</i>
<i> it takes to get there.</i>

1734
01:18:20,963 --> 01:18:22,029
( Shouts )

1735
01:18:40,649 --> 01:18:42,850
Daniel:
<i> As summer rolled on,</i>

1736
01:18:42,852 --> 01:18:45,586
<i> the bitcoin industry</i>
<i> continued to flourish.</i>

1737
01:18:45,588 --> 01:18:46,954
It's hard to remember
the days where I was

1738
01:18:46,956 --> 01:18:48,589
running this thing
out of my basement

1739
01:18:48,591 --> 01:18:49,857
and with one or two people.

1740
01:18:49,859 --> 01:18:52,793
Bitinstant was just
a domain name.

1741
01:18:52,795 --> 01:18:54,428
Daniel:
<i> Charlie and bitinstant</i>

1742
01:18:54,430 --> 01:18:56,030
<i> moved into</i>
<i> their new offices</i>

1743
01:18:56,032 --> 01:18:58,265
I always wonder
if satoshi knew

1744
01:18:58,267 --> 01:19:00,634
that he was gonna build
something that would foster

1745
01:19:00,636 --> 01:19:02,803
companies like this,

1746
01:19:02,805 --> 01:19:05,573
<i> where we're actually like</i>
<i> a company with jobs</i>

1747
01:19:05,575 --> 01:19:08,476
based on something
that someone we don't know
wrote a paper on.

1748
01:19:08,478 --> 01:19:10,344
It's kind of creepy
if you think about it.

1749
01:19:10,346 --> 01:19:12,847
I wonder if he's watching us
right now or something.

1750
01:19:14,382 --> 01:19:15,816
Daniel:
<i> In San Francisco,</i>

1751
01:19:15,818 --> 01:19:17,651
<i> jered and tradehill had moved</i>

1752
01:19:17,653 --> 01:19:20,121
<i> into their new space as well.</i>

1753
01:19:20,123 --> 01:19:22,456
It sounds funny.
It's not a $100-million
market anymore.

1754
01:19:22,458 --> 01:19:24,058
It's grown beyond that.

1755
01:19:24,060 --> 01:19:26,560
<i> More professional people</i>
<i> are in the space</i>

1756
01:19:26,562 --> 01:19:29,163
and they're expecting
to deal with other
professionals.

1757
01:19:29,165 --> 01:19:31,265
Daniel:
<i> But just as things</i>
<i> were ramping up,</i>

1758
01:19:31,267 --> 01:19:33,968
<i> regulators started taking</i>
<i> a closer look at bitcoin.</i>

1759
01:19:36,104 --> 01:19:38,773
Some bad news
for bitcoin, or is it?

1760
01:19:38,775 --> 01:19:40,608
Its days of glory
could be ending.

1761
01:19:40,610 --> 01:19:42,042
At least
two dozen companies

1762
01:19:42,044 --> 01:19:43,577
have been subpoenaed
by New York's

1763
01:19:43,579 --> 01:19:45,412
department of
financial services.

1764
01:19:45,414 --> 01:19:46,814
Can't be a good thing.

1765
01:19:46,816 --> 01:19:50,251
Daniel:
<i> Bitinstant, bitpay, coinbase</i>

1766
01:19:50,253 --> 01:19:53,921
<i> and winklevoss capital</i>
<i> were all issued subpoenas.</i>

1767
01:19:53,923 --> 01:19:56,157
We want to make sure that
as this enterprise grows

1768
01:19:56,159 --> 01:19:58,125
and if it does become
a place where

1769
01:19:58,127 --> 01:20:00,427
a lot of people are engaging
in financial transactions

1770
01:20:00,429 --> 01:20:03,264
that we have sufficient
protections in place.

1771
01:20:03,266 --> 01:20:05,933
Daniel:
<i> With increased pressure</i>
<i> in banking compliance issues,</i>

1772
01:20:05,935 --> 01:20:08,736
<i> bitinstant was forced</i>
<i> to suspend services.</i>

1773
01:20:15,744 --> 01:20:17,745
<i> Jered faced</i>
<i> similar battles.</i>

1774
01:20:17,747 --> 01:20:20,080
<i> Due to a lack</i>
<i> of regulation,</i>

1775
01:20:20,082 --> 01:20:23,717
<i> many banks decided to cut ties</i>
<i> with bitcoin companies.</i>

1776
01:20:23,719 --> 01:20:25,653
<i> Without a U.S. bank account</i>

1777
01:20:25,655 --> 01:20:27,555
<i> tradehill can't operate,</i>

1778
01:20:27,557 --> 01:20:29,156
<i> and jered was forced</i>
<i> to pull the plug.</i>

1779
01:20:34,095 --> 01:20:36,797
Regulation typically evolves

1780
01:20:36,799 --> 01:20:38,966
much more slowly
than innovation.

1781
01:20:38,968 --> 01:20:41,101
And regulations
cannot keep pace

1782
01:20:41,103 --> 01:20:42,369
with the pace
of innovation.

1783
01:20:43,772 --> 01:20:45,472
Singer:
<i> Explaining bitcoin to a bank</i>

1784
01:20:45,474 --> 01:20:47,174
feels like explaining
Amazon.Com

1785
01:20:47,176 --> 01:20:49,076
to Barnes & noble.

1786
01:20:49,078 --> 01:20:51,212
Daniel:
<i> Until lawmakers catch up,</i>

1787
01:20:51,214 --> 01:20:53,214
<i> startups like tradehill</i>
<i> and bitinstant</i>

1788
01:20:53,216 --> 01:20:54,548
<i> are left out on a limb.</i>

1789
01:20:56,384 --> 01:20:59,887
Banks do not want to bank
bitcoin companies.

1790
01:20:59,889 --> 01:21:01,622
When you have regulation,
you can comply with it.

1791
01:21:01,624 --> 01:21:04,525
When you don't
have any regulation,
they're not exactly sure.

1792
01:21:04,527 --> 01:21:07,561
And if the banks aren't sure,
they just default to "no."

1793
01:21:07,563 --> 01:21:11,365
New regulation takes
at least one year to develop

1794
01:21:11,367 --> 01:21:13,234
propose and adopt.

1795
01:21:13,236 --> 01:21:14,635
And in many cases,

1796
01:21:14,637 --> 01:21:16,103
it can take
much longer than that.

1797
01:21:18,740 --> 01:21:20,741
Shrem:
<i> I won't let this go.</i>

1798
01:21:20,743 --> 01:21:23,210
<i> I will fight till the end</i>
<i> for bitcoin.</i>

1799
01:21:23,212 --> 01:21:25,546
Whether I have
to work on the street
or sell lemonade,

1800
01:21:25,548 --> 01:21:27,281
bitcoin's gonna succeed
one way or another

1801
01:21:27,283 --> 01:21:28,215
and I'm gonna be
a part of it.

1802
01:21:35,223 --> 01:21:37,091
Daniel:
<i> Over the past several months</i>

1803
01:21:37,093 --> 01:21:40,060
<i> the bitcoin mining landscape</i>
<i> has changed significantly</i>

1804
01:21:40,062 --> 01:21:41,629
<i> ( machines humming )</i>

1805
01:21:41,631 --> 01:21:43,864
( Whirs )

1806
01:21:46,601 --> 01:21:48,168
Daniel:
<i> When I started,</i>

1807
01:21:48,170 --> 01:21:50,271
<i> bitcoin mining was</i>
<i> a hobby for geeks.</i>

1808
01:21:50,273 --> 01:21:52,339
<i> Now it's big business.</i>

1809
01:21:52,341 --> 01:21:54,308
<i> In order to continue mining</i>

1810
01:21:54,310 --> 01:21:55,843
and continue playing
in the game

1811
01:21:55,845 --> 01:21:57,244
and be competitive
and be profitable,

1812
01:21:57,246 --> 01:21:58,913
<i> I would have to spend</i>

1813
01:21:58,915 --> 01:22:00,681
<i> hundreds of thousands</i>
<i> of dollars on gear.</i>

1814
01:22:02,284 --> 01:22:04,251
<i> The 18 miners</i>
<i> I ordered from avalon</i>

1815
01:22:04,253 --> 01:22:06,020
<i> never arrived.</i>

1816
01:22:06,022 --> 01:22:08,155
<i> And the units</i>
<i> from butterfly labs</i>

1817
01:22:08,157 --> 01:22:10,190
<i> took over a year to ship.</i>

1818
01:22:10,192 --> 01:22:12,326
<i> By the time I got them,</i>

1819
01:22:12,328 --> 01:22:14,428
<i> bitcoin mining was</i>
<i> so competitive,</i>

1820
01:22:14,430 --> 01:22:15,930
<i> that I would never</i>
<i> be able to mine back</i>

1821
01:22:15,932 --> 01:22:18,465
<i> all the coins</i>
<i> I used to buy them.</i>

1822
01:22:18,467 --> 01:22:20,768
See that computer?
That computer makes bitcoins.

1823
01:22:20,770 --> 01:22:24,538
And this is all
the other computers that
are making bitcoins too,

1824
01:22:24,540 --> 01:22:27,741
<i> and it goes straight up</i>
<i> in a line up in the air.</i>

1825
01:22:27,743 --> 01:22:29,076
And that's 'cause
there's a lot people

1826
01:22:29,078 --> 01:22:31,979
that are making bitcoins
with computers like that.

1827
01:22:31,981 --> 01:22:33,948
<i> As my new units</i>
<i> are arriving,</i>

1828
01:22:33,950 --> 01:22:35,549
<i> I'm selling them</i>
<i> for bitcoins</i>

1829
01:22:35,551 --> 01:22:36,984
<i> to try to recoup</i>
<i> what I can.</i>

1830
01:22:36,986 --> 01:22:38,752
If you don't mind grabbing
those other cables,

1831
01:22:38,754 --> 01:22:40,521
- I'm not coming back up.
- Nick:<i> Okay.</i>

1832
01:22:41,957 --> 01:22:43,023
Daniel:
<i> I'm taking a pretty big hit...</i>

1833
01:22:44,592 --> 01:22:46,260
<i> But overall</i>
<i> the mining experience</i>

1834
01:22:46,262 --> 01:22:47,528
<i> has still been worth it.</i>

1835
01:22:51,833 --> 01:22:53,600
<i> My mining days</i>
<i> may be over,</i>

1836
01:22:53,602 --> 01:22:55,803
<i> but I'm still very involved</i>
<i> with bitcoin.</i>

1837
01:22:55,805 --> 01:22:57,972
With bitcoin,
it's a money system where

1838
01:22:57,974 --> 01:23:01,041
it's backed by math.
It's back by the laws
of mathematics

1839
01:23:01,043 --> 01:23:02,743
and by the rules
of the protocol.

1840
01:23:02,745 --> 01:23:04,745
I keep thinking
that there's gotta be
an easier way

1841
01:23:04,747 --> 01:23:06,447
to just set up
a secondary protocol

1842
01:23:06,449 --> 01:23:08,415
to trade private keys.

1843
01:23:08,417 --> 01:23:10,751
Every time I log on,
I see another dot on China

1844
01:23:10,753 --> 01:23:13,420
and I'm like, this is why
right now the price has gone up.

1845
01:23:13,422 --> 01:23:16,557
Daniel:
<i> The price is</i>
<i> nearing 150 again.</i>

1846
01:23:16,559 --> 01:23:18,492
<i> Many attribute it</i>
<i> to the explosion</i>

1847
01:23:18,494 --> 01:23:20,894
<i> of bitcoin's popularity</i>
<i> in China.</i>

1848
01:23:20,896 --> 01:23:22,663
What's happened recently
is Chinese people

1849
01:23:22,665 --> 01:23:23,998
have really come
and adopted bitcoin.

1850
01:23:24,000 --> 01:23:26,834
<i> As a culture,</i>
<i> as a nation</i>

1851
01:23:26,836 --> 01:23:28,836
<i> Chinese people are keen</i>
<i> to learn about</i>

1852
01:23:28,838 --> 01:23:30,871
<i> things that are</i>
<i> on the Internet,</i>

1853
01:23:30,873 --> 01:23:32,606
<i> things that involve</i>
<i> math and science.</i>

1854
01:23:32,608 --> 01:23:35,409
<i> We think that China can really</i>
<i> contribute in this space</i>

1855
01:23:35,411 --> 01:23:37,644
and help bring bitcoin
to the mainstream.

1856
01:23:37,646 --> 01:23:39,780
Daniel:
<i> Germany's another part</i>
<i> of the world</i>

1857
01:23:39,782 --> 01:23:41,415
<i> where bitcoin</i>
<i> has found a home.</i>

1858
01:23:41,417 --> 01:23:43,884
Woman:
<i> It's starting to get normal</i>
<i> if one person a day</i>

1859
01:23:43,886 --> 01:23:46,286
<i> comes in and buys</i>
<i> a coffee with bitcoins.</i>

1860
01:23:46,288 --> 01:23:49,223
People are looking
for a new way of paying--

1861
01:23:49,225 --> 01:23:50,824
not through banks,
not with Euros,

1862
01:23:50,826 --> 01:23:51,992
not with dollars.
Something new.

1863
01:23:53,795 --> 01:23:55,829
Daniel:
<i> The German ministry of finance</i>

1864
01:23:55,831 --> 01:23:57,931
<i> even became the first</i>
<i> governing body</i>

1865
01:23:57,933 --> 01:24:00,567
<i> to officially classify bitcoin</i>
<i> as "private money."</i>

1866
01:24:00,569 --> 01:24:02,703
I believe if we want to get

1867
01:24:02,705 --> 01:24:04,772
some justice back
into our society,

1868
01:24:04,774 --> 01:24:07,741
<i> we should reduce</i>
<i> the importance of the banks.</i>

1869
01:24:07,743 --> 01:24:10,778
<i> Bitcoin is banking</i>
<i> without banks,</i>

1870
01:24:10,780 --> 01:24:11,278
so here we go.

1871
01:24:15,083 --> 01:24:17,885
The FBI today shut down
what it's calling

1872
01:24:17,887 --> 01:24:20,187
the most sophisticated
Internet site

1873
01:24:20,189 --> 01:24:22,456
<i> in the business</i>
<i> of selling hard drugs,</i>

1874
01:24:22,458 --> 01:24:25,225
<i> including heroin,</i>
<i> cocaine and LSD.</i>

1875
01:24:25,227 --> 01:24:26,727
Daniel:
<i> In the Sci-Fi section</i>

1876
01:24:26,729 --> 01:24:28,796
<i> of a San Francisco</i>
<i> public library,</i>

1877
01:24:28,798 --> 01:24:30,964
<i> undercover agents</i>
<i> surprised a young man</i>

1878
01:24:30,966 --> 01:24:33,467
<i> quietly working</i>
<i> on his laptop.</i>

1879
01:24:33,469 --> 01:24:36,236
<i> They arrested a 29-year-old</i>
<i> software engineer</i>

1880
01:24:36,238 --> 01:24:38,205
<i> named Ross Albrecht</i>

1881
01:24:38,207 --> 01:24:40,140
<i> and accused him</i>
<i> of being the mastermind</i>

1882
01:24:40,142 --> 01:24:42,609
<i> behind the silk road.</i>

1883
01:24:42,611 --> 01:24:44,311
People have always tied
the silk road to it.

1884
01:24:44,313 --> 01:24:46,213
Media has always
tied the silk road to it,

1885
01:24:46,215 --> 01:24:49,716
as if silk road is bitcoin,
but it's not.

1886
01:24:49,718 --> 01:24:52,619
<i> This may be a sign</i>
<i> that bitcoin is growing up.</i>

1887
01:24:52,621 --> 01:24:54,655
It's funny. My friend
just I.M.'D me and said,

1888
01:24:54,657 --> 01:24:55,989
"silk road got raided

1889
01:24:55,991 --> 01:24:59,393
and the government seized
$3.6 million in bitcoin.

1890
01:24:59,395 --> 01:25:02,262
Is there a way
to invalidate bitcoins?"
( Chuckles )

1891
01:25:02,264 --> 01:25:04,131
I replied, "no."

1892
01:25:04,133 --> 01:25:06,233
<i> - ( Daniel speaking )</i>
<i> - ( Keyboard clicking )</i>

1893
01:25:11,573 --> 01:25:13,107
People are starting
to finally realize

1894
01:25:13,109 --> 01:25:15,909
that bitcoin has nothing
to do with how people use it.

1895
01:25:15,911 --> 01:25:17,411
It's just money.
It's like gold.

1896
01:25:19,080 --> 01:25:20,781
<i> Of course,</i>
<i> not everyone thinks</i>

1897
01:25:20,783 --> 01:25:23,016
<i> bitcoin is the way</i>
<i> of the future.</i>

1898
01:25:23,018 --> 01:25:24,751
James angel:
<i> Bitcoin will not be able</i>

1899
01:25:24,753 --> 01:25:27,554
<i> to survive or thrive</i>

1900
01:25:27,556 --> 01:25:30,290
without becoming legitimate.

1901
01:25:30,292 --> 01:25:31,558
I don't see it

1902
01:25:31,560 --> 01:25:33,827
having a serious place

1903
01:25:33,829 --> 01:25:34,995
in our financial system.

1904
01:25:36,197 --> 01:25:37,431
<i> There are</i>
<i> really good reasons</i>

1905
01:25:37,433 --> 01:25:39,733
<i> why we have central banks</i>

1906
01:25:39,735 --> 01:25:42,636
<i> that have the power</i>
<i> to put out financial fires</i>

1907
01:25:42,638 --> 01:25:44,104
<i> by printing money.</i>

1908
01:25:44,106 --> 01:25:47,474
I'm worried
about the technology.

1909
01:25:47,476 --> 01:25:49,243
<i> As darth vader once said,</i>

1910
01:25:49,245 --> 01:25:51,245
<i> "don't put all your faith</i>
<i> in technology."</i>

1911
01:25:51,247 --> 01:25:52,813
<i> I think</i>
<i> 10 years from now,</i>

1912
01:25:52,815 --> 01:25:54,915
<i> we'll look back on this</i>
<i> and just kind of chuckle</i>

1913
01:25:54,917 --> 01:25:57,284
<i> at the bitcoin fad.</i>

1914
01:25:57,286 --> 01:25:59,486
"Oh yeah,
I remember bitcoin.

1915
01:25:59,488 --> 01:26:02,556
Oh yeah,
I remember that."

1916
01:26:02,558 --> 01:26:04,024
Man:
It's financial freedom.

1917
01:26:04,026 --> 01:26:06,393
Come on, bro.
This is the new world, bro.

1918
01:26:06,395 --> 01:26:08,195
Daniel:
<i> Others are more optimistic.</i>

1919
01:26:08,197 --> 01:26:09,963
I think
within 10 years,

1920
01:26:09,965 --> 01:26:12,065
you're gonna have a lot
of people using bitcoin,

1921
01:26:12,067 --> 01:26:13,734
but they're not
gonna realize that
they're using it,

1922
01:26:13,736 --> 01:26:15,802
because it's gonna
be a protocol that's
imbedded underneath

1923
01:26:15,804 --> 01:26:17,971
whatever financial service
they're using today.

1924
01:26:17,973 --> 01:26:19,973
<i> And by bitcoin</i>
<i> being open-source</i>

1925
01:26:19,975 --> 01:26:21,875
<i> it's what can allow</i>
<i> all these different</i>
<i> mobile wallets</i>

1926
01:26:21,877 --> 01:26:23,443
<i> and all these</i>
<i> financial technologies</i>

1927
01:26:23,445 --> 01:26:24,645
<i> to all talk to each other,</i>

1928
01:26:24,647 --> 01:26:27,047
especially
around the world.

1929
01:26:27,049 --> 01:26:28,649
Voorhees:
<i> Whoever the hell satoshi was,</i>

1930
01:26:28,651 --> 01:26:31,084
<i> he should go down in history</i>
<i> as one of the greatest people</i>

1931
01:26:31,086 --> 01:26:32,719
<i> or groups of people</i>
<i> that ever existed.</i>

1932
01:26:32,721 --> 01:26:34,955
This is a technology
that mankind has needed

1933
01:26:34,957 --> 01:26:36,490
for thousands of years.

1934
01:26:36,492 --> 01:26:38,825
People have been dealing
with monetary shenanigans

1935
01:26:38,827 --> 01:26:41,628
since the Roman empire
clipping gold coins.

1936
01:26:41,630 --> 01:26:43,897
And finally people
can escape it.

1937
01:26:43,899 --> 01:26:47,634
I'm cautious to try
to predict the future.

1938
01:26:47,636 --> 01:26:49,069
<i> We don't really know.</i>

1939
01:26:49,071 --> 01:26:51,705
<i> I tend to be</i>
<i> a technological optimist.</i>

1940
01:26:51,707 --> 01:26:53,974
I see the democratization
of technology

1941
01:26:53,976 --> 01:26:55,709
as being
a really positive thing.

1942
01:26:55,711 --> 01:26:59,646
<i> And I think that's</i>
<i> a really powerful force</i>

1943
01:26:59,648 --> 01:27:01,515
<i> that is really</i>
<i> only just beginning.</i>

1944
01:27:26,007 --> 01:27:28,175
Not bad. Oh!

1945
01:27:30,378 --> 01:27:32,279
( Grunts,
breathing hard )

1946
01:27:32,281 --> 01:27:34,081
( Laughs )

1947
01:27:37,418 --> 01:27:39,219
( Sighs )

1948
01:27:39,221 --> 01:27:42,356
Recently, as the price has
been floating around 200 again,

1949
01:27:42,358 --> 01:27:45,058
I have a lot of friends
that have asked me,

1950
01:27:45,060 --> 01:27:48,462
"are you gonna cash out
some of your bitcoins now?

1951
01:27:48,464 --> 01:27:51,865
The price is really high.
You should get some dollars
out of it."

1952
01:27:51,867 --> 01:27:54,935
I kind of tell 'em,
"no, don't you see it?"

1953
01:27:56,771 --> 01:27:58,572
<i> I've met so many</i>
<i> interesting people</i>

1954
01:27:58,574 --> 01:28:00,407
and there seems to be
one thing that kind of binds

1955
01:28:00,409 --> 01:28:02,709
a lot of them together,
and that is that

1956
01:28:02,711 --> 01:28:05,145
they're willing
to face opposition

1957
01:28:05,147 --> 01:28:06,980
<i>and follow through on the ideas</i>
<i> that they believe in.</i>

1958
01:28:08,483 --> 01:28:10,250
<i> The people who try</i>
<i> the crazy ideas</i>

1959
01:28:10,252 --> 01:28:12,919
<i> often fail and then everybody</i>
<i> likes to point their fingers</i>

1960
01:28:12,921 --> 01:28:15,055
<i> and laugh and say,</i>
<i> "that was such a stupid idea."</i>

1961
01:28:15,057 --> 01:28:17,557
<i> But once in a while</i>
<i> it works out.</i>

1962
01:28:17,559 --> 01:28:19,559
<i> I think bitcoin</i>
<i> is proving to be</i>

1963
01:28:19,561 --> 01:28:20,961
<i> one of those things.</i>

1964
01:28:28,102 --> 01:28:29,836
The decision to bring
virtual currency

1965
01:28:29,838 --> 01:28:31,938
within the scope
of our regulatory framework

1966
01:28:31,940 --> 01:28:33,073
should be viewed as

1967
01:28:33,075 --> 01:28:34,941
a positive development
for this sector.

1968
01:28:34,943 --> 01:28:36,643
I'm here to testify,
because I believe

1969
01:28:36,645 --> 01:28:38,812
that digital currency
represents

1970
01:28:38,814 --> 01:28:40,714
one of the most important
technical

1971
01:28:40,716 --> 01:28:42,749
and economic innovations
of our time.

1972
01:28:42,751 --> 01:28:45,652
We are enthusiastic
about the potential

1973
01:28:45,654 --> 01:28:46,887
of virtual currencies

1974
01:28:46,889 --> 01:28:48,989
and the digital economy
for social good.

1975
01:28:53,594 --> 01:28:56,196
This latest generation
of technology

1976
01:28:56,198 --> 01:28:57,731
which we're talking
about today

1977
01:28:57,733 --> 01:29:00,200
takes things to a whole
new level.

1978
01:29:00,202 --> 01:29:01,768
There's a bit

1979
01:29:01,770 --> 01:29:03,136
of a shared
responsibility here

1980
01:29:03,138 --> 01:29:04,871
in trying to figure out
how to make this work.

1981
01:29:04,873 --> 01:29:07,541
It is a little strange
that bitcoin--

1982
01:29:07,543 --> 01:29:08,809
we don't know who
the creator is

1983
01:29:08,811 --> 01:29:11,745
and so that often

1984
01:29:11,747 --> 01:29:13,113
conjures up the idea
that there's

1985
01:29:13,115 --> 01:29:14,781
some risk here that
we have not--

1986
01:29:14,783 --> 01:29:16,183
you don't think it was
Al Gore, do you?

1987
01:29:16,185 --> 01:29:17,918
( Laughter )

1988
01:29:19,787 --> 01:29:21,288
If you think a little broadly,

1989
01:29:21,290 --> 01:29:23,757
this could, again, have
huge huge implications.

1990
01:29:25,193 --> 01:29:27,627
<i> ( Chimes )</i>

1991
01:29:33,935 --> 01:29:37,237
Daniel:
<i> 2013 was the year bitcoin</i>
<i> first entered the mainstream</i>

1992
01:29:37,239 --> 01:29:40,741
<i> and 2014 got off</i>
<i> to a dramatic start.</i>

1993
01:29:40,743 --> 01:29:43,243
<i> Just as we were wrapping</i>
<i> things up on our film,</i>

1994
01:29:43,245 --> 01:29:45,112
<i> Charlie shrem was arrested</i>

1995
01:29:45,114 --> 01:29:48,148
<i> after returning</i>
<i> from a bitcoin conference</i>
<i> in Amsterdam.</i>

1996
01:29:48,150 --> 01:29:51,151
<i> He could be facing</i>
<i> up to 30 years in prison</i>

1997
01:29:51,153 --> 01:29:53,787
<i> on charges related</i>
<i> to his activities</i>
<i> at bitinstant.</i>

1998
01:29:57,925 --> 01:30:00,560
In j.F.K.,
you walk right off the plane,

1999
01:30:00,562 --> 01:30:02,796
and you go straight
to customs.

2000
01:30:02,798 --> 01:30:04,698
About three agents
in front of me

2001
01:30:04,700 --> 01:30:06,800
and then four agents
behind me said,

2002
01:30:06,802 --> 01:30:08,702
"Mr. shrem,
please come with us."

2003
01:30:08,704 --> 01:30:11,271
<i> They took me</i>
<i> to an interrogating room,</i>

2004
01:30:11,273 --> 01:30:12,873
<i> told me that</i>
<i> I'm being arrested</i>

2005
01:30:12,875 --> 01:30:15,108
<i> on federal crimes</i>
<i> of money laundering,</i>

2006
01:30:15,110 --> 01:30:17,110
<i> running an unlicensed</i>
<i> money transmission business</i>

2007
01:30:17,112 --> 01:30:20,781
<i> and failing to file</i>
<i> suspicious-activity reports.</i>

2008
01:30:20,783 --> 01:30:23,884
Daniel:
<i> The indictment alleged that</i>
<i> Charlie had sold bitcoins</i>

2009
01:30:23,886 --> 01:30:26,520
<i> to a reseller that operated</i>
<i> on the silk road.</i>

2010
01:30:27,555 --> 01:30:29,623
What sucks
is the house arrest.

2011
01:30:29,625 --> 01:30:33,059
I have to pretty much be here
all the time, every day.
I can't even go outside

2012
01:30:33,061 --> 01:30:35,295
unless I'm going
to my lawyer's office,
which is once or twice a week.

2013
01:30:36,597 --> 01:30:38,365
<i> I pretty much lost</i>
<i> my freedom,</i>

2014
01:30:38,367 --> 01:30:40,400
<i> lost everything</i>
<i> that I've built</i>
<i> over the past year.</i>

2015
01:30:43,204 --> 01:30:45,405
Daniel:
<i> Charlie's arrest wasn't</i>
<i> the only bad news</i>

2016
01:30:45,407 --> 01:30:48,074
<i> that rocked the community</i>
<i> in the new year.</i>

2017
01:30:48,076 --> 01:30:51,178
<i> For months there had</i>
<i> been rumors that mt. Gox</i>
<i> had become insolvent.</i>

2018
01:30:51,180 --> 01:30:54,881
<i> And in February</i>
<i> the site went offline.</i>

2019
01:30:54,883 --> 01:30:57,350
- ( Man speaks )
- ( Karpeles speaks )

2020
01:30:57,352 --> 01:30:57,951
Do you still have
everyone's bitcoins?

2021
01:31:01,856 --> 01:31:03,757
I'm not touching you.
I haven't touched you.

2022
01:31:03,759 --> 01:31:06,293
Do you still have
everyone's bitcoins?

2023
01:31:06,295 --> 01:31:08,295
( Karpeles speaks )

2024
01:31:12,467 --> 01:31:14,034
( Cameras clicking )

2025
01:31:14,036 --> 01:31:15,368
Daniel:
<i> The rumors turned out</i>
<i> to be true.</i>

2026
01:31:15,370 --> 01:31:17,337
( Speaking Japanese )

2027
01:31:33,621 --> 01:31:35,889
Daniel:
<i> Mt. Gox had reportedly</i>
<i> been hacked</i>

2028
01:31:35,891 --> 01:31:38,892
<i> and nearly half</i>
<i> a billion dollars worth</i>
<i> of bitcoin were missing.</i>

2029
01:31:42,830 --> 01:31:45,632
<i> Mark was forced</i>
<i> to step down as c.E.O.</i>

2030
01:31:45,634 --> 01:31:47,801
<i> And mt. Gox went</i>
<i> into bankruptcy.</i>

2031
01:31:54,375 --> 01:31:56,977
A national
magazine claims
to have identified

2032
01:31:56,979 --> 01:31:58,712
the mysterious founder
of the worldwide

2033
01:31:58,714 --> 01:32:00,614
digital currency
called bitcoin.

2034
01:32:00,616 --> 01:32:02,115
<i> Tonight he is</i>
<i> speaking out,</i>

2035
01:32:02,117 --> 01:32:03,450
<i> but he says he has</i>

2036
01:32:03,452 --> 01:32:04,951
<i> nothing whatsoever to do</i>
<i> with bitcoin.</i>

2037
01:32:04,953 --> 01:32:06,887
Man:
<i> Why did you create</i>
<i> bitcoin, sir?</i>

2038
01:32:06,889 --> 01:32:07,954
Okay.

2039
01:32:09,624 --> 01:32:11,224
( Laughs )

2040
01:32:11,226 --> 01:32:12,792
Man #2:
<i> Sir, can we ask you</i>
<i> about bitcoin?</i>

2041
01:32:12,794 --> 01:32:14,027
- No no no no no.
-<i> Why were you involved</i>
<i> in bitcoin?</i>

2042
01:32:14,029 --> 01:32:17,564
Okay, I'm not involved
in bitcoin, okay?

2043
01:32:17,566 --> 01:32:18,698
-<i> Who's involved in it? </i>
- Wait a minute.

2044
01:32:18,700 --> 01:32:19,966
I want a free lunch first.

2045
01:32:19,968 --> 01:32:21,368
I'm gonna go with this guy.

2046
01:32:22,737 --> 01:32:25,872
I want a big one.
( Laughs ) Yeah.

2047
01:32:25,874 --> 01:32:27,908
Oh, okay. Yeah,
this will be good.

2048
01:32:27,910 --> 01:32:30,744
- Oh jeez.
- We have some water.

2049
01:32:30,746 --> 01:32:33,079
Hey, where's yours?

2050
01:32:33,081 --> 01:32:36,182
Daniel:
<i> "Newsweek" claimed</i>
<i> the creator of bitcoin</i>

2051
01:32:36,184 --> 01:32:38,218
<i> had not used a pseudonym.</i>

2052
01:32:38,220 --> 01:32:39,953
<i> They connected the dots</i>

2053
01:32:39,955 --> 01:32:41,955
<i> to a 64-year-old</i>
<i> Japanese man</i>

2054
01:32:41,957 --> 01:32:44,057
<i> living in Los Angeles...</i>

2055
01:32:44,059 --> 01:32:47,527
<i> Named Dorian prentice</i>
<i> satoshi nakamoto.</i>

2056
01:32:48,930 --> 01:32:51,464
<i> Nakamoto immediately denied</i>
<i> the allegations</i>

2057
01:32:51,466 --> 01:32:53,800
<i> and said he'd tell his story</i>
<i> to the first reporter</i>

2058
01:32:53,802 --> 01:32:55,602
<i> who agreed</i>
<i> to buy him lunch.</i>

2059
01:32:55,604 --> 01:32:57,437
The main reason
I'm here is

2060
01:32:57,439 --> 01:33:00,240
to clear my name,
that I have nothing

2061
01:33:00,242 --> 01:33:02,142
- to do with bitcoin...
- Yup.

2062
01:33:02,144 --> 01:33:04,911
...nothing to do
with developing.

2063
01:33:04,913 --> 01:33:08,114
I was just an engineer
doing something else.

2064
01:33:08,116 --> 01:33:10,350
Daniel:
<i> As the media</i>
<i> frenzy escalated,</i>

2065
01:33:10,352 --> 01:33:13,186
<i> "newsweek's" claims</i>
<i> started to unravel.</i>

2066
01:33:13,188 --> 01:33:15,922
<i> Holes in the story</i>
<i> led many to believe</i>

2067
01:33:15,924 --> 01:33:17,924
<i> it was nothing more</i>
<i> than sensational journalism.</i>

2068
01:33:19,393 --> 01:33:21,094
<i> There was</i>
<i> no conclusive evidence</i>

2069
01:33:21,096 --> 01:33:22,762
<i> tying Dorian to bitcoin.</i>

2070
01:33:24,365 --> 01:33:25,899
<i> Amidst the uncertainty,</i>

2071
01:33:25,901 --> 01:33:27,334
<i> on that same day...</i>

2072
01:33:28,469 --> 01:33:30,236
<i> A comment suddenly appeared</i>

2073
01:33:30,238 --> 01:33:33,773
<i> on satoshi's long-dormant</i>
<i> profile page which read...</i>

2074
01:33:42,416 --> 01:33:44,818
<i> Maybe we'll never know</i>
<i> who created bitcoin...</i>

2075
01:33:46,020 --> 01:33:47,554
<i> But the truth is</i>

2076
01:33:47,556 --> 01:33:49,122
<i> it doesn't really matter.</i>

2077
01:33:50,858 --> 01:33:52,459
<i> Bitcoin belongs</i>
<i> to everyone.</i>

2078
01:33:53,594 --> 01:33:55,762
<i> And the future</i>
<i> is ours to build.</i>

2079
01:34:06,340 --> 01:34:08,074
<i> ( Electronica music playing )</i>

2080
01:34:22,456 --> 01:34:24,958
Put $100,000
on market orders
right now.

2081
01:34:24,960 --> 01:34:26,626
- Why?
- Let's do it.
Let's do it. Come on.

2082
01:34:26,628 --> 01:34:28,595
- Come on.
- Why? What's
gonna happen?

2083
01:34:28,597 --> 01:34:30,597
Buy 100k worth
of bitcoins right now.

2084
01:34:30,599 --> 01:34:31,731
- Why?
- Do it.

2085
01:34:31,733 --> 01:34:33,099
- I don't wanna do it.
- Do it.

2086
01:34:33,101 --> 01:34:34,734
You owe me
$100,000. Do it.

2087
01:34:34,736 --> 01:34:36,636
I'll send you
$100,000 in bitcoins.

2088
01:34:36,638 --> 01:34:38,204
No, you buy it.
But 100k right now.

2089
01:34:38,206 --> 01:34:40,874
Dude, I can't. I need
the floating gox
for volume.

2090
01:34:40,876 --> 01:34:44,044
Closing bell
for satoshi square!

2091
01:34:44,046 --> 01:34:45,145
All right,
does this look right?

2092
01:34:45,147 --> 01:34:46,579
1-n-p-w? Yup.

2093
01:34:46,581 --> 01:34:48,048
Yup, okay.

2094
01:34:48,050 --> 01:34:49,049
And I owe you 0.2?

2095
01:34:49,051 --> 01:34:51,317
- Uh... 0.18.
- 0.18.

2096
01:34:51,319 --> 01:34:54,654
This is for
bitcoin t-shirt.

2097
01:34:54,656 --> 01:34:56,823
I got 'em.
A pleasure, sir.

2098
01:34:56,825 --> 01:34:58,324
Great doing
business with you.

2099
01:34:58,326 --> 01:35:00,427
- Gonna wear your
shirt proudly.
- Do it.

2100
01:35:00,429 --> 01:35:02,128
That's one thing
that's interesting
about bitcoin.

2101
01:35:02,130 --> 01:35:04,197
It's like, how do
you declare losses?

2102
01:35:04,199 --> 01:35:06,766
You point to two
transactions that
happened on the Internet

2103
01:35:06,768 --> 01:35:09,069
and you tell the I.R.S.
That you owned that?

2104
01:35:09,071 --> 01:35:11,438
"Oh, I used to own
that and I lost
the private key."

2105
01:35:12,707 --> 01:35:14,374
And then if you
really do lose it,

2106
01:35:14,376 --> 01:35:16,376
how do you write it
off for taxes?

2107
01:35:16,378 --> 01:35:18,044
Oh, that's gonna
be interesting.

2108
01:35:18,046 --> 01:35:19,679
( Thunder crashes )

2109
01:35:22,283 --> 01:35:24,584
We love bitcoin.

2110
01:35:24,586 --> 01:35:27,020
Okay, guys, we're gonna
play a special version
of hopscotch

2111
01:35:27,022 --> 01:35:30,290
called "bitcoin
blockchain hopscotch."

2112
01:35:30,292 --> 01:35:33,126
Oh, you lost
all your bitcoins!

2113
01:35:33,128 --> 01:35:34,728
( Sighs )

2114
01:35:34,730 --> 01:35:36,596
Daniel:
<i> Who is satoshi nakamoto?</i>

2115
01:35:36,598 --> 01:35:38,264
( Chuckles )

2116
01:35:38,266 --> 01:35:41,234
I'd... rather
not tell you,

2117
01:35:41,236 --> 01:35:42,602
- but yeah.
-<i> Oh, do you know?</i>

2118
01:35:42,604 --> 01:35:45,338
Uh, maybe not, maybe.

2119
01:35:45,340 --> 01:35:46,906
<i> Oh.</i>
<i> ( Chuckles )</i>

2120
01:35:46,908 --> 01:35:49,776
You know,
I have a bitcoin
and a half myself now.

2121
01:35:49,778 --> 01:35:51,578
Which I think
probably in 10 years

2122
01:35:55,416 --> 01:35:57,083
Voorhees:
<i> When you think</i>
<i> about it hard enough</i>

2123
01:35:57,085 --> 01:35:59,452
<i> on a global scale,</i>
<i> this is a net gain</i>
<i> for humanity.</i>