Banking on Bitcoin Page #3

- Yeah.

Just one small table, round.

And I have flowers,

like a flower arrangement.

- A very nice flower arrangement.

- Bitcoin flowers?

Bitcoin flowers.

Bitcoin flowers would be

white Lily, purple and orange.

Just right here, three colors.

We're putting together

the first bitcoin center

here in New York City,

right next door to

the New York stock exchange

bitcoin is a new space,

and many of the rules and regulations

haven't been imposed yet.

But we will open one day soon,

after the lawyers do their job,

a live digital currency

exchange.

What's happening here

is a fusion between

wall street and bitcoin,

hopefully.

Satoshi seemed to acknowledge

that it would be hard for

bitcoin to develop in any way

in which it wasn't interacting

with the regular economy

of dollars and Euros.

The problem with exchanges is

that they took you back

to this old world

that bitcoin was really

trying to get away from.

As soon as you move

back to an exchange,

you're moving back to a world

in which some third party has

all this personal data on you,

has all of your money,

has all of the security

vulnerabilities,

and really has none

of those strengths

that bitcoin

was designed to provide.

Jed mccaleb

created mt. Gox,

essentially on a lark one night

because he couldn't buy bitcoins

as quickly as he wanted to.

And interestingly,

he did it by starting

with a url

that he'd previously used

to run magic card trading sites.

So you get an idea about where

somebody's ideas are coming from

and how really kind of

rudimentary some of them were.

Jed essentially threw

this site together,

and put it online without

too much thought.

Jed essentially sold it

to the first person he found.

Who was mark karpeles,

a French guy

who was living in Tokyo.

He really knew

very little about mark

when he decided

to sell it to him.

And once he took it over,

it began growing

much more quickly

than mark was expecting

or was prepared for.

There are 21 million bitcoins

programmed into the system

that are going to be released.

It's a set number,

but within that,

every single bitcoin

can be divided up

into a hundred million

different pieces

so there's room for it

to expand as the use expands,

especially in the emerging

markets, in the developing world.

That is really

the most interesting place

to see where this thing goes.

So in my pocket I have a hundred

trillion Zimbabwe dollars

from the reserve bank

of Zimbabwe,

just as a reminder

of what happens

if our governments

screw up our money.

You know, Zimbabwe's

a good example

of a government that lost

the trust of their people,

and they lost

the trust of their people

by printing too much money

and causing runaway

hyperinflation.

So I think you will see people

in other parts of the world

who've experienced

hyperinflation

who've experienced

bank failures.

I think those will be

the kind of people

who are looking for something...

Something new, right?

They're willing

to take the risk.

A lot of us take the capacity

to send money to others,

receive money, store money

and do it electronically

these days for granted

because we are amongst the

lucky 50% or so of the world

that have bank accounts.

But 2.5 billion adults

in the world

do not have access

to bank accounts.

A technology like bitcoin,

cryptocurrency,

has the capacity to bring those

people into the financial system,

to give them this power

to effectively have

what you could argue

is a bank in their cell phone,

a bank in their pocket.

Really could open up commerce

to a lot of people

who are currently

excluded from it.

Somebody who is maybe

working in one country

and, you know, they want

to send money back home.

And right now, like,

western union is a big way

that people do remittances.

From a western union

perspective,

we serve clients in many different

locations around the globe,

and primarily for remittances.

Western union serves typically

an unbanked customer,

a customer who is

either a migrant worker,

or an individual who doesn't

feel comfortable

in the financial services

sector.

And the problem with remittances

is they're really expensive.

So if I'm sending $100

back home,

I may end up spending

$5.00 or $10.00

just on fees to get that

money back to my family.

That's a huge percentage

if you're poor and working.

So since bitcoin

doesn't care about borders,

I could just send bitcoin

to another country,

and if my family

in that other country

has some way of spending

that bitcoin

or has some way of trans...

Of exchanging that bitcoin

into the local currency,

then it's just quicker and

cheaper and more convenient.

And a lot of people think

that remittances

will be one of the really big

first uses for bitcoin.

The one challenge there

is we deal with

you know, at our company, 750

transactions, peak, a second.

And those happen instantly.

If you look at a blockchain, you

have to wait for verifications,

and if you do a recent test,

it takes about 15 minutes

for every transaction

to be validated by the network.

That doesn't scale,

so it has

its challenges as well.

Wikileaks, which solicits

and publishes

secrets and suppressed material

from whistleblowers

around the world,

has been under cyber attack

from governments

that want to shut it down.

PayPal is the latest business

to break ties with wikileaks,

but the whistle-blowing

website

dedicated to publishing

classified government documents

still continues to seek funding,

while crossing out PayPal

as one method of payment.

In order to insure

our future survival,

wikileaks is now forced

to temporarily suspend

all publishing operations

in order to direct

all our resources

into fighting the blockade

and raising funds.

The wikileaks scandal

seemed to provide

an opportunity for bitcoin.

At the time,

the big banks and credit cards

stopped processing payments

for wikileaks,

and some people thought that

bitcoin would provide a way

to send donations to wikileaks.

You could certainly see in

the hubbub around wikileaks

that satoshi was still somebody

who was very paranoid

about the government,

and the government coming in

and taking too close a look

at the bitcoin project.

And you could also see

that satoshi,

I think, realized at this point

that bitcoin was still

young software

and the kinks hadn't been

worked out yet.

In, I think, late 2010,

he asked me if it'd be okay

if he put my email address

on the bitcoin. Org

home page,

'cause he had been the

primary contact for people.

And I said, "sure."

He went ahead

and changed the web page,

but what he did is

he left his name there,

but he took away

his email address.

And so it was just me

and my email address

who was suddenly getting

all of the attention.

I think that was satoshi's way

of kind of saying,

"you're the leader

of the project now."

There was one particular email

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