Bitcoin: The End of Money as We Know It Page #6

any one person or computer.

Owners of the Bitcoin

mining computers

are rewarded with new Bitcoins

for processing transactions

and keeping the network secure.

In other words, the Bitcoin

network replaces banks

and bankers.

Today, the combined

computing power

of this global

network is greater

than the 500 biggest

supercomputers combined,

times 10,000!

And because every

transaction is verified

and recorded by the network,

a bitcoin cannot be forged.

Digital currency cannot be

debased with cheap metals,

or printed by the

billion at will.

Too much currency can

unleash a monster,

skyrocketing prices,

trillion dollar bills

that can't buy a loaf of bread.

- There is a big movement

in the U.S. demanding

that the Fed be audited so

that we can find out

what they are doing.

Nobody really knows

how many dollars

are in existence for example.

Ben Bernanke created

several trillions

of dollars over the

last several years.

But nobody really knows

where they landed.

- At any time for any reason,

the central banks can print

as much money as they want.

They call it fancy things

like quantitative easing.

And when they do that

it makes the dollar

or euros or yen that you

and I have worth less.

So if the world starts using

bitcoin as their currency

it can't be controlled by

central bankers or politicians.

- [Voiceover] Remember,

central banks create money

to boost the economy and try

to pull it back out

before inflation heats up.

But no one knows how much

magic money global banks

are creating to boost their

profits with questionable loans.

- Bitcoin is completely

the opposite.

It's totally transparent.

You know exactly how many exist.

- [Voiceover] The computer

code behind Bitcoin

has a built in brake pedal,

cutting the creation of bitcoins

in half every four years.

This ensures a transparent

controlled scarcity

and ultimately limits the

total number of bitcoins

to 21 million.

No lobbyist, no politician,

no banker can create more,

or change the mathematical

rules dictating their creation.

- Advancing accountability.

And that's something that's

the most exciting about Bitcoin

and technology behind it.

Is not so much that it

will supplant the dollar

or that it will supplant

government itself.

But all of a sudden there is

a competitor to government.

And that government

itself now needs

to look over its shoulder

more than it did.

- [Voiceover] This

new digital currency

can be purchased online

with a credit card

or in person with cash.

And it has the five key

characteristics of money.

But is it a store of value?

Is it stable or will

it diminish over time,

like a commodity rendered

useless, or a crop that fails?

The ultimate power

of a cryptocurrency

is unleashed by

mainstream adoption

and an ever-growing

volume of transactions.

- With bitcoin, the

currency is being created

much more slowly than

other currencies.

And the effect of that has been

to turn it into what is

essentially a speculative asset.

If you ask a lot of

Bitcoin enthusiasts

whether they are spending

the currency, they're not.

They're sitting on it and

waiting for the price to go up.

It isn't a currency if you

don't use it to pay people.

The point is that the

average person is quite happy

to walk into a bar and hand

over a five dollar note

in order to get a drink.

So you've got to

realize that most people

are happy with the

money system they have.

- [Voiceover] If most

people are happy with cash,

they're in love with plastic.

In the U.S. two-thirds

of in-person sales

are done with debit

or credit cards.

That plastic is a 60

year old technology,

created by a middleman.

Never designed for the internet.

Each transaction

requires personal data

like your name and address.

Credit card databases

are regularly hacked

with fraudulent purchases

charged to your account.

Criminals buy and sell

stolen credit cards

by the thousands in dark

corners of the internet.

In some parts of

London, one-third

of all online credit card

transactions are fraudulent.

Card issuers don't hold

you responsible for fraud

but protection

comes with a price,

2 to 4% in fees.

That's 50 billion

dollars a year.

- The issue with credit cards

from the merchant's perspective

is there's a lot of risk.

If they a take a credit card,

there might be a chargeback,

there might be

fraudulent purchases.

In fact there are

hundreds of billions

of dollars every year

in fraudulent purchases.

- [Voiceover] A bitcoin

purchase is done for pennies

but there are no protections.

If you lose your passwords,

or are fooled into

paying the wrong person,

you can never get

your money back.

It is like digital cash.

For a seller, this means

no chargeback risks.

For an e-commerce companies

like Expedia or Overstock,

cutting credit card fees can

double their profit margin.

- You could not miss the

point more effectively

than by thinking of

bitcoin as a currency

and payment network that

will make shopping easier

for the first world.

Bitcoin is about everything

else, everywhere else.

- [Voiceover] There

are 2.5 billion people

without a bank account.

With Bitcoin, a mobile phone

with an internet connection

is now a bank, with access

to the global market place.

- What happens when

Bitcoin services

and infrastructure

and Bitcoin wallets

and payment processors start

going into these countries.

These people will be

able to gain benefits

from trade where they

could not previously.

These people will be

able to send money home,

international

remittance, which is one

of the major pain points of

the current financial system.

- Here, if I send 100 dollars.

With banks it's

going to cost me 20%.

Western Union's

going to cost 10%.

Other options that are

competing with Western Union

are still going to be about 5%.

And if you are sending

to really remote areas

it's going to be anywhere

between 15 and 30%.

- So in terms of

money remittances

it is going to be a game

changer using Bitcoin.

You do not need a bank account.

You just need an

internet connection

and a wallet to get set up.

It's a tool to give

people an access

into the global ecosystem

and give them a promise

for an economic future and

specifically provide a way

for them to not be

dependent on a government

that could shut down

their bank accounts

or even could go into

their bank accounts

and take out finances.

- Goldman Sachs came

out with a report

and they basically looked at

if you were to replace

all transactions globally,

so FX, bank to bank transactions

with the Bitcoin protocol and

still charging 1%, mind you,

it would save the global

economy 200 billion,

not million, 200

billion dollars a year

in saved transaction costs

which ultimately goes back

into the hands of the consumer.

- [Voiceover] An

international wire transfer

can take up to four days.

Yet the internet

allows us to instantly

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