The Rise and Rise of Bitcoin

( WHIRRING )

Don't be filming

my passwords.

I used to have

a shirt in high school

that said "technology must be

used to liberate the individual."

And I didn't really know

what it meant for years,

'cause I didn't

really think about it.

But today I look back and I'm like,

"oh man, hell yeah, I like that shirt."

I'm glad I wore that shirt,

'cause it's how I really feel today.

My name is Daniel mross.

Today is may 3rd, 2012.

I go through college

and watch the Internet come

and all these different things.

And now, like, bitcoin,

it's just a single technology

built on top of the Internet,

but it's so fascinating

because there's so many

freaking things

you can do with it.

It's also just

a big experiment.

There's no guarantees

with it.

We might just all be

wasting our time...

Exploring concepts

and ideas.

It's at this crossroads

of technology

and philosophy

and politics and everything.

Just be a part of it.

It's fun.

It's crazy though,

but it's fun.

NICK MROSS:

Um, first question is

what is bitcoin?

- ( CHUCKLES )

- ( DRAMATIC MUSIC PLAYING )

DANIEL:

I can't tell you what bitcoin is

in just a few sentences.

It takes time

to understand it,

the same way it took

people time to understand

what the Internet was

back in 1994.

That little mark with the "a"

and then the ring around it.

- "At"?

- See, that's what I said.

- Mm-hmm.

- Katie said she thought it was "about."

- KATIE:
Yeah.

- ELIZABETH VARGAS: Oh, Internet is...

- That massive computer network...

- KATIE:
Right.

...the one that's becoming

really big now.

Allison, can you explain

what Internet is?

DANIEL:

When the Internet was taking off,

I was in college

at Virginia tech

studying computer science.

Looking back,

it's amazing to think about

how much the world

was changing.

Hey, Dan,

ready for the game?

I'm just finishing up here

with my new kayaking friends.

Kayaking friends

on your computer?

Yeah, I just got

America online.

DANIEL:
That same type of

innovation is happening again

with bitcoin.

It's the smartest people

in the room

that are the most excited about this.

So what are they seeing?

DANIEL:
The Internet changed

the way the world communicates

bitcoin changes

the way money works.

You can basically put

a bank in your pocket.

Psst!

Wanna buy some

secret stuff?

There is now a new note

that people are starting

to talk about...

the bitcoin.

The money of the future.

DANIEL:

Bitcoin was created to provide

an alternative

to the banking system.

GEORGE W. BUSH:

We're in the midst

of a serious financial crisis

and the federal government

is responding

with decisive action.

DANIEL:

Unlike most currencies,

bitcoins are issued according

to a set of fixed rules.

The idea was to create

money whose value

couldn't be manipulated

by a central authority.

The government, no matter

how many guns they draw,

cannot change

a mathematical problem.

They can point their guns

at "two plus two,"

but it's always

gonna equal four.

DANIEL:

It's fascinating to imagine

what it means to have

global decentralized money.

And that's what's happening.

( INSTRUMENTAL MUSIC PLAYING )

( BABBLES )

My five-year-old's birthday.

First round

of burgers is ready.

Second round is

going on in a second.

First round

of burgers is ready!

( PEOPLE CHATTERING )

First round.

ELIZA MROSS:

Dan has always been an idea guy.

Bitcoin is the perfect

combination

of how can I change the

world and make it better,

but how can

I also be a nerd?

So mostly I've just been

supporting him

in this craziness.

DANIEL:

Eliza and I met in college,

and we've been married

for seven years.

We live in Pittsburgh,

where I'm from,

and we have three boys,

I've spent most of my career

as a database administrator.

But for the past two years,

I've been consumed with bitcoin.

Bitcoins come into existence

through a process called mining.

I build computers

to mine for bitcoins.

I'm glad that it's finally

getting a little bit cooler out.

My wife won't be as angry

that the basement is so hot.

I've still got a bunch of mining

rigs running right now.

Actually they're right down here,

if you wanna go take a look.

Here they are.

So what is bitcoin?

Bitcoin is

a revolutionary technology

that enables a new way to send

payments over the Internet.

( BEEPS ) - You can think of

it as an open accounting system

where thousands of computers

all over the world

work together to track ownership

of digital tokens called bitcoins.

When you send

someone bitcoins,

the transaction is broadcast

to the entire network.

After it's verified,

it's recorded

in a public ledger

called the blockchain.

The blockchain

contains a record

of every bitcoin

transaction that has occurred

since the system began,

and it's shared

and maintained on the network,

so everyone keeps the books,

so to speak.

Most currencies are issued

by a central authority

that controls

the money supply.

Bitcoin is

a peer-to-peer system,

so there is

no central authority.

Instead bitcoins are

issued to users

who help process transactions

in the network.

This is known

as bitcoin mining.

Bitcoin miners are

specialized computers

that do the work

required to verify

and record transactions

in the blockchain.

As a reward for their work,

the miners earn bitcoins,

and this is how new bitcoins

are released into circulation.

The system is programmed

so that only 21 million

bitcoins will ever exist.

And as time goes by,

the mining reward decreases.

The result is

a predictable supply

that's governed

by scarcity,

making bitcoins

somewhat like a digital gold.

It's the first currency

of the Internet.

And everyone

is free to use it.

With bitcoin, you can send

any amount of money

to anyone anywhere

in the world

as easily

as sending an email.

My brother Nick

is a filmmaker.

After hearing me talk about

bitcoin incessantly for months,

we decided to start

documenting things.

NICK:
Hey,

I don't think we'll need the small camera.

- It can't hurt.

- NICK:
No, I'd rather just leave it behind.

I have so much equipment.

Do you mind?

Damn, you really

cramped it up, huh?

Not that bad.

What do you mean?

- Jeez.

- Dude, they're right there.

Right in the back.

Right there.

DANIEL:
I was convinced that

bitcoin was going to be huge,

and I knew there were a lot

of others like me out there.

Zipped my keys in my pocket,

so I don't forget 'em later.

Bitcoin was created by what's

believed to be a pseudonym,

a guy named

satoshi nakamoto.

Invented in '09

by a fictitious person

named satoshi nakamoto...

DANIEL:

On Halloween 2008,

someone using the name

satoshi nakamoto.

Posted on a cryptography

mailing list...

The post contained

a link to a white paper

in which satoshi proposed a new type

of payment system for the Internet.

It described a protocol that

used peer-to-peer networking,

proof of work

and public key cryptography.

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