The Rise and Rise of Bitcoin Page #11

to separate church and state.

There's a wonderful quote

from one of the rothschilds...

"give me control

of a nation's money

and I care not

who makes its laws."

So I'm trying to play

my part in that narrative.

DANIEL:

Outside of the United States,

billions of people

don't have access

to basic banking services.

Bitcoin can level

the playing field

and help bring

developing nations

into the global economy.

( CHATTERING )

Cheers, cheers.

VOORHEES:
Eventually people

are going to use a currency

that is as free

as the Internet

because people will seek out

freedom wherever they can.

And just as the government

can't stop the Internet

and the freedom of speech, it can't

stop bitcoin and the freedom of money.

So we're just gonna have to see

how hard they try to do it.

It's scary

but it's exciting,

because at the other end

freedom typically wins.

We just have see how long

it takes to get there.

( SHOUTS )

DANIEL:

As summer rolled on,

the bitcoin industry

continued to flourish.

It's hard to remember

the days where I was

running this thing

out of my basement

and with one or two people.

Bitinstant was just

a domain name.

DANIEL:

Charlie and bitinstant

moved into

their new offices

I always wonder

if satoshi knew

that he was gonna build

something that would foster

companies like this,

where we're actually like

a company with jobs

based on something that someone

we don't know wrote a paper on.

It's kind of creepy

if you think about it.

I wonder if he's watching us

right now or something.

DANIEL:

In San Francisco,

jered and tradehill had moved

into their new space as well.

It sounds funny.

It's not a $100-million market anymore.

It's grown beyond that.

More professional people

are in the space

and they're expecting to deal

with other professionals.

DANIEL:

But just as things were ramping up,

regulators started taking

a closer look at bitcoin.

Some bad news

for bitcoin, or is it?

Its days of glory

could be ending.

At least

two dozen companies

have been subpoenaed

by New York's

department of

financial services.

Can't be a good thing.

DANIEL:

Bitinstant, bitpay, coinbase

and winklevoss capital

were all issued subpoenas.

We want to make sure that

as this enterprise grows

and if it does become

a place where

a lot of people are engaging

in financial transactions

that we have sufficient

protections in place.

DANIEL:
With increased pressure

in banking compliance issues,

bitinstant was forced

to suspend services.

Jered faced

similar battles.

Due to a lack

of regulation,

many banks decided to cut ties

with bitcoin companies.

Without a U.S. bank account

tradehill can't operate,

and jered was forced

to pull the plug.

Regulation typically evolves

much more slowly

than innovation.

And regulations

cannot keep pace

with the pace

of innovation.

SINGER:

Explaining bitcoin to a bank

feels like explaining

Amazon. Com

to Barnes & noble.

DANIEL:

Until lawmakers catch up,

startups like tradehill

and bitinstant

are left out on a limb.

Banks do not want to bank

bitcoin companies.

When you have regulation,

you can comply with it.

When you don't have any regulation,

they're not exactly sure.

And if the banks aren't sure,

they just default to "no."

New regulation takes

at least one year to develop

propose and adopt.

And in many cases,

it can take

much longer than that.

SHREM:

I won't let this go.

I will fight till the end

for bitcoin.

Whether I have to work on

the street or sell lemonade,

bitcoin's gonna succeed

one way or another

and I'm gonna be

a part of it.

DANIEL:

Over the past several months

the bitcoin mining landscape

has changed significantly

( MACHINES HUMMING )

( WHIRS )

DANIEL:

When I started,

bitcoin mining was

a hobby for geeks.

Now it's big business.

In order to continue mining

and continue playing

in the game

and be competitive

and be profitable,

I would have to spend

hundreds of thousands

of dollars on gear.

The 18 miners

I ordered from avalon

never arrived.

And the units

from butterfly labs

took over a year to ship.

By the time I got them,

bitcoin mining was

so competitive,

that I would never

be able to mine back

all the coins

I used to buy them.

See that computer?

That computer makes bitcoins.

And this is all the other computers

that are making bitcoins too,

and it goes straight up

in a line up in the air.

And that's 'cause

there's a lot people

that are making bitcoins

with computers like that.

As my new units

are arriving,

I'm selling them

for bitcoins

to try to recoup

what I can.

If you don't mind grabbing

those other cables,

- I'm not coming back up.

- NICK:
Okay.

DANIEL:

I'm taking a pretty big hit...

But overall

the mining experience

has still been worth it.

My mining days

may be over,

but I'm still very involved

with bitcoin.

With bitcoin,

it's a money system where

it's backed by math.

It's back by the laws of mathematics

and by the rules

of the protocol.

I keep thinking that there's

gotta be an easier way

to just set up

a secondary protocol

to trade private keys.

Every time I log on,

I see another dot on China

and I'm like, this is why

right now the price has gone up.

DANIEL:

The price is nearing 150 again.

Many attribute it

to the explosion

of bitcoin's popularity

in China.

What's happened recently

is Chinese people

have really come

and adopted bitcoin.

As a culture,

as a nation

Chinese people are keen

to learn about

things that are

on the Internet,

things that involve

math and science.

We think that China can really

contribute in this space

and help bring bitcoin

to the mainstream.

DANIEL:

Germany's another part of the world

where bitcoin

has found a home.

WOMAN:
It's starting to get

normal if one person a day

comes in and buys

a coffee with bitcoins.

People are looking

for a new way of paying...

not through banks,

not with Euros,

not with dollars.

Something new.

DANIEL:

The German ministry of finance

even became the first

governing body

to officially classify bitcoin

as "private money."

I believe if we want to get

some justice back

into our society,

we should reduce

the importance of the banks.

Bitcoin is banking

without banks,

so here we go.

The FBI today shut down

what it's calling

the most sophisticated

Internet site

in the business

of selling hard drugs,

including heroin,

cocaine and LSD.

DANIEL:

In the Sci-Fi section

of a San Francisco

public library,

undercover agents

surprised a young man

quietly working

on his laptop.

They arrested a 29-year-old

software engineer

named Ross Albrecht

and accused him

of being the mastermind

behind the silk road.

People have always tied

the silk road to it.

Media has always

tied the silk road to it,

as if silk road is bitcoin,

but it's not.

This may be a sign

that bitcoin is growing up.

It's funny. My friend

just I.M.'D me and said,

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