The Rise and Rise of Bitcoin Page #3

- Bypass the fed.

- Right, yeah. ( CHUCKLES )

- That's what you should do.

My concern is how

the governments will react.

They can't kill

or stop bitcoin,

but they could impede it and they could

get in the way of its development.

DANIEL:

A few weeks later across the ocean,

a financial crisis was

reaching a breaking point

on the island of Cyprus.

Cyprus is on the brink

of going bust.

The rest of Europe

has agreed to a bailout,

but only if Cyprus raids people's

bank accounts for quick hard cash.

WOMAN:
People tried to get

money out of the cash machines

but electronic transfers

have been stopped.

- Never did I think that they would...

- ( PEOPLE CHANTING )

...in a completely

unprecedented manner

resort to stealing money

from people's

bank accounts.

DANIEL:

The Cypriots had placed their trust

in the banking system

and it had failed them.

As news of the crisis

spread around the world,

bitcoin believers

were quick to point it out

as an example

of why a currency

free from government control

was needed.

There's actually

bitcoin atms

apparently being

set up in Cyprus.

MAN:
All of a sudden,

bitcoin looks

like an attractive prospect.

DANIEL:

While this was happening in Cyprus,

regulators

at the U.S. treasury

weighed in on bitcoin.

The financial crimes enforcement network,

known as fincen,

issued its first regulatory

guidance on virtual currencies.

The guidance implied

that bitcoin,

in and of itself,

was not illegal.

It was the perfect storm.

The situation

in Cyprus suggested

that bitcoin could function

as a financial safe haven.

And the approving nod

of U.S. regulators

was a green light

for investors.

The market agreed

and the exchange

price continued to climb.

( BEEPS )

It's moving from the super

super-early-adopter phase

to possibly

the early-adopter phase.

DANIEL:

Bitcoin was getting

international exposure

and people were starting

to pay attention.

This is actually a live,

updated map of the globe

and the lines represent

bitcoin clients.

Basically where the bitcoin

software is running.

And the length

of the line determines

how long it's been online

or how active it's been.

And every time

I look at this,

I swear it gets more

and more saturated.

You can almost see

an outline of the U.S. now.

South America...

you're starting to get it.

But the big news,

in my opinion,

is this... China.

You used to see one,

two, three, maybe.

And this is all within

the last three weeks or so.

That's the most

I've ever seen in China.

Look down here.

Indonesia, Singapore,

Australia, New Zealand.

The following week

it snowed in pittsburg.

I was eagerly awaiting the

delivery of two avalon asics,

state of the art computers

with chips specifically

designed for mining bitcoins.

Yifu guo is

at the forefront

of the new generation

of hardware,

and is the first

to bring them to market.

Everybody,

including myself,

had severely

underestimated

the mining market

and how big it is.

DANIEL:

When bitcoin began,

a standard laptop

was powerful enough

to mine hundreds of bitcoins

in a matter of days.

The technology evolved rapidly

over the past couple of years.

A lot of people

are getting into it

or still trying

to catch up.

DANIEL:

I was on vacation with my family

when the new miners were

scheduled to arrive.

The price of bitcoin

had rocketed to $77

so I asked some friends

to wait at my house

to get them running

as soon as possible.

MANCINI:
All right!

( LAUGHS )

- I hope this is good. I hope it's

worthwhile. - Oh, definitely.

These are

new computer parts here...

- Excellent, excellent.

- ...Fresh in from China.

( LAUGHS ) - All right,

it's not official until you sign.

There we go.

NICK:
Yeah, we'll see.

Maybe down the road

you guys will start accepting

bitcoin one day, I bet.

- That's cool.

- Just a matter of time.

DRIVER:
Good luck to you guys.

All right.

MANCINI:

I notified Dan

and he has

a little response here.

Welcome to

the financial renaissance.

192.168.1.140.

255.255.255.0.

192.168.1.1.

That's the default gateway.

My first pull is gonna be

stratum.Ozc.In, port 3333.

Port 80,

but I can do 3333.

And when everything's all said and done,

for at least a little while,

it should be pulling in

10 to 12 coins a day.

That's gonna change though,

after another week.

It's gonna get

dropped down to, like, eight,

- just because the difficulty's just going

through the roof. - Yeah.

Everybody's firing

these things up,

so it's always

a race to stay ahead

and try to be the first guy

with the hardware, you know?

Oh, I'm getting pings.

Whoo!

MANCINI:

Yup, we're kicking.

We are accepting shares.

It is live.

We've got the Merlot!

( BOTH LAUGH )

( MUMBLES )

Hey, that looks

like johan.

Say, "I'm going to college

'cause my dad mines bitcoins."

Dad going bitcoins.

( LAUGHS )

NICK:

So, big day today, huh?

Big day.

Look at that. 104.

Current bitcoin price.

Broke 100 today.

It is April fool's day.

The price rising

so insanely high

is kind of

a little bit unprecedented,

so... I mean, it's bound

to pop a little bit.

Maybe.

I don't know.

Maybe it'll be at 225

in a week and a half,

so who knows?

Bitcoin styles...

could go up,

could go down.

DANIEL:

As the price passed 100,

we took a trip to visit

Gavin andresen.

He is known to have

worked closely with satoshi

during bitcoin's early days.

Here's the train tracks,

and he did say

there would be train tracks

maybe passing through.

Here we go.

This is Gavin's house.

Gavin is one

of the last people

to communicate with satoshi

before he disappeared.

Morning.

This is my brother Nick

- and his wife Ashley.

- Nice to meet you.

- ASHLEY:
Hi, nice to meet you.

- Nice to meet you.

DANIEL:
Found the place okay, so...

- good.

We're very excited

to be here.

Come in.

This is my humble house.

( DOOR CLOSES ) - That's where I work.

This is where I live.

- Beautiful home.

- Well, thanks.

NICK:
A little higher, please.

Right there. Great.

- Got it.

- ( DANIEL CHUCKLES )

How did you first

get into bitcoin?

Tell us a little bit of the

story of how you got involved.

I had been working at umass

as a staff programmer

in the computer science

department research group.

My wife's

a Professor at umass.

I actually quit

that job before going

on a six-month sabbatical

in Australia.

I just happened

to read a little blurb

online in somebody's blog

that mentioned

this bitcoin project,

which is an open-source

attempt to do money.

And it caught my interest.

I basically

just spent a few days

read everything

I could about it

looked at the source code,

downloaded the source code,

thought about it and I really

couldn't convince myself

that it would not work.

It seemed like satoshi

had thought of everything.

Since then...

I've just been sucked down

the rabbit hole.

DANIEL:

Bitcoin is open-source software.

With open-source software,

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