The Rise and Rise of Bitcoin Page #6

( ACOUSTIC GUITAR PLAYING )

- Bitcoin!

- ( LAUGHS )

Came to us

from the cryptogram

it came out of thin air

it saved us

from those nasty dollars

and won and yen

bitcoin.

- that's all I got. I'm done.

- ( MUTTERS )

( LAUGHTER )

Digital currency

is gonna happen.

I mean,

it's... it already is happening,

and it will be

the future,

whether that's now,

10 years from now,

a hundred years from now.

We're going to be using

digital currencies

that don't depend

on fiat government.

DANIEL:
Jered originally launched

tradehill about two years ago,

but ran into problems

with a payment processor

and was forced

to shut down.

Recently

he met Ryan singer

and together they are

relaunching the exchange.

The business

we're in is

helping people

speculate, right?

Markets are

price discovery mechanisms.

That's what they're for.

People...

they buy, they sell,

there's the bid,

there's the ask

and the price moves.

And when it levels out,

then that's what

the market price is.

I can't even count the amount

of people that have said,

"bitcoin's not backed

by anything.

At least dollars

are backed by gold."

I've realized that a lot

of people believe that.

My grandfather,

he got me into investing

when I was a kid.

I was five years old.

I could explain a p/e ratio,

and what a bid

and an ask was,

and the difference between a

limit order and a market order

and all that stuff,

so for me,

I saw this as a way

that the average person

could actually take control

of their finances.

I just grew up

pretty nerdy.

I don't know.

Then like at 15 years old,

I decided I didn't want

to be a nerd anymore,

which was a mistake...

'Cause...

'Cause now I realize

it's pretty awesome.

In 1999

I joined the marines.

I was originally

with an engineering unit.

2005, I went over

to Afghanistan.

I was mostly working

with the Afghan national army.

It changed me a lot

as a person.

I've always been interested

in economics

and finance and technology

and cryptography.

I was

in a cryptography forum

and somebody I'd never met...

who was anonymously

in this forum

that I was chatting with...

sent me 10,000 bitcoins

just as a way to test

the system out

and see how it worked,

and I got 'em.

I'm like, "that's cool,

but what can I do with them?"

And he said,

"well, nothing yet, but...

If people believe

it has value, it will."

At the time, there was really

only one bitcoin exchange

it was mt. Gox.

I said, "we need an alternative.

Who cares if the technology

is decentralized

and the method of transfer

is decentralized

and the people are

decentralized

if all the trades are

in the same location?"

I thought that building

another exchange

to give more people

access to bitcoin

would be a key part

of bitcoin's growth.

The day we launched, we got a quarter-million

dollars in from user deposits.

And we said, "oh sh*t,

this is... this is real.

Yeah.

Hey.

We're all fans

of "the big lebowski,"

so we're gonna have

a "big lebowski" party.

Nice!

It's a...

Very exciting day.

30 gallons of white Russian

and hallway bowling.

- ( MAN SHOUTS )

- Yeah!

KENNA:
We work hard,

but we party hard too.

Okay.

Okay, I'm good.

- WOMAN:
All right.

- I'm good. I'm not dead.

- ( ROCK MUSIC PLAYING )

- ( PEOPLE CHATTERING )

Yeah,

I'm the first one in the house...

That opened

a tradehill account.

WOMAN:

What happened?

In the same day

they went down to 90...

$65 or something,

or $90 a bitcoin.

I stopped smiling.

( LAUGHS )

KENNA:
Tradehill, round two,

we optimized for success.

We launched expecting

to have to do

hundreds of thousands

of transactions a second.

Right now we've got

about 15 people

in addition to that,

we've got about eight attorneys externally.

A lot of people are

depositing dollars.

A lot of people are depositing bitcoin.

We're getting more trading.

We're pushing that

from a business perspective.

Also, we're talking to people

who want to do more automated

trading on our platform.

Get robots trading

against each other.

We've stress tested this

and we can handle about

500 times as much volume

as mt. Gox was seeing.

So we'll see

what happens here.

The interest in us

is pretty crazy.

Just the news

with bitcoin

has really kind

of validated everything.

Now people are like, "oh,

you're not this crazy person

talking about some

digital made-up currency."

It's like, "oh, I've read about it in

'the wall street journal'

and 'the New York times.'

It's real."

KENNA:

We had an investor come in

and he said,

"hey, I really appreciate

your scrappy nature

and how you're hustling,

but I think it's time for you guys

to spend 30 grand a month on rent.

When you have

a billionaire client

and they want to come

check out your office

before they send you

a multi-million dollar wire,

asking them

to walk past pawn shops

- is not always the right feel.

- ( LAUGHTER )

So we're leaving the mission.

We're driving into soma right now.

We're gonna go take a look at

what may be our new office space

pretty prestigious address...

one market.

Right now we're trying

to forge this path,

and we're trying to comply

with existing laws

and anticipate

future laws,

which is extremely expensive

and extremely difficult.

- Is there parking here?

- MAN:
Yes.

Okay, is that

included with...

( CHUCKLES )

Of course.

- Right, what does that... how much does...

- ( LAUGHS )

How much does that cost?

That's not terrible.

Whoa.

That's pretty sexy.

Twitter was here

for over a year.

- Yeah.

- Amazon comes and go every single year.

- Oh, fantastic.

- I have Macy's, I have j.C. Penney.

All the big ones,

they come over.

They are part

of the club.

KENNA:
Sounds good.

We'll be here tomorrow.

- Picking it up.

- Thank you for the business.

- Thank you.

- I appreciate it.

Thanks so much.

- We move in tomorrow.

- NICK:
Just like...

- just like that, huh?

- Just like that.

- That's how we roll.

- NICK:
It's pretty surprising

that that deal

just happened so quickly.

What was it?

You just liked the space

and decided, "hey,

there's no point in waiting"?

We like the space,

we like the address.

We just don't have

the time to spend either.

We've got all kinds of important

stuff we're working on

and if we spend a week

trying to find an office,

and he and I put

20 hours into it

or 50 hours into it,

it's a huge waste of time.

I thought they'd be

in multiple bags

rather than one big one,

but hey...

I believe that bitcoin

will do to the banking industry

what email did

to the postal service.

It didn't make it irrelevant,

what it's forced

the post office to do

is concentrate

on their strengths

and less so

on their weaknesses.

DANIEL:

Mike Caldwell is the creator

of physical bitcoins,

known as casascius coins.

They're often featured

in mainstream media

coverage of bitcoin.

They're a novelty item,

collectables

that basically act

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