Bitcoins Origins and the Genesis Blockade What is Bitcoin and why are we here today? I would like to start with the genesis story and take you back to when this started. In October of 2008, a paper was published called Bitcoin: A PeertoPeer Electronic Cash System. That paper explained how this system work. It was published under a name, Satoshi Nakamoto.
We now know that this is not a real name. We dont know who Satoshi Nakamoto is. Somebody out there on the internet came up with an idea how to build a digital currency. The published the paper in October 2008.
They had also written a prototype software program, the Bitcoin software they launched on January 3rd 2009, just a few months later. That was the beginning of the Bitcoin system. It was the beginning of the Bitcoin network. It was the beginning of the bitcoin currency. It was also the introduction of this new concept, which became a word that gets said every single day on TV… on the financial news channels: blockchain, one of the technologies behind Bitcoin.
This sounds like a weird story, right? Some persons we dont know shows up on the internet, posts a paper, some software launches a network some other people run this software as well. This thing starts running and embedded within the first block created on the Bitcoin blockchain was a message. This message was embedded in there for a reason.
The message is a headline from that day, in a British newspaper, The Times of London. It says 03Jan2009 Chancellor on brink of second bailout for banks. The headline for the day Bitcoin was launched the British Chancellor of the Exchequer… like the head of the Treasury here would start a second bailout for the banks. This may have been a coincidence.
I dont think it was. I think it tells us about the motivation behind Bitcoin. Part of the motivation behind Bitcoin was at the financial system, which has existed and really evolved in the last twenty years, isnt serving us. It is serving someone very well, just not us. when I say us, I am looking out on a bunch of people who represent 5 of the human population… the most privileged, , and advanced banking in the world. have access to multiple foreign currencies, the ability to send and receive money with their bank.
How many of you here dont have a bank account because you cant get one? One, great. The average percentage in the United States is 18. That means about 60 million people dont have bank accounts in this country. want to guess who those people are?
The poor. Great answer. Poverty is one of the main reasons why people dont have access financial services, but also a lack of documentation. Maybe documentation because they dont have legal documentation of course, illegal immigrants are one of the big groups that dont have banking.
But they documentation for other reasons. perfectly legal residents dont have a drivers license, or the necessary literacy and numeracy. And 18 is the lowest percentage in the world for the unbanked. more unbanked people some countries having more than 80 of the population no access to banking whatsoever. But if you talk to people in this country, you realise that the banking system here doesnt serve us either. It doesnt. the same people who are quite happy to sell a variablerate subprime mortgage to you, your parents, your brother, or your children then walk away from that pile of debt and still get bailed out.
None of them went to jail, but more than a million homeowners lost their home in the United States. At the same time, while they were doing foreclosures, they were using a technique called robosigning. They were signing the foreclosure documents on deeds they didnt even . No one went to jail.
They were packaging toxic securities as collateralized debt obligations CDOs that they knew were fraudulent. They were talking amongst themselves and saying, These are fraudulent, so dont buy any, but we will sell them to the customers. No one went to jail. So who are they serving?
Themselves, yes, but also not just themselves. Ironically, people who work at banks, part of the middle class, are not being served by the banks either. They serve the weapon dealers. They serve the warmongers. They serve money launderers, international drug cartels, multinational corporations, but they dont serve us.
If they dont serve us here, in this country, imagine how much worse it is everywhere else. If you cant imagine, I can tell you. Much worse. Here we are, after twentyfive years of the internet.
The world is more connected than it has ever been. The ability to communicate information instantaneously, anywhere in the world, now exists for a large part of the human population. More people have access to the internet and cellphones than have access to clean drinking water.
Yet, in the last twentyfive years, banking has not better more inclusive. If anything, we are backtracking. Over the past fifteen years, international finance has become a weaponized tool of geopolitics, used by powerful countries to attack countries in the form of sanctions, currency controls, embargoes, and other of economic pressure.
Banking isnt serving more people, it is serving fewer people. More and more countries are finding themselves in situations where, no fault of their citizens, they are under embargo or facing currency controls, and cant transact with people other countries. face calamitous economic conditions they watch their life savings disappear overnight. This happened to my family in Greece, in the 1980s.
Twice. It has happened again and again throughout South America and Africa. It is currently happening in Venezuela, it is on the cusp of happening in Turkey. It is happening in Greece again beginning to in Argentina, Brazil, and a bunch of other countries.
The economic system we have is not serving the people. The internet has not brought us a financial system that connects everyone together. Modern banking is a deputized system of law enforcement domestically, and a militarized system of control internationally. Our banking is part of the domestic police system. It is part of the international military system.
Just like the banking in other countries. It doesnt serve commerce, it serves politics. Back in the early days of Bitcoin, something interesting happened.
An organization called WikiLeaks was publishing secrets that the U.S. State Department didnt want published. Secrets about war crimes committed by U.S. forces. As a result, they wanted to shut down WikiLeaks. One of the ways they was to prohibit people from sending money to support that organization.
The State Department first appealed to the court system to get the necessary convictions to stop WikiLeaks… from breaking the law. Of course, they didnt WikiLeaks wasnt breaking the law. Therefore they couldnt take them to court, they didnt have the basis in law to take them to court.
Instead, they pressured Visa, MasterCard, American Express, PayPal, and all American banks… to cut WikiLeaks off without any legal process. At the same time, you could use your Visa card to send money to racist groups in Alabama, to all kinds of atrocious political groups around the world, but not to WikiLeaks. As this was happening, Bitcoin was just emerging.
Buried in the first block was that little message. That little message said to me, and to many others, This is why we are doing this. This is why Bitcoin needs to exist., we are twentyfive years into the internet revolution in this world, we are no closer to having a globally connected than we were twentyfive years ago. We are further and the financial system is not better at serving people, it is worse at serving people. With control over money comes corruption.
We all know that. Power corrupts, absolute power corrupts absolutely. There is no more absolute power than the power over money.
You have freedom of expression? Great. But if I can control where you spend your money, you dont have freedom of expression.
You have the freedom to vote? . But if I can control who can send money to political parties, which political parties, you dont have . Watch what is happening in Russia or Turkey. That is straight out of the playbook of Putin. Starve of funds no opposition election with one candidate. I win! Democracy!
Bitcoin didnt appear in a vacuum, but for many people it seems miraculous, how Bitcoin emerged suddenly in 2009 and nobody noticed at first. It was just the purview of weird geeks in a few weird online mailing lists. But after a while, people started noticing. Now it has become this worldwide phenomenon. You might be skeptical.
Some person we dont know invented something we dont understand, launched it onto the world, and now my younger cousins think I should invest all my money into this thing. My aunt thinks it is a pyramid scheme and I cant tell who is right. If you think about as an investment, you may be missing the most important point. This isnt an opportunity to get rich, isnt an opportunity to invest in . It is an opportunity to change how finance, money, and banking work in the 21st century, worldwide.
If you dont think you need to change for yourself, think about the billions of people who have no access to banking, no hope of ever accessing banking. Then think about what happens if able to run a bank on a 25 Android phone. what that does to our world., some bad people be able to do transactions, and that is okay. billions of people are good, and they will be able to do transactions. That is how it works.
On that simple, we can change the world. My interest in Bitcoin stems from two sides: on one hand, Im a geek and I love technology. It is so cool, I get so excited by it that I cant sleep, and I want to read everything about it. Then I discover something else, even more excited, stay up longer, have more coffee, read more… and even more excited again.
Some of you share that with me, but you dont have to. It is okay. Some of you know exactly what Im talking about.
That is a reason to be interested in this technology, the kind learn about the kind that can lead to a computer science degree, a specialisation within another field of study. Something you could learn as an accountant, as someone who works in insurance and finance. It would be really useful and interesting as part of your career. just like learning how to use databases or build a website . On the other hand, I look at this technology and Im interested in it because of politics. Not the politics of parties, the politics of principles.
The politics growing up in Greece and seeing what happens when money stops working. This is an experience I dont wish on anyone. It is an experience that is alien to Americans, at least in the modern era. I hope it remains alien, but Im not that sure it will.
Money is this magical technology that, as long as it works, we dont need to know how it works. We dont concern ourselves with it and we dont need to worry about it too much. If we did, if we actually read about how money works, we would be horrified. Surely that cant be true.
They just make it out of thin air, distribute it to banks, and even then lend out money that doesnt exist? Then they charge us interest so they can get richer and richer? No, come on.
That a scam. That is a pyramid scheme. The dollar works on a pyramid scheme? Tell me it isnt so.
If we understood how modern central banking, most of us would be horrified. it is convenient, as long as it works, we dont need to really pay attention. Well, let me tell you something. In 2008, it broke, and we didnt fix what broke it.
In 2008, our economy broke, the worldwide economy broke, and central banking broke hard. It has not been fixed in the mean time. Since then, issued almost 100 trillion in debt by some measure, all of which is money borrowed from your retirement plans, education plans, and healthcare plans. That money be paid back. There is a very simple reason for that: broke.
JPMorgan Chase is bankrupt, Citibank is bankrupt, Bank of American is bankrupt, Goldman Sachs is bankrupt. The United States government is bankrupt. Europe is bankrupt.
Deutsche Bank is bankrupt. Japan is bankrupt, China is bankrupt. They are all bankrupt.
They can play around with the books, hide some debts, make bilateral agreements, shuffle shit around, pretend to bail out Greece, send money and then backdoor it straight back to Deutsche Bank. find some patsies and make it appear like nothing is happening, but they are all bankrupt. At some point, there will be a reckoning. We never fixed anything that happened in 2008. we destroyed currency in order to preserve the illusion of economy. That will come back and bite us.
Now, you dont to believe me. You dont to think this be important in your life. I really do hope it . But one of the reasons bitcoin was created, one of the reasons it is important, is because it is neutral. It is independent. No one can control it.
No one can change its issuance or create it out of thin air. When you see criticism of bitcoin by mainstream economists, they say it is not backed by anything. The question you should ask at that point is, ? But you really dont want to hear that story what it is backed by. You learn some history about Kissinger, the Saudis, and a little deal made in 1971.
Then some towers fell, some nasty things happened, and now we have been at war for eighteen years. Anyway, the dollar is backed by something: war, to protect oil. Bitcoin is backed by an international community of geeks, the same geeks who brought you the internet. Again, hopefully you never to make that choice in your life. always have the freedom to choose one currency versus another.
But you might be forced to choose between the bankers who brought you the Great Depression, and the geeks who brought you the internet. I hope you make the right choice. If you hear some of the people in the whole Bitcoin, blockchain, and cryptocurrency space talk, you might think the goal of all this is… to eradicate government money, as the first step towards eradicating government altogether… and replacing all currencies with bitcoin. One coin to rule them all, world domination.
I am not of that opinion. I think the idea of only one world currency a throwback to our current currency system. We have grown up with a system where all currencies are backed by nationstates. They represent flags. wrapped up with a bit of nationalism, patriotism, and a flagwaving person.
In each country, it is a different flag and a little chant. By the way, if you go to other countries, when they wave their flag, they also chant, were number one! It is when you ask people, Are you a good driver? They say, Definitely.
Then 80 of people say they are aboveaverage drivers. How does the math on that work? We have become accustomed to a world in which currencies represent nations therefore, they are part of this battle, like the world is a big chessboard and currencies are pawns. The dollar wins if the ruble fails. It is country versus country.
In that environment, it is natural to think that currency is a system of winnertakesall, or a zerosum game, where the only way that one currency wins is another currency losing. A world in which you cut off your nose to spite your face, which is a good summary of our current foreign policy, the foreign policies of the European Union, China, and Russia. We are currently engaged in currency wars, in we are expected to assume that… our currency representing our flag is the one we should be backing.
But if you stop and think about that for a second, you suddenly realize it is not money anymore. That token is no longer representing value in a commercial transaction or use in business. It is representing something else, some kind of nationalistic flag waving thing… where you are trying to beat the other side.
If that environment is what you know, if that is what you grew up with, when something like Bitcoin comes along, your natural inclination is to think, Oh, this one could win the zerosum game and dominate all the others. But what if that is not how it plays out? What if, all along, money was simply a form of language? What if we understood that money is a way for us to communicate value to each other? As languages there never be one that wins.
There will always be variety. Every place has its traditions, its special needs. We have languages like those of the Inuit, which have eight words for snow. They dont need those in the Kalahari Desert.
They will have a different language with twenty words for sand, which they dont need Alaska. The bottom line is, languages to the local environments. They will keep proliferating.
There isnt one that wins. If you speak three or four languages, you are better off than if you just speak one. Having variety give you greater value.
What if money works that way? What if we are going from a world with to a world… with a thousand, ten thousand, a hundred thousand currencies, and you can use as many as you want? You can choose at any moment in time.
When you hear that, you probably think, That sounds very fucking confusing! I dont want a thousand currencies. I can barely keep track of how many euros are in a dollar when I go on vacation to Disneyland in Paris.
Well, the good news is that we are not talking about traditional paper money. We are talking about purely electronic money. All the worlds currencies electronic money. The difficulty of trying to figure out which currency you have, which currency the shop will take, what the exchange rate is, and how to convert them, is something that disappears into your smartphone, iPad, smart watch, or whatever device holding your money. Then the fact that you have ten or more currencies really isnt an issue.
You even know that you have ten different currencies. What if we go into a world where fully connected, near instantaneous commerce is possible… by anyone, anywhere and they dont even need to commit to a specific currency? No currency wins.
Instead, we all win by having choice. That is what it boils down to. Until now, you use the currency of the country in which you were born. You do not have a choice. If you are American, you have choice to use other currencies, but in many countries in the world, you dont.
Just one, and you have to use that one to pay for government services and your taxes. You still have to play the games of geopolitics. Your retirement, education fund, healthcare, income, all of your expenses are denominated in a currency… that they are using as a weapon. Not that you wanted to be playing in those games, but you to. What does that look like?
Waking up in the morning and going to the supermarket early, because you know they will change prices at noon every day, and eggs could be 30 more expensive by the afternoon. That is what it looks like. I have seen that in Greece. experiencing that in Venezuela and Turkey today. When you that bitcoin happened in 2009, you might think, Why?
Who needs it? What we do with this? Is it just about beating the dollar, having a new thing that wins everything? It is not.
It is about having a choice. For most of the people in this country, that choice isnt very important for the rest of the world, that choice is absolutely critical . Most people live under horrible governments that do not freedom to transact with anybody. They also dont give them the freedom… to escape from whatever crazy trade or currency war playing at the moment. Most people live in countries where it is impossible to distinguish between organized crime and banking.
Although, to tell you the truth, the customer service from the black market criminal… who changed my money in Argentina, was a hell of a lot better than the Bank of Argentina… where I tried to change it earlier. So maybe there is a way to tell the difference between organized crime and banking: both are criminals, but some of them give better customer service. If you live in a country like that, and suddenly something like bitcoin comes into the world… Not quite yet.
It is difficult to use. Not many people have the tools and skills to use it. But one day soon, for many people and already some people, you suddenly have a choice. You can say, You can go play your games, Mr. Erdoğan.
Do you want to try and play Russia against America in a currency and trade war, over F35s and S400s? If you know what Im talking about, great! While you make the lira trash, I take my bit of wealth and move it into bitcoin. No one can stop me, because this is an internet currency which doesnt pay attention to borders.
If you live in Venezuela and your government is in a death spiral, you can say, I take my money and convert it to bitcoin, or have someone send me bitcoin from another country, be able to provide food for my children. I be called a terrorist by my own government, break the law and my children will be fed. We know of people who actually bought food on Amazon Prime, had it shipped to Colombia, and smuggled into Venezuela, bitcoin. Food! This technology gives people choice.
We already have more than a thousand currencies trying to find ways of using… that same basic technology to do different things. a very exciting technical space which has erupted over the past ten years. It has created this enormous, diverse environment with a lot of exciting developments. At the same time, it is a giant speculative bubble with a lot of greedy people running around in circles, screaming trying to get rich.
But it is also an enormously powerful international movement for freedom and choice… that can change the lives of billions. Thank you!