 Welcome everyone. This is the second time I've been here in the Mars District. It's always a pleasure. Toronto and Canada, in general, is a hot spot of activity in this space. Looking around this room, one thing that really strikes me is how diverse this audience is, in every sense of the word. So many people from so many different backgrounds gathered here to talk about this incredible technology. I do want to talk about technology. When I first got into this space, and I started talking about Bitcoin, one of the common misconceptions when I spoke to a room full of people was that they expected some kind of sales pitch. They expected that, like selling a timeshare for a holiday resort or a get-rich-quick scheme, I was there to recommend investment in this new-fangled currency, in this stock, this Bitcoin thing, a get-rich-quick scheme. Bitcoin isn't a get-rich-quick scheme, but some could argue that it certainly can be a get-poor-quick scheme, if you don't manage it quickly. The joke goes, how do you make a million dollars in trading Bitcoin? You start with two, and then you day trade. Very quickly, you will lose your shirt. How many in this room, without looking at their portable devices, can tell me what the price of Bitcoin is today? How many of you know what the price of Ether is today? How about the Dow? It's a big mistake to treat these technologies as stocks, yet it is a common misunderstanding, because they look like stocks, right? They've got a price, they trade, they have volatility, we can look at volume and graphs and things like that. But of course, these are not equities. Bitcoin isn't a company. Bitcoin is an industry, and it's a currency, and it's a technology platform. This very strange thing has happened in this space, where it has a tradeable instrument, and we haven't seen that before. When the internet started, you couldn't buy internet and trade it. Oh, look, Yahoo launched something. I bet my internet stock is going to go up. You couldn't do that, right? It's probably a good thing you couldn't, because boy, that would have been volatile. Now, Bitcoin isn't a stock, and it's not an index stock for the industry, even though it sometimes behaves like that. None of the cryptocurrencies are that. At a very fundamental level, these are technology platforms, but the instrument that's traded behaves a bit like an equity, a bit like a bond, a bit like an index stock, and very much so as a currency. But not the traditional type of currency that we know, not a currency with a very large economy behind it, but a currency with a very small, very distributed economy behind it, one that is buffeted by daily events, media announcements, for example, the announcement that Bitcoin died again. Someone's writing that article already. And all of these things make the price move a lot. So when you get involved in this space, a lot of people think, okay, maybe I should invest in Bitcoin. Maybe I should invest in Ether. Maybe I should create a portfolio. And I expect the last four years, dissuading people from that mentality, do not treat this as an investment. And the primary reason you should not treat this as an investment, unless you happen to be an investment professional, is that these things are extremely volatile. So you have to be very careful. You have to pick your timing right, buy low, sell high, which is, of course, the exact opposite of what naive people like me do. Right? It's going up. Time to buy. It's crashing. Time to sell. If you get the timing wrong, you lose a lot of money. What about picking which thing you would invest in? Would you invest in the Dow? Would you invest in Ether? Should you really be investing in Bitcoin? What about these new things that are popping up every now and then, with the initial coin offering, should be investing in those? So picking the right time and picking the right location for your investment, the right thing to invest in, will determine whether you have success or not. So I say, don't do that, because I have a much better recipe for success. And that is to invest in something that does not require timing, to invest in something that does not require choosing, to invest in something that cannot be lost, cannot be seized, cannot be forfeited. And that is skills and knowledge. You don't need timing to invest in learning about this technology. You learn now, and that skill will pay, possibly for years to come. If you learn how to do web development in 1997, you had a 15-year career ahead of you for a highly sought-after skill. If you learned how to do iPhone apps in 2008, you had again a massive career ahead of you for a highly sought-after skill. With learning these skills, you don't need to choose. Do I learn about Ethereum? Do I learn about Bitcoin? Do I learn about the Dow? You can learn about all of these things because these skills are highly transferable. The things that you learn about Bitcoin will teach you about blockchains in general. You'll learn about consensus algorithms. You'll learn cryptography. You'll learn the basics of economics and game theory, distributed systems, concurrent systems, security. All of these skills apply to all of the investments in this space. This is a skill that cannot be taken from you, that you can't lose in an afternoon because of volatility, that will continue to apply at least for a decade, probably more. No matter which direction Bitcoin goes, no matter which direction Ethereum goes, or any of the other currencies. After all, I am here to pitch you an investment. I'm here to tell you to invest in skills, and this, my friends, is a get-rich-slow scheme. It takes work, and if you work hard in this space, you will gain a lot. One thing I have found is that this is a space that moves so fast, that learning is a continuous effort. Every single day I learn something new, and I've been at it full-time for more than four years in this space. Every day I learn something new. Every day I learn something that redefines my understanding of this technology, that makes me think about it in a slightly different way, that unveils a new level of insight and depth that I hadn't anticipated. On the surface, it's a currency, it's a payment system, and if you just see the surface, you are missing everything. Underneath, there is this enormous, rich depth of complexity. If you see my book, you will notice on the cover, there is a woodcutter of ants. Already uses an animal on the cover of every one of their books, but I chose that one very carefully. Ant colonies are remarkable systems in which the individual is irrelevant, in which this very simplistic organism with just a few tens of thousands of neurons, that can be simulated on a computer quite easily. These individuals follow some very specific, very simple rules, triggered by an environment of chemical sense. Within the individual, there is no complexity, but you put a million of them together. What they build is this superorganism, this emergent complexity that is the only species on the planet, the rivals, the social complexity and construction of human society. Leafcutter ants don't eat leaves. They use an enzyme to break them down and brew them in giant breweries. They use the pulp that's produced to feed aphids that they farm like cattle. They milk the aphids to get nectar that they feed to their larvae. They are an agricultural society with enormous complexity, and none of that exists in the brain of a single ant. Distributed systems like Bitcoin are systems where tens of thousands of nodes, each following a very well-defined, simple set of consensus rules, come together, interacting with a vast complex society of human incentives and actions to produce this enormously complex secure trust platform, which exhibits all of these characteristics of real applied game theory on a massive scale never seen before. The emergence of robust trust backed by thermodynamic guarantees, in the case of proof of work, to create the most secure system we've ever built on this planet. We take the concept of proof of work that has existed for millennia. Proof of work is evident when you look at our societies. The Pyramids of Giza are proof of work. What they say is, behold the civilization that can marshal tens of billions of dollars worth of value, hundreds of thousands of slaves over tens of years to produce a monument that cannot be replicated unless you put an equal amount of work. The Great Cathedral of Notre-Dame, the Great Castles of medieval Europe, all of these things, the Great Wall of China, are proof of work artifacts. They are monuments of civilizations that say, Here is something that you can only build through the massive expenditure of resource, and that stands as evidence of our might. Bitcoin is the first planetary scale monument of proof of work. In its footsteps, others will follow. It creates this edifice, this monument, and it's a monument to security. It's a monument to trust on the network scale. Once you start understanding the complexities of the interaction of game theory, human motivation, incentives, and markets, you realize how deep this system is. We've never seen free markets operate in the way they do in things like Bitcoin or cryptocurrencies. Truly unfettered free markets that provide complete liquidity and flexibility on a global scale have never happened before. Payment systems that span the globe without borders or intermediaries have never happened before. We are standing on the front row of history while creating something that will change human society. If you learn the skills that allow you to understand these simple systems that produce this enormous complexity, these skills will serve you well. You may be thinking, but I need to be a developer to learn these things. That's not true. If you're a computer scientist, this is probably one of the most amazing things that's happened in computer science since HTTP. If you're a developer, you can learn a lot about this space. If you're interested in distributed systems, this is a revolutionary implementation of distributed systems. But what if you're an accountant, a lawyer, an economist? When you first look at Bitcoin, the initial inclination, the initial feeling is, let me take the tradition I have in my profession and see how that will affect Bitcoin. What will be the impact of traditional economics on Bitcoin? What will be the impact of central banks creating their own currency or banks regulating Bitcoin? What will be the impact of law on Bitcoin? What will be the impact of the accounting rules on Bitcoin? If that's what you see, you're missing much more important, bigger picture. The bigger picture is that Bitcoin will introduce a seed of disruptive innovation in every single one of these industries. The question is not, what will the law do to Bitcoin? What will Bitcoin do to the law? What will Bitcoin do to banking? What will blockchain technology do to economics and central banking? What will Ether do to contracts? What will these new technologies do in a field that has certain methods, processes, and traditions that go back hundreds of years? Because disrupting computer science is not a big deal. We barely have any tradition. This is a space that only has 60 years of history. What happens when you disrupt law that has 4,000 years of history? We are disrupting those spaces. Let me give you just one example. I'll give you several. Blockchain creates new economic tools that we've never seen before. I've coined the term computational microeconomics and computational macroeconomics to describe just two of these new fields. The study of macroeconomics involves today the X post-tacto analysis, six months after the fact, by statistical approximation of the velocity and activities of an entire economy. With blockchains, we can do real-time, data-based macroeconomics, and this has never happened before. We have never had the opportunity to look at an economy and study the velocity and inflation rates in real-time. We could do that with blockchains. In the study of microeconomics, studying the activities of a company or an industrial market, the best we can do again is X post-tacto analysis, six months after the fact, to a statistical approximation, but no more with blockchains. We can look at the impact on specific markets and companies in real-time. We're going to have to start thinking about real-time accounting and providing information to consumers of this data, who can look at companies and industries in real-time and evaluate their activity. We're reinventing accountability and transparency, turning it on its head, providing simultaneously very strong privacy to individuals, and a very strong impetus towards transparency and accountability for social organizations and governments. The opposite of what we have sometimes today, which is how it should be. If you look at all of the things that exist in all of these industries that have hundreds of years of tradition, it's important to realize that the traditions, the methods, the tools that we use in law and economics, even in computer science and accounting, it's not about the tools. This is a point we often miss. One of the characteristics of any profession is to establish traditions that propagate the tools and the means, and create out of those structures of permanence through academia, through professional certification, through regulation. And sometimes the more a match you are in that profession, the easier it is to forget why. Why do we have these processes? Why do we have the tools? What are the goals? Because we've become so attached to the means that we forgot what we're doing them from. I can't tell you how many times people tell me that in blockchains we need identity. As if identity was the goal. Identity is a means to an end. Identity is the means of establishing, as a second-order effect, the reputation. And reputation is a means to establishing, as a third-order effect, the risk of default. You don't care who someone is. You care whether they will pay you next month. And yet we've become so attached to the means we forgot about the goal. The goal is default risk. But we've associated that so completely with identity that we can't even imagine a way of protecting against default risk... in any other way than full identity, with all of the problems that comes with. And yet, with a multi-sig contract, I can protect against default risk with a party that is completely anonymous. I don't need identity to achieve my goal. In looking at these technologies we have to identify, really, what are the goals we're trying to achieve? And do these technologies give us a way of achieving those goals with fewer side effects, with greater efficiency, and with lower costs? And if the answer is yes, feel free to drop the 500-year-old tradition. If it doesn't serve you, feel free to sacrifice the sacred cows of accounting, law, justice, law enforcement, economics, and computer science if they do not serve you. Because now we have a new tool, a new set of tools, and if we carefully study these tools, we can learn how to apply them in ways that completely change the way we structure society, and allow us to more directly achieve the real goals that we have in all of these other fields. It's very difficult to step outside of tradition, training, professional development, and a sense of camaraderie. And when you do step outside of those things in your profession, you will be ridiculed, you will be ostracized, you will be called a fool, have faith. Most of the really great people in this world who did great things and changed the world were called fools by all of their peers. Fools like Edison, and Ford, and Tesla, Marconi, Maxwell, Einstein, none of them were greeted with open arms and accolades by their professional peers. They were ostracized, ridiculed, and called fools because their very ideas offended 100-year-old traditions, sometimes 1000-year-old traditions. Be the fool that's right. And the best way to do that is to invest in learning the really, really subtle nuances, the really deep knowledge and insights of this amazing set of technologies that is absolutely going to change our world. Thank you. I think we do have a bit of time for questions, if I can get a time check. Okay, we have ten minutes so we can take a few questions from the audience. Anybody have a question for me? Yes? Microphone coming to you, just one second. Microphone's behind me. It's a little rough. Thank you so much. That's number eight for the audio deck. Thank you. And number seven. There you go. This is our first Q&A session of the day so we're just going to iron out some wrinkles there. Go ahead, sir. Okay, great. Thanks for the great talk. I'm just curious if you could comment on the Dow. Awesome for the weekend. I am shocked and surprised that that would be the first question you could bring up. I'm conflicted on the Dow. I've been watching this with great fascination. Meditally disclosure, I am a Dow token holder. I bought, you know, I'm a whale in Dow spaces. I owned $40 for the Dow token. I know it's your doll, aren't you? So I bought that because as I invest in a number of different cryptocurrencies, because in all of these systems, the best way to learn is to do, right? And in order to do, you have to hold the token. If you want to write an Ethereum contract, you have to have Ether. If you want to use Dash or Monero or Bitcoin or Storagecoin or whatever, you have to own the token. So I did buy Dow tokens. I also warned people on social media that this is the first one. It's completely untested and it will probably be extremely risky. I did not expect it to blow up within just four weeks of launch. That was quite fast. But you know, one of the things I've said is that the most interesting lessons come not from success but from failure. If you think of this as a particle physics experiment, the really interesting science happens when you analyze the debris of a fiery explosion. You smash two particles together, create a very big bang, and then you look at what comes shooting out of that collision. Well, we're going to be studying the debris of the fiery collapse of the Dow for years. And it's going to teach us a lot about governance. I think it's important to realize that if you look at this from the perspective of capitalism, you need destruction in order to learn. And one of the things that is unique about all of these systems is we're not talking about them, we're not theoretically analyzing them, we're doing them. And that's the only way to learn. And sometimes that means spectacular problems like this. And I think that's okay as long as you go into it knowing the risks. And really people should understand the risks before they get involved. Now, how is this going to be resolved? There are no good options at this point. There's a lot of people who suggest that perhaps it should be allowed to fail, that it's a great security bounty for the person who discovered the flaws and that the investor's caveat mentor knew what they were getting into. Others say that this should precipitate a soft fork followed by a hard fork and other interventions in the Ethereum chain. The idea is appealing. It sets up a terrible precedent that may cause more problems than it solves. And I'm not going to take you in position because I have the luxury of not being either a minor or one of the Ethereum core developers who has to make this very difficult decision. I'm going to watch with interest, but there are no good options. In the end though, I don't think this changes the fundamental nature of these things. Smart contracts are fascinating. They will have an enormous impact on law, on commerce, on the internet of things, on many other technology fields. The implementation of distributed autonomous organizations, either as investment vehicles or as new forms of social organization for entrepreneurs, for cooperatives, for any form of governance-based social entity. All of these things are amazing and they will happen again and again and again, and more of them will blow up spectacularly and we will learn. Even Enron taught us something, if not at least to improve our accounting standards and practices. We have four of the great accounting and management consulting firms here today. Ten years ago, they were five. So sometimes that's the price you pay for innovation. All right, let's see if we have one more question in the back there. So I'm speaking from one of the accounting and consulting firms. I'm enough. So this sort of hype now, like a year ago, clients and folks would not know about blockchain. And now I get into a meeting and everybody is like, this is it. I've read so much about it. But then I'm wondering, is this the hype that's kind of building into it? And I see proof of concepts being done. But if there are, if there are to be scared that it's at least five years away, that's what I kind of see. Like would blockchains survive that long? And what would it take fundamentally one or two examples or events that will actually make it mainstream and people would start talking real things rather than just really hype about it? I think you're absolutely right. The hype around blockchain is entirely out of sync with the actual implementations. With one exception. And that exception is the Bitcoin blockchain. And you could also say, perhaps with two exceptions, because Ethereum has now become a large-scale viable production system with still some growing pains, but definitely something to watch carefully. So there are a couple of really important blockchains in the world today. And other than that, we're seeing an enormous amount of hype. I think part of that represents just kind of the general economic conditions. If you have a lot of money, and in many corporations today, a lot of money is the situation because of free money and stimulus and low interest rates that we've been in now for six or seven years, what are you going to invest in? Equities? That's a bubble. Real estate? That's a bubble. Student loans? That's a bubble. Auto loans? That's a bubble. Bonds? That's a bubble. Corporate bonds? That's a bubble. And so one of the problems we have in all of the Western developed economies is that we have a lot of money chasing very little yields, and that tends to create these exuberances. And so people are looking at blockchains, and maybe FinTech is the place where we might get some yields. And I think the investment has far outpaced the reality on the ground, which will eventually correct. But if you look at the broader space, you have to realize there are some real blockchains changing things in a very real way. And those blockchains are the open, transnational, borderless, open access, open innovation, permissionless blockchains such as Bitcoin and Ethereum and others that are setting the stage for real change with real applications today. A lot of hype, but also a seven-year experiment that refuses to die, continues to deliver more and more innovation every year, and will continue to surprise people. Five minutes. Let's take one more question and then we'll wrap it up. Maybe two questions if we have a quick one. Hey, Andreas. Thanks for the talk. Do you mind commenting quickly on alternative consensus mechanisms that are being proposed in different blockchain environments, and maybe how that impacts what your view is on the private versus public blockchain space as well? Thanks. I think consensus algorithms are really a very interesting area. It's basically a new science. It started in January 3rd, 2009, with one. If you look at the number of academic papers published in this space, they're growing at a hyperbolic rate at the moment. Hundreds and hundreds of PhD dissertations and papers on consensus algorithms in the last year. I only expect that pace to increase. I expect we're going to see entire master's degrees, perhaps, or postgraduate M-Fills or PhDs focused on consensus algorithms. There are many interesting experiments in that space, but to me, the really important thing is running your experiments in the wild at scale with real actors, real money at stake, and seeing how it survives in those conditions. This is not a theoretical science. This is an experimental science where we can run global-scale experiments and prove these systems in real terms. I think that's really to use the trite expression, where the rubber makes the road. Until we see large-scale deployments of practical use of novel consensus algorithms, I know one that works today, and that's proof of work. We'll see what comes next. That doesn't mean you can't do it another way, but I think it's also important to recognize that different consensus algorithms produce different characteristics and features. Proof of work produces thermodynamically guaranteed immutability, which is something you can't do any other way. Maybe with proof of stake, we're going to see different results, different features, different characteristics. This is a broad ecosystem in which different systems will specialize for fitness to a particular niche application use case, and there's plenty of room for a lot of competition. This is not the old zero-sum national currency game where in any particular domain there can be only one, and it's a winner takes all. That's not what we're doing here. It's completely different. Let's take one more question and then we'll wrap it. Hi. I know decentralization is the ultimate and final goal. I know you made mention of breaking and challenging traditions. Do you feel that a radical change in transformation to this can be accepted and adopted with ease? Or do you feel that a more gradual transition is the more logical road with more honest and transparent centralization methods of methods and practices for mainstream public adoption? I think neither is really the correct answer. First of all, I don't think you can have gradual transformation. History shows us that disruptive innovation never works in a gradual fashion. Revolutionary change, if you read about the philosophy of science, if you read the history of science, what you will see is this form of punctuated equilibrium where you have the status quo and tradition established kind of a plateau where ideas are relatively stale for very long periods of time, and then a little spark knocks everything out of equilibrium. It gets very chaotic for a short period and then it resettles into a new norm. We see that again and again in science. We also see it in technology. We also see it in politics. We see it in society. Gradual is not the way of this world. What you have is systems that build up energy within them until they reach a tipping point, and then some event, you never know what kind of event it will be, triggers that tipping point, and you have a sudden cascade into a new reality. We will not see a gradual transition into a new world through these technologies, and part of the reason is that there are many places in the world where people will not wait. Where mainstream adoption is not going to be done because of a whim, it's going to be done because of a desperate need. Talk to a Venezuelan, an Argentinian, a Brazilian, a Kazakh, a Ukrainian, perhaps even a Greek, or a Cypriot, and they will tell you that looking at these types of technologies as a safe haven, as an exit, as a safety valve from failing monetary systems is a very real possibility, and when you have that level of desperation, there's nothing to stop people from adopting them. Now, I can guarantee you that we do not need acceptance. We do not need the participation of the old system. We do not need the permission of the traditional systems in order to succeed. People will use these things because they are useful, and they will use them because they can opt in and choose to use them when they feel they are ready, when we give them a use case, when we give them an application that is sufficiently compelling to overcome their comfort zone, and then they will find a way to use these technologies. But I certainly don't expect that we will see this primarily driven by traditional institutions gracing us with permission and acceptance, so that we can innovate from within, disrupt the disruptors, create change from within the organizations. That stuff doesn't happen. In reality, large organizations can't do that, and they get disrupted from the outside. Most of the time, very painfully, and few of them survive in their original form. Start learning the skills, polish up your resume, and get ready for a roller coaster. This is going to be fun. Thank you very much. We'll close the questions there.