 What I'm going to talk about today is the chemistry of money, and specifically the chemistry of Bitcoin. I want to talk about one of the aspects of Bitcoin that makes it so exciting and so interesting, that yet most of us don't even notice it there until we study Bitcoin for one or two years. Bitcoin is a bit like an onion. You have to unwrap it, and as you unwrap it, you just find one more layer. I started five years ago, but I'm still unwrapping. I'm finding more and more things that surprise me every day about Bitcoin. One of the things that surprised me about Bitcoin is that, when I first encountered it, it looked like a relatively familiar banking system. I went to well-known sites like Blockchain Info, and I could see transactions, and I clicked on the transaction, and it said sender, receiver, and account. I was like, okay, this is pretty familiar, banking, great. Then I thought, let me look at the source code and see how this works. I'm a programmer, a computer scientist, and I'll try to understand how the system does these things. I went through the source code, and if you search for sender, receiver, and balance, and account, you won't find anything, because none of those things actually exist in Bitcoin. That really surprised me. When I looked at the source code, none of the things I expected to find there were actually there. You'd expect that a banking system, as it appeared to be, has been designed to do certain things in a very specific way. Bitcoin isn't like that. It's not like that at all. How many of you have looked into the source code at all, or understand the technical underpinnings? A few people in this room. So you go digging in there, and there's no balance, and there's UTXO, and there's no senders, there's inputs, and they don't really correspond to senders, and then a transaction has outputs, which don't really correspond to receivers. You realize that, suddenly, what you're looking at is almost this quantum or atomic nature of Bitcoin. In chemistry, we have elements like copper, steel, and iron. Well, steel isn't an element, but copper, iron, helium, whatever. Chemistry gives you this enormous complexity of things that you can combine to make interesting things like people. And toasters. But when you dig into the chemistry, you realize copper isn't a thing. Copper is a pattern of protons, neutrons, and electrons. There is no copper. Copper is just protons. One proton is just the same as another proton, and if you break it up, that proton can just as happily be part of helium. It doesn't care. There's nothing about that specific proton that makes it part of copper. Chemistry is one layer, but underneath that is atomic physics, and that layer is very simple. It's very simple. It has a handful of elements, and this handful of, you know, just a few elements make up all of the chemistry we know, hundredsome elements in nature, that all have unique and different properties that are completely different. Some of them are liquid, some of them are metals, some of them are gases. They behave differently. Some are acidic, some are not. But none of that is in their basic makeup. These are just patterns. Bitcoin has this fundamental atomic structure, this elemental structure. The elements of Bitcoin are the components of a transaction, and the elements of the scripting language. Those elements have nothing to do with traditional banking. You don't see anything about accounts, balances, senders, and receivers. Those elements are looking for fundamental mathematical properties and cryptographic properties. Whether a hash is equal to another hash, whether an elliptic curve signature matches another elliptic curve signature, manipulations of numbers, etc., etc. What you see on the surface, the transactions, are just constructs. They are a specific way of mashing up these elements to create something that kind of looks like a bank. Which is great, because if you are new to Bitcoin and someone tells you, well, there is an account, a sender, and a receiver, you are like, okay, I understand this. You have a wallet, but your wallet doesn't have coins, it has keys, and those keys can be copied. Now you are like, whoa, your wallet can be copied. Now you are losing me. This doesn't quite match my experience. Things get complicated because Bitcoin isn't what you think it is. It is a platform. It is not a payment network, it is not a currency, it is not a banking system. It is a platform that guarantees certain trust functions. Now, if you happen to have a platform that guarantees certain trust functions, one very useful application for that is to build a currency and a payment network. But you can build more things. When I was a child, my favorite toy was Lego. And the reason my favorite toy was Lego was not because what is on the box. Because when I took a Lego set, I did not build what is on the box. If the box had a red fire truck, I would build a dragon. Or a hippopotamus giraffe. Or something that didn't exist. Or some strange idea that I had. And so that is what I liked about it. I could take these basic building blocks, and I could build whatever I want. Now, what this does is it changes the perspective of how you look at things. Because from an abstract perspective, Lego is messy. And the thing I built didn't quite look like a fire truck or a spaceship. And if someone had given me a toy that was a fire truck, like a plastic injected, smooth edged, completed red fire truck, it would be the perfect fire truck, but it could only ever be a fire truck. And 20 minutes after I started playing with it, I'm bored. Because my perfect, rounded fire truck that is only a fire truck is a perfect fire truck, but can never be a hippopotamus giraffe, or a tomato, or a spaceship. But Lego allows me to do that. As I grew older, I started getting into cooking as a hobby. And what I loved about cooking is that it is the perfect combination of art and science. Because if you fundamentally understand how the ingredients work, and how they behave, and how their chemistry changes when they are combined, or when you add a catalyst like salt, or when you apply heat to them, then you can create anything imaginable. And so then you can create this idea of what you want to make when you're cooking. And as long as you understand how the ingredients work, you can execute and deliver that thing you wanted to create. And Bitcoin encompasses that elemental nature. It doesn't give you a final result. It gives you a set of ingredients and a recipe. It gives you a set of Lego blocks, and a photo on the box that looks like a red fire truck. And when we present that to the world, and the financial companies look at that, they say, well, your fire truck has sharp edges, and it's made of silly little blocks. Or you take the ingredients, and you put them together, and you make a burger. And in Bitcoin, we take the ingredients, we put them together, and we make a banking payment system, and the banks come and look at that. And it's as if they're saying to us, your burger is okay, but in McDonald's we can make it in 45 seconds. And we can sell a billion of them. So why do you need a chef, ingredients, a recipe, if you can just churn out a billion of them? And they're missing the point. And the point is not generating a billion copies of the same inferior product. The point is not getting the plastic injection molded plastic red truck that I'm going to be bored of in five seconds. The point is unleashing my creativity by giving me the tools and the elements I need to build something unique, to build something new. And I can guarantee you, my little red fire truck, or the burger I just built, I didn't do it, I didn't build the burger as fast as McDonald's, or as cheap as McDonald's. And my little red fire truck isn't as smooth as the Chinese copy. But I can also make albondegas with red tomato sauce, and I can also make a hippopotamus giraffe. And you can't do that with a prefabricated toy, and you can't do that in your McDonald's kitchen. I've unleashed my creativity. With Bitcoin, if you look just at some of the elements, you're beginning to see people realize that this is a set of ingredients, and you have one recipe, but you can make a different recipe. And so people are now trying to recombine these ingredients, and they say, well, if I have atomic transactions, and input versus output sums, and digital signatures, I can build a project that does Kickstarter projects, where you have a single transaction that can be funded by multiple people, but only if all of the amount is funded is it a valid transaction. That's the same elements I use to make a payment to you for a dollar over Bitcoin, but you can recombine them differently, and now you've got a crowdfunding platform. And then somebody else says, well, if we use two of two signatures, multi-signature, with transaction time locks, we can do a payment channel that charges for video streaming by the second, and that's a new recipe that no one had come up with before. And we can take that, and then we introduce this new thing, which is hash lock time contracts, and we can make multiple payment channels connected together, and then we've got Lightning Network, and that's a new recipe that no one has ever seen before. And so while the banks are saying, your truck has sharp corners and your burger is too expensive, and took more than 45 seconds, and what they're saying is, your transaction fees are too high, and you're too slow, and you can't possibly scale, they're missing the point. And the point is that we're not trying to sell a billion burgers in 45 seconds each, we're trying to unleash the creativity of an entire generation. We're building a system on top of which a thousand applications that require trust can be built. And when you have the ingredients, when you have these basic elements, what recipe you build is entirely up to you, because when they build the little red fire truck, they create an entire factory that can only do little red fire trucks. And I'm sure they will tell you, listen, our statistics say that 95% of children want a little red fire truck. We have tested this with the focus groups and the marketing teams we can produce them by the millions, they only cost three cents, they have a very small amount of lead paint and poisonous toxic carcinogenic hydrocarbons, not a problem, and we can do this very cheaply and very profitably, but they can't build anything else with that factory. And when you build a kitchen like McDonald's, you can churn out burgers every 45 seconds, but you can't make albondigas, you can't make something else, you are streamlined to do one thing and one thing only, and as long as that serves your profit line, it's okay, because I'm sure you focus group tested it to make sure that that's what everybody wanted. And that is a terrible way to build an economy, and that is a terrible way to build a financial system, and that is a terrible way to build a payment network, because effectively what the banks are saying to us is, we focus tested this, and what people want is the ability, instead of swiping their Visa card, they can wave it over the reader, saving almost two seconds and reducing their effort by at least four calories. I mean, we could deal with the four billion people who have no access to banking or clean water, we could deal with the fact that our world is a fragmented mess where the vast majority of humanity has no access to financial services, or we could reduce the shopper's effort and make a swipe card into a float card. We could face the fact that the reason more than four billion people are unbanked is because we require everyone to be identified on every side of every transaction, so that we can build a totalitarian surveillance system that the Stasi would be jealous of to monitor every financial transaction from every corner of the planet, because we have persuaded ourselves that our bourgeois sense of security will be protected not by solving poverty and not by reducing perhaps the bombing of other countries, but instead by watching everyone all the time when they buy a burger, just in case. And we subject ourselves to this mechanism that has now streamlined itself, like the factory that can only produce little red fire trucks. This is a system that can only deliver privileged financial services for a tiny elite sliver of the population worldwide, with totalitarian surveillance tied up in regulations of each country with barriers on the borders, not permitting international trade, a financial system where the government can apply pressure to stop you trading with WikiLeaks because they don't like them, while you can still send donations to the Ku Klux Klan. And that's not a joke, that's exactly what happened. They have built a system that can only do one thing in slavus, that can only do one thing impoverish us, and that system removes freedom in the most efficient possible way to deliver profits, and that system is broken and it doesn't scale. But if that's what you're trying to do, it's the most efficient system you've ever seen, and by comparison, the crazy little mishmash system that we've built with Bitcoin. Well, that's wrong, and it's slow, and it can't scale, and it's inefficient, and it's not as serious and sophisticated as the international banking system, but it delivers freedom, and it allows us to unleash creativity. Thank you. Hi, I'm Andreas Antonopoulos. If you enjoyed that video, consider that it takes a lot of work to produce open and free content that can be shared with everyone around the world. This isn't sponsored by some company, it's not promoting a product or an altcoin, or some kind of investment scheme. My goal is simply to help explain the technology of Bitcoin and open blockchains to as many people as possible in a neutral way that focuses really on the incredible possibilities that this technology brings us. If you'd like to support that mission, subscribe to my channel and go on patreon.com, where you can participate and help me build better content for more people. Thank you.