 An expert on cryptocurrency and ladies and gentlemen, without further ado, please help me give a warm Malaysian welcome to Andreas Antonopoulos. Thank you very much. Thank you. Hi everyone. Good afternoon, salam aleikum. It's a real pleasure to be here. It's my first time in Malaysia. I've now been in Kuala Lumpur for less than 24 hours. I'm enjoying it a lot, very much so. This is my latest book. It was published in September. It's called The Internet of Money. People often find that this is a difficult topic to understand. Bitcoin is a difficult topic to understand. I published two books on it. The first book, Mastering Bitcoin, which is over there, is for software developers, engineers, technical people. How many people here are software developers, engineers, technical? Anyone? Okay, so five people in this room can read that book. It explains how Bitcoin works. You can probably read the first three chapters before you get into the very technical stuff. From that point on, it's a bit challenging. It's challenging not because I aim it to be challenging, but because Bitcoin is a complex subject. For everybody who is not a developer, the reason I published that book, The Internet of Money, is that this isn't about how it works. This is about why it matters. It's a collection of eleven of my talks, delivered in this format. It explains the philosophy of money, the implications of Bitcoin on society, and it's a book for everyone. It's the book I gave my mom to read. She doesn't understand anything about computers or money. That's a good start. Before I get started, I'd like to get a feel for the people in the audience. Get a bit of an understanding of how many people are familiar with these technologies that we're going to be discussing today. By show of hands, let's start with a narrowest, which is how many people here own Bitcoin? Someone did a good turnout for the community. Hi. Thank you for coming. How many people have seen or conducted a transaction in Bitcoin but don't own any, have just experienced it? Okay, just a few. Very good. How many people have never conducted a transaction, have no idea what Bitcoin is, or how it works, and are new to this topic? Great. That was about maybe thirty people, I would say. For those of you who are new to this topic, what I'd like to suggest is that, whether you understand or not what we're discussing today, please ask your questions. I want to hear even the most basic questions about Bitcoin, because I believe those are the most powerful questions. After we're done with the presentation, after we're done with the Q&A, I would like to see as many of the people in the audience who have never experienced Bitcoin to either install a Bitcoin wallet on your mobile device, and someone in the audience will give you for free some Bitcoin, not a whole Bitcoin, a fraction of a Bitcoin. Just so you can see how a transaction works, and then you can turn to your friend who just started and exchange Bitcoin with them. So you can experiment with this. I can assure you it's entirely legal. It's very easy to do. It will allow you to really experience this technology, which is much easier to experience than it is explained. Let's try the next question. How many people in this audience who have Bitcoin and have Bitcoin on their mobile devices are willing to help people install a wallet and give them one or two dollars? I will look around the new people, look around at who's raised their hands, find these people after the Q&A, ask them to give you a small amount of Bitcoin and help you set up a wallet. Don't be shy. I will be happy to do it myself. With that, let's get started with Bitcoin Basics. In October of 2008, on an obscure anonymous mailing list called the Cypherpunk mailing list, an anonymous participant using the pseudonym Satoshi Nakamoto announced the publication of a paper and said, I think I have solved a problem in computer science. I have found a way to create a system of electronic cash that is direct between people, peer-to-peer, as we use the term in computer science. In this system of electronic cash, I have written a white paper and I have implemented it in software. On that day, Satoshi Nakamoto published the white paper. You can download it online. It is available at bitcoin.org. You can do a search for it, the Satoshi Nakamoto white paper or the Bitcoin white paper. In nine pages, Satoshi Nakamoto described in detail and in ways that predicted many of the things that happened over the next seven years. What Bitcoin was and what Bitcoin could become and how it would work. But he didn't stop there, or she didn't stop there, or they didn't stop there. We don't know if Satoshi Nakamoto is a man, a woman, or a group of people, or an alien being from the future. Probably not that last one. Satoshi Nakamoto then published software and invited people to participate in running a network. This gives you the first hint as to how Bitcoin works. Bitcoin is software. Bitcoin is an application, among other things. You download this application, you run it on your computer. You can run it on a laptop or desktop, preferably on a computer that is permanently connected to the internet. It uses quite a bit of RAM and disk space right now, but in those days it was very lightweight. If you run this program, it reaches out on the internet and finds other people running this program. You don't know who these people are. It doesn't reach out to specific people. It creates a random mesh network, what we call a peer-to-peer network, where every participant in the system is equal. There is no special computer. They are all just talking to each other. It creates what in network terms we would call a crowd. Randomly it reaches out and connects to various other computers running the Bitcoin software. Together they create a network. That network is used to exchange and propagate transactions. These transactions are encoded in a digital format. They contain information about the transfer of value and the authorization to transfer value between participants. Nobody controls this network. This is a critical concept. Nobody controls this network. You can be running one of these computers, but you do not control this network. If you run one of these applications, it connects to other people, and you run another one of these applications. It talks Bitcoin to the other computers that are talking Bitcoin, but no one is in control. No one is in charge. Just like when you are running a computer that speaks on the internet and communicates with other computers on the internet. If you interact directly between these systems. That network started on January 3rd, 2009. On that day, the world changed. For the first time in the history of money, in the history of trust, in the history of institutions, in the history of humanity. A system that is completely independent of authority and institutions. A system that develops trust as a result of collaboration, communication, and computation through cryptography. This system allows people to exchange value, to transmit money. This money is called Bitcoin. Bitcoin is the application. It is the software that you run on your computer that communicates with all of the other computers running the Bitcoin software. Bitcoin is the name of the network that runs the Bitcoin network, which is the collection of all of these computers. Six and a half thousand of them around the world, anywhere there is internet, are the ones we know that advertise their presence. Several thousand more that don't, and tens of thousands that simply listen on to this network without actively participating. The Bitcoin network. All of this is an infrastructure that is used to create and transmit value in the form of transactions expressed in a new currency, the Bitcoin currency. The Bitcoin currency is unlike any other form of money we have ever seen before. First of all, as a form of money, it does not exist in physical form. It is the culmination of a trajectory we have seen in human history. Over thousands of years, money has become a more abstract form of value. You start with very, very tangible forms of value, commodities, a goat, a banana, a pineapple. These are very poor forms of money because you can eat them, and they rot or die, and they can be lost. They are not very good forms of money because they are the thing of value. We went from that to gold, precious metals, and stamped coins. These are better forms of money because you cannot eat them. They do not die or rot. They do not represent the value itself. They are not the value. This is an interesting concept. Money is not the valuable thing itself. Money is the thing you exchange for the valuable thing itself. The reason bananas are not good money is because bananas are the value you are trying to get. Money is the thing you exchange for bananas that has no value in itself. It is simply a symbol, an abstraction. It represents something that can be carried that I can give to someone tomorrow. They will probably give me bananas. That future promise of value is the essence of money. Money is the ability to have an abstract token that in itself is immutable, unforgeable, eternal, maintains its value, and represents the exchange of value in the future as a promise. Over time, these things have become less and less physical and more and more abstract. People do not like changing. If you tell someone, I am not going to give you bananas for the work you did. I am going to give you a shiny gold coin, but do not worry. You can use this to get bananas. They look at you and say, I have always had bananas for my work. I think I would like to have bananas, not this yellow thing. A hundred years later, they now believe the yellow thing is valuable. Then you tell them, now I am going to give you a piece of paper instead of the yellow thing. Do not worry. You can still convert this into bananas. Most people say, I do not think that is real money. I want the yellow thing, and the world moves on. Eventually, we change. We say, you will not get the piece of paper either. You will not get the coin. You will go and look at numbers on a page or on a web page. That represents the amount you have in the bank. Do not worry. You can still use that to acquire food, products, and services. It really is money. You cannot touch it. You cannot see it. It is just a number. Finally, we arrive at Bitcoin. Bitcoin has no physical form. It does not exist in any way. It is entirely intangible. It cannot be touched. It is simply a digital form of money. But it is a digital form of money that is entirely different from everything we have seen before. What it does that is different is that it is not a form of money recorded in the database or records of a company. It is not a digital form of money that represents a debt owed to a central bank or government. It is not a digital form of money that has been issued by a sovereign, a central bank, a nation, a king. It is a form of digital money that has been issued through complex and energy-intensive computation on the internet. It is recorded simultaneously on every computer that participates in the Bitcoin network. It is validated independently by every computer that participates in the Bitcoin network. It cannot be forged. It cannot be counterfeited. It cannot be censored. It cannot be seized or frozen. It can be transmitted anywhere in the world as information. It can be verified independently by anyone who receives it and is not controlled by anyone. Its value is not controlled. Its issuance is not controlled. Its ownership is not controlled. It is direct from one person to another person with no intermediaries. If I use my mobile phone to make a Bitcoin payment to someone in this room, I am creating a digital transaction... that recognizes the fact that a certain number of Bitcoin that the network knows belongs to me... through the proof of my digital signature. I have authorized the transfer of that value to another owner of Bitcoin... who will then be able to control that Bitcoin through their own digital signature. You don't need to know anything about digital signatures or cryptographic keys. When you use Bitcoin, you see an application on your mobile device or desktop. This application tells you that you have three Bitcoin. It allows you to enter the address of a recipient, which is a number, just like an email address. It allows you to select an amount of Bitcoin you wish to transact. When you click send on your application, it uses the digital signature and private key... that is embedded in your device to create and sign a transaction... that is advertised to the entire Bitcoin network and says, I have transferred this value. The entire network now knows that this value belongs to someone else. They don't know who this someone else is. Nobody knows. When you do a Bitcoin transaction, it is not related or attached to identity. You do not need to create an account. You do not need to register. You do not need to provide ID, name, location, address, age, gender, race, religion, nationality, nothing. You don't even need to be human. You laugh, but it is true. Bitcoin enables, for the first time in human history, non-human entities to actively control and own value. Which is bizarre, because we have never had that in any legal system in the world. We have the legal fiction of corporations, and corporations can own value, but corporations can only exist as associations between living human beings. In Bitcoin, a software agent that is not owned by anyone through the use of cryptography... can own and transact in Bitcoin internationally. This creates some very interesting and disturbing possibilities for the future. Artificial intelligence systems can own and control money without any living human being involved. You can have corporations that have no directors, no living humans in control, that are controlled entirely by software. Back to people, though. If you are a person who has installed a Bitcoin wallet, you must pass a complex test in order to install this software. You must be able to download an application. That is it. If you happen to own an iPhone, you must remember your iTunes password in order to install an application. So far, I have found that this is the most difficult part of becoming part of the global economy of Bitcoin, remembering your iTunes password. But if you can access the Google Play Store, if you have basic familiarity with mobile applications, if you can download an EXE on Windows and install it, if you can double-click a mouse, that is it. You don't have to provide your name, email address, register or create an account. You don't have to prove who you are, where you are, or show that you are worthy. You do not have to have a credit score. You do not have to be authorized. This is something that is entirely different from every system of money we have ever had before. For the Internet generation, this is a very familiar concept. If you open a browser and you start using the web, do you have to register or get a license to use the web? Do you have to create an account to visit Wikipedia? No. The only requirement is that you are able to download, install, and operate a web browser. There was a time when the idea of allowing every human to be able to communicate without borders or censorship on the worldwide web was terrifying to people. To some people, it still is terrifying. Most of the younger generation find it liberating in a global sense. Bitcoin does that to money. What happens when every human being on the planet, through the simple act of downloading and installing an application, can become a member of a global economy without borders, one that allows people to transmit and receive money at will, anywhere in the world, 24 hours a day, uninterrupted for the last seven years, with fees that do not depend on the amount of money you are sending, but pay simply for the capacity you use on the network. You can transmit a Bitcoin transaction for about $1, and it doesn't matter if you send one or $100,000, you still pay $1. It doesn't matter if you are sending it from here to another province in Malaysia or if you are sending it from here to the opposite end of the planet. It doesn't matter if you are an individual or corporation, or if you are sending it to an individual or corporation. It doesn't matter if you are sending it to someone who is rich or someone who is poor. You can. Bitcoin changes the way we approach finance completely, but that is just the first layer. The technology that makes Bitcoin possible, that allows two people from opposite ends of the planet to securely transact with each other without knowing each other and without trusting each other, opens up an entire range of applications that we haven't yet imagined. Bitcoin is not just money for the internet. Bitcoin is a platform. The technology that Bitcoin uses is a combination of the blockchain, which is the global transaction ledger, that records every transaction. The decentralized consensus mechanism, called proof of work, allows security on the Bitcoin blockchain. The open system of access that allows anyone to participate without barriers, and it is borderless and neutral nature that makes it possible for anyone to participate, regardless of who they are. The only thing that matters is whether a transaction is valid, not who is the source or destination, not what is the amount. These fundamental building blocks that make Bitcoin possible open the door to dozens, hundreds, and thousands of applications of trust. At its core, Bitcoin represents the replacement of trust through institutions to trust through networks. For centuries, human society has been based on the fact that in order to coordinate the activity between large numbers of people, we have to have something to trust. Until now, the best answer to that problem was institutions. Collections of people governed by rules and policies with oversight, transparency, and accountability built into the rules, run by humans, in order to create centers of trust through tradition, reputation, longevity. Institutions of trust are failing. They are failing all over the world. They are failing when they are newspapers. They are failing in political institutions. They are failing in numbers of ways. The reason they are failing is because they represent systems of scale for industrial societies. We are no longer industrial nation-state societies. We are now information societies of global scale that collaborate across borders at massive scale. We are now solving problems that affect not 30 million people in one country, but 7.5 billion people on one planet. For problems of that scale and collaboration of that scale, traditional institutions do not work. They fail to scale. They are not evil. They are not deliberately corrupt. They simply fail to solve the problems of a global society. Yet, during that very time that we see these institutions failing, we have seen the emergence of new systems, of governance, of new systems of global collaboration, systems that do allow us to collaborate, communicate, and solve problems at scale. The first of those systems was the internet. With that, we see the first system of communication that transcends nations, that transcends borders, that allows anyone everywhere and anywhere to communicate. Bitcoin represents that happening to money. It represents a network-centric system of money that is beyond the nation-state. A network-centric system of money that scales and allows people to collaborate on a global basis, that allows anyone everywhere, and anywhere to participate in a global economy, without barriers, without ID, without credentials, simply through the act of running software. That will change the world. Thank you.