 Hi everyone, no slides on this one. So I'm sparing you that ordeal How many of you have heard of Bitcoin before today's session? All right, pretty much everybody great. We're doing a good PR job. How many of you own or have used Bitcoin? Okay, a much smaller number of people now if you have never used Bitcoin I Have a pledge from the other two people who are going to be speaking after me And I as well will be very happy to help you set up a wallet today Come see us after these talks. We'll set you up with the wallets. We'll give you a bit of Bitcoin and Help you try it out and experience it Bitcoin is better experience than explained Now I'm not gonna give you a Bitcoin Because that's worth quite a bit of money right now. I'll probably give you a pound In Bitcoin and so you think well a pound in Bitcoin. What are you gonna do with one pound in Bitcoin? Well, what you can do with one pound in Bitcoin is about 50 transactions And that will just give you a glimpse into the kind of thing that is possible with Bitcoin That is simply impossible with any other kind of system So what is Bitcoin? I'm not gonna try and explain Bitcoin in 15 minutes I wrote a book that answers the question. What is Bitcoin? It's 300 pages long it was obsolete the moment it was printed and Has to be corrected and updated every three months just to keep up with what is Bitcoin if You do get engaged in Bitcoin You'll quickly find out that mostly Bitcoin is none of the things you thought it was It's a lot more and a lot different than what you thought Many of the people who get involved in Bitcoin describe this experience is going down the rabbit hole You get this instant Effect where you feel that something Special something amazing is happening and then you start reading about Bitcoin and then you get obsessed Then you start reading more about Bitcoin and then you start annoying your friends and family about it And you start talking about it at parties and dinner parties and your significant other goes. Oh god Here we go again It's the Bitcoin talk and then you get really obsessed and you read about it for months and months and months And you don't eat enough and you get even more obsessed that experience has happened to a lot of people in Bitcoin and the reason is The Bitcoin is not just a minor incremental change. It's not a payments network Bitcoin is one of the most fundamental transformations on the basis of money and what is money Because that becomes the center of a conversation when you talk about Bitcoin You realize that the vast majority of people don't know what money is We use it every day and yet most of us really don't understand how it works I would think we understand how it works, but try explaining it to a five-year-old and You quickly find out the limitations of your knowledge on money The average person can't answer more than three questions from a five-year-old about what money is You quickly get to the question like mommy. Why can't we have more money? Who makes money? What's it made of and most parents after about three questions will revert to the good old Yeah, go do your homework, and that's the end of that conversation How old is money is a technology? It's not thousands of years old. It's hundreds of thousands of years old Part of the reason we don't know how old money is is because every archaeological site we uncover has evidence of money in it Beads feathers stones. We've seen four major transformations in the underlying form of money From physical objects like beads and feathers to pressed precious metals coming out just about five or six thousand years ago and Then over the years that being transformed through many civilizations including Greece where I come from and Then we start seeing the evidence of paper money that is an abstraction of this precious metal and then in the 1920s and 1930s we gave up on the precious metal part and went for just paper very convenient and Then in 2008 Bitcoin happened and a lot of people will look at Bitcoin and say it's a payment network. It's a currency It's not really that big of a transformation, but that would be a mistake Bitcoin is a fundamental transformation of every aspect of money It is the most abstract form of money we've ever created now the name is terrible because it has the word coin in it and A coin is the most physical form of money. You can imagine and Bitcoin is the least physical form of money You can imagine and so that can be confusing Bitcoin isn't a currency and Bitcoin isn't a payment network Bitcoin is a protocol and a network-centric platform for recording ownership and trust on a peer-to-peer basis and that's a lot of fancy words, but basically what it means is that Saying that Bitcoin is a currency is like saying that the internet is email Currency is just the first application if you have a platform that allows you to record ownership and trust The first type of asset that you are likely to record on that ledger is obviously a currency That's the most obvious application, but it's only the beginning Bitcoin is not money for the internet Bitcoin is the internet of money and currency is just the first app Why is it so hard to grasp what Bitcoin is? because it changes many of the fundamental aspects of money and Change is difficult So the experience of trying to explain Bitcoin changes over time when I first started trying to explain Bitcoin I was faced with denial People would tell me well Bitcoin isn't real money. I read serious scientists writing entire theses on why Bitcoin isn't real money and yet I'd already been living on Bitcoin for two years My own personal experience was a direct counterfactual to the idea that Bitcoin is not real money because if I can use it to buy goods and services It is money if I get paid for my goods and services that I'm offering it is money So denial was the first reaction Then we went into anger Well, Bitcoin is really all about drug dealers terrorists pedophiles criminals I Had people asked me on air whether I was a drug dealer when I tried to explain Bitcoin to them They didn't ask the HSBC banker if they were a money launderer But they asked me if I was a drug dealer. That's kind of bizarre So what comes after anger? bargaining Well, now we've reached the stage of bargaining Bitcoin is really disruptive Bitcoin is really strange Bitcoin is really different so Let's try and polish it up Let's try and smooth out the rough edges. Let's make it more palatable to regulators more comfortable for the corporate boardroom Beyond Bitcoin unleashing the power of the blockchain Bitcoin is just a silly currency the really important stuff is the blockchain So now we go through this great marketing whitewashing experience Where we pretend that what we want is disruption This is the buzzword of the time Disrupt we want to disrupt our industry. We want to disrupt our own company from the inside out We want to change the way banking is done Really great, let me tell you about Bitcoin open decentralized permissionless innovation completely without borders Identity and KYC won't do it can't do it. That's not a bug. It's a feature Control no Can't do it. That's not a bug. That's a feature you want disruption. Here you go Radical disruption completely decentralized money with no borders Well calm down there Che Guevara We said disruption, but we didn't mean that kind of disruption How about we take this massively decentralized completely open borderless network centric uncontrolled without intermediaries and We add a bit of control centralize it a tiny bit Maybe throw some KYC in there and then we'll rename it the blockchain and now we can start investing in this stuff and If you look at what companies are being invested in in Bitcoin, it's the ones that aren't doing blockchain It's the ones that are doing centralized banking with Bitcoin currency without any effect on the blockchain without any of the decentralization without any of the disruptive potential Bitcoin is not smooth jazz Bitcoin is punk rock deal with it It is disruptive and the reason it is disruptive is precisely why it's so difficult to Swallow and swaddle in traditional investment terms Bitcoin is the first completely decentralized transnational platform for exchanging value It has no borders. It doesn't care whether you like the transaction or not It is entirely based on mathematical verifiability It is the internet unleashed Unvarnished unpolished and Uncensurable and If you can't swallow that pill There's a startup out there That's going to take that innovation and is going to disrupt your industry because they can swallow that pill in fact as we saw with the internet when the first tier of telecommunication companies wanted to control and Polish and make the internet nice and cozy and came up with ISDN or colored faxing or CompuServe a Few of the third tier companies Who knew they couldn't compete on that playing field took the internet and used it as a trojan horse to disrupt the entire telecommunication industry They use that early first mover advantage If you think the Bitcoin companies are going to get a banking license Play nice with the regulators and do something mild Just to be able to jump on to some kind of retail shopping environment You're missing the point Bitcoin is about the other six billion Bitcoin is about unbanked and Borderless Bitcoin is disruption. It's disruption on a scale that most people haven't even begun to imagine so if You are in a startup Understand that not having a banking license is an advantage in Bitcoin Bitcoin solves the number one consumer problem in finance How many consumers have you heard go? Hey, you know, I'm with I'm with Lloyd's Bank, but I'm really thinking of switching to Barclays because they they have a robust KYC program I'm worried that I might accidentally money launder myself. So I want to make sure that I have some nice protection from their compliance department Consumers care about identity theft Which has become a plague upon the industry and the reason it has become a plague upon the industry is because personally Identifiable information must be collected by every intermediary on every transaction and Horted creating these giant honeypots that attract hackers like flies and you can't protect that information If you're realistic about it, no one can protect that information The banks can't protect that information the retailers can't protect that information the credit card companies can't protect that information The NSA can't protect that information The US government was unable to protect the clearance and background data For giving security clearances that's all of the information on drug addiction and criminal convictions and Sexual perversions of every single person in the US government who got a clearance And they couldn't protect that information and you think you can protect my social security number or my date of birth Don't fool yourself. The only way to protect personally identifiable information is to not collect it And guess what Bitcoin by design from day one solves the problem of identity theft by basing trust on verifiable transactional mathematics on Programmable money on the ability to do automated escrow and transaction verification without intermediaries and in such an environment identity is not required for trust and Just there you have one of the biggest breakthroughs in payment systems that we've seen in the last 50 years So what do we do in response to that? We tried to ram KYC on top of Bitcoin and say hey Let's collect information on everybody who's doing Bitcoin at an exchange. Guess what's gonna happen then you've got a completely open decentralized network It's like checking for tickets on two of the hundred doors on Wembley Stadium and Wondering why all of the people who don't have tickets use the other 98 doors And if you do KYC on the exchanges what you're going to end up doing is surveilling the innocent and the idiots Because those are the only people who will still be using Exchanges and now you've got a giant honey plots of surveillance information of the innocent and the idiots and you've Endangered the private information of every single customer while achieving absolutely nothing in terms of protecting criminal activity from being funded Bitcoin is not Going to be leashed and you can't go beyond Bitcoin to unleash the power of the blockchain The blockchain in itself is boring technology. It's a ledger. It's a slow database It's quicken only slow and distributed What's really interesting about the blockchain is the possibility of completely decentralized consensus a System that does not require intermediaries that does not require trusted third parties Where there are only two parties in a transaction the sender and the recipient and there are no counterparties Where transactions are verifiable on their own without appeal to authority? That is the revolutionary power of Bitcoin. That is the disruptive innovation banking changed in 2008 and If you think the end result of this will be that everyone will be able to run Banking customer service on their smartphone. You're missing the point a Decade from now a ten-year-old will be able to run the Swift network on their smartphone They'll be able to be a bank and a brokerage house on Their smartphone by the time they're allowed at 16 to open a bank account They've probably spent five or six years using Bitcoin on a day-to-day basis as their currency Because in a global connected world credit cards don't work for miners and they're going to end up using Bitcoin In fact, we're already seeing this So by the time they get to banking they've got six years of experience with Bitcoin Try explaining to them what three to five business days for clearing a check means Try explaining what a check is try explaining why they have to pay you five pounds to keep their account with you Try to explain them what an overdraft fee is While you're at it you might as well sell them a landline and a fax machine because they're just as likely to get one Of those as they are to open a bank account Blockchain technology is going to be very useful for banks to Disintermediate the clearing houses and settlement systems that offer centralized control over transaction clearing equity clearing securities clearing they're going to reduce the cost of doing those things They're going to change the financial equation for settlement and clearing on a global basis But that's not revolutionary and that's not disruptive Bitcoin offers the possibility of bringing banking to feature phones over SMS There are more people with feature phones and SMS today on the world in the world than people who have access to clean water Every single one of these text messaging phones Can become a loan origination station a Bloomberg terminal a swift terminal a banking system And they can serve customers who have other phones connected to it There are six billion people out there who have no access to international credit international liquidity international equities or the ability to move money between currencies across borders to do import and export Those are the restricted capabilities of the privileged few Bitcoin can deliver banking services Not by banking the unbanked But by debanking all of us Bitcoin can do that Either under the flagship title Bitcoin or under whatever other name we want to plaster on to make it more palatable But the underlying invention of a completely decentralized protocol for doing money is here It happened in 2008. It's not going anywhere and When you see that next article in the financial newspapers It tells you that Bitcoin died because its price has crashed. Is this the end of Bitcoin? Go to Bitcoin obituaries calm and add it to the other hundred and fifty obituaries that have been written for Bitcoin since 2010 because one thing Bitcoin does is it refuses to die It's a relentless anomaly It's an incubator for black swans and the reason it refuses to die is because there is no center There's nothing to co-opt. There's nothing to stamp down. There's nothing to shut down or filter or control Because it is completely decentralized and it takes a while to understand that if you want to get involved in one of the most disruptive Disruptive technologies and one of the most exciting technology spaces one of the most amazing Inventions in computer science of the last several decades The key focus is decentralization so don't make the mistake of Ignoring the disruptive potential of Bitcoin so you can get some watered-down CompuServe like smooth jazz soft version of it That feels nice and comfortable at the executive boardroom Because when faced with strategic massive disruption of that scale There are two places you can be you can be blockbuster or you can be Netflix You can be blackberry or you can be Apple or you can be Kodak and That's why Bitcoin is The important thing not the blockchain. Thank you Andreas your Greek sounding name leads me to make the first reference today to the Greek economy Yes, and I noticed in the last few days if you look at Google Trends from within side Greece There's been a lot of activity people researching Cryptocurrencies yes Bitcoin How could Bitcoin Make a difference in a situation like Greece is in at the moment Well, it can't not today and the reason for that is because Greece is not ready for Bitcoin and Bitcoin isn't ready for Greece Greece is already for Bitcoin because the fundamental problem is liquidity and If you have cash, you don't need Bitcoin and if you don't have cash, you can't get Bitcoin So the problem isn't solved by switching currencies Certainly not by adopting a cryptocurrency as a national initiative, which would be an utter disaster That's worse than the euro Bitcoin is about independent choice It's about people having a safe haven outside of the current currency control systems The reason people are interested in Bitcoin under these Times of crisis is because with Bitcoin that can be no bail ins There can be no bank holidays. No seizures. No freezes. No account limits. No currency controls Bitcoin allows any individual to send money anywhere in the world and it is completely unsensorable. So in a world where we see these crises Bitcoin shows us a vision of a potential safe haven and it's not gonna happen today any more than You could disrupt the media and entertainment Industry in the early 90s on the internet. It was too early but those of us who have the vision can see that it's coming and One day perhaps in ten years. We will see massive disruption from that and are there any governments today who you think are Seriously thinking about Bitcoin in the blockchain as ways may be of making their tax collection more efficient or anything else Are there any governments that we need to pay attention to? I'm not really and the reason for that is because Governments are not the focus of currency anymore Bitcoin launched the era of non-national currency and in retrospect National currency and central banking Occupies a very short period in history There was no national banking and national currencies before this century or last century and maybe there won't be after this century Or after a few decades But you have to think of Bitcoin in non-national terms. It's not a flag currency It doesn't belong to any nation. It is the first truly transnational currency. Thank you, Andrew. Thank you