Speaker 1: Get in touch with technology with tech Stuff from how
Speaker 1: Stuff Works dot com either everyone and welcome to tech Stuff.
Speaker 1: I'm Jonathan Strickland and I'm Lauren and we thought we
Speaker 1: would look at a subject that we've covered before on
Speaker 1: the show Tech Stuff, but it was it was quite
Speaker 1: a while ago. Yeah, it was back on July four,
Speaker 1: so I was I was not here yet. Mr Christophilett
Speaker 1: and Jonathan did an episode on bitcoin. Yeah, and in fact,
Speaker 1: bitcoin is another thing that you've probably heard about if
Speaker 1: you listen to our sisters show, a little known show
Speaker 1: called Stuff you should know. Yeah, I mean, you know,
Speaker 1: they're they're really up and coming folks. I think I
Speaker 1: think that you should give him a chance. But those
Speaker 1: kids are going please now. Josh and chucked an episode
Speaker 1: on how bitcoin works on June. We also spoke again
Speaker 1: about it briefly in our wrap up and Prediction episode. So,
Speaker 1: so why are we talking about it now? Well, as
Speaker 1: it turns out, this is just one of the stories
Speaker 1: that is constantly in the news, and particularly as of
Speaker 1: the time we're recording this podcast and the second part
Speaker 1: because this is going to be a two parter, there's
Speaker 1: just too much to talk about for it. Want to
Speaker 1: be one episode. We're recording this at the beginning of
Speaker 1: March two thousand and fourteen, and at this time there
Speaker 1: are lots and lots of stories about disasters that are
Speaker 1: befalling various institutions that are that rely on bitcoin. It
Speaker 1: has been a really wild ride for the past five
Speaker 1: months or so. Yeah, so we want to go and
Speaker 1: explain what bitcoin is, how it works, you know, give
Speaker 1: a refresher on all of that, and and talk a
Speaker 1: little bit about its origin because some interesting possible news
Speaker 1: has unfolded even as of the day we're recording this podcast,
Speaker 1: that being March six. Yeah, so we want to talk
Speaker 1: about some of the stories behind how it got started
Speaker 1: and the people behind it. Uh to really set the
Speaker 1: ground for the next episode, which will be more about
Speaker 1: the controversies that are going on. So to start off,
Speaker 1: what the heck is a bitcoin? Well, it's clearly a
Speaker 1: digital cryptocurrency. Obviously, I meant beyond that, Yeah, it's a
Speaker 1: digital cryptocurrency, which, if you break that down, digital means
Speaker 1: of course it belongs in the digital realm. Ultimately, we're
Speaker 1: talking about zeros and ones here lives on the Internet. Yes,
Speaker 1: crypto would mean some form of secrecy or encoding you
Speaker 1: would to put something in a cryptogram means that you
Speaker 1: have hidden it somehow in some form of you've done
Speaker 1: transformation on information, and unless you have a key to
Speaker 1: unlock that transformation, you can't get at what that original
Speaker 1: info actually is. Right, it's a security measure, yea. And
Speaker 1: so currency obviously that is something that represents wealth or
Speaker 1: or value money of some kind. Yes, we we've actually
Speaker 1: talked a lot about money recently. Yeah, it turns out
Speaker 1: tax season really just weighs heavily on our minds. But yeah,
Speaker 1: so so this bitcoin currency now, and we should go
Speaker 1: ahead and say it is not the only digital currency
Speaker 1: out there. There are actually quite a few other ones
Speaker 1: out there, and maybe someday we'll do episodes on those.
Speaker 1: The reason we're concentrating on bitcoin is again one it's
Speaker 1: the most well known, at least among the general public,
Speaker 1: and too, it's been the news quite a bit recently.
Speaker 1: So it depends on a really complex algorithm in other words,
Speaker 1: a very complex, uh mathematical system that tracks transaction. So
Speaker 1: technically every bitcoin contains within it a history of all
Speaker 1: transactions on the bitcoin platform. And this is this is
Speaker 1: for a couple of different reasons. One is it helps
Speaker 1: define how difficult it is to find a bitcoin. Two,
Speaker 1: it tracks the transactions so that way no one can
Speaker 1: spend the same bitcoin more than once. Uh. And it's
Speaker 1: it's again one of those things that is kind of
Speaker 1: in genius, and that by building it directly into the
Speaker 1: structure of the currency itself, not only does it track it,
Speaker 1: but it becomes part of it. So it's almost like
Speaker 1: if a dollar bill contained inside the dollar bill every
Speaker 1: record of every time that dollar had been used on something,
Speaker 1: so that way you would know, like when you got
Speaker 1: that dollar, you knew what it had been. You wouldn't
Speaker 1: necessarily know who used it, but you would know what
Speaker 1: it was used for. Uh. Personally, I think that would
Speaker 1: be absolutely terrifying, but uh, you know that that we'll
Speaker 1: get into some of that in our second episode. Anyway,
Speaker 1: it's an interesting concept, uh. And it's also a little
Speaker 1: scary to people because since it's digital, and since digital
Speaker 1: means that you can manipulate stuff with computers, a lot
Speaker 1: of people questioned whether or not it is a viable
Speaker 1: currency because they're worried that you might be able to
Speaker 1: do stuff like a lot of happens. What happens if
Speaker 1: I just copy this dollar over and over and over
Speaker 1: and over and over again, so now I have many
Speaker 1: dollars instead of the one dollar that I started with.
Speaker 1: Excepting stuff dollar, of course, we'd be talking about bitcoins,
Speaker 1: and uh, the cryptocurrency part of it is also meant
Speaker 1: to protect against that, to make sure that you cannot
Speaker 1: take a single bitcoin, copy it a billion times and
Speaker 1: suddenly become a bitcoin billionaire, and then simultaneously crash the
Speaker 1: value of bitcoins worldwide. This entire system was proposed by
Speaker 1: someone calling themselves to Toshi Nakamoto back in two thousand eight.
Speaker 1: And I say someone calling themselves that, because actually this
Speaker 1: this is a really big controversy right at this very moment,
Speaker 1: like as of the morning of the day that we
Speaker 1: are recording this podcast, News Broke and News is kind
Speaker 1: of in big quotation marks. There on Newsweek, a journalist
Speaker 1: is saying that this Satoshi Nakamoto person, which was once
Speaker 1: believed very strongly among the community of bitcoin users to
Speaker 1: be a pseudonym possibly for an entire group of people,
Speaker 1: is actually a a dude. Yeah, a sixty four year
Speaker 1: old dude, A sixty four year old Japanese American dude.
Speaker 1: So this, and not only that a sixty four year
Speaker 1: old Japanese American dude who's named Satoshi Nakamoto. It's actually
Speaker 1: his name, not a pseudonym. Uh. And as you were saying,
Speaker 1: news in big quotation marks, because when you read this story,
Speaker 1: you realize that there's nothing that directly connects Nakamoto of
Speaker 1: the story with Nakamoto of the person who proposed bitcoin. Now,
Speaker 1: there is someone who used that that screen name of
Speaker 1: Satoshi Nakamoto to create a proposal for bitcoin and published
Speaker 1: it right right right, That's that thing in two that
Speaker 1: I was talking about. So there's this other person who
Speaker 1: actually has that name and also seems to have a
Speaker 1: background that would be compatible with someone who would create
Speaker 1: this kind of cryptocurrency, at least on a surface level certainly.
Speaker 1: And also several members of actual Kamoto's family have said
Speaker 1: that it would make sense, and that furthermore, he will
Speaker 1: never confirm this, right, and then they themselves have no
Speaker 1: knowledge of it, so therefore they can't confirm it, right.
Speaker 1: And and this entire part of the part of the
Speaker 1: big quotes involved here also that this this Newsweek investigation, Um,
Speaker 1: it's just it's it's very it reads very uh, sensationalistically. Yeah,
Speaker 1: there's a lot of circumstantial evidence and no hard corroborating evidence. Uh,
Speaker 1: it's it's it's compelling circumstantial evidence, certainly, it's and it's
Speaker 1: a very compelling story. William William Gibson of famous science
Speaker 1: fiction writer Fame UM called the story on Twitter pinsion esque,
Speaker 1: which referring to Thomas Pension of course another I guess
Speaker 1: you could call him a science fiction writer anyway. But
Speaker 1: but but yeah, so so this was this investigation was
Speaker 1: done by one Lee or Leah McGrath Goodman, and it
Speaker 1: was published online on March six for the print version
Speaker 1: of Newsweek that I believe is come not coming out
Speaker 1: until March. Yes, we got a sneak peek, and it's
Speaker 1: set the world a Twitter, particularly on Twitter and also Reddit.
Speaker 1: People are kind of upset about this story. Well yeah,
Speaker 1: and we can talk about the upset part two. I mean,
Speaker 1: some people are of course reacting in that good old
Speaker 1: Internet way where because the reporter happens to be a yeah,
Speaker 1: she committed that terrible sin on the Internet of being female. Um. Yeah,
Speaker 1: first of all, I know this is a tangent, but gentlemen, uh,
Speaker 1: here's just just something from me to all of you
Speaker 1: out there, never ever ever attack anyone based upon their gender.
Speaker 1: It just bespeaks more of you than anything else that
Speaker 1: goes for the ladies as well. All y'all just just
Speaker 1: don't do that. Just the heck up. Okay. So anyway,
Speaker 1: beyond that, uh, the interesting things here, like they she
Speaker 1: uncovered that he had history working for some very important projects,
Speaker 1: many of which had top level secrecy involved. Oh yeah, yeah.
Speaker 1: He's a mathematician and computer scientist who has worked for
Speaker 1: the U. S. Military, the f a A, and several
Speaker 1: major corporations that we know of. I mean, he's a
Speaker 1: very secretive dude, Yes, he he seems to the word
Speaker 1: paranoid has been used to describe him. And I think
Speaker 1: it's completely accurate. Uh, it's not, you know, unjustifiable necessarily,
Speaker 1: because if you're someone who's worked on these high level projects,
Speaker 1: then clearly you have a heightened level of knowledge about
Speaker 1: the stuff what goes on out there. I mean, if
Speaker 1: it's top secret, then very few people know about it
Speaker 1: besides you. Sure, sure, And and I assume that much
Speaker 1: of that stuff is kind of scary, I I I imagine. So,
Speaker 1: I mean you're talking about stuff that is probably still
Speaker 1: to this day classified absolutely um, but Sonkamoto the figurehead
Speaker 1: at any rate, um was a really act a voice
Speaker 1: in the cryptography and in bitcoin communities in general until
Speaker 1: late So yeah, he ended up kind of It's funny
Speaker 1: he passed the torch to a person who didn't realize
Speaker 1: he was grabbing a torch. It was a guy, a
Speaker 1: guy named Avan Anderson, who is one of the one
Speaker 1: of the kind of the spokesman for bitcoin these days.
Speaker 1: He became the spokesperson when Nakamoto put his email on
Speaker 1: Bitcoin's main web page. Yeah, contact info, right, Nakamoto said,
Speaker 1: do you mind, Look, you know you're helping me out
Speaker 1: with fixing the code for bitcoin to make it better.
Speaker 1: Do you mind if I put your email address up
Speaker 1: on the website? And Anderson said, sure, go ahead, and
Speaker 1: so the Nakamoto puts up Anderson's email and then removes
Speaker 1: his Makamoto's email, So now Anderson is the only email
Speaker 1: up there. And that's when Anderson said, Yeah, that's when
Speaker 1: I found out that I'm kind of in charge. I
Speaker 1: guess I own this now. Yeah, kind of, yeah, it's
Speaker 1: it was definitely one of those I mean, the story
Speaker 1: in Newsweek when you read it, and you start reading
Speaker 1: about the personality of the person Nakamoto, who may or
Speaker 1: may not indeed be this figure that Kakamoto. You start
Speaker 1: picking up on things. We're thinking, well, I can at
Speaker 1: least see from a personality perspective, this is very consistent.
Speaker 1: Certainly right. This is someone who who essues and he
Speaker 1: does not want any attention directed toward himself. He prefers
Speaker 1: to remain anonymous, so much so that some attention is given.
Speaker 1: Actually quite a bit of attention in the article is
Speaker 1: given to the fact the Nakamoto is not living in
Speaker 1: a particularly fancy house. It's not a lush environment, certainly not.
Speaker 1: And and his family has even reported that he's had
Speaker 1: a little bit of money trouble with. He's had a
Speaker 1: few medical issues over the past few years, and stroke
Speaker 1: and some other medical problems. Yeah, and and his family says, well,
Speaker 1: if if Nakamoto are like this guy that we know,
Speaker 1: is in fact this bitcoin billionaire or millionaire at the
Speaker 1: very least because because all of the early adopters and
Speaker 1: early workers in bitcoin have made out really well conveniently, well, yeah,
Speaker 1: because you know, in the early days of mining bitcoins,
Speaker 1: it was easier to mind them that's something part of
Speaker 1: the system. Yeah, quick refresher. Course, bitcoins are released in blocks,
Speaker 1: and at least originally they were released in fairly large
Speaker 1: blocks of bitcoins. And the way you would get a
Speaker 1: block of bitcoins is you would quote unquote mind them
Speaker 1: by using your computer to solve mathematical problems. Now, those
Speaker 1: problems were based upon the information contained within the bitcoin itself,
Speaker 1: and the problems got harder the more computer power was
Speaker 1: dedicated to try and find bitcoins. So, in other words,
Speaker 1: the more people are looking, the harder it is to find.
Speaker 1: Which kind of mimics the way a physical commodity works.
Speaker 1: If you think about gold and you are an old
Speaker 1: timey prospector out in San France, Cisco just before the
Speaker 1: gold rush, it's not it's not impossible to think that
Speaker 1: you with your pick ax and your and your pan
Speaker 1: and your donkey, are able to find a significant amount
Speaker 1: of gold. But then as other people learned that gold
Speaker 1: is in them there hills, they swarm them their hills
Speaker 1: and it becomes a lot harder to find gold because
Speaker 1: now you've got people who have much larger equipment and
Speaker 1: much more sophisticated means of getting at the gold. Sure, sure,
Speaker 1: and it becomes a little bit more sparse as it
Speaker 1: is distributed across this larger population. Yes, and in fact,
Speaker 1: you get smaller and smaller deposits because you've mined away
Speaker 1: that first Yeah. So the same thing with bitcoins, except
Speaker 1: instead of using physical mining equipment, you're using computer power. Right,
Speaker 1: and Sonkamoto the figurehead, with his digital pick axes and donkeys, has,
Speaker 1: according to reports, held as many as a million bitcoins,
Speaker 1: which is a few hundred million dollars in US exchange.
Speaker 1: And I'm kind of that that value in US dollars
Speaker 1: has has um has there's a variability and we'll talk
Speaker 1: more about that in the second podcast to absolutely but
Speaker 1: so so so that's one strange thing. Um, there are
Speaker 1: several uh suggested reasons why Nakamoto the person might be
Speaker 1: living small that that could be completely plausible and not
Speaker 1: contradictory of the fact that he is, in fact Knockamoto
Speaker 1: the figurehead, but it could also just be part of
Speaker 1: a desire on on Nakamoto's part to draw attention away
Speaker 1: from himself and towards the currency. Well. Yeah, and and
Speaker 1: since since he's worried, here's the thing about those those
Speaker 1: transactions being recorded in every bitcoin. If Nakamoto were to
Speaker 1: start selling off his bitcoins in order to get some
Speaker 1: other currency for it, uh, several things would happen. One,
Speaker 1: he would have to pay taxes on it to people
Speaker 1: would know, because those transactions get distributed across the entire
Speaker 1: bitcoin network. So you get this point where everyone's hey,
Speaker 1: look that bank of coins that we know belong to
Speaker 1: Nakamoto are now being are now entering circulation. Therefore he's
Speaker 1: getting rid of them, he's selling. So it may and then, if,
Speaker 1: of course Knockamoto the man were to have a measurable difference,
Speaker 1: you know, his standard of living were to change dramatically,
Speaker 1: then you would say, okay, there's a smoking gun. Right.
Speaker 1: You saw the digital effect of these coins being sold off,
Speaker 1: and the physical effect of this this guy who was
Speaker 1: living a very private life suddenly having a turnaround in
Speaker 1: his lifestyle, you would say, all right, there's the connection.
Speaker 1: Then this guy is definitely the Nakamoto of the story. Sure,
Speaker 1: and Anderson has said that that Knakamoto the figurehead once
Speaker 1: emailed him um and I quote, I wish he wouldn't
Speaker 1: keep talking about me as a mysterious shadowy figure. The
Speaker 1: press just turns that into a pirate currency angle. Maybe
Speaker 1: instead make it about the open source project and give
Speaker 1: more credit to your dev contributors. It helps motivate them. Yeah,
Speaker 1: and uh, it's interesting too. I mean, first of all,
Speaker 1: Anderson says he never talked to Knockamoto on the phone
Speaker 1: or anything like that. It was always through an email,
Speaker 1: and it was through untraceable email. Uh. And also I
Speaker 1: believe there was a future um exchange between the two
Speaker 1: of them where uh Anderson or Anderson said, I'm going
Speaker 1: to go talk to the CIA. They've expressed interest in bitcoin,
Speaker 1: and I want to explain to them how this could
Speaker 1: be the future of currency and could be an amazing
Speaker 1: thing that could change the world. And that's the last
Speaker 1: he ever heard from Nakamoto, which suggest that perhaps Nakamoto
Speaker 1: did not want the attention of any kind of governmental agency,
Speaker 1: having worked for them in the past. That's a possibility.
Speaker 1: I'm assuming that the person in the figureheads are in
Speaker 1: fact the same entity, because again we don't have any
Speaker 1: direct connection. There's a lot of very compelling, circumstantial evidence,
Speaker 1: so we don't know ultimately whether Nakamoto the man is
Speaker 1: Nakamoto the person who came up with bitcoin. Uh, the
Speaker 1: the various stories kind of lend at least enough credence
Speaker 1: where it's it's it's a possibility that you can't just
Speaker 1: easily dismiss uh, certainly. Yeah. There is also part of
Speaker 1: the controversy about all of this, and part of why
Speaker 1: people are upset about the story breaking, is that it's
Speaker 1: been suggested that Nakamoto, the person's livelihood and safety are
Speaker 1: in danger if people know who he is and know
Speaker 1: that he kind of holds the mental keys to bitcoin. Yeah,
Speaker 1: there's definitely that as well, and some people have directly
Speaker 1: criticized Newsweek and this reporter in particular for doing that.
Speaker 1: As I said before, not all of the criticisms are
Speaker 1: directed in a way that's actually uh yeah, yeah there, right,
Speaker 1: there may be valid criticisms. I'm not dismissing that, but
Speaker 1: there's a right and a wrong way of doing that, folks.
Speaker 1: So anyway, Yeah, it could very well be that that
Speaker 1: this man's privacy has been uh violated in a way
Speaker 1: that could see harm visited upon him in the future.
Speaker 1: That that's a that's concerned. A lot of people have
Speaker 1: on the reporters side, they've said that all the information
Speaker 1: they had was stuff that was already publicly available. It
Speaker 1: wasn't like they went and dug all this information up
Speaker 1: in places that that anyone could could not have done,
Speaker 1: Like any person could have had the same experience, any
Speaker 1: intrepid person who chose to contact this dude through his
Speaker 1: model trained communities and visit his house unannounced, um, making
Speaker 1: him feel threatened enough that he called the police before
Speaker 1: he before he uh engaged in any sort of comfort. Yeah,
Speaker 1: that's yeah, just and anyone like that. And the conversation,
Speaker 1: by the way, did not once it got to bitcoin.
Speaker 1: He's like, yep, this this talk is over and he left.
Speaker 1: So it whether he has anything to do with bitcoin again, definitively,
Speaker 1: we can't say. But we've got a lot more to
Speaker 1: say about bitcoin before we do that. However, let's take
Speaker 1: a quick break to thank our sponsor. Okay, So Nakamoto,
Speaker 1: the man and the figurehead both have really try to
Speaker 1: stay away from the public eye. Uh and in general,
Speaker 1: the it's there's this interesting conflict where you've got a
Speaker 1: community that really wants this currency to to exist, they
Speaker 1: want it to work and do, and they want this
Speaker 1: to be the future of currency. On the other hand,
Speaker 1: you have a lot of people who are responsible in
Speaker 1: some way for the currency's existence. Who don't really want
Speaker 1: to talk about anything at all. And this conflict also
Speaker 1: grows into the fact of what the currency is intended
Speaker 1: to do. You see, it's it's not a centralized or
Speaker 1: regulated currency. The way most currencies work. There's something that
Speaker 1: are issued by a governmental body, right, and the weight
Speaker 1: of that government therefore is behind the currency. They're they're
Speaker 1: usually ensured in fact, by that government body. Yeah, so
Speaker 1: you've got some sort of government that is both responsible
Speaker 1: for the currency to to stay in value, uh, and
Speaker 1: that you know, ultimately if something goes wrong, bail you
Speaker 1: out in some way or another. And bitcoin is different.
Speaker 1: It is not centralized. It's decentralized. The idea here being
Speaker 1: that because it's not dependent upon any one government, should
Speaker 1: any one government have major problems, which we've seen. I mean,
Speaker 1: there's problems all around the world where governments rise and fall,
Speaker 1: and as a result, the currency often takes a huge
Speaker 1: beating during those those times of turmoil. Oh yeah, and
Speaker 1: I mean we've seen that repeatedly in the past few years. Yeah.
Speaker 1: This would allow you to have a global currency that
Speaker 1: you could use through you know, no matter where you are,
Speaker 1: and no matter where you're trying to purchase something that
Speaker 1: is not dependent upon any one government. So in theory
Speaker 1: it would remain it's its value would remain uh, unaffected
Speaker 1: by whatever you know, regional conflicts happen to be going
Speaker 1: on at the time, So you know, that's one of
Speaker 1: the ideas. Another one is that because there's no governmental regulation,
Speaker 1: are quote unquote interference anyone who has a deep distrust
Speaker 1: for the government, no matter where in the world you
Speaker 1: happen to live, no matter what sort of government happens
Speaker 1: to be personally. Uh, then this would allow you an
Speaker 1: opportunity to work outside of that, to have a money
Speaker 1: that you could use that does not in any way,
Speaker 1: uh benefit outside of the system. And whatever anarchist fight
Speaker 1: club style definition you want to take on that. And
Speaker 1: one more, one more quote from from this kind of
Speaker 1: ridiculous inflammatory news Week piece, by the way, on on
Speaker 1: in line with all of this, uh, the reporter tracked
Speaker 1: down one of nakamotives, the nacamotive. The person's daughters by
Speaker 1: the name of Eileen Mitchell, and she said of her father, I,
Speaker 1: quote again, he is very wary of government interference in general.
Speaker 1: When I was little, there was a game we used
Speaker 1: to play. He would say, pretend the government agencies are
Speaker 1: coming after you, and I would hide in the closet. Yes,
Speaker 1: so we you know that, In general, we've had a
Speaker 1: lot of a lot of the folks who are big
Speaker 1: fans of bitcoins have been called many things, including anarchists.
Speaker 1: Some say that it's it's you know, it's largely in
Speaker 1: the United States anyway, largely a libertarian kind of fan base.
Speaker 1: In fact, Nakamoto the person self identifies as libertarian. Um.
Speaker 1: Then there are other people who are interested in bitcoin
Speaker 1: who don't necessarily identify as either anarchists or libertarians. They
Speaker 1: are investors who are interested in bitcoin because it's a
Speaker 1: what potential way to make a heck of a lot
Speaker 1: of money. If you've ever looked at the value of
Speaker 1: bitcoin and versus the US dollar over the past uh,
Speaker 1: you know, it went from you know, a couple of
Speaker 1: bucks for a bitcoin to astronomical levels at one point
Speaker 1: of over a thousand share. Yeah. So I mean they're
Speaker 1: the actual community is very diverse. Yeah. And in addition
Speaker 1: to it being called an an anarchists dream or a
Speaker 1: investment opportunity, it's also been used as an opportunity to
Speaker 1: conduct transactions that would otherwise be outside of the law. Right.
Speaker 1: We'll have a lot more to say about some of
Speaker 1: the the less respectable ways one can use one's bitcoins,
Speaker 1: or at least one could have used one's bitcoins in
Speaker 1: the next episode. There's some other interesting little technical factors
Speaker 1: I'd like to to cover before we we wrap up
Speaker 1: on this one. The one of the things that is interesting,
Speaker 1: Like we've mentioned, you know, a physical commodity like gold,
Speaker 1: Ultimately there is a finite amount of that on earth,
Speaker 1: you know, So once you mind all the gold that
Speaker 1: is available on Earth, that's it. All the gold that
Speaker 1: is available has been mind. It's now out in the
Speaker 1: world in some other form, all right, same thing with bitcoins.
Speaker 1: The idea was that there needed to be a finite
Speaker 1: number because if it was infinite, then ultimately that that's
Speaker 1: a meaningless currency. Yeah, how could you ever expect that
Speaker 1: to to maintain its value? So there are twenty one
Speaker 1: million bitcoins, and that is all there ever will be. Now,
Speaker 1: not all of those are in circulation, right, Like we
Speaker 1: were saying earlier, these are released in batches, and in
Speaker 1: increasingly small smaller batches, right right, you you and only
Speaker 1: would you see fewer bitcoins per block once you once
Speaker 1: you get further down the line, eventually you get fractions
Speaker 1: of a bitcoin, and the bitcoin itself can be divided
Speaker 1: up into eight decimal places. So the base unit is
Speaker 1: technically point zero zero zero zero zero zero zero one
Speaker 1: bitcoins or btc. So you could yeah, I've seen it
Speaker 1: referring to that, So you could you could have you know,
Speaker 1: that tiny amount of a bitcoin, and depending upon the
Speaker 1: value of a full bitcoin, it could still be a
Speaker 1: meaningful amount of money. And once you get toward the
Speaker 1: end of the cycle, the life cycle of all the
Speaker 1: bitcoins that are available, that's kind of the amount you're
Speaker 1: going to get per mining operation. Now, in a way,
Speaker 1: this is also meant to make people back off of mining,
Speaker 1: because the amount of effort you put forth trying to
Speaker 1: get at that money is never balanced out by what
Speaker 1: you actually succeed in getting, all right, it's going to
Speaker 1: be a smaller return. Yeah, And so that's actually been
Speaker 1: one of the big big arguments against bitcoin is that
Speaker 1: the amount that you put forth, the return on your
Speaker 1: investment isn't equalled out, so you're investing way more than
Speaker 1: you're getting back. Especially to be competitive, because like I
Speaker 1: said earlier. The more computing power you dedicate to this,
Speaker 1: the more likely you are to mind a bitcoin. Now,
Speaker 1: just because you're more likely to mind it doesn't mean
Speaker 1: you're going to be successful. So they're gonna be times
Speaker 1: where you're trying and trying and trying, and someone else
Speaker 1: minds the next block, and then you have to start
Speaker 1: all over for the subsequent the or the following block. Rather, right,
Speaker 1: And it's not it's not as though it's some kind
Speaker 1: of slot machine. It's just whoever completes that code first. Yeah, So,
Speaker 1: and it's really you know, just think of like a
Speaker 1: very hard math problem where you don't have all the
Speaker 1: answers and you're trying to make lots and of guesses.
Speaker 1: Someone's gonna guess before everyone else, and sometimes that might
Speaker 1: be you if you happen to have enough computer power
Speaker 1: to be able to guess really really quickly. So people
Speaker 1: have been putting together some some pretty hefty computer power
Speaker 1: in order to accomplish these tasks. Yeah, we're talking like, uh,
Speaker 1: the equivalent of what a supercomputer would be, although you're
Speaker 1: not not your traditional supercomputer. Parallel processing is the key,
Speaker 1: that's the real important thing with this kind of approach,
Speaker 1: and sometimes people have said, well, you know, if I
Speaker 1: just downloaded a mining program on my little laptop and
Speaker 1: set to go in the idle time, I would never
Speaker 1: mind a coin, and just the chances are astronomically against me.
Speaker 1: So what if I joined forces and join up with
Speaker 1: another group? And there are these little mining companies little
Speaker 1: some of them are quite large, but they're mining pools
Speaker 1: really that you can join, and some of them are
Speaker 1: pretty big. There's one that's called g h a s
Speaker 1: h dot io or g hash dot io that is
Speaker 1: particularly powerful. It has you know, it's it's been gaining
Speaker 1: members steadily over time. And there's one major flaw with
Speaker 1: the way bitcoin works, which is that if anyone were
Speaker 1: to have fifty be contributing or more of the total
Speaker 1: computing power dedicated to mining bitcoins, that entity would then
Speaker 1: also have the ability to block or even reverse bitcoin
Speaker 1: transactions across the network. So if you have either a
Speaker 1: computer that is that half as powerful as everything that's
Speaker 1: out there, so that you you have like the deep
Speaker 1: thought machine and it and it is just as strong
Speaker 1: as at least everything else it's out there, then you
Speaker 1: would be able to do this. Or if you had,
Speaker 1: say a mining pool that had about fifty of the
Speaker 1: getting power dedicated to trying to find these bitcoins, you
Speaker 1: would have this power which could be very disruptive. I mean, clearly,
Speaker 1: if I had the ability to deny or reverse any
Speaker 1: kind of transaction in dollars, I'd be the biggest jerk
Speaker 1: in the world. I'd be like, yeah, you don't. You
Speaker 1: don't really want that latte, so that latte is not yours. Yeah.
Speaker 1: It's kind of like, uh, like like if you've ever
Speaker 1: had a lottery pool at your office, except if instead
Speaker 1: of just buying a whole bunch of tickets, your lottery
Speaker 1: pool bought a whole bunch of tickets and physically prevented
Speaker 1: other people from doing the same thing. Yeah. Yeah, so
Speaker 1: it would be pretty ugly. Yeah, like everyone who tried
Speaker 1: to buy a ticket, their their purchase was rejected. Um yeah,
Speaker 1: this is kind of crazy and uh. And the thing
Speaker 1: is is that this g hash mining pool it doesn't
Speaker 1: technically have, at least as the recording of this podcast,
Speaker 1: it does not have the computing po no, but it is.
Speaker 1: I mean, the fact that it has approached it's still
Speaker 1: pretty scary, and at certain times it has had effectively
Speaker 1: power so while you wouldn't say over the course of
Speaker 1: a day it had power, at certain times of the day,
Speaker 1: it kind of even out to that as certain computers
Speaker 1: drop off of the network and others join on. So
Speaker 1: there have been times where it could do that, and
Speaker 1: you know, there have been instances of transactions being denied,
Speaker 1: largely to things like gambling sites, which again kind of
Speaker 1: falls into that depending upon where you are, can fall
Speaker 1: into that illegal activity activity. So it's one of those
Speaker 1: things that is among the many problems of bitcoin, it's
Speaker 1: one of the few that has to do directly with
Speaker 1: the currency itself. Most of the problems we're going to
Speaker 1: talk about in our next episode have to do with
Speaker 1: the people who are using the currency, yeah, or the
Speaker 1: architecture that supports the use of the currency. So it's
Speaker 1: more like the banks and the exchanges that are the
Speaker 1: problem and not necessarily the currency itself. But that what
Speaker 1: you're gonna say for our next episode. So to wrap up, guys, bitcoins, Uh,
Speaker 1: stay tuned because we're going to cover all the crazy
Speaker 1: controversies that have happened recently and explain what is up
Speaker 1: with them and why they're important. Uh, And if you
Speaker 1: guys have any suggestions for future topics of tech stuff,
Speaker 1: whether it's Bitcoin related, maybe you're maybe you're just tired
Speaker 1: of us talking about money and you say, please talk
Speaker 1: about anything other than money, let us know, Or if
Speaker 1: you've got something specific, let's know that too. You can
Speaker 1: email us our addresses tech stuff at Discovery dot com
Speaker 1: or drop us a line on Facebook, Tumbler, or Twitter
Speaker 1: or handle at all. Three is tech stuff, hs W
Speaker 1: and Lauren and I will talk to you again really
Speaker 1: soon for more on this and thousands of other topics,
Speaker 1: because it how staff works dot com