1 00:00:00,040 --> 00:00:03,360 Speaker 1: The Coin Bureau Podcast is a production of I Heart Radio. 2 00:00:03,880 --> 00:00:07,080 Speaker 1: Ten days after the FED had loaned out five hundred 3 00:00:07,120 --> 00:00:11,080 Speaker 1: and forty billion dollars in order to keep the US 4 00:00:11,119 --> 00:00:16,120 Speaker 1: economy going, Satoshi reappeared and he published the Bitcoin white 5 00:00:16,120 --> 00:00:31,360 Speaker 1: Paper to the Cryptography mailing list. Welcome everyone to the 6 00:00:31,400 --> 00:00:35,839 Speaker 1: coin Bureau Podcast, and this one finally, after weeks of 7 00:00:35,960 --> 00:00:39,560 Speaker 1: dancing around the subject, we are going to finally talk 8 00:00:39,680 --> 00:00:47,600 Speaker 1: about We're going to finally talk about bitcoin. We've mentioned 9 00:00:47,600 --> 00:00:50,159 Speaker 1: it a lot, We've done We've done at least two episodes. 10 00:00:50,200 --> 00:00:53,159 Speaker 1: I think on on the background, what is money, how 11 00:00:53,200 --> 00:00:56,240 Speaker 1: does money work? The current financial system, all that. Then 12 00:00:56,280 --> 00:00:59,640 Speaker 1: we spent a couple of episodes talking about blockchain, and 13 00:00:59,640 --> 00:01:02,120 Speaker 1: that got quite techy, didn't it. Yeah. I tried to 14 00:01:02,200 --> 00:01:06,880 Speaker 1: keep its Yeah, we talked about nonsense. Now follow up 15 00:01:06,920 --> 00:01:09,320 Speaker 1: to that because I went back and I was like, 16 00:01:09,360 --> 00:01:13,440 Speaker 1: I must find out what why. It's called a nonce um. 17 00:01:13,800 --> 00:01:16,880 Speaker 1: It stands for number used only once, where you know 18 00:01:17,000 --> 00:01:22,800 Speaker 1: shorthand for number used on. Oh, okay, it turns out 19 00:01:22,840 --> 00:01:31,080 Speaker 1: what you're pronouncing it wrong. No, no, nuns okay, number 20 00:01:31,319 --> 00:01:34,080 Speaker 1: used only be used only one. So there's a little 21 00:01:34,080 --> 00:01:37,080 Speaker 1: bit of there's a little addendum to a previous episode. 22 00:01:37,280 --> 00:01:41,360 Speaker 1: It's time to talk about the original crypto, the o 23 00:01:41,600 --> 00:01:46,240 Speaker 1: G the big Daddy, the Granddaddy of crypto, Bitcoin, Crypto C. 24 00:01:46,600 --> 00:01:49,800 Speaker 1: Let's go. So in this episode, we're obviously gonna start 25 00:01:49,840 --> 00:01:52,080 Speaker 1: talking about Bitcoin. There is so much to cover, so 26 00:01:52,120 --> 00:01:54,040 Speaker 1: we're going to spread this out over a few episodes 27 00:01:54,920 --> 00:01:56,880 Speaker 1: because I want to go into a bit of detail. 28 00:01:56,920 --> 00:01:59,800 Speaker 1: I want to skirt as much of the tech as possible, 29 00:02:00,080 --> 00:02:02,640 Speaker 1: because We've covered quite a lot of the tech um 30 00:02:02,680 --> 00:02:04,840 Speaker 1: and I've worried that I don't want to get I 31 00:02:04,840 --> 00:02:07,720 Speaker 1: don't want to get too technical if we can help it, UM. 32 00:02:07,720 --> 00:02:09,640 Speaker 1: So this is going to be more sort of the 33 00:02:09,760 --> 00:02:12,600 Speaker 1: history the emergence of bitcoin, the history of it, and 34 00:02:12,639 --> 00:02:14,960 Speaker 1: what I've chosen to do is to try and focus 35 00:02:15,000 --> 00:02:19,079 Speaker 1: it around some of the people involved. Some of these 36 00:02:19,080 --> 00:02:24,240 Speaker 1: people are quite well known, others are a little more obscure, 37 00:02:24,440 --> 00:02:26,160 Speaker 1: and and this is kind of this thing is all 38 00:02:26,200 --> 00:02:29,600 Speaker 1: relative like in the crypto community, um, some are some 39 00:02:29,720 --> 00:02:32,040 Speaker 1: are sort of known in the wider world. But these 40 00:02:32,040 --> 00:02:35,440 Speaker 1: are people who have in their own way made massive 41 00:02:35,480 --> 00:02:39,360 Speaker 1: contributions to bitcoin, and as we go along sort of 42 00:02:39,400 --> 00:02:42,880 Speaker 1: different types of people will emerge. But for so for 43 00:02:43,320 --> 00:02:45,480 Speaker 1: but for a start, we're going to obviously focus on 44 00:02:45,520 --> 00:02:49,000 Speaker 1: the people who helped bring bitcoin into existence, including of 45 00:02:49,040 --> 00:02:53,680 Speaker 1: course Satoshi Nakamoto, the man whose name you always get wrong. 46 00:02:55,440 --> 00:02:57,480 Speaker 1: But before we go on, before we delve into the 47 00:02:57,520 --> 00:03:00,440 Speaker 1: history of bitcoin, let's quickly for those for those people 48 00:03:00,480 --> 00:03:02,560 Speaker 1: who didn't maybe catch any of the episodes on blockchain 49 00:03:02,639 --> 00:03:05,679 Speaker 1: or still getting up to speed, let's quickly remind ourselves 50 00:03:05,720 --> 00:03:10,799 Speaker 1: of exactly what bitcoin is. So, bitcoin is a form 51 00:03:11,040 --> 00:03:14,520 Speaker 1: of digital cash and it can be exchanged between in 52 00:03:14,560 --> 00:03:19,280 Speaker 1: the individuals without the need for any sort of third party, peerless, 53 00:03:19,840 --> 00:03:25,400 Speaker 1: peer to peer and peerless, it's peer to peer. Yeah, 54 00:03:25,600 --> 00:03:29,079 Speaker 1: So previously digital assets could only be exchanged if there 55 00:03:29,200 --> 00:03:31,480 Speaker 1: was some sort of third party, some sort of middleman, 56 00:03:31,560 --> 00:03:34,960 Speaker 1: if you like, in the middle, because there was no 57 00:03:35,000 --> 00:03:37,760 Speaker 1: way otherwise to prevent them being copied. And this we 58 00:03:37,840 --> 00:03:42,360 Speaker 1: touched on this exactly, Yeah, the double spend problem, because yeah, 59 00:03:42,400 --> 00:03:45,240 Speaker 1: any digital asset can be very easily copied and sent 60 00:03:45,280 --> 00:03:49,120 Speaker 1: to multiple, multiple recipients. So that obviously has no decent 61 00:03:49,200 --> 00:03:51,440 Speaker 1: function as a currency as a form of money if 62 00:03:51,440 --> 00:03:54,280 Speaker 1: it's can if it can be easily replicated. So the 63 00:03:54,440 --> 00:03:58,520 Speaker 1: genius of bitcoin was to find a way to exchange 64 00:03:58,880 --> 00:04:02,720 Speaker 1: digital assets that you could be confident that they were unique. 65 00:04:03,120 --> 00:04:05,760 Speaker 1: And the way it did this was was to use 66 00:04:05,880 --> 00:04:09,560 Speaker 1: the magic of blockchain technology, which obviously we've discussed a 67 00:04:09,600 --> 00:04:14,760 Speaker 1: lot recently. So, yeah, a form of digital cash, electronic 68 00:04:14,800 --> 00:04:20,400 Speaker 1: money that can be exchanged privately, pseudonymously, not anonymously importantly, 69 00:04:21,120 --> 00:04:24,039 Speaker 1: which is a common misconception, but with a with a 70 00:04:24,160 --> 00:04:29,799 Speaker 1: degree of privacy um and weirdly enough, the ideas for 71 00:04:29,839 --> 00:04:34,440 Speaker 1: this had been kicking around for quite some time. So 72 00:04:35,040 --> 00:04:39,359 Speaker 1: before we talk about bitcoin in detail, let's talk about 73 00:04:39,920 --> 00:04:43,480 Speaker 1: digi cash. Digi cash is one of the is an 74 00:04:43,480 --> 00:04:46,920 Speaker 1: early forerunner of bitcoin. Before we talk about let's remind 75 00:04:46,920 --> 00:04:51,480 Speaker 1: ourselves of the difference between a cash and a digital transaction. Obviously, 76 00:04:51,800 --> 00:04:54,320 Speaker 1: cash takes place peer to peer. It needs to be 77 00:04:54,400 --> 00:04:58,200 Speaker 1: in person, yeah, face to face. A digital transaction, the 78 00:04:58,240 --> 00:05:01,279 Speaker 1: advantages it has can be done over distance. You don't 79 00:05:01,279 --> 00:05:03,279 Speaker 1: need to be in the same room. But obviously it 80 00:05:03,320 --> 00:05:09,320 Speaker 1: needs a middleman, someone in a third party in a yeah. Yeah, 81 00:05:09,680 --> 00:05:11,960 Speaker 1: So this is we're going to go back to the 82 00:05:12,040 --> 00:05:16,520 Speaker 1: kind of the the computer revolution is just getting started 83 00:05:16,800 --> 00:05:20,480 Speaker 1: and the banking system is beginning to kind of take 84 00:05:20,600 --> 00:05:24,680 Speaker 1: notes of this. New technology. So the world is sort 85 00:05:24,720 --> 00:05:28,159 Speaker 1: of starting to slowly computerize, and this is obviously a 86 00:05:28,160 --> 00:05:31,560 Speaker 1: process that's going to speed up a lot, a bit 87 00:05:31,640 --> 00:05:35,640 Speaker 1: like a snowball. It's it's gonna grow exponentially over the years. 88 00:05:35,680 --> 00:05:39,560 Speaker 1: But a good example, I mean think I think two 89 00:05:39,920 --> 00:05:42,840 Speaker 1: linked cash machines linked a t M s. Do you 90 00:05:42,880 --> 00:05:47,280 Speaker 1: remember I do not? Well, when we were certain banks 91 00:05:47,400 --> 00:05:50,640 Speaker 1: and certain cash machines exactly exactly. So if you banked 92 00:05:50,640 --> 00:05:53,600 Speaker 1: with say Barclays, you could only use a Barclay's cash 93 00:05:53,640 --> 00:05:55,800 Speaker 1: machine or no, there was something like it was that 94 00:05:55,839 --> 00:05:58,839 Speaker 1: there were a little there were a little um logos 95 00:05:58,880 --> 00:06:01,240 Speaker 1: on your card that's right, yeah, and then you could 96 00:06:01,240 --> 00:06:03,080 Speaker 1: only like you had to basically see the logo. And 97 00:06:03,080 --> 00:06:05,359 Speaker 1: if you were like a Bank of Scotland or I 98 00:06:05,400 --> 00:06:09,680 Speaker 1: don't know, yeah, exactly exactly. So yeah, as a sort 99 00:06:09,720 --> 00:06:13,480 Speaker 1: of in general you could only you could only withdraw cash, 100 00:06:13,480 --> 00:06:16,160 Speaker 1: you could only use your bank card at certain a 101 00:06:16,240 --> 00:06:19,440 Speaker 1: t M sum And this will change. And I remember 102 00:06:19,480 --> 00:06:21,160 Speaker 1: this changing. I mean it must have been in the 103 00:06:21,200 --> 00:06:24,480 Speaker 1: sort of mid nineties and you certainly here in the 104 00:06:24,560 --> 00:06:27,480 Speaker 1: UK you started to see a t M machines with 105 00:06:28,120 --> 00:06:31,400 Speaker 1: link written yeah, yeah, yeah, and that meant. I mean 106 00:06:31,440 --> 00:06:33,960 Speaker 1: that that felt like a huge leap forward because you 107 00:06:34,000 --> 00:06:36,800 Speaker 1: didn't let's say you were out, you were out late 108 00:06:36,839 --> 00:06:39,080 Speaker 1: at night, you wanted to get home, you needed some cash. 109 00:06:39,520 --> 00:06:42,320 Speaker 1: You didn't have to track sort of several streets or 110 00:06:42,920 --> 00:06:46,000 Speaker 1: back end of the day when taxis would only take cash. Yeah, 111 00:06:46,279 --> 00:06:49,880 Speaker 1: it wasn't you know none of this. Tap your card 112 00:06:50,400 --> 00:06:53,839 Speaker 1: and your bank account is empty. You had to empty 113 00:06:53,839 --> 00:06:57,800 Speaker 1: your bank account handed over. Yeah. Banks are starting to computerize. 114 00:06:57,839 --> 00:07:00,520 Speaker 1: That the whole world is starting to computerize. It's basically 115 00:07:00,520 --> 00:07:04,440 Speaker 1: our lives started to become more digital less analog. And 116 00:07:04,560 --> 00:07:08,000 Speaker 1: some people began to realize that having banks in the 117 00:07:08,040 --> 00:07:12,720 Speaker 1: middle of digital transactions basically represented a pretty big potential 118 00:07:12,800 --> 00:07:16,080 Speaker 1: threat to use a privacy because they were going to 119 00:07:16,080 --> 00:07:19,480 Speaker 1: be able to not only see how much money we 120 00:07:19,480 --> 00:07:22,040 Speaker 1: were spending as obviously they knew how much money was 121 00:07:22,040 --> 00:07:24,400 Speaker 1: in our account and they could see how much cash 122 00:07:24,440 --> 00:07:27,480 Speaker 1: we were taking out, but now with everything being digitized, 123 00:07:27,520 --> 00:07:30,240 Speaker 1: they could also see where we were spending it. So 124 00:07:30,360 --> 00:07:32,600 Speaker 1: they were suddenly they were they were set to gain 125 00:07:32,640 --> 00:07:36,200 Speaker 1: an enormous amount of oversight, and obviously that has major 126 00:07:36,240 --> 00:07:40,440 Speaker 1: repercussions for privacy because as someone as someone I talked 127 00:07:40,480 --> 00:07:44,520 Speaker 1: to recently, said kind of, nothing reveals so much about 128 00:07:44,560 --> 00:07:48,480 Speaker 1: you as as how you spend your money. So one 129 00:07:48,520 --> 00:07:51,720 Speaker 1: of one particular person who was most concerned about this 130 00:07:51,800 --> 00:07:55,280 Speaker 1: state of affairs was a guy called David cham So. 131 00:07:55,400 --> 00:07:59,960 Speaker 1: He was a computer scientist and cryptographer from California. Yeah, 132 00:08:00,320 --> 00:08:04,000 Speaker 1: kind of. He was a nerd from California. He was 133 00:08:04,040 --> 00:08:07,680 Speaker 1: a very smart dude from California. Um, and he had 134 00:08:07,720 --> 00:08:11,520 Speaker 1: this idea of using cryptography to make it harder to 135 00:08:11,560 --> 00:08:15,880 Speaker 1: monitor email because obviously, not only you know, not only 136 00:08:15,960 --> 00:08:19,720 Speaker 1: was the banking system becoming more getting more oversight, but 137 00:08:19,760 --> 00:08:22,120 Speaker 1: obviously people were starting to use email more and more. 138 00:08:22,280 --> 00:08:28,160 Speaker 1: So obviously the painted about Yeah. Yeah, so I watched 139 00:08:28,440 --> 00:08:31,640 Speaker 1: I watched an interview with David chum And for a 140 00:08:31,680 --> 00:08:35,800 Speaker 1: BBC interview, and he's quoted as saying privacy is intimately 141 00:08:35,800 --> 00:08:40,240 Speaker 1: tied to human potential. It's an extraordinary important and extraordinarily 142 00:08:40,240 --> 00:08:44,800 Speaker 1: important aspect of democracy, which I think is yeah, which 143 00:08:44,840 --> 00:08:49,119 Speaker 1: is absolutely right. And again this this idea of privacy, 144 00:08:49,200 --> 00:08:51,120 Speaker 1: and I think it might have been David cham who 145 00:08:51,240 --> 00:08:55,360 Speaker 1: used this example. He said, well, let's let's let's imagine 146 00:08:55,400 --> 00:08:58,280 Speaker 1: you're in your front room of an evening you don't 147 00:08:58,320 --> 00:09:01,400 Speaker 1: have anything to hide, but that doesn't mean that you 148 00:09:01,440 --> 00:09:04,240 Speaker 1: don't want privacy and that you're not that you don't 149 00:09:04,240 --> 00:09:08,200 Speaker 1: have a right to privacy. So yeah, David cham was 150 00:09:08,200 --> 00:09:12,079 Speaker 1: was keenly aware of this, um and he became best 151 00:09:12,120 --> 00:09:16,400 Speaker 1: known for developing diggi cash. And this was around and 152 00:09:16,440 --> 00:09:20,040 Speaker 1: this grew out of his ideas around privacy and encryption, 153 00:09:20,080 --> 00:09:23,640 Speaker 1: you know, using cryptography, using encryption to keep things private. 154 00:09:24,400 --> 00:09:28,240 Speaker 1: So diggi cash used public key cryptography to develop a 155 00:09:28,320 --> 00:09:31,640 Speaker 1: form of digital money that could be transacted much more 156 00:09:31,679 --> 00:09:35,520 Speaker 1: privately than was possible under the regular system. So users 157 00:09:35,520 --> 00:09:38,720 Speaker 1: of diggi cash didn't have to hand over any personal 158 00:09:38,800 --> 00:09:42,840 Speaker 1: information while transacting. Yeah, this was and this was a 159 00:09:42,840 --> 00:09:47,760 Speaker 1: big step forward. Yeah. So and digi cash it bears 160 00:09:47,800 --> 00:09:51,160 Speaker 1: a lot of similarities to bitcoin, and weirdly it did 161 00:09:51,280 --> 00:09:55,079 Speaker 1: actually look like it might catch on at one point. Um. 162 00:09:55,200 --> 00:09:58,960 Speaker 1: So the rise of the Internet and now obviously we 163 00:09:59,120 --> 00:10:03,120 Speaker 1: we've kind of moved moving out of the digi cash 164 00:10:03,160 --> 00:10:06,200 Speaker 1: came along. So the ES is the next phase of 165 00:10:06,200 --> 00:10:08,360 Speaker 1: the computer revolution, and that is obviously the rise of 166 00:10:08,400 --> 00:10:12,640 Speaker 1: the Internet. So yeah, we have the Internet starting to 167 00:10:12,840 --> 00:10:16,040 Speaker 1: become a thing, the Internet starting to grow and starting 168 00:10:16,040 --> 00:10:19,920 Speaker 1: to catch on, and it looked like for a while 169 00:10:20,120 --> 00:10:24,800 Speaker 1: dig cash might be the answer to transacting online because 170 00:10:25,120 --> 00:10:27,840 Speaker 1: businesses were waking up to the potential of the Internet 171 00:10:27,840 --> 00:10:29,960 Speaker 1: and going, hang on, we can use this too. We 172 00:10:29,960 --> 00:10:33,640 Speaker 1: don't have used to sell to people with tamil radios. 173 00:10:33,679 --> 00:10:40,319 Speaker 1: It could be possibilities are endless charm exactly, exactly exactly. So, yeah, 174 00:10:40,360 --> 00:10:42,560 Speaker 1: the idea of I guess you'd call it e commerce 175 00:10:43,559 --> 00:10:45,200 Speaker 1: has been has been around for a long time. And 176 00:10:45,200 --> 00:10:48,360 Speaker 1: obviously Amazon itself used to us that used to read 177 00:10:49,240 --> 00:10:53,120 Speaker 1: um adverts in the back of comics used to have 178 00:10:53,160 --> 00:10:56,560 Speaker 1: to go get a postal order, yeah, and then send 179 00:10:56,600 --> 00:11:00,760 Speaker 1: that off to whatever comic and then you'd get um 180 00:11:00,960 --> 00:11:04,720 Speaker 1: um sea monkeys or whatever X ray goggles or whatever 181 00:11:04,800 --> 00:11:07,120 Speaker 1: that that didn't work and the sea monkeys died. But yeah, 182 00:11:07,160 --> 00:11:10,400 Speaker 1: that was probably the first form of not e commerce opposed, 183 00:11:10,800 --> 00:11:12,920 Speaker 1: but a pre runner, but a forerunner of it. You know, 184 00:11:12,960 --> 00:11:15,000 Speaker 1: this idea that you don't actually need to go to 185 00:11:15,040 --> 00:11:18,480 Speaker 1: a physical shop, to a physical location and hand over 186 00:11:18,559 --> 00:11:20,480 Speaker 1: cash and buy it in person. Yeah, the idea that 187 00:11:20,520 --> 00:11:25,160 Speaker 1: you can transact against transact magazine it's online, yea. And yeah, 188 00:11:25,240 --> 00:11:27,679 Speaker 1: it's just it's it takes one of the steps out 189 00:11:27,720 --> 00:11:31,360 Speaker 1: of it exactly, exactly. And yeah, so one of the 190 00:11:31,559 --> 00:11:35,319 Speaker 1: one of the big questions that these that these people 191 00:11:35,360 --> 00:11:38,840 Speaker 1: were asking themselves, those who saw the potential for e commerce, 192 00:11:38,960 --> 00:11:42,240 Speaker 1: and that includes you major banks and people like Visa 193 00:11:42,280 --> 00:11:45,320 Speaker 1: and MasterCard. One of the big problems that they were 194 00:11:45,320 --> 00:11:48,080 Speaker 1: thinking was how are how are we going to do 195 00:11:48,160 --> 00:11:51,480 Speaker 1: the money? Basically, how are we going to transact online? 196 00:11:52,320 --> 00:11:55,720 Speaker 1: Because obviously, you know, the information needs to be exchanged 197 00:11:56,920 --> 00:12:00,560 Speaker 1: and information that that has up to now been private, 198 00:12:00,800 --> 00:12:03,200 Speaker 1: this is going to be It's not like we're in 199 00:12:03,240 --> 00:12:05,720 Speaker 1: the in the age of the era. It's not like 200 00:12:05,720 --> 00:12:07,640 Speaker 1: we're in the same sort of area are today where 201 00:12:08,040 --> 00:12:12,000 Speaker 1: everyone is connected on a phone. Yeah, it's it's a 202 00:12:12,000 --> 00:12:17,120 Speaker 1: lot more of nomadic, I don't know, not nomadic, it's 203 00:12:17,120 --> 00:12:19,439 Speaker 1: a lot more sort of isolated, you know. Yeah, like 204 00:12:20,080 --> 00:12:23,440 Speaker 1: only certain people had in the eighties as well. Well, yeah, 205 00:12:23,440 --> 00:12:26,480 Speaker 1: we're sort of more into that into the nineties. I 206 00:12:26,520 --> 00:12:29,679 Speaker 1: remember I was one of the first people on our 207 00:12:29,679 --> 00:12:33,120 Speaker 1: street to get dial up into it. My dad was 208 00:12:33,440 --> 00:12:36,600 Speaker 1: very much into it. It was an early adopter. Yeah, 209 00:12:36,600 --> 00:12:40,600 Speaker 1: I mean he sort of wanted to do his banking 210 00:12:40,640 --> 00:12:42,520 Speaker 1: online and went with the Royal Bank of Scotland because 211 00:12:42,559 --> 00:12:45,400 Speaker 1: they were the only ones who were able to do 212 00:12:45,600 --> 00:12:48,560 Speaker 1: he could check his balance online. Yeah, like and it 213 00:12:48,640 --> 00:12:50,960 Speaker 1: was it was it was like something from ms DOS 214 00:12:52,880 --> 00:12:56,240 Speaker 1: but it was. Yeah, that's why he's always bank with them. 215 00:12:56,280 --> 00:12:58,280 Speaker 1: It's amazing, isn't it. And I mean you've got to 216 00:12:58,440 --> 00:13:01,640 Speaker 1: you've got to admire the foresight if these guys for 217 00:13:01,320 --> 00:13:06,000 Speaker 1: for seeing that potential early on, because yeah, I mean 218 00:13:06,240 --> 00:13:09,040 Speaker 1: a lot of us like to think that we're you know, 219 00:13:09,080 --> 00:13:10,960 Speaker 1: we we were early adopters and we came to it, 220 00:13:11,000 --> 00:13:13,679 Speaker 1: but actually to to be in there at the beginning 221 00:13:13,800 --> 00:13:16,199 Speaker 1: to realize the potential and then find a way to 222 00:13:16,760 --> 00:13:19,600 Speaker 1: make it happen, and think how much that changed our lives. 223 00:13:19,880 --> 00:13:23,160 Speaker 1: The idea of having to leave the house to check 224 00:13:23,240 --> 00:13:26,199 Speaker 1: to find out how much money you have is just 225 00:13:26,880 --> 00:13:28,880 Speaker 1: It used to be easier because you have to just 226 00:13:28,920 --> 00:13:31,240 Speaker 1: go to the to the A T M machine and 227 00:13:31,240 --> 00:13:32,680 Speaker 1: you'll be able to print it. I remember when that 228 00:13:32,800 --> 00:13:34,960 Speaker 1: was like, oh wow, yeah, well I can print off 229 00:13:34,960 --> 00:13:39,240 Speaker 1: a balance anywhere in the street. And now we'll have 230 00:13:39,280 --> 00:13:41,960 Speaker 1: to do is push my phone to my face, it 231 00:13:42,200 --> 00:13:45,280 Speaker 1: recognizes my face and then tells me how much I 232 00:13:47,600 --> 00:13:51,160 Speaker 1: tell you how much debt you're actually and yeah, well 233 00:13:51,200 --> 00:13:52,800 Speaker 1: at least you don't have to trek down to the 234 00:13:52,800 --> 00:13:54,800 Speaker 1: A T M to find out how how poor you 235 00:13:54,840 --> 00:13:58,520 Speaker 1: are now yeah, um so yeah, as I say, didg 236 00:13:58,679 --> 00:14:02,600 Speaker 1: cash it looks for a while like it might be 237 00:14:02,760 --> 00:14:06,000 Speaker 1: the answer to this problem of transacting online because of 238 00:14:06,080 --> 00:14:10,440 Speaker 1: it's built in sort of privacy features um and David 239 00:14:10,480 --> 00:14:12,880 Speaker 1: Cham he you know, it became a it became a 240 00:14:12,920 --> 00:14:16,240 Speaker 1: proper company. It signed a lot of partnerships again with 241 00:14:16,280 --> 00:14:19,120 Speaker 1: the likes of I think Visa and I think Microsoft 242 00:14:19,200 --> 00:14:22,840 Speaker 1: was interested in using it. Major banks were picking it up. 243 00:14:23,000 --> 00:14:25,480 Speaker 1: So it really did look like it could become a thing, 244 00:14:26,400 --> 00:14:30,600 Speaker 1: and it basically interest waned. It eventually came to nothing 245 00:14:30,800 --> 00:14:34,520 Speaker 1: um and diggi cash itself that the company went bankrupt, 246 00:14:35,080 --> 00:14:39,520 Speaker 1: which is relatively recent, So it lasted. It lasted sort 247 00:14:39,520 --> 00:14:43,560 Speaker 1: of about ten years, which is quite a long time really, 248 00:14:43,600 --> 00:14:46,880 Speaker 1: and you know when you consider how how quickly startups 249 00:14:47,000 --> 00:14:50,640 Speaker 1: come and go. Um. So, there are a few reasons 250 00:14:51,120 --> 00:14:54,240 Speaker 1: for why diggi cash didn't catch on summer to do 251 00:14:54,280 --> 00:14:57,080 Speaker 1: with David cham himself. Some sources say that he was 252 00:14:57,360 --> 00:14:59,800 Speaker 1: very difficult to work with, He asked for too much money, 253 00:15:00,560 --> 00:15:05,560 Speaker 1: um Charm himself said that basically DIGGI Cash New Management 254 00:15:05,560 --> 00:15:08,800 Speaker 1: came on board um the year before it went under, 255 00:15:08,880 --> 00:15:12,520 Speaker 1: and they mismanaged it. And you know, one but one 256 00:15:12,760 --> 00:15:16,000 Speaker 1: one side says one thing, another says another. Um, there's 257 00:15:16,000 --> 00:15:19,760 Speaker 1: another interesting theory that says it actually represented a threat 258 00:15:19,800 --> 00:15:21,880 Speaker 1: to the banks. So these banks were getting into bed 259 00:15:21,920 --> 00:15:23,880 Speaker 1: with it sort of suddenly realized, hang on this, I 260 00:15:23,920 --> 00:15:26,320 Speaker 1: don't I don't dismiss that at all. Yeah, I mean, 261 00:15:26,360 --> 00:15:30,920 Speaker 1: that's that's definitely, that's definitely possible. They they saw that, um, 262 00:15:32,400 --> 00:15:35,080 Speaker 1: you know, they saw that this could be a potential 263 00:15:35,280 --> 00:15:37,960 Speaker 1: a potential competitor, It could be a better way of 264 00:15:37,960 --> 00:15:42,280 Speaker 1: doing things. And obviously banks they weren't all that concerned 265 00:15:42,320 --> 00:15:45,520 Speaker 1: about you used a privacy. Why would they be? You know, 266 00:15:45,840 --> 00:15:47,800 Speaker 1: for them, it's and for them, they want to get 267 00:15:47,840 --> 00:15:50,640 Speaker 1: their system up and running and actually and they want 268 00:15:50,680 --> 00:15:54,000 Speaker 1: their system to catch on. They want more customers. And 269 00:15:54,040 --> 00:15:56,240 Speaker 1: actually if they can see, if they if they have 270 00:15:56,320 --> 00:15:58,720 Speaker 1: access to that sort of data, that's an enormous amount 271 00:15:58,760 --> 00:16:01,840 Speaker 1: of power. So yeah, there's there's certainly a theory that 272 00:16:01,880 --> 00:16:04,920 Speaker 1: they that the banks and themselves, the big the big 273 00:16:04,920 --> 00:16:07,240 Speaker 1: customers might have might have killed it. As a as 274 00:16:07,480 --> 00:16:10,560 Speaker 1: as being too dangerous, sort of strangled as at birth 275 00:16:10,680 --> 00:16:14,560 Speaker 1: as it were UM and because their concern again was 276 00:16:14,920 --> 00:16:17,600 Speaker 1: they were more interested in in harnessing the potential of 277 00:16:17,600 --> 00:16:21,160 Speaker 1: e commerce UM, and they could do that without diggi cash. 278 00:16:21,200 --> 00:16:24,120 Speaker 1: They they found other ways to do it UM, and 279 00:16:24,160 --> 00:16:27,240 Speaker 1: eventually the systems were developed that made it easier and 280 00:16:27,320 --> 00:16:30,160 Speaker 1: safer to use credit cards on the internet UM and 281 00:16:30,240 --> 00:16:34,120 Speaker 1: that gave rise to the likes of PayPal UM that 282 00:16:34,240 --> 00:16:37,480 Speaker 1: emerged and basically e commerce found a different way. Diggi 283 00:16:37,520 --> 00:16:39,920 Speaker 1: cash it looked like it could be the answer, but 284 00:16:40,000 --> 00:16:42,800 Speaker 1: it wasn't. Before we get too disappointed about the fact 285 00:16:42,840 --> 00:16:45,880 Speaker 1: that diggi cash didn't catch on, it was itself actually 286 00:16:45,960 --> 00:16:49,760 Speaker 1: quite centralized, and as we've seen from episodes on blockchain, 287 00:16:50,160 --> 00:16:54,240 Speaker 1: centralization is not good. It's not something it's not something 288 00:16:54,280 --> 00:16:57,600 Speaker 1: that that that we want UM and it has its 289 00:16:57,600 --> 00:17:01,560 Speaker 1: own its own particular dangers. So even though users were 290 00:17:01,560 --> 00:17:05,320 Speaker 1: able to transact more privately, the digi cash company itself 291 00:17:05,760 --> 00:17:09,800 Speaker 1: was still needed to confirm transactions and balances, and this 292 00:17:09,960 --> 00:17:13,840 Speaker 1: is not in keeping with the core ideals of bitcoin 293 00:17:14,200 --> 00:17:19,760 Speaker 1: in particular. UM just quickly mentioned another project this was 294 00:17:19,840 --> 00:17:23,760 Speaker 1: founded in and this attempted a similar thing. This was 295 00:17:23,800 --> 00:17:27,919 Speaker 1: called the Gold. You created an egold account, you bought 296 00:17:28,080 --> 00:17:31,200 Speaker 1: some actual gold, and then paid other e gold account 297 00:17:31,200 --> 00:17:34,000 Speaker 1: holders with it. It did become quite successful as well, 298 00:17:34,160 --> 00:17:36,880 Speaker 1: and I'm looking at looking at some stats here. By 299 00:17:36,920 --> 00:17:39,720 Speaker 1: two thousand and eight, sadly the gold was being used 300 00:17:39,760 --> 00:17:47,199 Speaker 1: largely by criminals. There was there were all sorts of 301 00:17:47,240 --> 00:17:50,359 Speaker 1: problems that we were hacking. There was identity there that 302 00:17:50,480 --> 00:17:53,440 Speaker 1: was fraud. It was shut down in two thousand and nine. 303 00:17:53,560 --> 00:17:56,320 Speaker 1: The FBI had actually had it under investigations since around 304 00:17:56,359 --> 00:18:00,280 Speaker 1: two thousand and five. And I think when I when 305 00:18:00,280 --> 00:18:03,359 Speaker 1: I was looking into it, I think that consequences are 306 00:18:03,359 --> 00:18:06,920 Speaker 1: still playing out. I think the people behind it are 307 00:18:07,119 --> 00:18:10,320 Speaker 1: still having to deal with the fallout from it. Um. 308 00:18:10,359 --> 00:18:13,240 Speaker 1: And this was weird because this egold, I must say, 309 00:18:13,280 --> 00:18:14,840 Speaker 1: and and diggi cash as well, But then I was 310 00:18:14,840 --> 00:18:17,000 Speaker 1: a bit too young for Diggiti cash, but Eagle completely 311 00:18:17,000 --> 00:18:19,760 Speaker 1: passed me by. I don't remember hearing about that at 312 00:18:19,800 --> 00:18:24,040 Speaker 1: all at the time. Um, But yeah, it did again, 313 00:18:24,119 --> 00:18:27,520 Speaker 1: it looked like it might become popular, but again it 314 00:18:27,600 --> 00:18:30,920 Speaker 1: was kind of riddled with issues. And yeah, criminals caught 315 00:18:30,920 --> 00:18:33,000 Speaker 1: onto it. And as we'll see, as we'll see later. 316 00:18:33,040 --> 00:18:35,760 Speaker 1: Criminals tend to a quite good at latching onto this 317 00:18:35,800 --> 00:18:38,640 Speaker 1: sort of thing. I mentioned earlier. I mentioned that some 318 00:18:38,760 --> 00:18:42,080 Speaker 1: people had become worried about the erosion of privacy in 319 00:18:42,119 --> 00:18:45,679 Speaker 1: the digital age. So David Chan was one, but there 320 00:18:45,680 --> 00:18:48,920 Speaker 1: were others, and they have come to be known as 321 00:18:49,720 --> 00:18:52,320 Speaker 1: the cipher punks. So the cipher punks, and not to 322 00:18:52,359 --> 00:18:55,960 Speaker 1: be confused with the cyberpunks, which is which is Yeah, 323 00:18:56,000 --> 00:18:58,160 Speaker 1: I think that's where the player on words come from. Yeah, 324 00:18:58,600 --> 00:19:02,440 Speaker 1: So the cipher punks basically were a group of kind 325 00:19:02,480 --> 00:19:08,560 Speaker 1: of libertarian leaning computer programmers, cryptographers, scientists, thinkers, and others 326 00:19:08,600 --> 00:19:11,560 Speaker 1: who are mainly obsessed with the idea of privacy in 327 00:19:11,600 --> 00:19:17,959 Speaker 1: the digital age. Nerds basically, Yeah, about a group of 328 00:19:18,359 --> 00:19:21,520 Speaker 1: very smart people, a group of very geeky people. Um 329 00:19:21,800 --> 00:19:24,560 Speaker 1: with Yeah, no, honorable, I like it. Yeah, yeah. I 330 00:19:24,560 --> 00:19:28,920 Speaker 1: mean these guys again, they had amazing foresight. They saw 331 00:19:29,000 --> 00:19:31,640 Speaker 1: the computer age dawn, they saw the coming of the Internet, 332 00:19:31,960 --> 00:19:36,440 Speaker 1: and they realized pretty quickly that although it was potentially 333 00:19:36,520 --> 00:19:38,880 Speaker 1: an amazing thing, you've got to have a real understanding 334 00:19:38,920 --> 00:19:43,160 Speaker 1: of how the world works to go, Okay, the Internet 335 00:19:43,200 --> 00:19:45,400 Speaker 1: is this, this is this is what it can do 336 00:19:45,720 --> 00:19:47,800 Speaker 1: and not just think alright, cool, how can I get 337 00:19:47,880 --> 00:19:52,240 Speaker 1: pawn or buy some clothes from further afield and have 338 00:19:52,480 --> 00:19:56,399 Speaker 1: such a sort of um macro view of it to go, 339 00:19:56,720 --> 00:19:59,080 Speaker 1: this is how it's going to affect this, this, this, 340 00:19:59,080 --> 00:20:02,000 Speaker 1: this is the pitfall. Is it something to do with history? 341 00:20:02,040 --> 00:20:04,400 Speaker 1: How do they have that full sight? Have they've seen 342 00:20:04,440 --> 00:20:08,359 Speaker 1: this play out before some sort of technological advancement which 343 00:20:08,400 --> 00:20:11,240 Speaker 1: means that you know, power shifts here here and here. Yeah, 344 00:20:11,359 --> 00:20:13,440 Speaker 1: it's a good question. And yeah, when you look at 345 00:20:13,440 --> 00:20:15,919 Speaker 1: these people, it's easy. It's easy to write the cipher 346 00:20:15,920 --> 00:20:20,240 Speaker 1: punks off as as computer geeks, as as we've just done. Yeah, 347 00:20:20,840 --> 00:20:22,719 Speaker 1: I mean, if you called yourself that, you're gonna you're 348 00:20:22,720 --> 00:20:25,080 Speaker 1: gonna catch some flak. Yeah, it's easy to think of 349 00:20:25,119 --> 00:20:27,920 Speaker 1: them as as just guys who are sort of obsessed 350 00:20:27,920 --> 00:20:30,399 Speaker 1: with computers. But you're you're absolutely right. They had a 351 00:20:30,400 --> 00:20:33,680 Speaker 1: lot of foresight and when you especially when you when 352 00:20:33,720 --> 00:20:36,200 Speaker 1: you look at some of their writings and a lot 353 00:20:36,200 --> 00:20:38,480 Speaker 1: of things that they talked about on their forums, you know, 354 00:20:38,520 --> 00:20:41,040 Speaker 1: these are people not just with knowledge of computers, but 355 00:20:41,160 --> 00:20:44,200 Speaker 1: of economics, of history, as you say, of yeah, basically 356 00:20:44,320 --> 00:20:47,200 Speaker 1: how the world works. These were really really smart people. 357 00:20:47,520 --> 00:20:50,400 Speaker 1: And you know, I say these were that these guys 358 00:20:50,240 --> 00:20:55,119 Speaker 1: are still around today, Um and they are. Yeah, they 359 00:20:55,240 --> 00:20:57,719 Speaker 1: they still have a lot of these concerns. They're still 360 00:20:57,840 --> 00:21:01,960 Speaker 1: kind of fighting these battles. But yeah, the group that 361 00:21:02,080 --> 00:21:05,480 Speaker 1: became known as the cipher Punks, it emerged from a 362 00:21:05,640 --> 00:21:10,480 Speaker 1: meeting held in California, so again early days of the Internet. 363 00:21:10,560 --> 00:21:13,560 Speaker 1: It's it's it's quite intriguing. Actually, I couldn't find the 364 00:21:13,600 --> 00:21:15,720 Speaker 1: details at this meeting are a bit unclear. Some say 365 00:21:15,720 --> 00:21:18,520 Speaker 1: it was held at the home of a guy called 366 00:21:18,960 --> 00:21:22,600 Speaker 1: Eric Hughes who was a mathemician and mathematician and cryptographer 367 00:21:23,440 --> 00:21:25,680 Speaker 1: his home in Oakland. Others say that it was held 368 00:21:25,720 --> 00:21:27,640 Speaker 1: in Santa Cruz at the home of a guy called 369 00:21:27,640 --> 00:21:30,560 Speaker 1: Tim May and he had worked at places like Intel 370 00:21:31,000 --> 00:21:34,120 Speaker 1: and things like that. Um so the the origin stories 371 00:21:34,400 --> 00:21:37,800 Speaker 1: is sort of suitably murky. But that said, the cipher 372 00:21:37,800 --> 00:21:41,520 Speaker 1: punk movement itself has roots going back to around the seventies. 373 00:21:41,920 --> 00:21:45,639 Speaker 1: Um so it's kind of it's it's aptly mysterious for 374 00:21:45,640 --> 00:21:49,480 Speaker 1: for a group of people's quite hippis to me, these 375 00:21:49,560 --> 00:21:53,400 Speaker 1: these engineers and sort of programmers, who's who who took 376 00:21:53,400 --> 00:21:57,240 Speaker 1: some acid in the sixties yeah, I think I think 377 00:21:57,240 --> 00:22:01,720 Speaker 1: it's definitely definitely got some this like deep on, deep 378 00:22:01,880 --> 00:22:04,399 Speaker 1: lyne knowledge of how the world works. They've just had 379 00:22:04,720 --> 00:22:08,480 Speaker 1: some some they've done a lot of drugs. That's my 380 00:22:08,600 --> 00:22:12,840 Speaker 1: answer to a lot of things that was still is 381 00:22:13,200 --> 00:22:16,760 Speaker 1: still is. I'm sure. Yeah, I think I think there's 382 00:22:16,800 --> 00:22:19,199 Speaker 1: I think there's almost certainly a lot of roots of 383 00:22:19,240 --> 00:22:22,040 Speaker 1: it in the in the counterculture and things like that. 384 00:22:22,080 --> 00:22:25,560 Speaker 1: You know, these guys, um, yeah, perhaps they had, perhaps 385 00:22:25,560 --> 00:22:28,000 Speaker 1: they had I'm sure a lot of them had experimented 386 00:22:28,080 --> 00:22:32,080 Speaker 1: with all sorts of things. Um, so yeah, they became 387 00:22:32,160 --> 00:22:36,240 Speaker 1: they were increasingly concerned about how the Internet and digitization 388 00:22:36,280 --> 00:22:40,119 Speaker 1: in general could be used by governments, in particular to 389 00:22:40,200 --> 00:22:43,920 Speaker 1: infringe on personal privacy. This became a hot topping among them, 390 00:22:43,960 --> 00:22:46,399 Speaker 1: and David cham he was a kind of early inspiration 391 00:22:46,480 --> 00:22:49,080 Speaker 1: to them thanks to well what we've discussed, you know, 392 00:22:49,160 --> 00:22:53,639 Speaker 1: the digi cash, the notions of privacy, um, and in 393 00:22:53,680 --> 00:22:56,960 Speaker 1: many ways the cipher punks. They anticipated a lot of 394 00:22:57,000 --> 00:23:00,920 Speaker 1: the problems we're dealing with today in relation to private see. Um, 395 00:23:00,960 --> 00:23:03,480 Speaker 1: you know, we we we have these worries around governments 396 00:23:03,480 --> 00:23:05,679 Speaker 1: and corporations. That's one of them coming for us, right 397 00:23:05,720 --> 00:23:11,320 Speaker 1: now lad please. Um. Yeah, the worries around governments and 398 00:23:11,359 --> 00:23:14,760 Speaker 1: corporations being able to view our transactions harvest our data, 399 00:23:14,800 --> 00:23:18,679 Speaker 1: the likes of Facebook obviously, um and yes, and you 400 00:23:18,720 --> 00:23:22,119 Speaker 1: can see obviously an upshot of this was wiki leaks. 401 00:23:23,200 --> 00:23:26,320 Speaker 1: And funnily enough, one of the most famous if you 402 00:23:26,400 --> 00:23:30,720 Speaker 1: like cipher punks is Julian Losane. He was Yeah, he's 403 00:23:30,760 --> 00:23:35,000 Speaker 1: been involved with the movement for a while. Um. So 404 00:23:35,119 --> 00:23:37,160 Speaker 1: I think you can sum up the cipher punks really 405 00:23:37,200 --> 00:23:40,000 Speaker 1: as a very fast sighted group of people. They believe 406 00:23:40,080 --> 00:23:43,360 Speaker 1: that cryptography was the tool that they could use they 407 00:23:43,359 --> 00:23:46,719 Speaker 1: and others could use to protect themselves from outside interference. 408 00:23:46,800 --> 00:23:50,120 Speaker 1: And this is where the cipher from cipher punk comes from. 409 00:23:50,240 --> 00:23:52,280 Speaker 1: So this meeting, wherever it happened, it led to the 410 00:23:52,320 --> 00:23:55,240 Speaker 1: creation of the cipher Punk's mailing list. And this was 411 00:23:55,320 --> 00:23:58,520 Speaker 1: designed by a member of the group, appropriately enough, and 412 00:23:58,560 --> 00:24:00,919 Speaker 1: it was a secure and anonymous email list where they 413 00:24:00,920 --> 00:24:05,120 Speaker 1: could which they could communicate and use share ideas. Yeah. 414 00:24:05,320 --> 00:24:08,399 Speaker 1: So they drew up a manifesto that outlines their core beliefs. 415 00:24:08,400 --> 00:24:12,720 Speaker 1: I'll read your quote from its um voice please okay, 416 00:24:12,880 --> 00:24:16,120 Speaker 1: we need The cipher Punks are dedicated to building ananimous systems. 417 00:24:16,240 --> 00:24:20,400 Speaker 1: We're defending our privacy with cryptography, with anonymous mail forwarding systems, 418 00:24:20,440 --> 00:24:24,920 Speaker 1: with digital signatures, and with electronic money. That was quite good. Yeah, 419 00:24:25,040 --> 00:24:27,240 Speaker 1: was that nerdy enough? That was okay? It's very very 420 00:24:27,280 --> 00:24:31,960 Speaker 1: stereotypical nerdy. Yeah. I apologize to any cipherpunks listening. I'm sure. 421 00:24:32,160 --> 00:24:34,840 Speaker 1: I'm sure they've got bigger fish to fry me. So 422 00:24:34,920 --> 00:24:37,480 Speaker 1: although they're now most famous because of their place in 423 00:24:37,520 --> 00:24:41,880 Speaker 1: the story of bitcoin, they weren't solely focused on digital money. Obviously, 424 00:24:41,920 --> 00:24:44,479 Speaker 1: that that that last mention of electronic money, but you know, 425 00:24:44,680 --> 00:24:47,920 Speaker 1: it was privacy in general, anonymous mail forwarding systems, these 426 00:24:47,920 --> 00:24:50,240 Speaker 1: digital signatures. There was a lot more to it than 427 00:24:50,359 --> 00:24:52,800 Speaker 1: just creating a system of money that we could interact 428 00:24:52,840 --> 00:24:57,480 Speaker 1: with anonymously. But that said, it was it was a 429 00:24:57,560 --> 00:25:01,920 Speaker 1: core concern of theirs. So privacy and there's pushing back 430 00:25:01,960 --> 00:25:04,280 Speaker 1: against the power of the state were just as important 431 00:25:04,280 --> 00:25:08,320 Speaker 1: to their identity. So along with a distrust of big 432 00:25:08,320 --> 00:25:11,320 Speaker 1: and centralized institutions that were entrusted with our money and 433 00:25:11,600 --> 00:25:14,159 Speaker 1: able to see how we spent it. Um, you know, 434 00:25:14,440 --> 00:25:16,879 Speaker 1: they saw it. They saw this as a tool of 435 00:25:17,400 --> 00:25:22,520 Speaker 1: a tool of governments. Ah, so should we take a break. Yeah, 436 00:25:22,760 --> 00:25:39,720 Speaker 1: let's take a boak. We're back part to part two, 437 00:25:39,880 --> 00:25:44,359 Speaker 1: Part one about bitcoin exact a mom, We're going to 438 00:25:44,400 --> 00:25:47,720 Speaker 1: talk more about the cipher punks and their influence on bitcoin. 439 00:25:47,880 --> 00:25:52,400 Speaker 1: How does that sound. That sounds amazing, excellence. That's uncharacteristically 440 00:25:52,480 --> 00:25:57,840 Speaker 1: enthusiastic of you. I've had my fourth copy. Everything is great. Okay, 441 00:25:57,920 --> 00:26:04,520 Speaker 1: let's let's take advantage of that before inevitably crash in flames. Okay, 442 00:26:04,800 --> 00:26:07,520 Speaker 1: So the cipher punks, Yeah, these guys did a lot 443 00:26:07,560 --> 00:26:10,800 Speaker 1: of work trying to come up with a workable form 444 00:26:10,920 --> 00:26:13,639 Speaker 1: of electronic money. This was one of their big obsessions, 445 00:26:13,720 --> 00:26:15,479 Speaker 1: along with other things. But yeah, they did a lot 446 00:26:15,560 --> 00:26:19,439 Speaker 1: of work on electronic money and the double spend problem 447 00:26:19,480 --> 00:26:23,920 Speaker 1: we've discussed many times in previous episodes. A number of 448 00:26:23,960 --> 00:26:27,560 Speaker 1: these cipher punks have gone on to become famous names 449 00:26:27,600 --> 00:26:31,280 Speaker 1: in the crypto industry, for in particular rock stars crypto 450 00:26:31,359 --> 00:26:34,440 Speaker 1: rock stars, Yeah, crypto o g s and obviously they 451 00:26:34,480 --> 00:26:37,600 Speaker 1: were Yeah, they were very much focused on trying to 452 00:26:37,680 --> 00:26:40,280 Speaker 1: solve this double spend problem. This was the big kind 453 00:26:40,280 --> 00:26:43,600 Speaker 1: of stumbling block, if you will. So one of the 454 00:26:43,640 --> 00:26:48,480 Speaker 1: first guys was a British computer scientists Array and cryptographer 455 00:26:48,600 --> 00:26:53,040 Speaker 1: called Adam Back. Adam Back, Adam Back, Yeah, and he 456 00:26:53,160 --> 00:26:56,239 Speaker 1: came up with a system called hash cash. Now this 457 00:26:56,359 --> 00:27:01,200 Speaker 1: was in and the thing king behind it was it 458 00:27:01,240 --> 00:27:05,760 Speaker 1: was originally designed to combat spam email and he made 459 00:27:05,880 --> 00:27:08,280 Speaker 1: use of the proof of work system that we discussed 460 00:27:08,320 --> 00:27:13,000 Speaker 1: when talking about blockchain, this idea of using cryptographic hash 461 00:27:13,000 --> 00:27:17,119 Speaker 1: functions to create problems basically for a computer to solve. 462 00:27:17,880 --> 00:27:20,199 Speaker 1: So and as we saw, the only way that the 463 00:27:20,200 --> 00:27:22,520 Speaker 1: computer can do this is to submit a lot of 464 00:27:22,520 --> 00:27:25,520 Speaker 1: guesses and thus use up a lot of power. So 465 00:27:25,680 --> 00:27:28,000 Speaker 1: under the system that Adam Back came up with, a 466 00:27:28,040 --> 00:27:32,080 Speaker 1: computer was rewarded with hashcash when it solved this problem 467 00:27:32,080 --> 00:27:35,080 Speaker 1: when it made the correct guess if you like. Now, 468 00:27:35,119 --> 00:27:38,160 Speaker 1: if you apply this to email, the idea behind it 469 00:27:38,240 --> 00:27:43,159 Speaker 1: was he was trying to make sending spam uneconomic because obviously, 470 00:27:43,160 --> 00:27:46,880 Speaker 1: if you're haining a cost into sending email though exactly, well, yeah, 471 00:27:47,200 --> 00:27:49,879 Speaker 1: it's obviously the big thing with spam is that you know, 472 00:27:49,920 --> 00:27:51,280 Speaker 1: all you need is that all you need is the 473 00:27:51,320 --> 00:27:52,880 Speaker 1: addresses and you can send it out to as many 474 00:27:52,880 --> 00:27:55,520 Speaker 1: people you like. It's very cost efficient. It doesn't really 475 00:27:55,600 --> 00:27:59,160 Speaker 1: cost anything to do. But this system was designed so 476 00:27:59,320 --> 00:28:01,640 Speaker 1: that the or could only be sent if it had 477 00:28:01,720 --> 00:28:05,600 Speaker 1: a sort of hash cash stamp which proved that the 478 00:28:05,640 --> 00:28:07,800 Speaker 1: work had been done. That proved that the computer had 479 00:28:07,840 --> 00:28:11,440 Speaker 1: done this proof of work process. So I mean, I 480 00:28:11,520 --> 00:28:15,199 Speaker 1: guess the easiest analogy to make is like having to 481 00:28:15,320 --> 00:28:18,399 Speaker 1: put a stamp on a real letter. This was almost 482 00:28:18,440 --> 00:28:21,480 Speaker 1: finding a way to stamp spam emails. So and the 483 00:28:21,480 --> 00:28:25,120 Speaker 1: whole process was designed to make sending spam so uneconomic 484 00:28:25,160 --> 00:28:29,280 Speaker 1: that no one would bother. Um, So, yeah, it was. 485 00:28:29,359 --> 00:28:33,520 Speaker 1: It was a really good idea that Nigeria. You hear that, 486 00:28:33,560 --> 00:28:36,280 Speaker 1: all those spammers. Yeah, it's a shame. It's a shame. 487 00:28:36,280 --> 00:28:40,080 Speaker 1: Really it didn't. It didn't catch on more. Um, the 488 00:28:40,160 --> 00:28:43,040 Speaker 1: problem with hash cash. The main problem was that the 489 00:28:43,160 --> 00:28:46,240 Speaker 1: units of hash cash that acted as these sort of 490 00:28:46,240 --> 00:28:50,360 Speaker 1: digital stamps, they could only be used once, so anyone 491 00:28:50,480 --> 00:28:53,240 Speaker 1: using the system you kept having to create new ones. 492 00:28:53,840 --> 00:28:56,080 Speaker 1: And obviously this isn't very useful if you're if you're 493 00:28:56,080 --> 00:28:58,360 Speaker 1: trying to make a form of money, If you actually 494 00:28:58,360 --> 00:29:01,400 Speaker 1: have to create the money in reverse and you can't 495 00:29:01,680 --> 00:29:04,440 Speaker 1: spend it again, you know it doesn't that system quickly 496 00:29:04,480 --> 00:29:09,640 Speaker 1: falls both shelf life exactly. So yeah, back he shared 497 00:29:09,680 --> 00:29:12,840 Speaker 1: his ideas on the cipher Punk's mailing list, and others 498 00:29:12,880 --> 00:29:14,640 Speaker 1: in the community kind of picked up the bat and 499 00:29:14,640 --> 00:29:17,040 Speaker 1: they kind of ran with it, fiddled with it to 500 00:29:17,080 --> 00:29:18,960 Speaker 1: try and see if they could get it to work. Now, 501 00:29:19,120 --> 00:29:21,400 Speaker 1: one of these guys to do was how Finny. He 502 00:29:21,520 --> 00:29:24,520 Speaker 1: had the idea of being able to reuse these proof 503 00:29:24,520 --> 00:29:27,760 Speaker 1: of work guesses, which would then you know, theoretically give 504 00:29:27,800 --> 00:29:30,120 Speaker 1: them value as a currency because of the work that 505 00:29:30,160 --> 00:29:32,360 Speaker 1: had been done to produce them. How Finny We're going 506 00:29:32,360 --> 00:29:34,760 Speaker 1: to see a bit more of in future because he 507 00:29:34,960 --> 00:29:38,880 Speaker 1: is a big contributor to bitcoin, and depending on who 508 00:29:38,920 --> 00:29:41,280 Speaker 1: you believe, some people may think he's more than that. 509 00:29:42,880 --> 00:29:45,800 Speaker 1: We'll leave that there for the time being. Another guide 510 00:29:45,840 --> 00:29:48,880 Speaker 1: to contribute to to to work on Adam Back's idea. 511 00:29:48,920 --> 00:29:53,040 Speaker 1: This hash cash idea was way die Um and his 512 00:29:53,200 --> 00:29:55,959 Speaker 1: system was known as b money. Now this came around 513 00:29:56,080 --> 00:29:59,840 Speaker 1: he I think he proposed this in around and this 514 00:30:00,320 --> 00:30:02,720 Speaker 1: made use of the idea of a public ledger, which 515 00:30:02,760 --> 00:30:05,560 Speaker 1: meant that all transactions could be seen by the rest 516 00:30:05,560 --> 00:30:08,520 Speaker 1: of the network. And yeah, as you can see, there's 517 00:30:08,600 --> 00:30:12,600 Speaker 1: there's kind of similarities here emerging to bitcoin. And then 518 00:30:12,640 --> 00:30:16,440 Speaker 1: there was another guy called Nick Sabo that's s z 519 00:30:16,840 --> 00:30:20,320 Speaker 1: A b O Nick Sabo. I'm loving these names there. 520 00:30:20,320 --> 00:30:24,800 Speaker 1: There there are some amazing names. Is how Finnyabo? Yeah? 521 00:30:25,000 --> 00:30:28,480 Speaker 1: What was the other one? Yeah? There are Crypto is 522 00:30:28,520 --> 00:30:31,200 Speaker 1: a is a sort of never ending source of amazing names. 523 00:30:31,240 --> 00:30:34,440 Speaker 1: Kevin Smith's I'm I'm sure there are some. I'm sure 524 00:30:34,480 --> 00:30:38,800 Speaker 1: there are. Yeah. He came up with a system called 525 00:30:38,880 --> 00:30:41,800 Speaker 1: bit gold. Now this was two thousand and five, and 526 00:30:41,880 --> 00:30:46,520 Speaker 1: this is very similar to bitcoin. So how Finny and 527 00:30:46,920 --> 00:30:49,360 Speaker 1: Nick Sabo are two guys. I'd love to talk more 528 00:30:49,360 --> 00:30:52,720 Speaker 1: about them, more about them now, But we're going to 529 00:30:52,800 --> 00:30:55,720 Speaker 1: do an episode in future where we focus on this 530 00:30:55,760 --> 00:30:58,080 Speaker 1: idea on the rocks that well there, We're going to 531 00:30:58,160 --> 00:31:03,400 Speaker 1: focus more on Stocen Kamoto. This this anonymous figure who 532 00:31:03,560 --> 00:31:06,200 Speaker 1: no one, no one knows who he is, No one 533 00:31:06,240 --> 00:31:08,520 Speaker 1: knows who he is, who he might have been, whether 534 00:31:08,520 --> 00:31:10,480 Speaker 1: he's still alive. So we're going to do a whole 535 00:31:10,520 --> 00:31:14,440 Speaker 1: episode in future on the hunt for Satoshi Nakamoto, who 536 00:31:14,480 --> 00:31:16,880 Speaker 1: and and possible candidates for who to get him on 537 00:31:16,880 --> 00:31:21,120 Speaker 1: the point he could be Yeah, yeah, I'll yeah. So Toshi, 538 00:31:21,160 --> 00:31:24,400 Speaker 1: if you're listening and you'd like to unmask yourself off 539 00:31:25,200 --> 00:31:26,800 Speaker 1: just like we could do it on a zoom and 540 00:31:26,840 --> 00:31:29,600 Speaker 1: just black out his thing or just yeah, yeah, it's 541 00:31:29,680 --> 00:31:31,560 Speaker 1: I mean, it's just getting him on the zoom that's 542 00:31:31,600 --> 00:31:33,240 Speaker 1: going to be the difficult bit. I'm sure it's the 543 00:31:33,280 --> 00:31:37,280 Speaker 1: invented bitcoin. I'm sure he can work out you zoom. Yes, 544 00:31:37,280 --> 00:31:39,120 Speaker 1: it's more that no one knows who he is and 545 00:31:39,160 --> 00:31:40,920 Speaker 1: no one knows how to get hold of him. So yeah, 546 00:31:40,920 --> 00:31:43,120 Speaker 1: we're gonna do a whole episode on the hunt for 547 00:31:43,120 --> 00:31:46,560 Speaker 1: Setoshi Nakamoto, possible candidates to who he or she or 548 00:31:46,640 --> 00:31:50,080 Speaker 1: they could be. And spoiler alert, how Finny and Nick 549 00:31:50,120 --> 00:31:52,360 Speaker 1: Sabo are two of the names that are going to 550 00:31:52,440 --> 00:31:55,160 Speaker 1: feature quite heavily in that. So I think we'll we're 551 00:31:55,160 --> 00:31:57,240 Speaker 1: going to talk a bit more about how Finny later on. 552 00:31:57,360 --> 00:31:59,400 Speaker 1: Nick Sarbo we're going to leave for another time because 553 00:31:59,400 --> 00:32:04,680 Speaker 1: he is Yeah, he's a fascinating, fascinating character. Um. So, 554 00:32:05,040 --> 00:32:09,000 Speaker 1: these systems Wide Eyes be Money and Nick Sabo's bit Gold, 555 00:32:09,200 --> 00:32:11,720 Speaker 1: they were only ever theories. They were only ever kind 556 00:32:11,720 --> 00:32:15,480 Speaker 1: of written down, no one actually built them. Um, but 557 00:32:16,040 --> 00:32:20,840 Speaker 1: they both had similarities both with each other and with bitcoin. Okay, 558 00:32:20,920 --> 00:32:23,840 Speaker 1: so they both used made use of public key cryptography, 559 00:32:23,880 --> 00:32:26,680 Speaker 1: which is we've talked about in previous episodes. They both 560 00:32:26,800 --> 00:32:29,960 Speaker 1: used this proof of work system that had that was 561 00:32:30,000 --> 00:32:33,200 Speaker 1: sort of an improvement on Adam Back's hash cash idea. 562 00:32:33,320 --> 00:32:37,160 Speaker 1: And they also both used time stamping to order transactions. 563 00:32:37,320 --> 00:32:39,200 Speaker 1: And we haven't talked too much about this, but this 564 00:32:39,240 --> 00:32:42,640 Speaker 1: is this is another component of bitcoin that's quite important. 565 00:32:43,480 --> 00:32:47,000 Speaker 1: We'll we'll talk about that another time perhaps, But both 566 00:32:47,040 --> 00:32:49,280 Speaker 1: be money and bit gold, these these theories that were 567 00:32:49,280 --> 00:32:51,680 Speaker 1: put out there, they were shown to be vulnerable to 568 00:32:51,960 --> 00:32:55,280 Speaker 1: sybil attacks. So a simil attack, yes, is where a 569 00:32:55,280 --> 00:32:59,080 Speaker 1: malicious entity or actor or hack or whatever is able 570 00:32:59,120 --> 00:33:01,720 Speaker 1: to gain control over the network by signing up lots 571 00:33:01,800 --> 00:33:04,240 Speaker 1: of new users. Oh. Yes, we talked about this with 572 00:33:04,320 --> 00:33:06,960 Speaker 1: the blockchain thing, where basically, because there are so many 573 00:33:07,240 --> 00:33:10,959 Speaker 1: it would take so much computing power to do this. 574 00:33:11,080 --> 00:33:14,600 Speaker 1: It's it's nion impossible exactly exactly. Yeah, and this is 575 00:33:14,680 --> 00:33:17,240 Speaker 1: again one of bitcoin's one of bitcoin's real strengths now 576 00:33:17,280 --> 00:33:19,800 Speaker 1: is that, Yeah, this sort of attack is impossible, but 577 00:33:20,320 --> 00:33:23,960 Speaker 1: in theory, both be money and bit gold were vulnerable 578 00:33:23,960 --> 00:33:27,680 Speaker 1: to this. It's very possible. Yeah, because there's so few 579 00:33:28,160 --> 00:33:32,240 Speaker 1: nodes exactly. Yeah, Okay, exactly right, this Yeah, yeah, you're 580 00:33:32,400 --> 00:33:34,560 Speaker 1: absolutely spot on. And this is something that we'll see 581 00:33:34,680 --> 00:33:38,160 Speaker 1: in that the bitcoin was incredibly vulnerable in its early days, 582 00:33:38,640 --> 00:33:40,560 Speaker 1: and it's really thanks to some of the people that 583 00:33:40,560 --> 00:33:43,040 Speaker 1: we're going to talk about today in this episode and 584 00:33:43,080 --> 00:33:46,000 Speaker 1: future episodes. It's thanks really to them and the fact 585 00:33:46,080 --> 00:33:50,600 Speaker 1: that they were so selfless in their in in working 586 00:33:50,600 --> 00:33:54,800 Speaker 1: on bitcoin with no thought of personal gain. It's really 587 00:33:54,840 --> 00:33:56,320 Speaker 1: thanks to them. I think in large part of the 588 00:33:56,320 --> 00:33:59,680 Speaker 1: Bitcoin survived because in its early days it was really vulnerable. 589 00:34:00,160 --> 00:34:02,800 Speaker 1: And yet a sibil attack. So yeah, this anyone wanting 590 00:34:02,840 --> 00:34:04,640 Speaker 1: to take over the network, they sign up loads of 591 00:34:04,680 --> 00:34:10,120 Speaker 1: new users which are called sybils controlled by the malicious entity, 592 00:34:10,200 --> 00:34:12,640 Speaker 1: and in that way they're able to overwhelm the know 593 00:34:12,680 --> 00:34:15,319 Speaker 1: to to gain control of the network. And I guess 594 00:34:15,080 --> 00:34:17,920 Speaker 1: the easiest way to do this would be to use bots. 595 00:34:18,600 --> 00:34:20,400 Speaker 1: You could sign up a load of boats to to 596 00:34:20,520 --> 00:34:24,280 Speaker 1: spam the network or whatever. So these three systems, hash cash, 597 00:34:24,360 --> 00:34:26,680 Speaker 1: b money, and bit gold, they were all four runners 598 00:34:26,719 --> 00:34:29,399 Speaker 1: of bitcoin. And all these guys mentioned as I say, 599 00:34:29,440 --> 00:34:31,719 Speaker 1: they're they're key players in the Bitcoin story and we'll 600 00:34:31,719 --> 00:34:34,560 Speaker 1: talk about we'll talk more about them at different points 601 00:34:34,560 --> 00:34:38,200 Speaker 1: in the story. So the systems they designed, these were 602 00:34:38,200 --> 00:34:40,719 Speaker 1: all attempts to create a form of digital money. But 603 00:34:40,760 --> 00:34:43,040 Speaker 1: they all had they all had flaws. They all came 604 00:34:43,120 --> 00:34:45,800 Speaker 1: up short for one reason or another, as we've discussed, 605 00:34:46,680 --> 00:34:51,280 Speaker 1: but close, but no cigar exactly exactly. But the biggest 606 00:34:51,280 --> 00:34:54,000 Speaker 1: problem was that no one seemed to be able to 607 00:34:54,040 --> 00:34:56,440 Speaker 1: figure out how to make such a system work without 608 00:34:56,560 --> 00:35:00,440 Speaker 1: a central authority overseeing things. This again, this idea of 609 00:35:00,480 --> 00:35:05,040 Speaker 1: a third party of centralization. Um. And what's also worth noticing, 610 00:35:05,520 --> 00:35:08,480 Speaker 1: I think, is this work took a long time. You know, 611 00:35:08,520 --> 00:35:12,520 Speaker 1: hashcas should we say that was bit gold came out 612 00:35:12,520 --> 00:35:16,279 Speaker 1: in two thousand and five, and these guys, you know, 613 00:35:16,360 --> 00:35:20,440 Speaker 1: these guys were working on it as basically a hobby. Um. 614 00:35:20,800 --> 00:35:23,560 Speaker 1: These guys, you know, they had other jobs that they 615 00:35:23,600 --> 00:35:26,640 Speaker 1: had careers. There's no money coming in from this, yeah, 616 00:35:27,280 --> 00:35:29,880 Speaker 1: So it was a really it was a slow process. 617 00:35:29,920 --> 00:35:31,960 Speaker 1: This was something that that you know, these guys passion 618 00:35:31,960 --> 00:35:35,239 Speaker 1: projects that word, yeah, real labor of love. So yes. 619 00:35:35,280 --> 00:35:38,239 Speaker 1: So bitcoin first appeared in two thousand and eight, three 620 00:35:38,320 --> 00:35:40,520 Speaker 1: years after bit gold, which was two thousand and five. 621 00:35:40,560 --> 00:35:47,840 Speaker 1: But before bitcoin appeared, something else happened. Was it the 622 00:35:48,040 --> 00:35:52,839 Speaker 1: two thousand seven crush two thousand and eight crash, crash yeah, exactly. Yeah, 623 00:35:52,880 --> 00:35:56,640 Speaker 1: the financial crash, so yeah, I mean we I think 624 00:35:56,719 --> 00:35:59,920 Speaker 1: we both remember this quite well, don't we. Basically two 625 00:36:00,040 --> 00:36:02,840 Speaker 1: thousand and eight for anyone who either wasn't paying attention 626 00:36:02,960 --> 00:36:06,040 Speaker 1: or wasn't really or wasn't born, perhaps two thousand and 627 00:36:06,080 --> 00:36:09,880 Speaker 1: eight basically the whole financial system almost went down the toilet. 628 00:36:10,280 --> 00:36:13,960 Speaker 1: I think it's the technical time, um, and I mean 629 00:36:14,400 --> 00:36:16,400 Speaker 1: I look back on that and I think it's the 630 00:36:16,480 --> 00:36:20,280 Speaker 1: more you read about it, it's it's terrifying how close 631 00:36:20,360 --> 00:36:24,520 Speaker 1: we came. Two two anarchy. I think in a way, 632 00:36:24,719 --> 00:36:26,919 Speaker 1: you know that there's there's talk about I remember seeing 633 00:36:26,920 --> 00:36:30,759 Speaker 1: an article from Alistair Darling who was the UK chance 634 00:36:30,800 --> 00:36:33,839 Speaker 1: at Alistair who was the UK chancellor at the time, 635 00:36:33,880 --> 00:36:35,880 Speaker 1: and he said, the cash machine. You know, we were 636 00:36:35,960 --> 00:36:38,279 Speaker 1: a day away, we were hours away from the cash 637 00:36:38,320 --> 00:36:41,799 Speaker 1: machines running out of cash. And can you imagine can 638 00:36:41,840 --> 00:36:44,040 Speaker 1: you imagine, you know, if people are going into shops 639 00:36:44,040 --> 00:36:47,160 Speaker 1: and being like, hang on, my my car doesn't work 640 00:36:47,239 --> 00:36:50,480 Speaker 1: or I can't get cash out that I think it's 641 00:36:50,520 --> 00:36:54,560 Speaker 1: not very many steps from that too, Cars burning in 642 00:36:54,560 --> 00:36:59,200 Speaker 1: the street and you know, just just yeah, pure anarchy. Yeah, yeah, 643 00:36:59,280 --> 00:37:02,640 Speaker 1: it's it's scared. Verry how close, how close we came 644 00:37:02,719 --> 00:37:05,920 Speaker 1: to you know, things getting really really bad, and things 645 00:37:06,000 --> 00:37:09,040 Speaker 1: were bad in the financial sense, and um, you know 646 00:37:09,320 --> 00:37:11,759 Speaker 1: it was it was chaos and we're still dealing with 647 00:37:11,960 --> 00:37:14,080 Speaker 1: the fallout from it. But it's pretty easy to know 648 00:37:14,200 --> 00:37:17,160 Speaker 1: where most of the blame for the financial crash lies. 649 00:37:17,440 --> 00:37:20,200 Speaker 1: The blame for the financial crash, it can be largely 650 00:37:20,239 --> 00:37:23,719 Speaker 1: put at the feet of the banks. Um. Now, just 651 00:37:23,760 --> 00:37:25,960 Speaker 1: to give that a bit of context, because since the 652 00:37:26,000 --> 00:37:28,879 Speaker 1: Great Depression in back in the nineteen thirties, it had 653 00:37:28,920 --> 00:37:34,320 Speaker 1: been illegal for commercial and investment banks, yeah, to merge. 654 00:37:34,840 --> 00:37:37,239 Speaker 1: And obviously by commercial banks we mean the sort of 655 00:37:37,280 --> 00:37:39,719 Speaker 1: you know, the piggy bank where you where you put 656 00:37:39,719 --> 00:37:44,840 Speaker 1: your savings, your chase, your nutworst your exactly exactly. Whereas 657 00:37:44,840 --> 00:37:47,440 Speaker 1: an investment bank, those that you know, these guys are 658 00:37:47,440 --> 00:37:50,160 Speaker 1: the speculators. These are were the ones doing crazy trades, 659 00:37:50,239 --> 00:37:55,000 Speaker 1: making obscene amounts of money. Um. But yeah, they weren't 660 00:37:55,280 --> 00:37:59,359 Speaker 1: they weren't allowed to merge together specifically in the US, UM. 661 00:37:59,400 --> 00:38:01,680 Speaker 1: And this was a result of the Great Depression, and 662 00:38:01,719 --> 00:38:04,560 Speaker 1: this was enshrined in something called the Glass Stiegel Act, 663 00:38:04,800 --> 00:38:08,239 Speaker 1: which was three I think we might have touched on 664 00:38:08,280 --> 00:38:11,439 Speaker 1: this in in an in an earlier episode. Um, but yeah, 665 00:38:11,480 --> 00:38:16,880 Speaker 1: this stopped commercial and investment banks being being the same entity. However, 666 00:38:17,320 --> 00:38:23,800 Speaker 1: in Bill Clinton was persuaded to repeal the Glass Stiegel actum, 667 00:38:24,080 --> 00:38:27,200 Speaker 1: and he said it would help by stimulating greater innovation 668 00:38:27,280 --> 00:38:30,759 Speaker 1: and competition in the financial services industry. People had been 669 00:38:30,800 --> 00:38:34,360 Speaker 1: the financial the financial sector had been lobbying for I 670 00:38:34,360 --> 00:38:37,319 Speaker 1: think for decades really to get Glass Stiegel overturned, because 671 00:38:37,360 --> 00:38:39,839 Speaker 1: they knew how much money they could make if they 672 00:38:39,840 --> 00:38:43,160 Speaker 1: were only given access to everyone's savings that they could 673 00:38:43,200 --> 00:38:46,200 Speaker 1: then speculate with. So yes. So one of Clinton's reasons 674 00:38:46,239 --> 00:38:47,759 Speaker 1: for doing this might have been the effects of the 675 00:38:47,800 --> 00:38:50,520 Speaker 1: Big Bang which took place in six in the city 676 00:38:50,560 --> 00:38:53,520 Speaker 1: of London. This was when Margaret Thatcher British PM at 677 00:38:53,520 --> 00:38:57,440 Speaker 1: the time. She allowed for the deregulation of British banks 678 00:38:58,480 --> 00:39:02,960 Speaker 1: and this basically turned into the financial powerhouse, which is 679 00:39:03,040 --> 00:39:07,200 Speaker 1: which it still is today. Um. And so you basically 680 00:39:07,200 --> 00:39:10,120 Speaker 1: had the creation of these new hybrid banks. Um. And 681 00:39:10,160 --> 00:39:13,400 Speaker 1: they hired maths geniuses. Now, these guys were known as quants, 682 00:39:13,600 --> 00:39:16,280 Speaker 1: which I think is a great name, who basically figured 683 00:39:16,320 --> 00:39:21,920 Speaker 1: out increasingly complicated and baroque and opaque ways to make money, 684 00:39:22,280 --> 00:39:29,680 Speaker 1: and these get insanely difficult to understand, and great, yeah, 685 00:39:29,719 --> 00:39:33,719 Speaker 1: which is why we're not going to But yeah, I 686 00:39:33,719 --> 00:39:36,880 Speaker 1: mean there are plenty of bankers out there who can't, 687 00:39:37,080 --> 00:39:39,600 Speaker 1: who couldn't really give you an explanation of how these 688 00:39:39,600 --> 00:39:43,719 Speaker 1: things work. They were so complicated. But you know, these 689 00:39:43,800 --> 00:39:46,680 Speaker 1: these quants, these maths, geniuses, understood them and they made 690 00:39:46,760 --> 00:39:49,680 Speaker 1: a lot of money. And one of the most notorious 691 00:39:49,680 --> 00:39:53,240 Speaker 1: ways involved basically packaging up mortgage debt that was sitting 692 00:39:53,239 --> 00:39:56,640 Speaker 1: on banks books and then selling that debt in the 693 00:39:56,719 --> 00:40:00,600 Speaker 1: form of securities. And now our securities basic any sort 694 00:40:00,640 --> 00:40:05,840 Speaker 1: of financial instrument that can be bought and sold, so stocks, bonds, 695 00:40:06,280 --> 00:40:08,520 Speaker 1: you know, those sorts of things, they are securities. So 696 00:40:08,560 --> 00:40:11,640 Speaker 1: these these these insanely clever guys figured out a way 697 00:40:11,680 --> 00:40:16,399 Speaker 1: to to basically sell these mortgage backed securities. And these 698 00:40:16,400 --> 00:40:19,279 Speaker 1: securities they were seen as safe bets. You know, no one, 699 00:40:19,560 --> 00:40:22,040 Speaker 1: no one thought they'd caused any problems that made them 700 00:40:22,040 --> 00:40:25,400 Speaker 1: easier to sell. And once they saw how easy they 701 00:40:25,400 --> 00:40:27,440 Speaker 1: were to sell, they made more, so they took on 702 00:40:27,560 --> 00:40:31,560 Speaker 1: more debt um and they did this by approving more mortgages. 703 00:40:32,480 --> 00:40:35,960 Speaker 1: So what happened was that people with terrible credit who 704 00:40:36,000 --> 00:40:38,919 Speaker 1: should never have been allowed any sort of loan really, 705 00:40:39,280 --> 00:40:41,600 Speaker 1: or you know, had who had no chance of paying 706 00:40:41,600 --> 00:40:45,200 Speaker 1: a loan back, were suddenly were suddenly given mortgages, were 707 00:40:45,200 --> 00:40:48,320 Speaker 1: suddenly approved for mortgages. And there are just crazy stories 708 00:40:48,360 --> 00:40:52,880 Speaker 1: from the US and elsewhere of people of dead people 709 00:40:53,320 --> 00:40:56,760 Speaker 1: being approved for mortgages, of homeless drug addicts being approved 710 00:40:56,760 --> 00:40:59,680 Speaker 1: for mortgages, you know, people who just should not have 711 00:40:59,719 --> 00:41:03,319 Speaker 1: been a from judges um. And these became known as 712 00:41:03,320 --> 00:41:10,760 Speaker 1: subprime mortgages. Obviously, this this was unsustainable, so they didn't 713 00:41:10,800 --> 00:41:14,319 Speaker 1: pay back their mortgage. As shocking as it is, that 714 00:41:14,480 --> 00:41:18,160 Speaker 1: is that that is what happened. Yet because they couldn't um, 715 00:41:18,200 --> 00:41:21,840 Speaker 1: it was unsustainable. And eventually this house of cards that 716 00:41:21,880 --> 00:41:24,680 Speaker 1: was built up came crashing down. Basically, the banks stopped 717 00:41:24,719 --> 00:41:26,960 Speaker 1: lending to each other. This was known as the credit crunch, 718 00:41:27,680 --> 00:41:32,320 Speaker 1: and this saw the collapse of bank Bear Sterns, Lehman Brothers. 719 00:41:33,120 --> 00:41:36,160 Speaker 1: A I g the insurance giant that that had to 720 00:41:36,200 --> 00:41:39,200 Speaker 1: be brought out eighty five billion dollars the Federal Reserve 721 00:41:39,280 --> 00:41:41,879 Speaker 1: had to pay to bail out well to basically buy 722 00:41:41,880 --> 00:41:45,080 Speaker 1: out A I g Um, they had the mortgage companies 723 00:41:45,080 --> 00:41:47,600 Speaker 1: in the US Fannie Mae and Freddie Mack. They had 724 00:41:47,640 --> 00:41:51,040 Speaker 1: to be rescued by the US government. Just billions upon 725 00:41:51,200 --> 00:41:53,480 Speaker 1: billions of dollars had to be had to be spent 726 00:41:53,680 --> 00:41:56,960 Speaker 1: to bail these entities out. And as I say, um, 727 00:41:57,400 --> 00:42:00,200 Speaker 1: we're still dealing with the after effects of that over 728 00:42:00,480 --> 00:42:03,680 Speaker 1: you know, over you know, nearly too. Yeah, I mean, 729 00:42:03,760 --> 00:42:05,839 Speaker 1: what was it so two thousand and eight, Yeah, well 730 00:42:05,880 --> 00:42:10,080 Speaker 1: over well over ten years ago encounting um. And I 731 00:42:10,200 --> 00:42:12,520 Speaker 1: think the fallout from the two thousand and eight crashes 732 00:42:12,760 --> 00:42:15,360 Speaker 1: is going to be with us for possibly decades longer, 733 00:42:16,400 --> 00:42:22,160 Speaker 1: even more than this crash wee pandemic, the post pandemic crash. Yeah, 734 00:42:22,320 --> 00:42:26,040 Speaker 1: it was. Yeah, it was a disaster. These banks and 735 00:42:26,800 --> 00:42:29,640 Speaker 1: all these other financial institutions, they'd all been lending and 736 00:42:29,840 --> 00:42:32,000 Speaker 1: borrowing to each other the whole thing. It was a 737 00:42:32,080 --> 00:42:35,400 Speaker 1: domino effect, you know. Once once one went down, they 738 00:42:35,480 --> 00:42:39,759 Speaker 1: all went down. So and yeah, it ended with these bailouts, 739 00:42:39,800 --> 00:42:43,360 Speaker 1: which were funded by the taxpayer, but by us, the 740 00:42:43,440 --> 00:42:46,520 Speaker 1: little guys. Um. And of course no one responsible ever 741 00:42:46,560 --> 00:42:49,600 Speaker 1: went to jail. One person went to one yeah, maybe 742 00:42:49,640 --> 00:42:54,200 Speaker 1: one person. Yeah, I'm mu sure what for. Yeah, it was, 743 00:42:54,600 --> 00:42:56,960 Speaker 1: I mean, it was it was crazy. It was crazy. 744 00:42:57,600 --> 00:43:02,719 Speaker 1: So it's really important to consider bitcoin in the context 745 00:43:02,880 --> 00:43:05,759 Speaker 1: of what's firstly what happened in two thousand and eight, 746 00:43:06,120 --> 00:43:08,720 Speaker 1: and also what the cipher punks had been talking about 747 00:43:08,800 --> 00:43:12,040 Speaker 1: long before that, the fact that we couldn't trust these 748 00:43:12,120 --> 00:43:15,799 Speaker 1: large entities. Um. You know that the computer age had 749 00:43:15,920 --> 00:43:20,400 Speaker 1: ushered in this whole new era and there were massive 750 00:43:20,520 --> 00:43:23,360 Speaker 1: risks associated with it. And these risks basically came to 751 00:43:23,440 --> 00:43:26,880 Speaker 1: pass in two thousand and eight. Um, yeah, because the 752 00:43:26,960 --> 00:43:30,719 Speaker 1: institutions that supposedly that we're supposedly looking after our money 753 00:43:30,760 --> 00:43:33,680 Speaker 1: had basically been gambling with it instead, basically gone to 754 00:43:33,760 --> 00:43:38,440 Speaker 1: the casino. Yeah, And so you couldn't trust them anymore, 755 00:43:38,600 --> 00:43:40,520 Speaker 1: and especially when they were bailed out and no one 756 00:43:40,680 --> 00:43:44,920 Speaker 1: was punished, trust was just completely eroded. And governments were 757 00:43:45,040 --> 00:43:47,200 Speaker 1: kind of seen to be colluding in this as well, 758 00:43:47,520 --> 00:43:49,920 Speaker 1: because you know, they were acting in the interests of 759 00:43:49,960 --> 00:43:53,520 Speaker 1: the banks rather than in the interests of the people. Um. 760 00:43:53,719 --> 00:43:56,880 Speaker 1: And this only really confirmed the kind of libertarian views 761 00:43:56,920 --> 00:44:01,080 Speaker 1: that the cipher punks had. So that's that's really important 762 00:44:01,120 --> 00:44:04,120 Speaker 1: context to what happened next to the emergence of bitcoin. 763 00:44:04,600 --> 00:44:06,839 Speaker 1: Should we take a break before we talk about that, Yeah, 764 00:44:06,960 --> 00:44:24,080 Speaker 1: let's let's have a quick, quick farm. Shall we bring 765 00:44:24,520 --> 00:44:29,719 Speaker 1: Satoshi Nakamoto onto the stage, as it were, Let's let's 766 00:44:29,719 --> 00:44:32,160 Speaker 1: bring this man into that. Let's let's start talking about 767 00:44:32,200 --> 00:44:35,839 Speaker 1: Satoshi Nakamoto a bit of context. So obviously we've talked 768 00:44:35,840 --> 00:44:38,399 Speaker 1: about the financial crisis. Also, by two thousand and eight, 769 00:44:38,440 --> 00:44:41,359 Speaker 1: the cipher Punk mailing list that kind of fizzled out 770 00:44:41,400 --> 00:44:44,279 Speaker 1: a bit um because as you can imagine, a lot 771 00:44:44,360 --> 00:44:49,040 Speaker 1: of very clever I think there was a lot of 772 00:44:49,120 --> 00:44:50,880 Speaker 1: spam on his Actually I think spam was one of 773 00:44:50,960 --> 00:44:54,440 Speaker 1: the problems. But also as you can imagine a lot 774 00:44:54,520 --> 00:44:58,040 Speaker 1: of a lot of very smart people discussing all these 775 00:44:58,120 --> 00:45:00,120 Speaker 1: kind of high level ideas, it had kind of got 776 00:45:00,160 --> 00:45:05,160 Speaker 1: a bit toxic apparently. Yeah, yeah, it was all very argumentative, 777 00:45:05,320 --> 00:45:07,960 Speaker 1: and yeah, it wasn't a lot of egos, Yeah, a 778 00:45:08,120 --> 00:45:11,120 Speaker 1: lot of big egos and and obviously very very clever 779 00:45:11,200 --> 00:45:14,839 Speaker 1: people as well. So in its place, in his place 780 00:45:14,960 --> 00:45:18,080 Speaker 1: sprang up something called the Cryptography mailing List, which was 781 00:45:18,160 --> 00:45:19,719 Speaker 1: I think where some of the better, you know, the 782 00:45:19,800 --> 00:45:21,719 Speaker 1: better behaved people were It's like, let's go off and 783 00:45:22,200 --> 00:45:25,879 Speaker 1: join our own, make our own club. So Adam back 784 00:45:25,960 --> 00:45:32,040 Speaker 1: remember him, the hashcash guess who's back. He was, he 785 00:45:32,160 --> 00:45:34,680 Speaker 1: was on the Cryptography mailing list. And then one day 786 00:45:34,840 --> 00:45:37,680 Speaker 1: in August two thousand and eight, he got an email 787 00:45:37,760 --> 00:45:40,520 Speaker 1: from someone he'd never heard of before. This person's name 788 00:45:40,680 --> 00:45:46,600 Speaker 1: was Satoshi Nakamoto. Satoshi basically asked Adam if he could 789 00:45:46,640 --> 00:45:49,240 Speaker 1: have a look at a proposal for something called bitcoin, 790 00:45:50,520 --> 00:45:53,319 Speaker 1: and so Adam had a brief look at it, um 791 00:45:53,680 --> 00:45:56,759 Speaker 1: and he he took the time. When he replied to Satoshi, 792 00:45:56,880 --> 00:45:59,440 Speaker 1: he reminded him about all the other experiments with digital 793 00:45:59,520 --> 00:46:01,960 Speaker 1: cash that been tried by him and others. And I 794 00:46:02,000 --> 00:46:06,239 Speaker 1: think he mentioned sort of way die and and Nixio's yeah, 795 00:46:07,440 --> 00:46:09,359 Speaker 1: and how yeah he might yeah it probably might might 796 00:46:09,400 --> 00:46:13,600 Speaker 1: have mentioned Helfini as well. Um. Then, on the thirty 797 00:46:13,640 --> 00:46:16,000 Speaker 1: one of October two thousand and eight, and this was 798 00:46:16,160 --> 00:46:19,280 Speaker 1: ten days after the FED had loaned out five hundred 799 00:46:19,400 --> 00:46:23,160 Speaker 1: and forty billion dollars in order to keep the U 800 00:46:23,320 --> 00:46:27,200 Speaker 1: S economy going. So Toshi reappeared and he published the 801 00:46:27,320 --> 00:46:31,719 Speaker 1: Bitcoin white Paper to the Cryptography mailing list. And this 802 00:46:32,120 --> 00:46:35,880 Speaker 1: is yeah, I mean, this is basically the beginning of crypto. 803 00:46:35,920 --> 00:46:40,000 Speaker 1: Currently did another manifest though it wasn't so much a manifesto, no, 804 00:46:40,320 --> 00:46:43,320 Speaker 1: so a white paper is it's a kind of outline. 805 00:46:43,360 --> 00:46:46,640 Speaker 1: It's a synopsis of what you're trying to achieve. Um. Now, 806 00:46:46,719 --> 00:46:49,120 Speaker 1: this the Bitcoin white paper, which I've which I've looked 807 00:46:49,160 --> 00:46:52,600 Speaker 1: through several times. I mean, it gets pretty complicated. Usually 808 00:46:52,640 --> 00:46:55,800 Speaker 1: a white paper is, as I say, more of a synopsis, 809 00:46:55,840 --> 00:46:57,440 Speaker 1: a bit more of a general overview, and then you 810 00:46:57,520 --> 00:47:00,799 Speaker 1: have a bark page of a book. Yeah, the blurb basically, Um, 811 00:47:01,480 --> 00:47:05,360 Speaker 1: and if you and and the yellow paper is the 812 00:47:05,440 --> 00:47:07,279 Speaker 1: next one. That the yellow paper tends to be the 813 00:47:07,360 --> 00:47:10,040 Speaker 1: more technical one. That's how it's sort of a lot 814 00:47:10,080 --> 00:47:13,040 Speaker 1: of projects work nowadays. But the Bitcoin white paper was 815 00:47:13,360 --> 00:47:15,760 Speaker 1: was sort of both. It was a kind of technical overview. 816 00:47:15,960 --> 00:47:18,840 Speaker 1: But I'm told, I mean, I'm I'm no expert on 817 00:47:19,400 --> 00:47:22,560 Speaker 1: you know, on programming or or writing code or anything 818 00:47:22,640 --> 00:47:26,040 Speaker 1: like that, but I'm told that actually, as these things go, 819 00:47:26,160 --> 00:47:28,960 Speaker 1: the Bitcoin white Paper is extremely well written. I mean, 820 00:47:29,080 --> 00:47:32,880 Speaker 1: it explains this very complex idea actually quite clearly. And 821 00:47:33,160 --> 00:47:35,719 Speaker 1: when you do look through it, obviously I have I 822 00:47:35,840 --> 00:47:38,040 Speaker 1: have the benefit of having done quite a lot of 823 00:47:38,120 --> 00:47:40,799 Speaker 1: research into it. But it is, Yeah, it's it makes 824 00:47:41,040 --> 00:47:44,279 Speaker 1: it seems to make this complicated as straightforward as it can. Yeah, 825 00:47:44,520 --> 00:47:46,759 Speaker 1: it does and this is something we'll come back to 826 00:47:46,880 --> 00:47:48,759 Speaker 1: when we talk about when we talk about the hunt 827 00:47:48,800 --> 00:47:51,320 Speaker 1: for Setoshi, because the way he writes is really important. 828 00:47:52,680 --> 00:47:56,680 Speaker 1: So this white paper was titled Bitcoin a Peer to 829 00:47:56,760 --> 00:48:00,200 Speaker 1: Peer Electronic Cash System. And here's the opening line. A 830 00:48:00,360 --> 00:48:03,680 Speaker 1: purely peer to peer version of electronic cash will allow 831 00:48:03,800 --> 00:48:06,960 Speaker 1: online payments to be sent directly from one party to 832 00:48:07,120 --> 00:48:13,680 Speaker 1: another without going through a financial institution. That's the elevator pitch. Yeah, yeah, 833 00:48:14,280 --> 00:48:17,239 Speaker 1: this is Yeah, is is very clearly set out. Yeah, 834 00:48:17,280 --> 00:48:20,000 Speaker 1: it's it's a great opening line. Um. So the rest 835 00:48:20,040 --> 00:48:23,400 Speaker 1: of the pdf basically explained how it will the proceeding that. 836 00:48:23,560 --> 00:48:25,879 Speaker 1: The next few pages explained to how it will all work, 837 00:48:26,840 --> 00:48:32,880 Speaker 1: and then nothing happened. Yeah. So a week later, so 838 00:48:33,000 --> 00:48:35,360 Speaker 1: he put it so, so TOCI put this out on 839 00:48:35,800 --> 00:48:38,600 Speaker 1: the cipher punk mailing list. Here's my idea called the 840 00:48:38,640 --> 00:48:42,560 Speaker 1: crypto one. Oh yes, good point that the cryptography mailing list. 841 00:48:42,680 --> 00:48:46,000 Speaker 1: That's true, Yeah, well spotted um. Yes, So he put 842 00:48:46,080 --> 00:48:50,240 Speaker 1: this out on the cryptography mailing list and said here's 843 00:48:50,239 --> 00:48:53,880 Speaker 1: my basically, here's my big idea, and nothing happened. About 844 00:48:53,920 --> 00:48:55,640 Speaker 1: a week later, I think it was. There have been 845 00:48:55,680 --> 00:48:59,359 Speaker 1: two replies, and both of them were fairly negative, although 846 00:48:59,400 --> 00:49:03,239 Speaker 1: both were sort of valid concerned but yeah, but it 847 00:49:03,360 --> 00:49:06,120 Speaker 1: wasn't like this sounds this sounds awful. Who's this idiot? 848 00:49:06,239 --> 00:49:09,000 Speaker 1: You know? Um? And interestingly, one was from a guy 849 00:49:09,080 --> 00:49:12,879 Speaker 1: called John Levine. He was the guy who's father Avril's father. 850 00:49:12,960 --> 00:49:16,520 Speaker 1: He was the guy who went went on to write 851 00:49:16,800 --> 00:49:21,000 Speaker 1: The Internet for Dummies. Okay, yeah, did he invest in bitcoin? 852 00:49:21,080 --> 00:49:22,560 Speaker 1: Because I'm not going to read that book. If he 853 00:49:23,960 --> 00:49:25,799 Speaker 1: I'll be like, you know, you know, you are, well, 854 00:49:25,880 --> 00:49:27,680 Speaker 1: maybe it does work out there. I'm not sure. I'm 855 00:49:27,680 --> 00:49:31,520 Speaker 1: not sure, you know, as much as I'm not sure actually, 856 00:49:31,680 --> 00:49:34,759 Speaker 1: but yeah, he he pointed out that bitcoin would be 857 00:49:34,840 --> 00:49:38,239 Speaker 1: too vulnerable to hackers, which was a valid concern early on, 858 00:49:38,480 --> 00:49:40,719 Speaker 1: early on. Yeah. And the other was from a guy 859 00:49:40,800 --> 00:49:43,439 Speaker 1: called James Donald, and he didn't think that it would 860 00:49:43,440 --> 00:49:45,520 Speaker 1: be able to scale to be used by hundreds of 861 00:49:45,560 --> 00:49:48,600 Speaker 1: millions of users. And as we'll see in future, again 862 00:49:48,719 --> 00:49:52,120 Speaker 1: this is a this is a fairly valid criticism. Is 863 00:49:52,200 --> 00:49:57,399 Speaker 1: that because there's a limited number of of um transactions 864 00:49:57,440 --> 00:50:01,520 Speaker 1: that can be that can be processed, or coins coins. 865 00:50:01,760 --> 00:50:03,680 Speaker 1: I don't think it was so much the limited the 866 00:50:03,760 --> 00:50:05,759 Speaker 1: limited coins, because yes, as you remember, there was a 867 00:50:05,920 --> 00:50:09,919 Speaker 1: the bitcoin has a twenty one twenty one million coin limit, 868 00:50:09,960 --> 00:50:15,399 Speaker 1: there will only ever be twenty one million bitcoins produced. Um. 869 00:50:15,760 --> 00:50:18,239 Speaker 1: But yeah, I don't think. I don't think it was 870 00:50:18,320 --> 00:50:20,320 Speaker 1: so much that it was like how will you know? 871 00:50:20,360 --> 00:50:24,000 Speaker 1: How will you scale this? How will how will use it? Yeah? 872 00:50:24,600 --> 00:50:26,880 Speaker 1: And I think something else that's really important to remember 873 00:50:27,160 --> 00:50:29,680 Speaker 1: is and one of the reasons why perhaps this idea 874 00:50:29,760 --> 00:50:31,960 Speaker 1: didn't get all that much all that much in the 875 00:50:32,000 --> 00:50:35,400 Speaker 1: way of replies, was that a lot of the cipher punks, remember, 876 00:50:35,480 --> 00:50:38,960 Speaker 1: weren't too interested in the digits in the digital cash thing. 877 00:50:39,160 --> 00:50:43,160 Speaker 1: They've seen it, tried, the sen it tried and fell before. Yeah, yeah, 878 00:50:43,200 --> 00:50:46,840 Speaker 1: so a lot disillusioned with with it exactly exactly. I 879 00:50:46,880 --> 00:50:48,759 Speaker 1: think a lot of them were sort of like, yeah, 880 00:50:48,760 --> 00:50:50,839 Speaker 1: we've tried this and it hasn't worked, And of course 881 00:50:50,880 --> 00:50:52,560 Speaker 1: a lot of them, how do you go is probably 882 00:50:52,640 --> 00:50:54,480 Speaker 1: then like, well, we we'd tried her on one of 883 00:50:54,560 --> 00:50:56,319 Speaker 1: this and yeah, if I can't get it to work, 884 00:50:56,360 --> 00:50:59,239 Speaker 1: then I just can't work. Um. Yeah, And I think 885 00:50:59,280 --> 00:51:01,960 Speaker 1: there was that there was a lot of disillusionment. But also, 886 00:51:02,280 --> 00:51:04,240 Speaker 1: as I said, as I said when we first started 887 00:51:04,239 --> 00:51:06,560 Speaker 1: talking about the cipher punks, a lot of them had 888 00:51:06,600 --> 00:51:09,000 Speaker 1: other interests, you know, a lot of them were more 889 00:51:09,040 --> 00:51:11,839 Speaker 1: focused on times like privacy. Yeah, and I remember, yeah, 890 00:51:11,880 --> 00:51:14,399 Speaker 1: no one's doing this for a job. This isn't anyone's job. 891 00:51:14,560 --> 00:51:16,799 Speaker 1: So a combination of sort of I think people being 892 00:51:16,800 --> 00:51:18,719 Speaker 1: a bit disillusioned about it and people just being like 893 00:51:19,200 --> 00:51:22,120 Speaker 1: digital cash again here, you know, there are more important 894 00:51:22,160 --> 00:51:27,520 Speaker 1: problems out there. Okay, so a fairly to start with. 895 00:51:28,120 --> 00:51:31,239 Speaker 1: So Toshi then fired up the bitcoin software kind of 896 00:51:31,280 --> 00:51:34,360 Speaker 1: around New Year two thousand and nine, presumably kind of 897 00:51:34,440 --> 00:51:38,320 Speaker 1: undaunted by this sort of almost deafening silence. Um, and 898 00:51:38,520 --> 00:51:41,399 Speaker 1: he mined the first block and that is now known 899 00:51:41,600 --> 00:51:45,520 Speaker 1: as the Genesis block. Okay, another really big moment in 900 00:51:45,560 --> 00:51:49,480 Speaker 1: the history of cryptocurrency. And he received the first fifty 901 00:51:49,520 --> 00:51:52,200 Speaker 1: bitcoins as a block reward. And if you don't know 902 00:51:52,280 --> 00:51:54,160 Speaker 1: what a block reward is, that's all. That's what we 903 00:51:54,239 --> 00:52:00,200 Speaker 1: talked about. Go back to the involved episodes about block jame. 904 00:52:01,080 --> 00:52:06,160 Speaker 1: So intriguingly, this Genesis block contained a message. The message 905 00:52:06,200 --> 00:52:10,480 Speaker 1: read the Times, third of January two thousand and nine, 906 00:52:11,000 --> 00:52:15,960 Speaker 1: Chancellor on the brink of second bailout for banks. Yeah, 907 00:52:16,120 --> 00:52:18,520 Speaker 1: and obviously this is the Times, the newspaper in the 908 00:52:18,920 --> 00:52:25,719 Speaker 1: British newspaper and yeah, brit Well this is yeah, there 909 00:52:25,840 --> 00:52:31,000 Speaker 1: there is specula well, it's we just don't know, but 910 00:52:31,280 --> 00:52:33,520 Speaker 1: there are a few there are a few things that 911 00:52:33,600 --> 00:52:35,960 Speaker 1: suggest he might be a brit He used British spelling 912 00:52:36,480 --> 00:52:39,640 Speaker 1: for one thing, so I think he was either British 913 00:52:39,719 --> 00:52:43,200 Speaker 1: or British edicate. Yeah, so you know he'd use color 914 00:52:43,440 --> 00:52:47,480 Speaker 1: ce l oh you are rather built it correctly. He 915 00:52:47,560 --> 00:52:52,880 Speaker 1: spelt it correctly, that's correct. Yeah, he used British spelling. 916 00:52:53,040 --> 00:52:56,239 Speaker 1: And I think also people have analyzed the times that 917 00:52:56,360 --> 00:53:00,640 Speaker 1: he was online, and it suggests that he is online 918 00:53:01,040 --> 00:53:05,040 Speaker 1: at around you know, kind of daytime, Greenwich meantime. So 919 00:53:05,239 --> 00:53:07,440 Speaker 1: but that I mean, you know that. But but with 920 00:53:07,680 --> 00:53:10,000 Speaker 1: with with nocturnal people, you know, he could have been 921 00:53:10,160 --> 00:53:12,560 Speaker 1: I mean, yeah he was. Yeah, if he was a programmer, 922 00:53:12,640 --> 00:53:14,680 Speaker 1: he could he could have been keeping all sorts of ours. 923 00:53:14,760 --> 00:53:16,880 Speaker 1: So that doesn't that doesn't tell us not you know 924 00:53:17,000 --> 00:53:20,520 Speaker 1: for sure. But it's an interesting it's an interesting But 925 00:53:20,680 --> 00:53:23,399 Speaker 1: with those two you can you can you can make 926 00:53:23,440 --> 00:53:26,400 Speaker 1: it safe. Bet well, you can make it yeah, you 927 00:53:26,440 --> 00:53:30,240 Speaker 1: can make an educated Yeah, it's certainly it's certainly points 928 00:53:30,320 --> 00:53:33,400 Speaker 1: to that. And there I mean there's so much interesting, 929 00:53:34,200 --> 00:53:38,239 Speaker 1: so many interesting little facts and quirks about the way 930 00:53:38,280 --> 00:53:40,360 Speaker 1: he wrote and about the Times that he was online, 931 00:53:40,360 --> 00:53:42,279 Speaker 1: all this sort of thing, and and and that'll that's 932 00:53:42,520 --> 00:53:44,960 Speaker 1: all stuff we'll discuss when we when we go digging 933 00:53:45,000 --> 00:53:49,759 Speaker 1: deeper for him. But yeah, it's yeah, there's definitely there's 934 00:53:49,800 --> 00:53:52,279 Speaker 1: definitely a chance that he could be a brit But yeah, 935 00:53:52,480 --> 00:53:54,360 Speaker 1: and obviously, yeah, the fact that he used a headline 936 00:53:54,480 --> 00:53:58,399 Speaker 1: from the Times, um is another indicator that he could 937 00:53:58,480 --> 00:54:01,080 Speaker 1: perhaps be a brit. But yeah, it really what's important 938 00:54:01,080 --> 00:54:03,120 Speaker 1: about the headline is what it says, you know, Chancellor 939 00:54:03,200 --> 00:54:05,279 Speaker 1: on the brink of second bailout for banks, And that 940 00:54:05,400 --> 00:54:09,560 Speaker 1: to me is an unmistakable pointer to the fact that, yeah, 941 00:54:09,920 --> 00:54:14,520 Speaker 1: we've been through this. Yeah, this, this is this is 942 00:54:14,640 --> 00:54:17,680 Speaker 1: a reaction to what these what these guys have done. 943 00:54:18,480 --> 00:54:21,839 Speaker 1: He was Satoshi was obviously, he mined the first block, 944 00:54:21,920 --> 00:54:24,880 Speaker 1: He was the first node on the Bitcoin network, and 945 00:54:24,960 --> 00:54:27,760 Speaker 1: he then announced on the Cryptography mailing list that bitcoin 946 00:54:28,080 --> 00:54:32,160 Speaker 1: was live, and again kind of a fairly big mare 947 00:54:32,400 --> 00:54:37,200 Speaker 1: across the board, pretty lukewarm response. Now this leads leads 948 00:54:37,200 --> 00:54:40,880 Speaker 1: me to one of my favorite quotations of all time. Um, 949 00:54:41,000 --> 00:54:45,960 Speaker 1: and this is Satoshi writing on the cryptography mainlist, it 950 00:54:46,120 --> 00:54:48,759 Speaker 1: might make sense to just to get some in case 951 00:54:48,840 --> 00:54:54,960 Speaker 1: it catches off. And I'm seriously contemplating having that tattooed 952 00:54:55,239 --> 00:54:58,520 Speaker 1: somewhere on my body. Um. Now, the only person to 953 00:54:58,840 --> 00:55:05,000 Speaker 1: respond positive was haw Finny. Half Finny was hal Finny. Yeah. 954 00:55:05,239 --> 00:55:08,120 Speaker 1: Now he asked to see the actual code. He was 955 00:55:08,200 --> 00:55:10,719 Speaker 1: interested enough. Okay, let's see what this is made of. 956 00:55:10,840 --> 00:55:14,200 Speaker 1: So Satoshi sent it to him and they then began 957 00:55:14,600 --> 00:55:16,920 Speaker 1: working on it together. So they would make tweaks, and 958 00:55:17,000 --> 00:55:19,440 Speaker 1: then they tested out and they'd send each other emails, 959 00:55:20,680 --> 00:55:23,719 Speaker 1: and how became node number two on the network, and 960 00:55:23,920 --> 00:55:28,760 Speaker 1: he also mined a few blocks, and then Satoshi tested 961 00:55:28,800 --> 00:55:32,600 Speaker 1: the network by sending how ten bitcoins ten BTC. As 962 00:55:32,640 --> 00:55:36,600 Speaker 1: we say, BTC is basically, as we've discussed, the shorthand 963 00:55:36,640 --> 00:55:39,920 Speaker 1: the ticker for the coins that live on the Bitcoin 964 00:55:40,160 --> 00:55:42,880 Speaker 1: to be confused with bts, not to be confused with 965 00:55:42,920 --> 00:55:46,160 Speaker 1: bats the Korean k pop band. Yeah, so it's it's 966 00:55:46,200 --> 00:55:50,800 Speaker 1: how about No, So how Finny How Finny has a 967 00:55:51,360 --> 00:55:54,400 Speaker 1: is a very is a very sad story. Um, but 968 00:55:54,480 --> 00:55:57,160 Speaker 1: I'm going to tell you about that in the next episode. Yeah, 969 00:55:57,840 --> 00:56:00,200 Speaker 1: but yeah, how is how is a big how there's 970 00:56:00,200 --> 00:56:04,000 Speaker 1: a big presence in the especially in the early bitcoin story. 971 00:56:05,360 --> 00:56:07,440 Speaker 1: And one of the reasons why is, Yeah, he he 972 00:56:07,600 --> 00:56:12,240 Speaker 1: received the first ever bitcoin transaction. He received ten btc 973 00:56:12,640 --> 00:56:15,920 Speaker 1: from Satoshi um as he was testing out the network, 974 00:56:16,320 --> 00:56:18,360 Speaker 1: So he was the first person ever to receive a 975 00:56:18,600 --> 00:56:23,000 Speaker 1: bitcoin payment. Now, the first few versions of the bitcoin 976 00:56:23,080 --> 00:56:26,319 Speaker 1: software they basically kept crashing, you know, full of bugs. 977 00:56:26,360 --> 00:56:28,760 Speaker 1: There was one problem after another, and yeah, how basically 978 00:56:28,840 --> 00:56:32,719 Speaker 1: mine several blocks as well, and he's reckoned to have 979 00:56:32,840 --> 00:56:37,640 Speaker 1: received about a thousand btc a thousand bitcoins as block rewards, yeah, 980 00:56:38,160 --> 00:56:41,160 Speaker 1: which obviously were worth nothing at the time. Um. But 981 00:56:41,560 --> 00:56:44,719 Speaker 1: here's the thing. After a week, he became worried that 982 00:56:44,880 --> 00:56:47,160 Speaker 1: all the work his computer was doing to mind these 983 00:56:47,200 --> 00:56:50,759 Speaker 1: blocks was damaging it because as you know, like can 984 00:56:50,920 --> 00:56:54,640 Speaker 1: be quite a processor. Yea, yeah, it requires the computer 985 00:56:54,800 --> 00:56:57,600 Speaker 1: to do a lot of a lot of work, you know, 986 00:56:57,960 --> 00:57:02,640 Speaker 1: guessing these getting these numbers. And the fan was running 987 00:57:02,640 --> 00:57:04,680 Speaker 1: on the computer to keep it cool, and the noise 988 00:57:04,719 --> 00:57:07,239 Speaker 1: of the fan was irritating him, so he switched it off. 989 00:57:08,160 --> 00:57:13,400 Speaker 1: So it's not exactly the best start to this new technology. No. 990 00:57:13,640 --> 00:57:16,160 Speaker 1: Number two tries it out for a bit and then 991 00:57:16,280 --> 00:57:19,880 Speaker 1: like yeah, this is actually quite annoying, going to stop 992 00:57:19,960 --> 00:57:24,240 Speaker 1: it um. So yeah, so that was that was the 993 00:57:24,360 --> 00:57:27,640 Speaker 1: first that the really the first few days, the first 994 00:57:27,680 --> 00:57:30,920 Speaker 1: few weeks of bitcoin, basically Satoshi, whoever he was, and 995 00:57:31,000 --> 00:57:35,720 Speaker 1: how Finny out in California, collaborating on on tweaking this 996 00:57:35,880 --> 00:57:38,600 Speaker 1: software and trying to get this system to work and 997 00:57:38,680 --> 00:57:42,040 Speaker 1: ironing out bugs as they came along. And it's worth 998 00:57:42,080 --> 00:57:44,880 Speaker 1: pointing out again at this point and and still to 999 00:57:45,000 --> 00:57:48,240 Speaker 1: this day, nobody knew who this Satoshi guy was. He 1000 00:57:48,360 --> 00:57:50,640 Speaker 1: was completely unheard of, and you know, he was just 1001 00:57:51,280 --> 00:57:54,000 Speaker 1: he was just a name that popped out out of 1002 00:57:54,040 --> 00:57:58,080 Speaker 1: the ether um. And what's weird is because most of 1003 00:57:58,080 --> 00:58:00,800 Speaker 1: the cipher punks, they've been corresponding with each other for 1004 00:58:00,960 --> 00:58:03,880 Speaker 1: years on these you know, first on the cipher Punk 1005 00:58:03,920 --> 00:58:06,320 Speaker 1: mailing list, then on the Cryptography mailing list. You know, 1006 00:58:06,640 --> 00:58:09,560 Speaker 1: they sort of they knew each other, and some of 1007 00:58:09,600 --> 00:58:11,800 Speaker 1: them had actually met in person. You know, they'd occasionally 1008 00:58:11,840 --> 00:58:14,640 Speaker 1: sort of got together and yeah, geet meets up and 1009 00:58:16,240 --> 00:58:19,200 Speaker 1: so tocial just he appeared one day. He the first 1010 00:58:19,280 --> 00:58:22,560 Speaker 1: anyone hears of him is this email to Addam back Um, 1011 00:58:22,840 --> 00:58:25,480 Speaker 1: and he was promoting an idea that a lot of 1012 00:58:25,520 --> 00:58:27,720 Speaker 1: the cipher punks had kind of long ago given up 1013 00:58:27,760 --> 00:58:29,840 Speaker 1: on or didn't have any interest in in the first place. 1014 00:58:30,560 --> 00:58:34,200 Speaker 1: So perhaps in that context, it's not all that surprising 1015 00:58:34,720 --> 00:58:38,360 Speaker 1: that bitcoin didn't catch on straight away. That's you know, 1016 00:58:38,480 --> 00:58:40,920 Speaker 1: everyone didn't throw read the white paper, throw up their 1017 00:58:40,960 --> 00:58:43,439 Speaker 1: hands and go, oh my words. Imagine there's probably quite 1018 00:58:43,440 --> 00:58:48,040 Speaker 1: a few of these ideas floated about. Yeah, and I'm 1019 00:58:48,080 --> 00:58:50,000 Speaker 1: sure sure you know that there was every now and 1020 00:58:50,040 --> 00:58:52,680 Speaker 1: again someone would come up with an idea and everyone 1021 00:58:52,760 --> 00:58:56,800 Speaker 1: just ships on it privately negnored the email. Yeah, and 1022 00:58:56,880 --> 00:58:58,400 Speaker 1: I mean they would have seen they would have seen 1023 00:58:58,440 --> 00:59:01,080 Speaker 1: the similarities to to hash cash, to be money to 1024 00:59:01,640 --> 00:59:05,480 Speaker 1: gold gold, um. Yeah, and they probably would have gone, 1025 00:59:05,480 --> 00:59:10,080 Speaker 1: all right, here we go, peer to peer electronic cash gain. Yeah, Okay, okay, okay, 1026 00:59:10,160 --> 00:59:13,120 Speaker 1: let's let's wrap things up. Let's let's quickly sort of 1027 00:59:13,640 --> 00:59:17,800 Speaker 1: draw together everything that we've that we've talked about today. So, 1028 00:59:18,240 --> 00:59:20,560 Speaker 1: as we said, the idea of digital cash had been 1029 00:59:20,600 --> 00:59:23,040 Speaker 1: knocking around for a long time. Nobody could make it work, 1030 00:59:23,560 --> 00:59:25,120 Speaker 1: um And as a result, a lot of a lot 1031 00:59:25,160 --> 00:59:26,760 Speaker 1: of the cipher punks had kind of got fed up 1032 00:59:26,800 --> 00:59:30,520 Speaker 1: with it and gone on to other things. But many 1033 00:59:30,640 --> 00:59:33,400 Speaker 1: people saw the potential of the Internet. They wondered how 1034 00:59:33,480 --> 00:59:36,680 Speaker 1: it could be safely harnessed. And the cipher punks, you know, 1035 00:59:36,800 --> 00:59:38,800 Speaker 1: were the real driving force behind this. They were the 1036 00:59:38,840 --> 00:59:41,160 Speaker 1: people who wanted to push back against the power of 1037 00:59:41,240 --> 00:59:45,200 Speaker 1: governments and corporations to intrude upon our privacy. Um. But 1038 00:59:45,520 --> 00:59:48,240 Speaker 1: you know, they tried, and they tried to find ways 1039 00:59:48,280 --> 00:59:50,400 Speaker 1: around this. They tried to build systems that would push 1040 00:59:50,440 --> 00:59:53,560 Speaker 1: back against it, and you know, most most of the 1041 00:59:53,640 --> 00:59:57,640 Speaker 1: time they came to nothing. They didn't succeed, but their 1042 00:59:57,800 --> 01:00:00,880 Speaker 1: ideas and as well as their failures and the some 1043 01:00:01,120 --> 01:00:06,400 Speaker 1: successes that they had, they basically provided the conditions. Yeah, yeah, 1044 01:00:06,480 --> 01:00:10,000 Speaker 1: they they provided. I'm almost certainly provided inspiration, but just 1045 01:00:10,120 --> 01:00:14,680 Speaker 1: the conditions the the ecosystem, if you like, for bitcoin 1046 01:00:14,840 --> 01:00:18,080 Speaker 1: and Satoshi to emerge from the sidelines. And Satoshi, whoever 1047 01:00:18,320 --> 01:00:22,640 Speaker 1: he is, she was she is was, yeah, must have 1048 01:00:22,760 --> 01:00:28,040 Speaker 1: been following these developments over time and and and been 1049 01:00:28,080 --> 01:00:33,720 Speaker 1: inspired to create bitcoin from from seeing these So no 1050 01:00:33,800 --> 01:00:37,280 Speaker 1: one knows, does they have any clues. I'm I'm more 1051 01:00:37,320 --> 01:00:39,800 Speaker 1: interested in who Satoshi. Yeah, you really want to crack 1052 01:00:39,880 --> 01:00:43,000 Speaker 1: on with the setosia? Okay, Well I will, Yeah, we'll 1053 01:00:43,080 --> 01:00:45,640 Speaker 1: we'll do that. We'll do that very soon. Should we 1054 01:00:45,720 --> 01:00:47,600 Speaker 1: talk about what we're briefly what we're going to talk 1055 01:00:47,640 --> 01:00:50,480 Speaker 1: about in the next episode? That okay, so next time 1056 01:00:50,720 --> 01:00:53,640 Speaker 1: bitcoin basically starts to grow, it starts to take off 1057 01:00:53,680 --> 01:00:56,240 Speaker 1: a bit. So we're going to take a closer look 1058 01:00:56,320 --> 01:00:58,320 Speaker 1: at some of these people that we've been talking about 1059 01:00:58,600 --> 01:01:01,480 Speaker 1: in this episode, and we are going to start asking 1060 01:01:01,560 --> 01:01:04,240 Speaker 1: that question that I know you're so desperate to talk about. 1061 01:01:04,320 --> 01:01:08,640 Speaker 1: Who the heck is Satoshi? Anyway? Okay, Yeah, there's lots, yeah, 1062 01:01:08,720 --> 01:01:12,040 Speaker 1: lots more coming up. We are, Yeah, we're just in 1063 01:01:12,120 --> 01:01:15,439 Speaker 1: the story of the point, we're just in the early days. Yeah, 1064 01:01:15,520 --> 01:01:17,720 Speaker 1: it's just starting to kick off, and there's some yeah, 1065 01:01:17,760 --> 01:01:20,440 Speaker 1: some fascinating stuff. If you're listening and you and and 1066 01:01:21,080 --> 01:01:25,760 Speaker 1: you've pushed on past those let's be honest, quite tough 1067 01:01:25,920 --> 01:01:29,560 Speaker 1: first few episodes. Yeah, a lot to get your head around. Yeah, 1068 01:01:29,640 --> 01:01:31,560 Speaker 1: but you've got a better idea of it. It's going 1069 01:01:31,640 --> 01:01:34,120 Speaker 1: to get more exciting from this point on, isn't it. Yes, 1070 01:01:34,280 --> 01:01:37,200 Speaker 1: I can pretty much guarantee that. Yeah, if you've yeah, 1071 01:01:37,280 --> 01:01:39,680 Speaker 1: if you've kind of stuck with us talking about blockchain, 1072 01:01:39,800 --> 01:01:44,240 Speaker 1: and also I mean, yeah, there's it's interesting, but it's 1073 01:01:44,280 --> 01:01:47,800 Speaker 1: also complex and it's hard to get well talking from 1074 01:01:47,800 --> 01:01:52,320 Speaker 1: a personal body like, you're not alone, You're not alone. Yeah, 1075 01:01:52,360 --> 01:01:54,920 Speaker 1: I've been. I mean, I've been looking at in particular 1076 01:01:54,960 --> 01:01:58,320 Speaker 1: blockchain for a long time and it's it took me 1077 01:01:58,400 --> 01:01:59,840 Speaker 1: a long time to get my head around it. But 1078 01:02:00,320 --> 01:02:02,760 Speaker 1: once you once you know how. Yeah, and that's what 1079 01:02:03,120 --> 01:02:05,600 Speaker 1: that's what we hope our listeners have now. But yeah, guys, 1080 01:02:05,640 --> 01:02:08,560 Speaker 1: if you've yeah, if you've been sort of if you've 1081 01:02:08,560 --> 01:02:10,520 Speaker 1: sat with us through blockchain and the history of money 1082 01:02:10,520 --> 01:02:13,240 Speaker 1: and all this sort of stuff. Now where now we're 1083 01:02:13,240 --> 01:02:17,160 Speaker 1: getting into the good. Yeah, lots to look forward to. Everyone. 1084 01:02:17,280 --> 01:02:19,080 Speaker 1: Thank you so much for listening, and we'll be back 1085 01:02:19,280 --> 01:02:31,320 Speaker 1: very soon with Bitcoin part. For more podcasts from I 1086 01:02:31,480 --> 01:02:35,120 Speaker 1: Heart Radio, visit the I Heart Radio app, Apple Podcasts, 1087 01:02:35,360 --> 01:02:39,280 Speaker 1: or wherever we get your podcasts. The coin Viereau podcast 1088 01:02:39,480 --> 01:03:08,920 Speaker 1: is a production of I Heart Radio. Go