WEBVTT - Paul Vigna Discusses the Technology Behind Cryptocurrency 0:00:02.200 --> 0:00:06.800 This is Masters in Business with Barry Ridholts on Boomberg Radio. 0:00:09.720 --> 0:00:12.319 This week on the podcast, I have a special guest, 0:00:12.480 --> 0:00:14.880 my friend Paul Vigna has been a reporter with The 0:00:14.880 --> 0:00:17.880 Wall Street Journal for a hundred and twenty years. He 0:00:18.040 --> 0:00:22.880 is the author of multiple books on blockchain cryptocurrency bitcoin. 0:00:23.440 --> 0:00:26.040 This is an area that is quite fascinating and a 0:00:26.120 --> 0:00:29.320 little bit wonky, and if you are at all interested 0:00:29.440 --> 0:00:34.080 in a crash course, I heartily recommend both of his books, 0:00:34.520 --> 0:00:37.040 or you could spend the next ninety minutes listening to 0:00:37.200 --> 0:00:41.280 us chat about all sorts of things involving bitcoin. And 0:00:41.320 --> 0:00:44.880 to be honest, it's really me asking Poul questions and 0:00:45.000 --> 0:00:48.320 him taking me to school about, uh, some of the 0:00:48.400 --> 0:00:54.639 details history minutia about bitcoin. I am really intrigued at 0:00:54.640 --> 0:01:00.480 how he breaks the entire blockchain slash bitcoin discussion into 0:01:00.680 --> 0:01:05.280 three distinct groups. The first is the underlying software, the 0:01:05.319 --> 0:01:09.320 technology of the distributed ledger a k A blockchain. Uh, 0:01:09.360 --> 0:01:13.600 that's one. The second is really the fascinating group of 0:01:14.280 --> 0:01:19.399 um cyberpunks and libertarians and and just generally kind of 0:01:19.400 --> 0:01:24.160 wacky dudes. And it's mostly dudes who um become enamorative 0:01:24.200 --> 0:01:28.040 bitcoin in the early days and help take it viral 0:01:28.200 --> 0:01:33.959 from this open source software program to really a a 0:01:34.000 --> 0:01:38.399 full blown phenomena and now arguably a bubble in in 0:01:38.440 --> 0:01:41.840 the actual coins itself. And that's the third part. The 0:01:41.880 --> 0:01:46.199 bit coins, the transactions, the mania surrounding the trading. That's 0:01:46.200 --> 0:01:51.360 a different issue than either the people behind it or 0:01:51.480 --> 0:01:55.640 or the technology underlying it. I found the conversation fascinating. 0:01:56.080 --> 0:01:59.360 I think you will also, with no further ado, my 0:01:59.520 --> 0:02:05.640 conversation Nation with Paul Vinya. This is Master's in Business 0:02:05.880 --> 0:02:12.000 with Barry rid Holts on Bloomberg Radio. I'm Barry Ridhults. 0:02:12.040 --> 0:02:15.600 You're listening to Masters in Business on Bloomberg Radio. My 0:02:15.680 --> 0:02:19.240 guest today is Paul Viena. For the past twenty years 0:02:19.680 --> 0:02:23.400 he has been a journalist covering markets in the economy 0:02:23.440 --> 0:02:26.880 for such August outfits as Dow Jones and The Wall 0:02:26.919 --> 0:02:31.120 Street Journal. He is the co author, with Michael Casey, 0:02:31.160 --> 0:02:36.240 of two fascinating books on blockchain and bitcoin. His first 0:02:36.240 --> 0:02:41.600 book was The Age of Cryptocurrency, How Bitcoin Is Challenging 0:02:41.639 --> 0:02:45.880 the Global Economy, and his latest book, The Truth Machine, 0:02:46.440 --> 0:02:49.880 Blockchain and the Future of Everything, was just released to 0:02:50.080 --> 0:02:54.840 excellent reviews. Paul Viena. Welcome to Bloomberg, Barry Hults, how 0:02:54.880 --> 0:02:58.320 are you very very well, let's let's jump right into 0:02:58.360 --> 0:03:01.919 the bitcoin conversation. And you know more about this than 0:03:02.000 --> 0:03:05.720 just about anybody I know. That's a totally untrue statement. 0:03:06.480 --> 0:03:08.200 Well you don't, I know, I know something, I know 0:03:08.320 --> 0:03:11.040 some about it. Well you don't know the people I know, 0:03:11.160 --> 0:03:14.480 and apparently everybody else knows less than you. So it's 0:03:14.520 --> 0:03:19.000 a flawa running. That's right. But let me ask you 0:03:19.040 --> 0:03:24.400 this question. What was the initial idea behind the entire 0:03:24.480 --> 0:03:29.080 concept of bitcoin? The initial idea that So this comes 0:03:29.080 --> 0:03:32.280 out in October two thousand and eight, some guy names 0:03:32.280 --> 0:03:34.600 to Toshi Nakamoto. Nobody knows who he is? Is that 0:03:34.639 --> 0:03:37.960 a real name? Is that us? Nobody knows what his 0:03:38.000 --> 0:03:39.800 real name is? Who he is? If it's a team 0:03:39.840 --> 0:03:42.640 of people, you know, it's it's a whole mystery. So 0:03:42.680 --> 0:03:46.720 this white paper comes out to Toshy Nakamoto, uh bitcoin A. 0:03:47.440 --> 0:03:49.560 I forget the exact title, but basically the point is 0:03:49.840 --> 0:03:54.000 what he is creating is a digital version of cash. So, 0:03:54.000 --> 0:03:56.240 in other words, if you're a shopkeeper and I come 0:03:56.240 --> 0:03:57.640 in for a cup of coffee or whatever, I hand 0:03:57.680 --> 0:04:00.680 you a five dollar bill. That is the transaction. What 0:04:00.760 --> 0:04:04.560 Knakamoto was trying to do was replicate that transaction digitally 0:04:04.840 --> 0:04:08.360 on the internet, meaning no paper, no credit card, no 0:04:08.360 --> 0:04:11.840 no paper, no credit card, and also an immediate transaction 0:04:12.360 --> 0:04:16.039 between just you and I that nobody else sees another 0:04:16.080 --> 0:04:20.080 word party, government, no banks, no credit card, nobody exactly, 0:04:20.120 --> 0:04:22.560 just buyer and seller, right, just buyer and seller, peer 0:04:22.640 --> 0:04:26.640 to peer electronic money. That was the original idea. It 0:04:26.680 --> 0:04:28.440 sounds like a good idea. It sounds like a good idea, 0:04:28.440 --> 0:04:30.720 sounds like a simple idea, right. And and remember this 0:04:30.800 --> 0:04:32.960 is two thousand and eight, right in the middle of 0:04:32.960 --> 0:04:37.040 the financial crisis, where confidence in banks and governments or 0:04:37.480 --> 0:04:41.520 record lows. So alright, so he comes up publishes this 0:04:41.600 --> 0:04:44.440 white paper. How do you get from and where was 0:04:44.440 --> 0:04:46.760 the white paper published? We just released it online just 0:04:47.279 --> 0:04:49.880 to Originally it was to this uh, I think it 0:04:49.960 --> 0:04:52.040 was on an email list, sir, you know, one of 0:04:52.080 --> 0:04:55.359 those distributions. So, so, how do you get from a 0:04:55.560 --> 0:05:00.599 white paper to an actual blockchain technology g and a 0:05:00.800 --> 0:05:04.360 coin that starts to appreciate in value almost immedia. So 0:05:04.400 --> 0:05:08.480 what the white paper was describing was a computer program, 0:05:08.560 --> 0:05:11.880 and the goal of the computer program was to create 0:05:12.120 --> 0:05:15.520 this digital money, this peer to peer electronic version of cash. 0:05:15.920 --> 0:05:18.799 So he releases the white paper in October two thousand 0:05:18.839 --> 0:05:24.400 and eight and puts the program online. So he set 0:05:24.480 --> 0:05:27.720 up the program. Was more than a white paper, It 0:05:27.760 --> 0:05:29.680 was a paper describing what he's doing. He wrote the 0:05:29.680 --> 0:05:32.440 program too, puts the program online in January of two 0:05:32.440 --> 0:05:35.599 thousand and nine as an open source project where and 0:05:35.640 --> 0:05:38.680 anyone is open to participate in building it. So let's 0:05:38.720 --> 0:05:43.760 describe that. So building the software or building the coins themselves. Well, 0:05:43.760 --> 0:05:47.279 the software, So you know, he releases version zero point 0:05:47.400 --> 0:05:51.440 zero of bitcoin, and what he is looking for our collaborators. 0:05:51.440 --> 0:05:53.760 He's looking for people to come on and help develop 0:05:53.839 --> 0:05:56.039 the program. In other words, again, you know a company 0:05:56.080 --> 0:05:58.760 like Microsoft, like Apple, whatever, they have teams of developer 0:05:59.000 --> 0:06:03.640 building a thousand. This is a a different kind of 0:06:03.720 --> 0:06:07.240 version of that. You're talking about developing a software program, 0:06:07.400 --> 0:06:11.680 but you're looking for collaborators like Linux is a great 0:06:11.680 --> 0:06:14.839 example of it of an open source program. So that's 0:06:14.839 --> 0:06:17.360 what he releases. And again it's it's very key I 0:06:17.400 --> 0:06:19.640 think that you mentioned this is all happening during the 0:06:19.680 --> 0:06:24.280 financial crisis. This is a time where the the existing 0:06:24.480 --> 0:06:30.279 financial infrastructure has shown that it is just hopelessly conflicted, 0:06:30.640 --> 0:06:34.600 hopelessly corrupted. In this Philip Right, we could do a 0:06:34.600 --> 0:06:37.200 whole radio show on just that. I could write a 0:06:37.240 --> 0:06:39.280 book on it. You could write a book on some 0:06:39.360 --> 0:06:43.479 of us have right bailout nation. People are interested in 0:06:43.520 --> 0:06:47.520 alternatives the existing the warts of the existing system have 0:06:47.640 --> 0:06:50.240 been shown. People are looking for an alternative. He comes 0:06:50.320 --> 0:06:52.840 up with an alternative and people take to it, and 0:06:52.839 --> 0:06:55.080 it kind of goes viral. It takes a little while, 0:06:55.360 --> 0:06:59.520 but inside this community of uh they call him cipher punks, 0:06:59.600 --> 0:07:05.120 you know, anarchists, libertarians, coders, tinkerers, this small clack, this 0:07:05.120 --> 0:07:08.280 thing does go viral and it starts getting this community 0:07:08.400 --> 0:07:11.720 very quickly around. Initially a lot of skepticism, but once 0:07:11.760 --> 0:07:13.840 it goes live and they see it working, people start 0:07:13.880 --> 0:07:16.280 coming on and and and originally what you have is 0:07:16.320 --> 0:07:21.160 a lot of again tinkerers, programmers, anarchists, cypherpunk's. This small 0:07:21.240 --> 0:07:24.520 group it grows within that probably takes a couple of 0:07:24.600 --> 0:07:27.960 years until it starts hitting the mainstream. So let's talk 0:07:28.000 --> 0:07:31.280 about that period before it ramps into the mainstream. You 0:07:31.400 --> 0:07:36.480 download the software you want to create coins, so you 0:07:36.560 --> 0:07:40.760 have to solve a complicated mathematical problem, and there's only 0:07:40.960 --> 0:07:44.560 a finite number of potential coins twenty one millions, right, 0:07:45.240 --> 0:07:49.360 what bitcoin has? It's really actually and to degreed to 0:07:49.480 --> 0:07:52.720 the degree that I understand coding and programming at all, Uh, 0:07:52.880 --> 0:07:57.000 it's really it's a very elegant program. The idea is 0:07:57.320 --> 0:08:01.880 to create a program that can support a currency, a 0:08:01.920 --> 0:08:06.880 digital currency that does not need a centralized party controlling it. 0:08:07.200 --> 0:08:10.480 In other words, you don't have a computer company running 0:08:10.480 --> 0:08:12.920 the software and responsible for it. You don't have a 0:08:13.000 --> 0:08:15.680 government or a bank running the software, responsible for the 0:08:15.720 --> 0:08:18.520 software and the currency. You have to come up with 0:08:18.520 --> 0:08:21.240 a way to create a system that can opt that 0:08:21.240 --> 0:08:25.760 can be self self sustaining by this sort of decentralized 0:08:25.760 --> 0:08:28.680 group of people. So within that there are a bunch 0:08:28.760 --> 0:08:30.720 of ways that he There are a bunch of levers 0:08:30.720 --> 0:08:33.360 that he pulls to make that happen. One of them 0:08:33.640 --> 0:08:37.360 is you you want to you want to you want 0:08:37.360 --> 0:08:38.640 people to come on or you want to people to 0:08:38.640 --> 0:08:40.480 download the software. You want people to run it. You 0:08:40.520 --> 0:08:43.320 need people to run the software for the program to work, obviously, right, 0:08:43.480 --> 0:08:45.440 how do you do that? How do you entice people 0:08:45.720 --> 0:08:49.960 to contribute their computing power to a volunteer project. Well, 0:08:50.040 --> 0:08:51.840 one way you do it is your reward them. What 0:08:51.880 --> 0:08:56.680 do you reward them with bitcoin? So the way bitcoin 0:08:56.840 --> 0:09:02.040 is created is you download the software. You are contributing 0:09:02.240 --> 0:09:05.800 your computing power to the network. What you are really 0:09:05.840 --> 0:09:09.040 doing is you are confirming transactions. That's sort of the 0:09:09.160 --> 0:09:13.719 live operation of this software is you and I trade, Right, 0:09:14.040 --> 0:09:18.920 So my mobile app on my phone, I used to 0:09:18.960 --> 0:09:21.839 send you five bitcoin. Now five bitcoin would be like 0:09:21.840 --> 0:09:24.559 a hundred thousand dollars. I'm not sending you that. Then 0:09:24.600 --> 0:09:29.520 it was pennies. How did that leap from that period 0:09:29.600 --> 0:09:34.600 to bursting into the mainstream? So the program is released 0:09:34.600 --> 0:09:37.120 in two thousand and nine, two thousand nine, two ten. 0:09:37.280 --> 0:09:39.400 It is like I said that this small group of 0:09:39.440 --> 0:09:46.880 codas tinkerers, programmers, anarchists, libertarians, cypher punks, uh and the currency. 0:09:48.200 --> 0:09:49.760 And you know it's funny people argue, is that a 0:09:49.840 --> 0:09:51.679 currency is not whatever I'm gonna call it a currency. 0:09:51.760 --> 0:09:55.599 For um, it really had no actual value, right, I 0:09:55.640 --> 0:09:58.240 mean it was it was a program that these guys 0:09:58.280 --> 0:10:00.520 were using. There was nothing in the real world you 0:10:00.559 --> 0:10:02.960 could do with it. You could argue that any currency's 0:10:03.080 --> 0:10:06.839 value is only the populace is willingness to assign it 0:10:06.920 --> 0:10:10.400 a value. Well, of course, right, So so no currency 0:10:10.440 --> 0:10:12.120 has a value unless people are willing to use it 0:10:12.120 --> 0:10:17.600 as a medium of exactly the very first time bitcoin 0:10:17.679 --> 0:10:21.280 gets used to buy something in the real world is 0:10:22.800 --> 0:10:27.600 programmer in Florida. Uh, this programmer and Florida, Da says 0:10:28.200 --> 0:10:31.000 that he on a on a message board. He says, 0:10:31.040 --> 0:10:34.240 I will give anyone ten thousand bitcoin if you'll buy 0:10:34.280 --> 0:10:36.719 me two pizzas. So, in other words, he wants to 0:10:36.760 --> 0:10:38.920 show that bitcoin can be used to buy things, but 0:10:39.000 --> 0:10:41.160 he can't do it directly because no one's gonna take 0:10:41.160 --> 0:10:43.520 a bitcoin because to start out, it's just amongst that. 0:10:43.600 --> 0:10:47.880 It's just among the uh, the pizza places don't have 0:10:48.000 --> 0:10:51.400 a bitcoin swipe here for bitcoin. So this guy, and 0:10:51.480 --> 0:10:54.160 it's a pretty famous story, you know, he has this 0:10:54.280 --> 0:10:56.880 open offer. He says, I'll give anyone ten thousand bitcoin 0:10:56.920 --> 0:10:59.199 if you buy me two pizzas. And he does that 0:10:59.320 --> 0:11:02.160 for about two weeks, and people are sending pizzas to 0:11:02.240 --> 0:11:04.520 his house and he's sending them ten thousand, multiple pizzas, 0:11:04.640 --> 0:11:08.400 multiple pizzas. Yeah, the first one was I forget that 0:11:08.600 --> 0:11:10.720 early in May, and then he kept this thing open 0:11:10.760 --> 0:11:12.920 for about two weeks and he probably you know, spent 0:11:12.960 --> 0:11:15.480 about two hundred thousand bitcoin on it, which is to 0:11:15.640 --> 0:11:19.439 day of fortune God. But that was the first time 0:11:20.240 --> 0:11:23.160 that it was proven that you could actually use this 0:11:23.320 --> 0:11:25.680 to buy something in the world, real world, It could 0:11:25.760 --> 0:11:30.600 actually work as a currency. At that point it starts changing. 0:11:31.080 --> 0:11:35.000 Now people realize there's something here, and of course at 0:11:35.080 --> 0:11:39.599 the very beginning, it's really only being used basically on 0:11:39.679 --> 0:11:41.439 the dark web, right, I mean, people who want to 0:11:41.440 --> 0:11:46.640 buy and sell things sociately. He was the early criticism 0:11:46.720 --> 0:11:51.360 that I recall hearing about this is used for drugs, 0:11:51.480 --> 0:11:55.120 this is used for human trafficking, this is used to 0:11:55.200 --> 0:11:58.839 buy hitmen, this is used for all sorts of nefarious things, 0:11:59.480 --> 0:12:02.240 and there for it will never be incredible well product. 0:12:02.240 --> 0:12:04.719 I mean, the answer to that is there are two 0:12:04.720 --> 0:12:06.559 answers to that. The first answer is, yes, it is 0:12:06.640 --> 0:12:08.760 being used for that, but that is not the main 0:12:08.920 --> 0:12:10.960 It really isn't the main use of it. It's still there. 0:12:11.240 --> 0:12:13.440 And look, we're in the media. We love sensational stories 0:12:13.480 --> 0:12:15.599 and we tell those stories, but it really is a 0:12:15.720 --> 0:12:21.680 very small percentage of overall bitcoin track and the dollars 0:12:21.720 --> 0:12:24.000 so is the year. I mean, every currency is used, 0:12:24.640 --> 0:12:28.360 So that's not really criticism of bitcoin, that's a criticism 0:12:28.440 --> 0:12:35.040 of currency. Right, So people start realizing this can be 0:12:35.280 --> 0:12:37.280 used to buy and sell things. And what is the 0:12:37.360 --> 0:12:41.360 price of bitcoin back then? Oh, I think it's in 0:12:41.440 --> 0:12:43.960 the single dollars. It's in the single dollar. I mean, 0:12:43.960 --> 0:12:46.160 if we pulled up the chart, we could find out, uh, 0:12:46.440 --> 0:12:49.720 it's in the it's it is in single dollars around 0:12:49.880 --> 0:12:53.360 the same time, and we're not to go into the hold. 0:12:53.640 --> 0:12:58.360 But anyhow, in it starts getting out of this small 0:12:58.520 --> 0:13:02.959 sort of cipher on uh programm or community, and it 0:13:03.040 --> 0:13:06.720 starts permeating a little bit into the mainstream really into 0:13:06.760 --> 0:13:10.199 sort of more the the the tech press, the tech mainstream. 0:13:10.880 --> 0:13:14.520 From there probably around starts hitting the mainstream mainstream. Because 0:13:14.520 --> 0:13:19.480 I remember first reading about it in early July, it 0:13:19.559 --> 0:13:25.120 finally gets over ten dollars exactly ten dollars, right, so 0:13:25.880 --> 0:13:31.280 inteen it kind of has its first wave of mainstream 0:13:32.360 --> 0:13:36.520 uh awareness, almost runs by November that year, it's just 0:13:36.840 --> 0:13:40.559 under a thousand dollars itself. Is a great run from 0:13:40.600 --> 0:13:43.680 ten box. Now. Yeah, also remember too, and your audience 0:13:43.679 --> 0:13:46.079 will appreciate this and you will too. The thing you 0:13:46.360 --> 0:13:48.400 have to keep in mind when you're talking about bitcoin 0:13:48.440 --> 0:13:50.480 in the price of it, you have to keep in 0:13:50.559 --> 0:13:53.599 mind that this is still a relatively small market, a 0:13:53.720 --> 0:13:56.800 relatively a liquid market, and it is a relatively one 0:13:56.880 --> 0:13:59.640 way market, meaning you could buy it, but it's very 0:13:59.679 --> 0:14:02.800 hard to actually convert that into cash. Yeah, it's well, 0:14:02.800 --> 0:14:05.160 it's difficult to convert into cash. It's difficult to sell it. 0:14:05.840 --> 0:14:09.199 Uh it. You know, they're look, they're just starting to 0:14:09.320 --> 0:14:12.439 build derivative products, they're just starting to build different more 0:14:12.600 --> 0:14:14.920 more you know, intricate ways to bet on, bick on 0:14:15.000 --> 0:14:16.839 things that are in the market right now. It is 0:14:16.880 --> 0:14:20.640 also a market that run has no there's no closing bell, 0:14:20.880 --> 0:14:23.880 there's no circuit breakers. It goes in whatever direction it is. 0:14:25.080 --> 0:14:27.880 It is wild West of trade. If you like open markets, 0:14:28.080 --> 0:14:30.120 there has never been a more open market than this 0:14:30.800 --> 0:14:32.240 you have, So you have to keep that in mindment 0:14:32.280 --> 0:14:34.200 talking about the price. The price can go in crazy 0:14:34.280 --> 0:14:39.880 directions because of those reasons. But it goes from ten 0:14:40.000 --> 0:14:42.600 to eighty, back down or whatever. Then you know, in 0:14:42.640 --> 0:14:44.160 the second half of the year it goes up to 0:14:44.200 --> 0:14:47.360 almost a thousand. You have an exchange called mount Cox 0:14:47.520 --> 0:14:50.440 which was handling about seven year eighty percent of all 0:14:50.560 --> 0:14:56.000 the trading and Mount Cox was a terribly created financial exchange. 0:14:56.120 --> 0:14:59.880 It was just bad. It was not they call not secure, 0:15:00.000 --> 0:15:02.680 are not well built, not well constructed, and all the 0:15:02.760 --> 0:15:05.800 money is going through it, so the liquidity there is 0:15:05.800 --> 0:15:07.800 almost nothing. So when Mount Cock shuts down and you 0:15:07.840 --> 0:15:11.280 can't get your money out easily, what do you do 0:15:11.400 --> 0:15:13.400 to get your money out? What you gotta offer higher prices, 0:15:14.200 --> 0:15:18.680 really higher prices just a big reason why to sell. 0:15:19.080 --> 0:15:21.680 So you're offering higher prices to sell or lower I 0:15:21.720 --> 0:15:25.040 would think you're offering lower prices to sell the only 0:15:25.120 --> 0:15:27.520 way you can get it out because withdrawals were limited, 0:15:28.400 --> 0:15:31.440 so and it was thin. There was not a lot 0:15:31.480 --> 0:15:34.400 of liquidity, so you know, you gotta entice people to sell, 0:15:34.520 --> 0:15:36.840 so you're offering higher prices. So the price goes flying up. 0:15:39.360 --> 0:15:41.240 It kind of comes down a little bit. Now you're 0:15:41.320 --> 0:15:43.320 now you're starting to get more and more in the mainstream. 0:15:43.320 --> 0:15:47.880 People are seeing it and you what you have though, 0:15:48.200 --> 0:15:53.000 is again still longer. It's still completely a volunteer community. 0:15:53.360 --> 0:15:55.480 I mean, this thing is just being built by volunteers, 0:15:55.480 --> 0:15:58.960 by volunteer coders. You're starting to have some people realize 0:15:58.960 --> 0:16:01.440 that there's money to be aid here. And you're starting 0:16:01.440 --> 0:16:04.360 to have people try to build businesses on top of bitcoin, 0:16:05.040 --> 0:16:10.640 and that was sort of the um and that was 0:16:10.720 --> 0:16:13.200 sort of the first time you have some infrastructure being 0:16:13.240 --> 0:16:16.000 put around this computer program that I was talking about before. 0:16:16.840 --> 0:16:19.160 And importantly too, I think there are I think there 0:16:19.200 --> 0:16:20.480 are a couple of things that you have to keep 0:16:20.520 --> 0:16:22.280 in mind when you're talking about bitcoin, and I think 0:16:22.320 --> 0:16:24.160 this is why people kind of get so screwed up 0:16:24.200 --> 0:16:27.680 about it. There are really three main things there. And again, 0:16:27.880 --> 0:16:29.160 this is one of the reasons why I love this 0:16:29.240 --> 0:16:31.440 so much as a writer. There are so many angles, 0:16:31.480 --> 0:16:34.000 there are so many stories. You have to keep in mind. 0:16:34.040 --> 0:16:36.000 A couple of things. One, this is a computer program. 0:16:36.280 --> 0:16:39.240 That is really what this is. If Microsoft in two 0:16:39.320 --> 0:16:41.400 thousand and nine had said, hey, you know what, We've 0:16:41.440 --> 0:16:44.160 come out with a new feature on Excel that will 0:16:44.200 --> 0:16:49.280 allow people to run a shared database that will be 0:16:49.880 --> 0:16:52.640 all all your transactions that you put onto This database 0:16:52.720 --> 0:16:55.120 will be recorded, an exact copy, will be distributed to 0:16:55.200 --> 0:16:59.360 everybody in real time, and it will be cryptographically secure. 0:16:59.720 --> 0:17:03.600 It will be impossible to counterfeit, to create false entries. 0:17:03.920 --> 0:17:07.560 It is an open source, a transparent database that an 0:17:07.720 --> 0:17:10.440 entire community can run and can feel confident that it's 0:17:10.480 --> 0:17:13.560 real and well. You would have said, Okay, that's nice, 0:17:13.600 --> 0:17:15.480 and Microsoft probably would have done well, and you would 0:17:15.480 --> 0:17:17.399 have said, oh, Sati has come up with a new product. 0:17:17.440 --> 0:17:19.240 You know, he's really doing a good job over at Microsoft, 0:17:19.359 --> 0:17:20.440 and that would have been the end of it. It 0:17:20.440 --> 0:17:24.080 would have been a nice program. However, what you have 0:17:24.240 --> 0:17:26.600 with bitcoin is you have the program, you have the 0:17:26.640 --> 0:17:28.560 time that it was released. Like you said, people looking 0:17:28.600 --> 0:17:31.040 for alternative way to do things, so you have this 0:17:31.119 --> 0:17:33.760 sort of viral community grow up around it. Personally, I 0:17:33.840 --> 0:17:38.000 think bitcoin is one of the three big social movements 0:17:38.080 --> 0:17:40.320 that erupted out of two thousand and eight. You have 0:17:40.400 --> 0:17:43.080 the tea party you had to occupy, and you have bitcoin. 0:17:43.480 --> 0:17:46.480 Bitcoin is a social movement and that is why people 0:17:46.480 --> 0:17:49.800 are so passionate about it. This is not just a 0:17:49.920 --> 0:17:52.719 computer program, This is not just digits, ones and zeros. 0:17:53.040 --> 0:17:56.160 This is a new way to build finance, to build 0:17:56.200 --> 0:18:01.080 a financial infrastructure. That's fascinating. Let's talk a bit about 0:18:01.320 --> 0:18:06.160 your career as a journalist covering markets and the economy 0:18:06.200 --> 0:18:10.280 and how that morphed into your coverage on bitcoin. How 0:18:10.359 --> 0:18:13.200 did you get into financial journalism, what what led you 0:18:13.320 --> 0:18:16.359 to your first first gig. Oh my god. Well, I 0:18:16.440 --> 0:18:20.280 mean it was quite simply. It was money, but not 0:18:20.440 --> 0:18:22.639 for the reason that you might think most people get 0:18:22.680 --> 0:18:24.720 into finance. I was just Look, I was working at 0:18:24.920 --> 0:18:27.920 a weekly newspaper. I had done been there a few years, 0:18:28.320 --> 0:18:31.360 making no real money. You make no money at community journalism. 0:18:31.640 --> 0:18:33.760 It's fun, it's a good place to learn the ropes, 0:18:33.840 --> 0:18:36.040 but you make no money at it. So I needed 0:18:36.040 --> 0:18:37.840 a job orr I can make some money. Dal Jones 0:18:37.920 --> 0:18:40.840 was hiring. It was a doctor. It was so everybody 0:18:40.880 --> 0:18:44.159 was everybody was hiring. Dal Jones was hiring editors. So 0:18:44.320 --> 0:18:47.120 I took the editing test. I passed the editing test. 0:18:47.280 --> 0:18:49.200 I knew nothing about finance. I did not go to 0:18:49.280 --> 0:18:51.800 school for finance. Really, I didn't know. No, I didn't 0:18:51.800 --> 0:18:56.280 study it at all. I literally passed the editing test. 0:18:56.359 --> 0:18:58.880 So they hired me as an editor, and my first 0:18:58.960 --> 0:19:01.800 job was rewriting press releases. And that's what I did. 0:19:01.880 --> 0:19:04.000 That's how I started out, rewriting press releases. How did 0:19:04.080 --> 0:19:07.440 you end up at what was so few young uns 0:19:07.480 --> 0:19:10.400 out there? The U C I LX terminals and other 0:19:10.520 --> 0:19:14.600 such um quote machines and the news feed would have 0:19:14.760 --> 0:19:19.400 a constant stream of of stories. But my favorite feedback 0:19:19.480 --> 0:19:22.959 in the nineties was Dow Jones market Talk, which were 0:19:23.000 --> 0:19:25.920 all these little blurby stories about what was going on 0:19:26.000 --> 0:19:28.359 in the market. It was Twitter before there was Twitter 0:19:28.480 --> 0:19:31.600 for it was finance Twitter before there was such a thing. Um, 0:19:32.359 --> 0:19:35.080 how how did you find your way to down Jones Market? 0:19:35.320 --> 0:19:37.680 So I spent a few years on what was called 0:19:37.720 --> 0:19:40.680 the spot news desk doing that press release rewrite job, 0:19:41.000 --> 0:19:45.639 which was actually another great education in journalism. And it 0:19:45.720 --> 0:19:47.879 sounds horrific to me, Well it was. I mean, it 0:19:47.960 --> 0:19:49.680 was a total It was. It was a grind, I 0:19:49.720 --> 0:19:51.640 mean it was it was. That's what I was thinking 0:19:51.920 --> 0:19:55.600 that you learn a lot about finding You're constantly looking 0:19:55.720 --> 0:19:58.919 at what companies are telling you, and if you're if 0:19:58.960 --> 0:20:01.080 you're being discerning about it, you're trying to find the 0:20:01.119 --> 0:20:04.000 holes in it. So I learned a lot about finance 0:20:04.080 --> 0:20:05.960 doing that. Then I spent a few years on the 0:20:06.119 --> 0:20:08.800 editing desk, and then I had a friend who was 0:20:08.880 --> 0:20:14.240 on market Talk, which which really was from I loved. Well, 0:20:14.280 --> 0:20:16.280 we still do market Talk, I don't think they published 0:20:16.280 --> 0:20:18.720 it in quite the same way. So we used to 0:20:18.760 --> 0:20:21.800 publish it on the web and then they stopped, so 0:20:21.920 --> 0:20:24.520 in two thousand and five, now I've been there a while. 0:20:24.840 --> 0:20:27.520 In two thousand five I started at market Talk with 0:20:27.680 --> 0:20:30.280 John Shipman, and it was it was great. It was 0:20:30.359 --> 0:20:32.520 just the two of us. It was it was actually 0:20:32.600 --> 0:20:34.920 a great job because you're right, I think our limit 0:20:35.040 --> 0:20:40.280 was a hundred words, so these tight little commentaries on 0:20:40.400 --> 0:20:45.680 which is about yeah, exactly right. So that was that 0:20:45.840 --> 0:20:47.320 was how I kind of got out of editing and 0:20:47.400 --> 0:20:52.240 into writing. And I did that for probably seven years. Again, 0:20:52.520 --> 0:20:57.920 another great education, right fast, right analytically and right short. 0:20:58.800 --> 0:21:00.440 That was it. That was our own only kind of 0:21:00.520 --> 0:21:02.960 remit and I did that for a long time. Loved it. 0:21:03.040 --> 0:21:04.480 John and I had a great time doing it. We 0:21:04.520 --> 0:21:06.520 were kind of left out on our own in the newsroom. 0:21:06.560 --> 0:21:12.719 No by the voice. It had a voice, don't get right, 0:21:12.800 --> 0:21:15.280 and the voice was my voice in John's voice. And 0:21:15.480 --> 0:21:17.200 from that I moved over to one of the blogs 0:21:17.440 --> 0:21:22.560 and then I heard about bitcoin. And my first reaction 0:21:22.640 --> 0:21:25.800 to bitcoin was, this is an online scam, this is 0:21:25.800 --> 0:21:29.080 an internet joke. We are not writing about this. We're 0:21:29.080 --> 0:21:31.720 not writing about this. Because I was gonna so how 0:21:31.840 --> 0:21:35.640 much bitcoin did you buy? An ask? The answer is zero? 0:21:37.320 --> 0:21:41.200 So My first reaction was probably what everyone's reaction is, 0:21:41.320 --> 0:21:43.840 is that this is some kind of scam, and I thought, 0:21:43.840 --> 0:21:46.399 we're not writing about this no way. But like I 0:21:46.440 --> 0:21:49.400 said earlier, it was starting to permeate into the mainstream. 0:21:49.400 --> 0:21:51.119 You're starting to hear more and more about it. And 0:21:51.200 --> 0:21:52.919 the more and more I heard about it, the more 0:21:52.960 --> 0:21:55.600 I read about it, and then I started to become interested. 0:21:56.040 --> 0:21:58.520 And at the time, now this is this is the 0:21:58.600 --> 0:22:02.600 spring of At the time, the Wall Street Journal had 0:22:02.640 --> 0:22:07.600 nobody writing about bitcoin, and I was exactly I was 0:22:07.680 --> 0:22:11.479 writing for our money Beat blog, and so I had 0:22:11.520 --> 0:22:14.120 a pretty wide, pretty wide latitude in what I wanted 0:22:14.119 --> 0:22:17.200 to write about. My my coverage was the markets. It 0:22:17.320 --> 0:22:18.920 was a market in the economy, so I could write 0:22:18.920 --> 0:22:22.120 about anything within that, which is pretty much everything, which 0:22:22.160 --> 0:22:25.200 is pretty much right exactly, which which was great. So 0:22:26.160 --> 0:22:28.480 because I had that latitude to write about whatever I 0:22:28.520 --> 0:22:30.000 wanted to write about, and I was starting to get 0:22:30.040 --> 0:22:33.440 interested in bitcoin, I started writing some bitcoin posts and 0:22:33.680 --> 0:22:36.280 I did that for a few months, and in the 0:22:36.720 --> 0:22:40.120 summer of I went to a conference here in the city. 0:22:40.160 --> 0:22:41.800 It was called Inside Bitcoins. It was a one day 0:22:41.880 --> 0:22:45.119