WEBVTT - Is there a future for Bitcoin? 0:00:00.160 --> 0:00:07.160 Brought to you by Toyota. Let's go places. Welcome to 0:00:07.360 --> 0:00:14.159 Forward Thinking Taylor, and welcome to up Forward Thinking, the 0:00:14.360 --> 0:00:17.079 podcast that looks at the future and says, grabbed that 0:00:17.239 --> 0:00:20.840 cash with both hands and make a stash. I'm Jonathan Strickland, 0:00:21.040 --> 0:00:23.640 and I'm Lauren Voke Obama, and our other co host, 0:00:23.760 --> 0:00:27.400 Joe is not here today, but hey Jonathan, Hey Lauren. 0:00:28.080 --> 0:00:32.000 I didn't. I didn't prepare anything to say. That's we 0:00:32.240 --> 0:00:35.120 usually turned to Joe for this. Joe is keeper of 0:00:35.200 --> 0:00:39.000 two things, the introduction and the acts, the mystical acts, 0:00:39.040 --> 0:00:41.880 the mystical acts, and so neither of those are here. 0:00:41.880 --> 0:00:44.839 But honestly, this should be pretty much a walk in 0:00:44.880 --> 0:00:47.720 the park because we're going to give sort of a 0:00:47.880 --> 0:00:50.720 focused update to something we talked about in our previous 0:00:50.720 --> 0:00:54.000 episode way back in April two thirteen, which is so 0:00:54.040 --> 0:00:58.880 long ago. I didn't open the show with lyrics back then. 0:00:59.760 --> 0:01:05.560 I no. I sometimes wish that we could go back 0:01:05.600 --> 0:01:08.360 to them, but I feel like now I've committed, and 0:01:08.520 --> 0:01:12.040 if I don't open the show with the lyrics, yeah, 0:01:12.160 --> 0:01:14.960 it's fun. It's it's fun when I remember it before 0:01:15.520 --> 0:01:18.560 we hit record, and then I think, oh, no, I 0:01:18.600 --> 0:01:20.279 need to come up with a lyric that is somehow 0:01:20.319 --> 0:01:23.200 tangentially related to our topic. But yes, back then we 0:01:23.319 --> 0:01:26.279 recorded a show called Brother, Can You Spare a Zero? 0:01:26.360 --> 0:01:30.000 One one zero zero one zero zero, which was an 0:01:30.040 --> 0:01:33.640 episode specifically about digital currency, and we talked a lot 0:01:34.440 --> 0:01:38.720 about a particular digital currency called bitcoin, which I'm sure 0:01:38.800 --> 0:01:41.360 many of you are very familiar with. It's kind of 0:01:41.360 --> 0:01:43.200 the big one. Yeah, that would be the one that 0:01:43.240 --> 0:01:45.640 I think most people have heard about. There are other 0:01:46.080 --> 0:01:49.000 digital currencies out there, by the way, Often people refer 0:01:49.080 --> 0:01:51.920 to bitcoin as the one that started at all. Guess what, 0:01:52.280 --> 0:01:54.920 it didn't. There were other ones before it, but it 0:01:55.200 --> 0:01:58.680 is definitely the one that got the most attention, including 0:01:59.560 --> 0:02:02.200 I think no small part but due to the mysterious, 0:02:02.280 --> 0:02:06.400 mysterious nature of the inventor of bitcoin. We'll touch on 0:02:06.440 --> 0:02:09.160 that a little bit in this episode. Yeah, but let's 0:02:09.160 --> 0:02:12.760 give a quick overview of what bitcoin is and how 0:02:12.800 --> 0:02:18.000 it works. Okay, So it's a cryptocurrency, so called because 0:02:18.120 --> 0:02:22.760 the currency depends partly on cryptography, in the way that 0:02:22.880 --> 0:02:27.440 transactions are recorded and the way that the currency itself 0:02:27.520 --> 0:02:29.760 is built. We'll talk about that a little bit later too. 0:02:30.040 --> 0:02:32.840 Not because it's used by Bigfoot. No, it is not 0:02:32.919 --> 0:02:36.480 a cryptid currency, although who knows, I mean Bigfoot could 0:02:36.600 --> 0:02:38.639 use it. It actually would make a lot of sense 0:02:38.760 --> 0:02:42.760 because you know, you don't trace it back. But so 0:02:42.880 --> 0:02:44.120 I mean, if you want, if you need to buy 0:02:44.200 --> 0:02:47.040 us pair of size twenty eight shoes, that would be 0:02:47.080 --> 0:02:50.760 an excellent way of doing it. But it exists independently 0:02:50.800 --> 0:02:53.600 of any national government backing it. So it is a 0:02:53.639 --> 0:02:58.000 completely independent currency in that respect. So unlike dollars or pounds, sterling, 0:02:58.120 --> 0:03:01.880 or yen or the euro, there's no official state behind 0:03:02.040 --> 0:03:05.720 the money, which is considered to be a pro in 0:03:05.760 --> 0:03:10.360 the folks who really support bitcoin. Sure, although like the 0:03:10.400 --> 0:03:13.919 way real money real money, like the way traditional currency 0:03:13.960 --> 0:03:17.480 systems are supposed to work, it's based on a limited 0:03:17.800 --> 0:03:22.520 number of of bitcoins, right, and generally speaking, when we 0:03:22.520 --> 0:03:25.760 talk about currencies, you know, you can't solve a financial 0:03:25.760 --> 0:03:28.720 crisis just by printing more currency. In fact, that makes 0:03:28.720 --> 0:03:32.040 it worse. Yeah, devalues the currency that's already out there. 0:03:32.160 --> 0:03:36.960 The way that you generally make more wealth is that 0:03:37.120 --> 0:03:39.720 as you do it through something like loans, where you 0:03:39.840 --> 0:03:44.440 have interest on those loans, that quote unquote creates more wealth. 0:03:44.480 --> 0:03:47.680 Thus you need more currency it's complicated. We won't get 0:03:47.720 --> 0:03:52.040 into it. But at any rate, the way Bitcoin does 0:03:52.080 --> 0:03:54.680 this is it just establishes the fact that there is 0:03:54.720 --> 0:03:57.480 this thing, there is a limited number of this thing, 0:03:57.960 --> 0:04:01.280 and at any given time, there's a smaller amount of 0:04:01.320 --> 0:04:04.600 that available in circulation. Because it's treating it almost like 0:04:04.720 --> 0:04:07.520 it would be a precious mineral, you you don't have 0:04:07.680 --> 0:04:10.960 access to all of it all at once. Rather, you 0:04:11.000 --> 0:04:14.560 have to go through a process to get more of 0:04:14.600 --> 0:04:17.800 the existing bitcoins that are not yet in circulation so 0:04:17.839 --> 0:04:20.680 that they can then enter circulation. That the total number 0:04:20.680 --> 0:04:25.120 of bitcoins that will ever exist, assuming that this system 0:04:25.160 --> 0:04:28.280 actually works out the way it was intended and doesn't 0:04:28.440 --> 0:04:31.680 totally crash the way that it might. Yep, it would 0:04:31.720 --> 0:04:35.520 be twenty one million bitcoins. That's it there. Once you 0:04:35.600 --> 0:04:40.120 get to that that last bitcoin, then you're done. There 0:04:40.120 --> 0:04:42.240 are no more bitcoins to be mined, and the ones 0:04:42.279 --> 0:04:44.440 that exist are the only ones that will ever be 0:04:44.560 --> 0:04:49.000 used in circulation. Uh. Now. This is done through a 0:04:49.000 --> 0:04:52.919 process that's called mining, which evolves using computer processing power 0:04:52.960 --> 0:04:57.480 to perform certain transactions, and sometimes when your computer completes 0:04:57.520 --> 0:05:00.440 such a transaction, it finds a bitcoin, or more likely 0:05:01.240 --> 0:05:04.560 part of a bitcoin. They can be divided up all 0:05:04.600 --> 0:05:06.520 the way down to a unit that's tend to the 0:05:06.600 --> 0:05:10.680 minus eight bitcoins. Yeah. Yeah, you wouldn't really find a 0:05:10.680 --> 0:05:13.880 whole bitcoin or mine a whole bitcoin, right, That is 0:05:13.880 --> 0:05:15.600 not a thing that happens. No, it'd be like kind 0:05:15.600 --> 0:05:18.360 of panning for gold. You're gonna find flakes of gold, 0:05:18.400 --> 0:05:22.560 not a bar of gold, right right. Uh. And it's 0:05:22.880 --> 0:05:27.839 it's really interesting elegant in a convoluted way system because 0:05:27.920 --> 0:05:29.719 you get a chance at earning a piece of a 0:05:29.720 --> 0:05:33.719 bitcoin by helping run the software that that the company uses, 0:05:33.800 --> 0:05:38.120 that the bitcoin the organization uses to process and confirm 0:05:38.600 --> 0:05:43.520 its transactions. Uh. And it's also interesting because bitcoins can't 0:05:43.520 --> 0:05:46.640 be counterfeited. Each time they're traded, a block of code 0:05:46.720 --> 0:05:49.520 is added to the transaction chain describing it, and that 0:05:49.600 --> 0:05:52.919 chain is public, So you can't just just duplicate you 0:05:53.000 --> 0:05:55.680 some bitcoins. That's not how it does. And that's that's 0:05:55.720 --> 0:05:58.479 meant to not just for for counterfeiting purposes, but like 0:05:58.560 --> 0:06:00.920 you said, duplicating purposes, which I guess is a kind 0:06:00.920 --> 0:06:04.480 of counterfeiting. You wouldn't be able to spend a bitcoin 0:06:04.839 --> 0:06:09.000 and then spend that same bitcoin a second time. Immediately thereafter, 0:06:09.440 --> 0:06:13.760 because the transaction is part of this entire chain of 0:06:13.800 --> 0:06:15.760 information that dates all the way back to when the 0:06:15.760 --> 0:06:18.320 bitcoin was first mind. Sure, and and it's a matter 0:06:18.360 --> 0:06:22.599 of public record. Yeah, so here's another thing we gotta 0:06:22.720 --> 0:06:26.320 we gotta mention. Currencies depend upon people accepting them as 0:06:26.360 --> 0:06:31.560 a form of payment. Whether it's backed by a country 0:06:31.680 --> 0:06:36.000 or it's independent, it doesn't matter if people don't see 0:06:36.120 --> 0:06:40.040 that your currency has value. Right, money is essentially imaginary 0:06:40.240 --> 0:06:44.200 and therefore terrifying. Yeah, it actually is completely based upon 0:06:44.279 --> 0:06:48.160 all of us agreeing that this thing represents value of 0:06:48.240 --> 0:06:52.479 some sort, that it represents the value of a product 0:06:52.600 --> 0:06:55.520 or a service. So if you were to ask me 0:06:55.560 --> 0:06:58.440 to come over and paint your house and offer me here, 0:06:58.520 --> 0:07:01.800 I I've printed up these sheets of paper that have 0:07:02.720 --> 0:07:06.839 Bongo bucks on them, and they don't relate to anything else. 0:07:07.120 --> 0:07:10.240 I would say, I need to go do something else 0:07:10.520 --> 0:07:13.480 because my time, Because the Bongo bucks don't mean anything 0:07:13.480 --> 0:07:16.040 to anyone else. I can't go and take those Bongo 0:07:16.120 --> 0:07:19.080 bucks and spend them to get delicious ice cream, which 0:07:19.120 --> 0:07:22.120 fuels my ability to paint your house. Right now, maybe 0:07:22.160 --> 0:07:25.440 if I had offered you delicious ice cream to begin with, Yeah, 0:07:25.480 --> 0:07:29.160 there was more of a you probably wouldn't respend the 0:07:29.200 --> 0:07:33.800 ice cream. So yeah, that's a barter currency, but total 0:07:33.920 --> 0:07:36.400 legitimate By the way, I will I will paint your 0:07:36.400 --> 0:07:39.200 house if there is the proper amount and flavor of 0:07:39.200 --> 0:07:43.240 ice cream involved. Offers will be entertained at the end 0:07:43.280 --> 0:07:46.360 of the show. So at any rate, Yeah, we have 0:07:46.480 --> 0:07:49.800 to have this situation where the people spending and the 0:07:49.800 --> 0:07:53.720 people accepting all agree that this currency has value, that 0:07:53.720 --> 0:07:58.120 that value is something that both parties agree to, that 0:07:58.200 --> 0:08:02.000 it represents a certain amount of buying power. And bitcoins 0:08:02.000 --> 0:08:05.120 have had a pretty crazy roller goes to ride of 0:08:05.120 --> 0:08:08.000 an existence from the time when they first came out 0:08:08.000 --> 0:08:11.000 in two thousand eight to present day, right, because the 0:08:11.040 --> 0:08:14.640 amount of value it's not holding steady the way that 0:08:14.800 --> 0:08:18.600 most currency does. Yeah, currencies can fluctuate in value, but 0:08:18.680 --> 0:08:24.600 not not too wildly dramatic extent unless there's serious financial 0:08:24.640 --> 0:08:27.600 crisis going on, right, right, But bitcoins are fluctuating all 0:08:27.640 --> 0:08:30.040 the time. Yeah, to the point where you know, at 0:08:30.040 --> 0:08:32.880 their peak, they were almost twelve dollars for a bitcoin, 0:08:33.480 --> 0:08:37.600 and right now they're somewhere they're lower than there, between 0:08:37.600 --> 0:08:40.600 two hundred and two hundred fifty dollars depending upon exactly 0:08:40.600 --> 0:08:44.680 when you check. So definitely some some crazy variation in 0:08:44.800 --> 0:08:48.080 value there. Although it's really not a small system like 0:08:48.160 --> 0:08:51.319 this might seem really fringe, especially if you don't participate 0:08:51.360 --> 0:08:53.080 in the mining of bitcoins and if you don't have 0:08:53.080 --> 0:08:56.360 a bitcoin wallet, but the system is currently worth some 0:08:56.480 --> 0:09:01.240 like three point three billion dollars. Yeah, yeah, So getting 0:09:01.240 --> 0:09:03.719 into the problems of bitcoins, we're gonna talk about does 0:09:03.760 --> 0:09:07.000 bitcoin actually have a future? That's the real question we 0:09:07.040 --> 0:09:10.680 want to answer today as best we can. And part 0:09:10.720 --> 0:09:13.319 of that it means that we have to acknowledge the 0:09:13.760 --> 0:09:18.680 challenges that bitcoin faces, the problems and difficulties it has 0:09:18.760 --> 0:09:22.560 as a currency, And we already mentioned one the volatility, 0:09:22.640 --> 0:09:26.319 the variability of its value from that twelve hundred dollars 0:09:26.360 --> 0:09:29.360 to two d and thirty some odd bucks this morning 0:09:29.360 --> 0:09:31.160 when I checked it. Yeah, that's a big that's a 0:09:31.200 --> 0:09:34.480 big difference. Yeah. Yeah. If you if you've found out 0:09:34.520 --> 0:09:39.520 that your money was no longer nearly as valuable as 0:09:39.520 --> 0:09:41.200 it once was, that you would not be able to 0:09:41.240 --> 0:09:44.720 buy the same amount of stuff today as you could 0:09:44.800 --> 0:09:49.480 back in early two thousand and fourteen, you'd probably be 0:09:49.760 --> 0:09:52.839 a little more than a little upset uh. And keep 0:09:52.920 --> 0:09:55.680 in mind that this also means that a lot of 0:09:55.720 --> 0:09:58.719 people have trouble figuring out when they can spend that 0:09:58.760 --> 0:10:02.240 money U, because you know, if you're if your dollar. 0:10:02.440 --> 0:10:05.280 Let's say, let's let's take dollars as an example. So 0:10:05.320 --> 0:10:08.120 let's say I've got a Crisp one dollar bill, and 0:10:08.160 --> 0:10:10.720 today that one dollar bill, and I'm just making up examples, 0:10:10.720 --> 0:10:13.320 but today that one dollar bill could buy me a 0:10:13.400 --> 0:10:17.560 small cup of coffee. I've found a discount coffee place somewhere, 0:10:17.600 --> 0:10:19.280 and that one dollar bill will buy me a small 0:10:19.360 --> 0:10:22.400 cup of coffee. And I it's a very small cup 0:10:22.400 --> 0:10:26.760 of yes coffee, and exactly it's not espresso. It's still 0:10:26.800 --> 0:10:29.000 just regular old coffee. So I spend that dollar and 0:10:29.000 --> 0:10:31.120 I get my little espresso cup of coffee. I go 0:10:31.200 --> 0:10:33.760 back to the coffee shop the next day, but because 0:10:33.840 --> 0:10:36.839 the value of the dollar has changed, the coffee is 0:10:36.880 --> 0:10:38.760 the same, the size of the cup is the same. 0:10:39.240 --> 0:10:41.720 But because the value of the dollar has changed, it 0:10:41.760 --> 0:10:44.760 now requires me me to spend two of my Crisp 0:10:44.800 --> 0:10:46.920 one dollar bills to get that small cup of coffee. 0:10:47.040 --> 0:10:49.520 And although this might feel like what's going on when 0:10:49.520 --> 0:10:52.800 you go to Starbucks, yeah, it's it's really not that dramatic, right, 0:10:52.840 --> 0:10:55.960 It's not. It's not that the coffee place has dramatically 0:10:56.040 --> 0:10:59.600 increased their price. It's that the dollar has dramatically reduced 0:10:59.600 --> 0:11:02.240 in value. But let's say the next day, because this 0:11:02.320 --> 0:11:05.160 is going to be illustrating the craziness of bitcoin, the 0:11:05.160 --> 0:11:07.160 next day, I come in and I find out that 0:11:07.240 --> 0:11:10.560 my Crisp one dollar bill, which yesterday I needed too 0:11:10.600 --> 0:11:12.520 off to buy a small cup of coffee, now my 0:11:12.559 --> 0:11:15.439 CRISP one dollar bill will give me that trendy size 0:11:15.480 --> 0:11:20.280 the ridiculous like like hot tub sized cup of cost. Yeah, 0:11:20.320 --> 0:11:23.280 I have to have a dolly to move the cup 0:11:23.280 --> 0:11:26.840 of coffee out. That's kind of the the the what 0:11:26.960 --> 0:11:30.840 bitcoin has been through. And that makes it very difficult 0:11:31.320 --> 0:11:34.600 to figure out when you can spend a bitcoin, because 0:11:34.840 --> 0:11:38.079 if I, if I, if I price things in bitcoin, 0:11:38.559 --> 0:11:42.560 even in fractions of a bitcoin, I will constantly be 0:11:42.720 --> 0:11:46.040 scared that the price will not reflect the value of 0:11:46.080 --> 0:11:49.760 the product, either as a merchant or as a buyer. 0:11:49.880 --> 0:11:52.200 Oh yeah, yeah, it's difficult for both sides of the 0:11:52.240 --> 0:11:55.800 equation because one person or the other is at I mean, 0:11:55.800 --> 0:11:59.760 both people really are continually going to be unsure whether 0:11:59.800 --> 0:12:03.240 they being cheated, right, And even if they're not being cheated, 0:12:03.280 --> 0:12:07.040 they may just feel like are being cheated by the system. Yeah, 0:12:07.080 --> 0:12:09.760 like like like they had the worst timing, like they 0:12:09.880 --> 0:12:12.920 either spent way too much or they sold for way 0:12:12.920 --> 0:12:17.200 too little. And that the same the same thing sold 0:12:17.200 --> 0:12:20.439 by at the same quote unquote price each day could 0:12:20.679 --> 0:12:25.080 end up giving you crazy different values of actual dollar 0:12:25.200 --> 0:12:27.720 money or or whatever you know. And I hate saying 0:12:27.760 --> 0:12:32.240 actual because of course bitcoin is actual money. Yeah, you 0:12:32.280 --> 0:12:34.520 can use it to buy stuff. It's a money. It's 0:12:34.559 --> 0:12:36.800 just that I think of it more in terms of 0:12:36.800 --> 0:12:40.560 of a of a you know, a tradeable entity, rather 0:12:40.600 --> 0:12:43.840 than as a currency, simply because of this volatility. Yeah, 0:12:43.920 --> 0:12:46.320 it works so much more like a like a stock market, 0:12:46.360 --> 0:12:50.040 for example, than it does like other currencies currencies that 0:12:50.080 --> 0:12:52.760 we see out there. And and as it turns out, 0:12:52.880 --> 0:12:58.679 even the very top people involved in bitcoin are are 0:12:58.800 --> 0:13:03.240 not entirely sure how much how much bitcoin you should bitcoin? 0:13:03.440 --> 0:13:06.120 Right exactly. Yeah, we'll get into more of that too, 0:13:06.200 --> 0:13:08.640 so h In my notes I gave an example. The 0:13:08.679 --> 0:13:11.080 coffee makes a perfect example. But in my notes I 0:13:11.120 --> 0:13:15.040 mentioned that because one bitcoin is around two dollars, let's 0:13:15.080 --> 0:13:20.199 say I'm selling a current generation, gently used video game console, 0:13:20.880 --> 0:13:23.760 and those are around four hundred bucks or so, depending 0:13:23.800 --> 0:13:26.480 upon which ones you're looking at. But I it's gently used, 0:13:26.520 --> 0:13:28.199 so I want to sell it for about two d 0:13:28.320 --> 0:13:31.600 thirty bucks or one bitcoin. Now it maybe that when 0:13:31.600 --> 0:13:33.680 I sell it for one bitcoin, it turns out that 0:13:33.720 --> 0:13:36.360 the bitcoin is actually worth two dollars, so I'm under 0:13:36.360 --> 0:13:38.560 selling a little bit. Or it may turn out that 0:13:38.640 --> 0:13:40.800 the bitcoin at that moment is worth two hundred sixty 0:13:41.360 --> 0:13:44.360 so I actually got more value out of it than 0:13:44.480 --> 0:13:47.520 I thought I would. But that could all change if 0:13:47.520 --> 0:13:50.880 I don't cash out the bitcoin, and then the value 0:13:50.920 --> 0:13:55.040 of bitcoins dramatically plummets or escalates. Yeah, yeah, it could 0:13:55.120 --> 0:13:58.200 wind up being that you sold that console for either 0:13:58.440 --> 0:14:04.839 you know, fifty cent or for Yeah, it hasn't dropped 0:14:04.840 --> 0:14:07.840 as low as fifty cents. No, it hasn't had that 0:14:07.920 --> 0:14:10.520 bad of a day yet, all right. So one way 0:14:10.520 --> 0:14:13.599 to get around that, if you are in the bitcoin 0:14:13.960 --> 0:14:18.520 like market biz is to offer up your various goods 0:14:18.679 --> 0:14:22.680 or services at a dollar or other you know, less 0:14:22.760 --> 0:14:26.080 volatile currency price tag, and then when it comes to 0:14:26.120 --> 0:14:30.720 the actual moment of purchase, agree with the the person 0:14:30.760 --> 0:14:34.440 who wants to buy something what that is in bitcoin 0:14:34.720 --> 0:14:38.040 at that moment, right, right, Although really this this is 0:14:38.840 --> 0:14:41.480 just making the problem a little bit more complicated, it's 0:14:41.480 --> 0:14:47.440 not actually solving it. Furthermore, the lack of that transcription 0:14:47.800 --> 0:14:51.520 of of dollars to whatever, it's part of what attracts 0:14:51.520 --> 0:14:53.360 people to us in bitcoin in the first plaint, right 0:14:53.480 --> 0:14:55.400 it really, I think the only thing it does is 0:14:55.440 --> 0:14:58.640 create a little bit of a psychological cushion for the 0:14:58.680 --> 0:15:00.800 person buying it. But then the and it doesn't change 0:15:00.840 --> 0:15:04.360 the fact that the bitcoin value itself will change. It's 0:15:04.360 --> 0:15:06.960 the same problem exists. It's just you might be able 0:15:07.000 --> 0:15:09.640 to go away thinking, oh, I spent bucks on that, 0:15:09.720 --> 0:15:13.200 not I spent point zero zero zero four bitcoins on that, 0:15:13.720 --> 0:15:17.200 and now I I'm out a significant amount of money 0:15:17.200 --> 0:15:20.360 because of the value of bitcoin changing. So do we 0:15:20.400 --> 0:15:23.760 know why this volatility exists. Yeah, it's because people don't 0:15:23.760 --> 0:15:27.240 want to spend them. So one of the one of 0:15:27.280 --> 0:15:29.600 the big points of currency, one of the really important 0:15:29.640 --> 0:15:32.080 things is that in order for a currency to work, 0:15:32.120 --> 0:15:34.760 people have to be willing to spend the currency. Right 0:15:34.800 --> 0:15:37.800 if it's all buried in their boxes in their backyard, 0:15:37.840 --> 0:15:40.440 and then it's not really doing anyone good, and it's 0:15:40.480 --> 0:15:42.720 it's not a system at that point. It's a box 0:15:42.760 --> 0:15:45.240 in a backyard. You're looking at like a commodity, not 0:15:45.360 --> 0:15:49.320 a currency. And that's a problem. Right. So there was 0:15:49.480 --> 0:15:53.920 a two thousand, fourteen UM study by bitcoin itself. Actually 0:15:53.960 --> 0:15:56.960 they made the they created the bitcoin distribution chart to 0:15:57.000 --> 0:16:00.400 find out where all these bitcoins are going and where 0:16:00.400 --> 0:16:03.360 they're hanging out. Yeah, so they they found that about 0:16:04.640 --> 0:16:09.000 out of all the addresses associated with owning a bitcoin, 0:16:09.280 --> 0:16:13.400 only two d fifty thousand owned more than one. So 0:16:14.160 --> 0:16:18.080 and also those addresses don't necessarily translate to a single person. 0:16:18.120 --> 0:16:20.600 But let's say let's say just for the sake of argument, 0:16:20.920 --> 0:16:25.560 these are easy Indians, exactly two human beings. That means 0:16:25.640 --> 0:16:30.480 two d fifty thousand people out of everyone on earth 0:16:30.960 --> 0:16:35.800 for this global currency, owns more than one bitcoin. And 0:16:35.880 --> 0:16:40.520 that that's like the overwhelming percentage of bitcoins that are 0:16:40.520 --> 0:16:43.960 already in circulation, which means that people are not spending 0:16:43.960 --> 0:16:46.720 these bitcoins. They are hoarding the bitcoins. Yeah, they're they're 0:16:46.760 --> 0:16:50.120 they're mining them and keeping them. Yeah, because their value 0:16:50.160 --> 0:16:53.080 goes up so high. It would be again, it seems 0:16:53.120 --> 0:16:55.880 weird to spend something like that you might think, no, 0:16:56.080 --> 0:16:59.560 this is security here. I've got this huge amount of 0:16:59.560 --> 0:17:02.560 of existing value that I could trade in for other 0:17:02.640 --> 0:17:05.680 currencies at any time, and then we might go back 0:17:05.800 --> 0:17:08.479 up to a thousand bucks of bitcoin. Yeah, and then 0:17:08.560 --> 0:17:11.720 which case I would feel stupid for cashing out before 0:17:11.840 --> 0:17:15.560 it got really big, right, And uh, keep in mind again, 0:17:15.600 --> 0:17:18.119 these people are are folks who are using lots and 0:17:18.160 --> 0:17:20.439 lots of computer power to get at these One of 0:17:20.480 --> 0:17:23.800 the interesting things about bitcoin is the mining process gets 0:17:23.840 --> 0:17:27.520 more complicated the more computer power is dedicated to mining, 0:17:27.960 --> 0:17:29.920 So that means that if you want to be effective 0:17:29.960 --> 0:17:33.720 at mining, you have to leverage larger and larger systems 0:17:33.760 --> 0:17:37.400 of computers are faster and faster computers, which then narrows 0:17:37.440 --> 0:17:40.240 down the number of people who can actually do this effectively. 0:17:40.680 --> 0:17:43.199 Like you and your basement with your old you know, 0:17:43.560 --> 0:17:47.480 IBM to eight six. You're not going to compete with 0:17:47.600 --> 0:17:50.159 the folks who are doing this. Yeah, uh, you know, 0:17:50.240 --> 0:17:52.320 it's just not going to happen. That kind of brings 0:17:52.400 --> 0:17:55.600 up another Another issue with bitcoins is that not everybody 0:17:55.840 --> 0:17:59.280 is going to be excited about using them. But there 0:17:59.280 --> 0:18:01.600 are other reasons why some people might not be excited 0:18:01.600 --> 0:18:05.679 about using them. Yeah, so volatility being one big challenge. 0:18:05.680 --> 0:18:09.320 The other one being that bitcoin has had no shortage 0:18:09.320 --> 0:18:12.119 of scandals associated with it, and in some cases it 0:18:12.160 --> 0:18:15.000 has nothing to do with the currency itself. The currency 0:18:15.080 --> 0:18:19.120 is just involved, right the the currency was there. It's 0:18:19.160 --> 0:18:22.040 like if you watch Scarface, you can't blame the huge 0:18:22.160 --> 0:18:26.200 piles of money for the behavior of the characters, and Scarface, 0:18:26.320 --> 0:18:29.919 it's the character's desire for the huge piles of money 0:18:29.960 --> 0:18:36.200 that cause all the problems. Who Scarface at any rate? 0:18:36.359 --> 0:18:40.440 H So, bitcoin has always had kind of a seedy reputation, 0:18:40.640 --> 0:18:43.760 largely because a lot of the people who are attracted 0:18:43.800 --> 0:18:48.639 to this non state sponsored currency happen to be involved 0:18:48.800 --> 0:18:53.680 in things that states are Generally they don't, they aren't 0:18:53.680 --> 0:18:56.600 in favor of them. Sure, well, you know, some people 0:18:56.720 --> 0:19:00.760 just really want privacy, and that's understandable to but some 0:19:00.840 --> 0:19:04.480 people specifically want privacy because they're going to do illegal stuff, 0:19:04.640 --> 0:19:07.400 right exactly. There are people who just like we would 0:19:07.520 --> 0:19:10.879 argue with things like like peer to peer sharing. There's 0:19:11.000 --> 0:19:13.720 nothing inherently wrong with peer to peer sharing. It's a 0:19:13.920 --> 0:19:18.600 great means of distributing large files, right you distributing large files? 0:19:18.640 --> 0:19:21.480 I put the wrong emphosis on the wrong level. Uh, 0:19:21.520 --> 0:19:24.600 distributing large files, nothing wrong with that. It's the problem 0:19:24.640 --> 0:19:28.280 that some people use it to pirate stuff and share 0:19:28.320 --> 0:19:31.080 pirated material that give it a bad name, so as 0:19:31.119 --> 0:19:34.400 it is with bitcoin, and that there are some very 0:19:34.440 --> 0:19:38.640 well publicized incidents of people using bitcoin as the currency 0:19:38.680 --> 0:19:41.679 of choice on things like the Silk Road, which was 0:19:41.760 --> 0:19:45.359 the illegal black market that dealton lots of stuff, some 0:19:45.400 --> 0:19:48.119 stuff that was just completely benign, you know, there was 0:19:48.200 --> 0:19:51.560 nothing wrong with it, but there was a significant number 0:19:52.160 --> 0:19:55.760 of illegal goods on sale on the Silk Road, whether 0:19:55.840 --> 0:19:59.720 they'd be weapons or mostly drugs, but other stuff too, 0:20:00.280 --> 0:20:02.639 And bitcoin was one of those things that a lot 0:20:02.640 --> 0:20:04.800 of people like because it wasn't something that was easily 0:20:05.119 --> 0:20:07.160 despite the fact there's a public record of the transaction, 0:20:07.240 --> 0:20:12.840 it's not traceable in the classic sense. So that's definitely 0:20:12.880 --> 0:20:15.919 part of it. Was that has this bad reputation because 0:20:15.960 --> 0:20:18.679 of the association with the way bitcoins have been used. 0:20:18.960 --> 0:20:21.840 But you can't really blame that on the currency. But sure, 0:20:21.920 --> 0:20:25.720 sure Another thing that you can't really blame directly on 0:20:25.800 --> 0:20:31.080 the currency is the behavior of some of its exchanges. Yes, 0:20:31.320 --> 0:20:34.320 this is a huge issue. So the neat thing about 0:20:34.320 --> 0:20:37.000 bitcoins is that on the individual level, on the individual 0:20:37.080 --> 0:20:41.280 coin level, they're pretty secure because they have this record 0:20:41.320 --> 0:20:45.399 behind them, and it's not the currency that's at fault 0:20:45.720 --> 0:20:49.760 when things like the Mount Cox scandal happen. Uh, just 0:20:49.880 --> 0:20:52.280 as just as again, you would not blame a dollar 0:20:52.480 --> 0:20:55.159 for getting stolen out of a bank, you can't blame 0:20:55.200 --> 0:20:57.439 a bitcoin for being stolen out of Mount Cox. But 0:20:57.480 --> 0:20:59.800 what you can say is what the heck happened? And 0:20:59.800 --> 0:21:02.920 what we can tell you is we don't know. Nobody 0:21:03.040 --> 0:21:06.720 knows still, at least at least nobody nobody who is 0:21:06.760 --> 0:21:09.600 curious about it knows. The people who perpetrated it probably do. 0:21:10.160 --> 0:21:12.520 Oh it's likely. Uh, I mean unless they had a 0:21:12.640 --> 0:21:16.440 very strange weekend. What did I do? How did I 0:21:16.480 --> 0:21:22.680 get bitcoins in my account? Yeah? So so in this 0:21:22.680 --> 0:21:27.320 this giant exchange for bitcoins, uh, in which it's sort 0:21:27.359 --> 0:21:29.440 of like a little bit like a bank, yeah kind 0:21:29.480 --> 0:21:33.120 of it. It's like, you know, essentially it's meant to 0:21:33.160 --> 0:21:37.120 help exchange bitcoins for other currencies. So if you wanted 0:21:37.160 --> 0:21:39.800 to come in and buy a bunch of bitcoins, they 0:21:39.800 --> 0:21:41.480 would sell them to you. Or if you had a 0:21:41.480 --> 0:21:43.159 bunch of bitcoins, you wanted to exchange it for some 0:21:43.200 --> 0:21:45.439 other currency, they would then exchange it for you, and 0:21:45.480 --> 0:21:47.520 then you know, of course they take some percentage of 0:21:47.560 --> 0:21:50.160 that transaction for themselves. Sure, sure, but rather than having 0:21:50.200 --> 0:21:54.160 to purely mine your own bitcoin, as your ancestors would 0:21:54.160 --> 0:21:56.760 have done. Yeah, maybe it. Maybe that the bitcoin value 0:21:57.080 --> 0:21:59.680 you suspect that it's going to escalate, and you think, well, 0:21:59.720 --> 0:22:01.920 the way I'm gonna make my money is by investing 0:22:01.920 --> 0:22:03.680 in bitcoin, waiting for that value to go high and 0:22:03.720 --> 0:22:06.720 then I'll cash out. But but so in it had 0:22:06.760 --> 0:22:12.000 like eight hundred and fifty thousand bitcoins stolen from this 0:22:12.160 --> 0:22:16.680 one exchange mount cox They they disappeared, and uh, there's 0:22:16.760 --> 0:22:19.480 some suggestions that I have seen that at least some 0:22:19.480 --> 0:22:22.040 some of it was due to bought activity bots that 0:22:22.080 --> 0:22:26.040 were buying up bitcoins during certain hours of the day, 0:22:26.040 --> 0:22:29.440 early trading hours in in Japan, because this all took 0:22:29.440 --> 0:22:32.880 place in Japan. Really, um so at early trading hours, 0:22:33.480 --> 0:22:37.480 bots were buying up bitcoins using fake money they were creating, 0:22:37.800 --> 0:22:44.680 they were creating profiles that had huge bank accounts, fake 0:22:44.720 --> 0:22:48.520 baking bank accounts associated with them. We're purchasing bitcoins with 0:22:48.600 --> 0:22:52.440 fake money and then uh, sort of disappearing after a while, 0:22:53.280 --> 0:22:57.000 but that has not really led investigators to any pathways 0:22:57.040 --> 0:22:59.479 to figuring out who actually was behind this. It might 0:22:59.520 --> 0:23:01.040