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(audience applauds)

- Right, finally, we have Torsten Hoffmann,

who's the producer of the Cryptopia Film.

(audience applauds)

- Thanks, Peter.

Five years ago,

I made a film about the history of money,

banking, and Bitcoin.

Buckle up, we said, it's gonna be a bumpy ride.

And now, some of the big brains and big egos

who championed cryptocurrency

claim they're building a crypto-utopia.

- Magical things will happen.

- [Torsten] With something called blockchain technology,

and it just might change your life.

- And they really could compete with,

if not take down the Facebooks

and the Googles, and the Amazons.

- My name is Torsten Hoffmann,

and I'm going to put some of these claims to the test.

Some critics say you kind of hurt the community.

What's your response to that?

This innovation has enabled lots of criminals and scammers.

But basically looking at it now, you lied to us.

Forget all the hype.

We'll explore the true potential of this new invention.

See who's already using it.

- Making it really easy and simple

for people to own a piece of a solar farm or wind farm.

(soft music)

- [Torsten] And go deep into a secret bunker

that holds billions in Bitcoin.

- [Christoph] We cannot talk too much about it

because it's pretty secret what is down there, right.

(soft music)

- And if Bitcoin succeeds,

it'll be at least $1 million per coin.

(soft music)

- [Torsten] We'll learn lessons from the past

and meet those building the future.

But there are those who want to kill it.

- Join with me in introducing

a bill to outlaw cryptocurrency

so that we nip this in the bud.

- [Torsten] Control it.

- Next year, people are going to start seeing

that we have hundreds of patents

and everything changes.

- [Torsten] Or change the world with it.

Welcome to ground zero

in the battle for the future of the Internet: Web 3.0.

- They wanted a science fiction dream,

what they actually did was build forthcoming disaster.

- A lot of people were not willing to learn

and were not willing to admit they were wrong.

- They're idiots.

- Why is this fraud allowed to speak at this conference?

- Stop telling me that I have no clue.

- That's just bullshit.

- If you don't support free speech,

you don't support Bitcoin.

You're an enemy of Bitcoin.

- [Tim Draper] This is bigger than the internet,

the Iron Age,

the Renaissance,

the Industrial Revolution.

This affects the entire world.

(electronic music)

- For years and years,

I've been researching blockchain technology,

cryptocurrencies, the market booms and busts,

and many have asked me to explain Bitcoin to them,

but I think this is why it's so difficult.

- Cryptocurrencies,

everything you don't understand about money

combine with everything

you don't understand about computers.

- [Torsten] Okay, let's start slowly

with the basics of money and it's creation.

- [Narrator] The total value of all the world's money

is about $120 trillion.

What you probably didn't know

is that each new dollar

is created by governments and banks as debt,

which needs to be paid back by someone in the future

with interest.

That's why there isn't enough money in the world

to repay all that debt.

And there never will be.

Oh, and almost all of the world's money

is already digital,

just entries in the ledger,

usually managed by a bank.

Only a small portion exists as physical currency

like cash or coins.

Think of it this way,

your employer deposits $1,000 into your bank account.

Then you pay $200 in taxes,

$500 for rent,

$200 for bills and shopping and so forth.

Whether you use credit cards,

debit cards, PayPal, or bank transfers,

they're all just pluses and minuses

in different digital ledgers.

That's why there's almost no need for physical money

in our daily lives.

- During the financial crisis in 2008,

a mysterious figure called Satoshi Nakamoto

published this nine page white paper.

It said with Bitcoin's open source software,

we can create our own money

without banks or Governments.

(electronic music)

This new nerd money, called cryptocurrency,

is created and stored in computers.

And before long, there was a growing fan club,

mostly guys like Roger Ver.

Today, he's a polarizing figure,

but back then, he gave away thousands of coins

to kickstart the movement,

and they all called him Bitcoin Jesus.

- I think that for may years,

he brought more people to Bitcoin than anyone else.

And we will forever be grateful to him for doing that.

- When I was a kid,

I was reading all these science fiction books.

They were talking about

how the world is gonna be

when we have this like anonymous digital cash

that people can use on the internet

that's not controllable by anybody.

And then when Bitcoin came along,

it was like: Wow, this science fiction money idea

that I'd been reading about as a kid

is finally here.

So I got so excited about it.

I heard about it at about 10 in the morning.

And I was planning to go to work that day, but I didn't.

I stayed home the entire day reading about it.

Didn't leave, I stayed up all night that night

reading about it.

Stayed up all night the next night reading about it.

- [Torsten] He went deep down that rabbit hole

to the point of physical exhaustion.

- So I called up a friend of mine,

said please help me, I'm so sick.

Can you bring me to the hospital?

- [Torsten] Yeah, Roger got bit bad

by the Bitcoin bug.

- Cause it's truly one of the most exciting inventions

ever in the entire history of human kind.

- [Torsten] But how does it work?

When my friends ask me to explain,

well I often start with this analogy.

- [Narrator] Imagine a bank vault

where you have a safety deposit box.

Your key opens one of the boxes

where you can securely store physical valuables,

like gold coins.

In Bitcoin, there are digital keys.

Think of them as very long passwords.

Your private key gives you access to a wallet,

which unlocks billions of unique Bitcoin addresses.

Each one is a virtual safety deposit box

that only you can open with your key.

And there are more addresses in this virtual vault

than atoms in the universe.

The doors to these boxes are transparent.

You can see inside them.

Here's one with digital money, 0.21 Bitcoins.

Sending them from one box to another

is what's called a Bitcoin transaction.

We'll explain that later.

But for now,

just remember that these digital coins

can only exist inside these transparent address boxes,

can't be copied,

and can't ever leave the vault.

And this vault is owned by no single entity.

You don't need permission from a government,

a bank, or a corporation to use it.

(electronic music)

- [Torsten] For most early adopters of Bitcoin,

it was all about global peer to peer electronic cash.

Room 77 in Berlin was one of the very first businesses

to accept Bitcoins as payment for physical things,

beers and burgers.

- Back in 2011, there were no mobile wallets, right.

So you had to go there, bring your laptop,

type in this long address,

risk losing the money if you didn't type it correctly.

So the first guy who built a mobile wallet

was some guy in Berlin

who built it in order to buy his beer

with his phone instead of his computer.

(speaking in foreign language)

- [Narrator] Credit cards are an old technology,

and actually pretty complex.

And you payment details are shared with many middlemen.

Each of these parties are also taking a cut of the action,

which is built into the price of nearly everything you buy.

If you purchase something internationally,

double the number of middlemen and triple the fees.

Credit cards handle almost $20 trillion

of transactions per year.

(upbeat music)

- [Torsten] Early Bitcoin adopters, like Room 77,

avoided paying credit card fees.

But Joerg's real beef was with the bankers

who collect them.

(upbeat music)

- [Torsten] Collapsing economies, murder,

I didn't sign up for this.

Let me get a drink.

Well, actually, I need to buy my German crew

some Gluwein

and explain why they won't get paid

until after Christmas.

You see, transferring money from Australia,

where I live,

to Germany can take several days,

and it will cost $30 plus exchange fees

just for updating numbers in digital ledgers.

After all, it's just moving data.

I can send a picture or video

to anyone on the planet almost instantly, for free.

We live in the age of the Internet,

but the banks won't send the data

after 5:00 p.m., or on a weekend?

That doesn't make any sense.

So what if those slow and expensive middlemen

with their multiple ledgers

could be replaced with a giant database

synchronised over the Internet?

That's the big idea behind Bitcoin.

And it's run by a decentralised global network

of powerful mining computers and regular laptops.

Here's how it works.

When I pay my cameraman,

what's really happening is that I use my key

to open my wallet,

and then instruct the network

to send Bitcoins to his address.

Most Bitcoin apps use QR codes

to identify and address.

You scan it,

then swipe to use your key,

and approve the transaction.

- [Narrator] This information is shared

throughout the global network within seconds.

Every 10 minutes or so,

one miner using a tremendous amount of energy

beats all the others in a contest

to solve a very difficult math problem.

That miner is authorised

to arrange the most recent transactions

into a structured block,

and is rewarded in Bitcoins for this work.

All the data contained inside each block

is represented by a check sum.

The miner now adds the new block

to the previous one.

That's why it's called the blockchain.

Now the ledger will be updated globally.

The check sums of the previous block

match the beginning of the new one,

which are baked together forever.

It's impossible to tanker with the data inside the block

without changing the check sums

and breaking the chain.

(soft music)

- [Torsten] This immutability is the first rule of Bitcoin.

It means one one can ever change

what was once recorded in the blockchain,

or spend the same coin twice.

That's also called censorship resistance,

and it's critical to Bitcoin being used as real money.

Awarded winning journalist Laura Shin

tells me a story about women bloggers in Afghanistan

being paid in Bitcoin.

- One of the women had an abusive husband,

and saved up here Bitcoins

and eventually was able to divorce him

because she was able to control her money

when she earned the Bitcoins.

- [Torsten] In my first film, the early adopters

said that this kind of financial freedom for everyone

was just around the corner.

- The world's most populous network is adopting Bitcoin,

that's the Internet.

The world's largest economy is adopting Bitcoin.

That's the internet.

We have transcended borders.

- It's totally failed as electronic cash.

- [Torsten] David Gerard says it has unbanked

the banked more than it has banked the unbanked.

He's an outspoken critic of this technology.

- It's not very good as a payment system.

There a small payment in this case

if you want to trade in things

the Government doesn't want you to trade in.

- [Torsten] That's David's polite way

of saying illegal stuff.

- In 2011, most of my partner colleagues

- In 2011, most of my partner colleagues (soft music)

(soft music)

were saying three things. (soft music)

were saying three things.

It was either drugs, pornography, or arm sales.

- [Torsten] The Silk Road was a black market

on the dark web

where the buyers and sellers used Bitcoins

to fly under the radar of the authorities.

It had one million users

until the FBI showed up and shut it down.

They caught this guy for running it,

and confiscated the coins held in escrow

by snatching his computer.

And then they locked him away for life.

Seems like a pretty straight forward case

of law enforcement doing their job,

but in crypto, not everybody sees it that way.

(soft music)

- People have an absolute right

to put whatever they want in their own bodies

because their bodies belong to them.

That makes Ross Ulbricht

and the users of the Silk Road heroes,

not criminal law breakers in a bad sense.

They are criminal law breakers in a good sense

the same way that Harriet Tubman or Rosa Parks,

or you know, Thomas Jefferson,

or George Washington were.

- [Torsten] No doubt cryptocurrencies can be a tool

for criminal activity.

But so are dollar bills

or the banking system.

And let's not forget the blockchain is a public ledger.

- It's actually been quite useful

for uncovering crimes.

A former federal prosecutor named Kathryn Haun,

she was the one who discovered

that there were a couple federal agents that

were pilfering the Bitcoins that the Government had obtained

from the Silk Road case

for their own gain.

And what was interesting

was she got a tip that there might be one,

one agent that was doing this.

But from looking at the movements

on the blockchain itself,

she realised that there were two people.

- [Torsten] The prosecutor could see

those Bitcoins being moved.

And when the dirty cops tried to sell them for dollars,

they got busted.

(soft music)

But what makes Bitcoins worth stealing?

Why do they have value at all?

- [Narrator] Let's go back to where Bitcoins are stored

in transparent digital deposit boxes,

protected by strong cryptography.

They can never be copied or leave the vault

because any transaction of any Bitcoin,

down to a 100 millionth fraction

is recorded in the blockchain for eternity.

This synchronised global ledger

is shared among thousands of computers worldwide.

That's why it can't be compromised or altered.

Think about that.

We can make an infinite number of perfect digital copies

of a movie, a song, any file,

but for the first time in history,

this distributed record keeping

allows us to have a truly unique and fungible

digital object that is also scarce.

If you could count all of these virtual coins,

you'd find about 18 million of them today.

The mining reward is the only way

new coins are created.

(soft music)

In the first years of Bitcoin,

miners competed for 50 Bitcoins every 10 minutes.

Then their reward for processing transactions

dropped to 25 Bitcoins,

then 12.5,

and then half again and again every four years.

It's good old fashioned supply and demand.

If investors or users of Bitcoin

create a higher demand than this decreasing supply,

the price will go up.

When the cap of 21 million is reached,

the protocol stops the network from creating any more.

It's the opposite of our traditional money supply,

which keeps growing and growing.

(soft music)

- Hmm, and unlimited amount of dollars

versus a very limited supply of Bitcoins.

You do the math!

If you use Euros or dollars,

you might not care about a little inflation per year.

But if your currency isn't stable,

you might be a trillionaire on paper,

and be dead broke.

(slow suspenseful music)

- I grew up in Patagonia

in the southern part of Argentina.

My parents are sheep ranchers there.

And I remember growing up in my childhood,

I saw my parents loose everything three times.

First because of a huge devaluation,

then because of hyperinflation,

and the last time because the Government confiscated all

our bank deposits.

I think that today,

there are billions of people,

at least four billion people

who would be a lot better off

by having access to a form of money

that is non-political and more democratic.

(soft music) (muffled speech)

- We think of finance.

We think of banking.

We think of money.

In terms of the experience and perspective

of Western European or developed nation person,

and that is really just a billion and a half people

who have a very privileged financial life.

What about the other six billion?

Every single country that is free

has essentially a legal status for cryptocurrencies

that is very open and permissive.

And every single country that is unfree

has restrictive or banned cryptocurrency status.

(soft music)

- This is the Berlin Wall,

still a powerful symbol

of a Government trying to control its citizens.

But this is what happens when people

want to be free.

The very first open crypto-war is playing out in Venezuela

where the local currency loses value every hour

due to hyperinflation.

- A lot of people in Venezuela

are trying to mine cryptocurrencies.

And the government views this as a threat obviously

because they're trying to keep the Bolivar propped up.

The government actually provided electricity

to a lot of people,

and if they perceive that your electricity usage

has gone up,

they will come and check if you have mining equipment

in your house, and they will confiscate it

if they find it.

- [Torsten] And that brings us to the big question,

can Governments or banks ban Bitcoin?

- So the title is "Jamie Dimon,

"Here's why you're wrong about Bitcoin".

- [Torsten] Dimon runs JP Morgan Chase,

one of the largest banks in the world

that moves $6 trillion every single day.

- Oh, you said of Bitcoin

eventually it will be closed.

And then I said to anyone who knows anything

about the technology, this is an incredibly absurd statement.

I even said it was a little bit hilarious

because I find it kind of funny

the idea that you thought you could close Bitcoin.

But you'd have to shut down the Internet,

which also doesn't make sense.

I could understand if you wanted Bitcoin shut down,

or hoped it was a fraud.

I mean if I were you,

and if I really understood the disruption

that crypto assets could bring to financial services,

I'd be very scared.

- And I think whatever Jamie Dimon

says or thinks about Bitcoin

is as relevant as whatever the Postmaster General

thought or said about email:

Who cares?

- Then I wrote sincerely, Laura Shin.

- [Torsten] But some politicians

still think they can stop open source software.

- I look for colleagues to join with me

in introducing a bill to outlaw cryptocurrency purchases

by Americans so that we nip this in the bud

in part because an awful lot of our international power

comes from the fact that the dollar

is the standard unit of international finance

and transactions clearing through the New York Fed

is critical for major oil and other transactions.

And it is the announced purpose

of the supporters of cryptocurrency

to take that power away from us.

- Cryptocurrency represents a litmus test for Governments.

It reveals how much your Government believes in,

in the fundamental freedoms and Human Rights

because if they don't trust their own citizens

to have control over their own money,

that says a lot about the government

and says very little about cryptocurrency.

- [Torsten] You see, the reason why some Governments

and most banks are threatened by this technology

is simple, your private key and your wallet

can replace your bank account.

The network is run by software

and its currency is made and maintained

by computing power and electricity.

It can't be manipulated

by central bankers, Wall Street lobbyists

or politicians.

But with new freedom comes new responsibility.

- Simple rule, if you control the keys, it's your Bitcoin.

If you don't control the keys, it's not your Bitcoin.

Your keys, your Bitcoin.

Not your keys, not your Bitcoin.

Your keys, your Bitcoin.

Not your keys, not your Bitcoin.

- [Torsten] Got that?

If you lose your key,

you will never be able to access your coins again.

And if someone hacks your computer

where you store those passwords,

your coins will be stolen in a second.

And remember how Wences's family

had their money stolen by their own government?

Well, maybe that's why he built the Fort Knox

of Bitcoin security, Xapo.

- Most of our seven million customers

are in emerging markets.

In countries where there is problems with the currency,

we have explosions in activity like Venezuela

right now or Turkey.

And we develop this system of vault

where we have five private keys

for each one of our Bitcoin addresses.

We keep those private keys

in an offline server that has never been online,

will never be online.

It's inside the vault.

The vault is inside a bunker,

usually deep underground.

Our main one is in Switzerland

in a decommissioned military bunker.

- [Torsten] I just had to see it for myself

even though it took months for us to get cleared for a tour.

(soft music)

We were met by Christoph Oschwald,

a former military commander who runs the place,

and a representative from Xapo.

Christoph said the guards would rather shoot us

than show us around.

I hope he was kidding.

- They need to bring in the material

to the other side of the personal lock.

- [Torsten] First up, one more check of our IDs,

a pat down for weapons or any other monkey business,

and gear inspection.

Even the boss was searched.

It took nearly an hour to get my team through security,

but it was worth it.

No other film crew has been allowed access.

- We are the largest custodian of Bitcoin in the world

because a lot of the largest holders in the world

use us for security.

- [Torsten] Rumour has it

that 10% of all Bitcoins are stored here

and in their four other secret locations.

(soft music)

- Unfortunately, I can't confirm any of those numbers.

- From the mountain,

we are getting a lot of benefits, right?

Earthquake proof,

flooding proof,

but on the other side,

you're facing a lot of additional costs.

- [Torsten] Like maintaining seven independent

backup power supplies.

The labyrinth of tunnels deep into the mountain

is interrupted by nuclear grade doors.

(soft music)

It's a level of security

applied to all of the data Christoph protects here,

not just for Xapo.

- We cannot talk too much about it

because it's pretty secret what is down there.

- Are we allowed to film there?

- No.

- [Torsten] There were doors that remained shut

and security measures we weren't allowed to see.

- And some of those checks may be biometric

including the eye and the finger print scan

and the fingerprint scanner

also makes sure that you are alive

so that you didn't cut someone's finger

and you're just using it to open the gate.

- So you must have a pulse.

(soft music)

- Don't touch the racks.

- [Torsten] These aren't Xapo's actual servers,

but if you've ever wondered what cryptocurrency thieves

dream about, it's sitting somewhere down here

unplugged from the Internet.

- There is absolutely no way,

zero way to attack the data on the cold storage site.

- [Torsten] But here's my question,

why do I need the cold offline servers

to be inside a mountain?

Why can't it be in my basement?

- While the server is in the basement,

it still can be stolen, right?

So this is like money.

It is data, yes,

it's bits and bytes,

but it is money at the end,

and a lot of money.

This is why this data centre here

is more a bank than a data centre.

(soft music)

- [Torsten] Okay, let's do a quick recap.

We now have billions of dollars worth of data

secured in digital banks

deep inside secret military bunkers.

If you don't think Bitcoin

is already changing the world's concept of money,

you haven't been paying attention.

Remember Mervyn?

He used to be a senior executive at Deutsche Bank.

His colleagues once said Bitcoin

was for law breakers and troublemakers.

He now runs $100 million crypto fund out of Malta.

- Our research shows that the crypto markets

are gonna probably be worth about $8.7 trillion in 2027.

- Which is 50x from today.

- Exactly.

- [Torsten] Most financial analysts

say you better stick to your shares and bonds and dollars.

Bitcoin is dangerous nonsense,

far too risky as investment.

To others, Bitcoin is an escape hatch

that will take them away from risk,

an insurance against financial doomsday,

a way out of the debt crisis,

negative interest rates,

trade wars, and economic downturn.

They say it's an anti-fragile asset

uncorrelated to financial markets.

So who's right here?

Well, every time I turn on the television,

it gets even more confusing.

- Bitcoin is worth about a bit

under $200 billion today.

All the gold in the world is worth eight trillion,

and it could become the next gold.

- In terms of cryptocurrencies, generally,

I can say almost with certainty

that they will come to a bad ending.

- But if Bitcoin is out there, and gold is out there,

it can be a participant in bringing down the dollar.

- I say it's the mother of all bubbles,

and it's also the biggest bubble in human history.

- Do you think this is a currency?

A currency that's really gonna work eventually?

- Well, I think it is working.

And there will be other currencies like it

that may be even better.

- Bitcoin is successful

only because of its potential for circumvention,

lack of oversight.

So it seems to me it ought to be outlawed.

It doesn't serve any social useful function.

- [Torsten] This film isn't investment advice,

but it strikes me that most of these TV shows

just want to stir controversy.

They don't understand what's going on,

but they know that filling airtime

with a controversial topic

will get them higher ratings.

So how about the general public?

In America, the younger generation

already starts to trust this new asset class

and Wences says Bitcoin

may reach a million dollars per coin.

- I would say the biggest financial mistake

you can make right now

is to own an amount of Bitcoin

that you cannot afford to lose

because it's super risky and you may lose it.

The second biggest financial mistake you can make

is not to own any.

Because you put 1% of your net worth in Bitcoin.

Most people can afford to lose 1% of their net worth.

And if I am right,

it's gonna be more than 100% of your net worth,

so with a non-material exposure,

you change your life.

Now what you would spend on a romantic weekend

with your wife,

say sorry, we're not gonna do that this weekend.

I'm gonna just buy Bitcoin.

Consider it spent.

It disappears, and check in seven years.

I either give you bad advice, and cost you a weekend,

or I want a grandkid called Wencito.

(laughs)

- But what you fail to mention is that the currency,

the micro transaction.

- All of that is irrelevant, right?

Meaning all of the cryptocurrencies

are way too volatile

for anyone to take them seriously.

- Hold on, let's go back to where we started.

Bitcoin was created as peer to peer electronic cash.

That was the killer app,

a payment directly from you to me,

from me to the coffee shop.

- I have bought a bag of coffee

for two Bitcoin in 2012,

which today costs me $12,000 in today's money.

That is a deflationary effect.

As long as Bitcoin keeps doing sudden increases in prices,

that's gonna stop retail use in it's tracks.

- With Bitcoin, you can send $1 or $1 million

worth of value anywhere in the world.

You can do it for free.

- [Torsten] But basically, looking at it now,

you lied to us.

Yeah, that's what they all used to tell me,

cheap, easy, fast, global, unstoppable.

I'm not done with you, pal.

But I need to explain what happened here.

Every block contains about one megabyte of data,

much smaller than a photo you post on Instagram.

That means only a limited number of transactions

can fit into each block.

If you want your payment to jump the line,

you can choose to pay a premium fee

or sit and wait.

At one point, the blocks became so full

that the transaction time went to several hundred hours.

That's days!

And it was more expensive than international wire services.

It got so bad that a Bitcoin conference

wouldn't take payment in Bitcoins!

And he's the guy who promised me moving money fast and for free.

What went wrong?

- That's a direct intentional result

of Bitcoin Core's policies

of intentionally making it slow,

expensive and unreliable.

- [Torsten] And Roger blames this guy

for Bitcoin not becoming a mainstream global currency.

- There are no shortage of conspiracy theories.

-

- Blockstream was founded in 2014.

The original co-founders are a lot of core developers.

- [Torsten] Those are the software coders

who continue building Bitcoin after Satoshi vanished.

Roger thinks those guys sabotaged the scaling of the network

so Blockstream could promote its own software solutions.

Sampson says come on,

the blockchain is already 200 Gigabytes large and growing.

- Every transaction made

has to go out to the whole network.

And every block that contains that transaction that is mined

has also to go out to the whole network.

And it has to be stored for eternity.

- [Torsten] The argument,

more independent miners will continue running Bitcoin

and ensure decentralisation

if the blockchain is kept small.

In his view, this decentralisation

is what makes Bitcoin valuable,

a store of value!

- So holding Bitcoin is also a use case.

- And that store money hypothesis,

I cannot get my head around.

It's the most,

like, nutty thing I've ever heard.

- One philosophy could be described as Bitcoin

as digital gold, and the other philosophy

could be described as Bitcoin as digital cash.

- [Torsten] The other team said

you guys have it the wrong way around.

First, Bitcoin needs to be usable as a currency,

a medium of exchange.

Then, maybe, it will become stable

and a store of value.

(soft music)

The solution is easy, just increase the size of the blocks

from one to two, four, eight megabytes

so that more transactions fit into them.

This will lower the fees,

and people will start using Bitcoin as cash again.

- The original title of the Bitcoin white paper

is Bitcoin, an electronic peer to peer

electronic cash system.

- [Torsten] But you know, Satoshi's white paper

isn't the Bible.

It's not a religion.

Stuff changes, we evolve,

we might find out new things.

So why this fixation on that white paper

created 10 years ago.

- There isn't any fixation.

It's not the version of Bitcoin that I got involved with,

and it's not the version of Bitcoin

that I want to support.

- [Torsten] So Roger joined forces

with a controversial online gambling billionaire, Bitmain,

a Chinese crypto mining company and this guy.

- I'll do whatever the fuck I want with my money.

- [Torsten] Okay?!

Anyway, they forced a software fork,

which is a split into two separate blockchains.

Every holder of Bitcoin now also owned

the same amount of Bitcoin cash.

- Roger had nothing to do with the creation of Bitcoin cash.

Roger didn't know about it

until a few weeks before it actually happened.

- [Torsten] But still, Bitcoin Jesus

had become Bitcoin Judas.

- Every revolution is followed by the counter-revolution,

which is usually a purge of the original revolutionaries.

- People are very passionate about Bitcoin.

And that's why they show a lot of emotion.

- When you're part of a tribe,

you get very religious about your tribe,

making the other tribe almost your enemy.

- It's very hard to debate Roger

because a lot of what he's saying is just his opinions

and his emotions.

You cannot debate someone's emotions.

- And then they basically diverted entire Bitcoin project

into something that wasn't usable as peer to peer cash.

- When he gave his talk,

I kinda knew that that whole debate slash panel,

I kind of expected it to go off the rails,

but I didn't expect killing babies.

- So that means more babies

are dying in countries around the world

because they have less economic freedom.

More people are starving to death

because they have less economic freedom.

People are literally dying because of this.

I'm not exaggerating.

This is a life and death matter.

- [Torsten] And remember that list of promises

that early Bitcoiners championed?

Cheap, easy, fast, unstoppable.

I forgot one.

- If you don't support free speech,

you don't support Bitcoin.

You're an enemy of Bitcoin.

- [Torsten] Censorship shall not be abided.

- In fact, I myself

have tried posting just a direct quote

from Satoshi Nakamoto,

the creator of Bitcoin.

- I think Roger complains a lot about censorship on Reddit,

but Reddit is just one of many platforms.

- Word for word quote from Satoshi,

without any additional commentary from myself at all,

and I've had that post deleted.

- Even though I may not agree with a lot of things

that Roger Ver is doing now,

I do sympathise with him

and his frustration with being censored.

- They're literally censoring the words

of the creator of Bitcoin.

- Ultimately, it's just a forum

that these guys set up

to talk about Bitcoin,

and they can do whatever they want with it, right?

- [Torsten] When I first started covering this space,

everyone was united in their struggle

against the establishment.

Now the industry has grown so much

that they are competing parties,

propaganda machines, conspiracy theories.

Looks a lot like politics.

- The biggest fight within the Bitcoin ecosystem

is over at the moment

is who has the right to the name Bitcoin?

But at the end of the day,

I think the version of Bitcoin described

in the Bitcoin white paper

has the strongest claim to the name Bitcoin

than anything else.

And that's Bitcoin Cash.

- [Torsten] Roger owns Bitcoin.com

and he has every intention of bringing Bitcoin Cash

to the masses,

even if it means that some people

coming to his website

think that they're buying Bitcoin

but they're getting Bitcoin Cash.

- I think it's fraudulent to say that in causing people

to buy Bitcoin Cash when they actually want to buy Bitcoin.

- [Torsten] So Bitcoin core fans

say Roger is hijacking the brand name,

and Bitcoin Cash supports claim that Blockstream

is hijacking Bitcoin's development.

- I mean yeah, it is a conflict of interest

because they're developing this open source protocol

in a way where their company can benefit from it.

- Everything we're doing is open source,

so it's not like there's some secrecy or anything.

You can see all the code that's committed,

and it does go through this vetting process.

- They have had influence.

I wouldn't say it's not true.

But I don't think they have enough influence

to actually corrupt Bitcoin.

- We no longer have anyone maintaining the project

just because we don't want

that potential conflict of interest.

- But in a way, now they've won the battle anyways.

- [Torsten] So who won Bitcoin's first war?

Well, both parties got their way.

After the split, the market valued Bitcoins much higher.

And Bitcoin Cash transaction fees were much lower.

- The benefit of the scaling debate or civil war was

Bitcoin was battle tested.

Like a lot of companies

and a lot of powerful people

tried very hard to try to change Bitcoin, and they failed.

- This thing that Satoshi Nakamoto launched

is much more resilient than anyone even hoped.

- I know, I know, you want to find out

what any of this has to do

with this new crytopia, a revolutionary internet.

We'll get there, I promise.

But first, we need to go from Bitcoins original blockchain

to hundreds of blockchains.

Back in 2011, when Charlie Lee was a Google engineer,

he wanted a faster and lighter version

of Satoshi's cryptocurrency,

and was one of the first to experiment

with the open source software.

- The actual coding in terms of the code differences

became Bitcoin and Litecoin

was actually pretty trivial.

- And what does that mean in time?

- I would say like four, four or five hours.

- Litecoin was positioned as silver

to Bitcoin's gold.

And it's network value grew to billions of dollars.

Some critics say: Well, you sold at the highest point,

and you kind of hurt the community.

What's your response to that?

- When I sold, no one knew it was at the highest point.

I didn't know it was gonna be the highest point.

Everyone thought it was gonna keep going up.

In hindsight, it was good timing,

selling it at that high.

But I'm still focused full-time on Litecoin adoption,

and working on Litecoin, Litecoin development.

So it's not like I sold it and just quit.

Nobody gets to kind of dictate

how Bitcoin improves or grows.

Whereas with Litecoin, I have a strong influence

on the growth of Litecoin,

which is good and bad.

It's kinda like difference between the benevolent dictator

versus a democracy.

The benevolent dictator is more efficient,

but you have to assume

that the benevolent dictator stays benevolent.

- Let's put a pin in that.

Litecoin was one of the first alternative cryptocurrencies,

or alt-coins.

Some of the early adopters, like Charlie, made fortunes.

Soon, there were hundreds of coins

made by cryptographers, copycats, and con-men.

There's a coin for bloggers,

a currency for online gamers,

one with anonymity, and even one for banks.

But can this invention unleash something even more powerful

than digital currencies?

(dog barks)

Back in 2014, I met the kid who knew how to do it.

- Hi, I'm Vitalik Buterin,

co-founder of Bitcoin Magazine,

founder of Ethereum,

and just general Bitcoin and crypto currency advocate.

- [Torsten] Just 19 years old,

Vitalik was on a mission to make money programmable.

- Vitalik is a very very smart guy.

The thing about Vitalik is he was pushed away of Bitcoin

because he had gone to to Bitcoin Core developers

and tried to build Ethereum on top of Bitcoin.

- [Torsten] And they basically said nope, not interested.

So he built a separate blockchain called Ethereum,

with its own currency called Ether.

- A comparison might be Bitcoin is like a spreadsheet,

and Ethereum is like a spreadsheet with macros.

- [Torsten] Using our analogy, Ethereum allows you

to store cryptocurrency and computer code

in the same secure box.

Here's how a smart contract might work.

Let's say I bet Charlie

that a Litecoin will be worth $200

on January 1st of next year.

We each put an ether into a box

along with a smart contract,

a simple programme that automatically checks

the price of Litecoins

on that future date.

If I'm right, the money goes to me.

If I'm wrong,

it's sent to Charlie.

- A smart contract is neither smart nor a contract.

It's a dumb program.

And once you understand that all it is a dumb program,

that clarifies a lot of stuff.

And the word contract there is in the meaning of finance.

- [Narrator] Most financial arrangements

are pretty simple and clear cut.

A bet with Charlie,

your home loan,

and insurance policy,

just two parties and some form of exchange of value

based on a set of rules called a contract.

The same is true for global financial markets.

Think bonds, futures, derivatives,

credit default swaps.

They're all just contracts,

and the world economy runs on them using middlemen

who all charge high fees.

Proponents say that if we used smart contracts,

we could tell the bankers,

lawyers, escrow agents, and Wall Street finance guys

to take a hike.

- A soda machine is a smart contract machine, right.

You stick in a dollar, you get a soda.

It's very, very simple.

The soda machine does take statistics,

and it has to make sure that you can't scam it

by stealing the soda,

but Ethereum and the people

that are trying to decentralise this

will tell you that that transaction,

that smart contract between you and the soda machine

is so critical that it needs to be globally processed

and saved at 100,000 decentralised computers

because it is so sensitive.

And in reality, 99% of all of these contracts,

they don't need this kind of censorship resistance.

- [Torsten] You know, in two years time

when people will see this film,

or in four years time,

I think will be an interesting historic moment.

- What we're doing is we're saying,

we have this Ethereum network,

inside the Ethereum network there's this asset called Ether,

and we're actually going to be selling Ether.

We're going to be selling Ether

at a rate of 1,000 to 2,000 Ether for one Bitcoin.

And that's how we're gonna raise all the money.

- [Torsten] It worked.

Vitalik figured out a way to fun the Ethereum project.

And it made his investors very rich.

(soft music)

This new model for fundraising soon had a name,

and initial coin offering, or ICO.

- IPOs and ICOs sound similar,

but they have, they're nothing similar.

The only thing similar about them

is they both help you raise money.

IPOs, you don't do until you have a company,

until you have revenue,

until you have users,

until you can actually prove to the public investors

that this is a valuable company

that's worth investing in,

and it's worth buying their stock.

ICOs, it's pre-product.

You have maybe a couple of people on the team.

It's just a white paper.

And so people are just buying into,

trust into faith that this is something that will exist.

- [Torsten] And this is the guy who opened the floodgates.

He crated a standard called ERC-20,

enabling you or me or anyone to create an ICO.

- So on the one hand,

you have these smart contracts,

these little programmes that can talk to each other,

but you have to define how do they talk to each other.

And because everybody now agrees to that same standard.

- [Torsten] Smart contracts can interact

within the entire Ethereum network

and the ERC-20 standard allow the creation of tokens.

- The goal here is like, ultimately,

I'd like to see eight year olds

building their own financial systems.

- [Torsten] Yeah, but what if some of these eight year olds

are also scammers?

- So let's say I'm trying to do a ICO,

and I create a smart contract

where I create a million coins,

and one of the transactions is that if you

send me $100, I will send you that many worth of coins.

- [Torsten] It was a mad gold rush.

- People realised wow, if,

if I can just pull up, pull together a project

and a white paper, I can raise money.

- Like a lot of money.

(soft music)

Some people hawking new coins didn't actually exist.

This handsome chap is the graphic designer

of a Bulgarian ICO.

Actually, they just posted a photo of Ryan Gosling.

Another project raised millions in Ether,

and then vanished,

leaving investors with this website.

Look closer, that's nice.

Most of the scam coins were built

on Vitalik's smart contract platform Ethereum

using Fabian's token standard.

This innovation has enabled a lot of criminals and scammers.

- So I would say the amount of scams

in that system are rather low.

It sometimes looks bigger than it is.

I would assume that the actual scams,

purposeful scams, in that system

maybe were like two or three percent.

I would say actually most ICOs were not scams.

- I would say about two to five percent of the thousands of ICOs

that are happening are actually legit.

- [Torsten] And the rest is?

- Pretty scammy, or just not gonna work.

- Can you define for me what a shitcoin is?

(laughs)

- I think it's just a derogatory term people use

on coins that they don't like

for Bitcoin maximalists,

people who only care about Bitcoin,

everything else is a shitcoin.

In my point of view,

I think a coin that is kind of a scam is a shitcoin.

So people create coins just to get rich from it,

print a lot of tokens out of thin air,

trying to pump the price up

and make a lot of money from it.

And it's not really providing a lot of value

to the world.

- [Torsten] No value for the world,

but they did add value for their creators.

If you can print billions of tokens out of thin air

like a central bank, well, that's why this guy

was one of the wealthiest men on earth for a brief moment.

Here's how that happened.

- [Narrator] There will only every be 21 million Bitcoins,

and it's inventor had to earn them

by mining with his computers

just like everyone else.

There are more Litecoins,

and even more Ether in circulation.

Vitalik kept some portion to fund the development team.

And then there's Ripple.

They created 100 billion XRP

but kept 80% for themselves and their clients.

And the other 20%, they gave as a bonus to the founders.

That's how you get to be one of the richest men on earth.

- [Torsten] Okay, maybe I was a bit too harsh on ICOs

democratising start up finance can be a good thing.

There were many legit companies raising capital too.

Over the years, I've met many founders

who have real offices with real people

trying to solve real problems.

But to Bitcoin maximalists,

Bitcoin is the be all end all of cryptocurrency.

Other blockchains, ICOs, smart contracts,

that's all a waste of time.

- There is no such thing as blockchains,

that revolutionise the healthcare industry,

and the automotive production...

- Of course there is.

- Huh?

- Of course there is.

What you're saying is a maximalist point of view.

You are speaking about from a perspective of,

of a cult or a sect.

My problem is that you are hijacking a movement

of a technology that is far greater

and has far more potential

than just these individuals.

- There's all of these different things

that you could use blockchain for, right.

And so people have,

they're almost like different ecosystems.

And then what you see is almost like an evolutionary process

right, where the blockchains fork

and they have the same ancestries,

but they adapt to different environments

and we see this like every increasing level of diversity

in number of blockchains.

So I think the idea that here's like one blockchain,

gonna be one blockchain

and it's gonna be fit for everything,

it's almost like disregarding the nature of evolution.

- Meanwhile, the big corporations

have been studying cryptocurrency.

And they think that Bitcoin's underlying database

is where the magic is.

The motto in the boardrooms,

Blockchain, not Bitcoin!

Back in Germany, my friend Oliver

keeps tabs on the men in suits.

He used to be one of them.

- [Torsten] BMW is looking at using the blockchain

for their future fleet of electric cars

to interact with public transport.

Lufthansa wants to see if the blockchain

can better track parts and maintenance.

And Deutsche Telekom is using smart contracts

to negotiate tariffs

for roaming costs with other telecoms.

(soft music)

if we can store trade certificates and shipping documents

on the blockchain,

you can check to see where those organic avocados

really came from, who grew them,

who packed them,

and who shipped them.

Besides, the Internet of things

needs a ledger of all those things.

Well, that's the idea

behind private centralised blockchains,

maintained and controlled by corporations.

A famous example, the Walmart supply chain trial,

which they're working with IBM.

That's a completely centralised.

They use a blockchain derived product Hyperledger,

but all the nodes reside on the IBM cloud,

and they're all administered by Walmart,

and the supplier is used because Walmart told them to.

It's a centralised database system!

But they marketed it Blockchain.

So that means one,

they wouldn't have got a New York Times headline

if they just said database.

- [Torsten] You might wonder

what's the point of a blockchain

if it's controlled by a company?

Well, I compare it to the open Internet

versus company owned Intranets.

They both exist.

Meanwhile, Facebook announced a cryptocurrency

for their two billion users.

Such a system might be more efficient

than a public blockchain,

but there's a downside.

Some Governments banned it within weeks.

(group chatter)

- Right now, the ways, pieces of paper,

that's being shifted around, that doesn't make any sense.

That infrastructure needs to be replaced.

- [Torsten] Why occupy Wall Street

when we can build a new one on the blockchain instead?

In the future of decentralised finance,

stock certificate, corporate bonds,

insurance policies, property deeds,

mortgages, all can be turned into crypto tokens

and made tradable 24/7.

(electronic music)

(electronic buzzing)

- What's much more exciting than tokenized securities

of traditional businesses where it's just equity

that you pass around

is totally novel digital securities

that you couldn't do before, right.

Novel use cases where you could kick back cash flow

on a continual basis.

I think some examples of this

that we're seeing now are MakerDao,

Binance which has Binance Coin,

that's actually much bigger of an opportunity

because it represents something totally new.

(soft music)

- My name is Dr. Jemma Green,

and I'm a co-founder and the chairman of PowerLedger.

And we use the blockchain

to enable electricity trading,

energy asset financing, and carbon markets.

- [Torsten] This award winning Australian company

wants to take us to a carbon-free economy faster.

Jemma has identified a problem.

- Apartment buildings, often the buildings are tenanted.

An it means that if there is solar panels,

the owner of the apartment isn't really incentivize

to put in solar panels or batteries

because the tenant benefits.

But using our platform,

the tenant will pay their electricity bill

to the body corporate.

- [Torsten] Using PowerLedger,

the tenant pays the owner, not the power company

for their electricity.

And if the tenant isn't at home,

the unused energy will be sold to a neighbour,

lowering their power bill

and making a profit for the owner.

- So it actually crates the mechanism

to justify investing the capital in the first place.

- This system could speed up investment

in sustainable energy projects

by making it easy to own a piece of a solar or wind farm.

(soft music)

Why do I need a blockchain for this?

Can't I invest in a solar farm without this new fancy tech?

- The blockchain acts as a kind of asset register

and income register,

and in tokenizing the asset,

it becomes tradable on an exchange.

You might own two or three solar panels

of a thousand, you know, in a solar farm,

and you would receive the income associated with that

amount of ownership.

(soft music)

- Now bankers don't very much like being cut out

of the cashflow loop,

so they took another look

at Mr. Nakamoto's curious little white paper.

And they've recently been spending

a billion dollars a year in blockchain research.

Isn't it ironic,

Satoshi's anti-bank invention

is now being used by the banks

to move money faster.

And by big business to track supply chains.

(electronic music)

Cryptocurrencies, digital tokens,

public blockchains, private blockchains,

where is the killer app?

Well, adoption of new technology

often follows old trends.

- My name is Marc Ventresca.

I'm here at Oxford, the University of Oxford

on the faculty.

I'm an economics sociologist by training,

interested in how large-scale infrastructure changes.

- So great so see you after nine years.

- [Marc] I know.

- [Torsten] Marc teaches a class

on innovation and system building.

He tells me what must align

for a new technology to become fruitful.

- All technologies start out as interesting ideas.

Some of them begin to develop into innovations

and we know that arc from invention to innovation

takes a lot of time, takes a lot of work.

Some of those innovations

eventually become commercially viable.

- [Torsten] Case in point, the automobile.

In the early days,

cars looked like a pretty lousy idea,

and poorly executed.

- Early on, there were electric cars,

there were battery operated cars.

The combustion engine was a relative late comer.

- [Torsten] It took Henry Ford's mass production

to create the standards,

what a car looked like,

what parts it needed,

how it operated.

That's when complementary assets

and infrastructure emerged.

- So you have a paved roads and petrol stations.

Then you have secondary things like motels and restaurants,

and places to eat while you're on the highway and buy food.

Then you have interesting questions

like what side of the road should we drive on.

- [Torsten] An entire ecosystem had been built,

but it wasn't a smooth transition by any means.

- The imagery here is there are maybe a couple of hundred,

three or four hundred companies

that tried to get into this space.

But they're not car companies.

They're bicycle manufacturers

or steam engine manufacturers.

At some point, in this account,

all that period of ferment settles

around a dominant design,

and then you have what,

again, what innovation economist would call a shakeout.

They would say you go from 300 or 400 producers,

all of them vying to shape this emerging space,

this emerging thing called the automobile.

You may then drop to 20 or 30 manufacturers.

And then you may drop to five or six.

(soft music)

- [Torsten] It took 50 years

for cars to go from curious invention

to finally tuned, mass market product.

50 years to change the world as we knew it.

♪ Bitcoin is Gold theme song ♪

- [GPS] Your destination is on the left.

- [Torsten] But our story isn't about cars or roads.

I want to learn about dominate designs

of digital technology.

That's why I came to the Computer History Museum

in the heart of Silicon Valley.

- So you're looking at the console for SAGE,

which was probably the first computer network.

which was probably the first computer network. - [Torsten] The US military and some American universities

- [Torsten] The US military and some American universities

There were 23 centres around North America - [Torsten] The US military and some American universities

There were 23 centres around North America

to warn against Soviet bombers.

And they were waiting for World War III.

asked this guy to create a new kind of network

to connect their separate networks.

- And this young girl

got up and she had a bunch of questions,

but her first one was

how did I manage to convince all the governments

of the world to let us build the Internet.

And I said well, except for the handful of us

that were actually working on the Internet,

nobody else really thought it was a very good idea,

and they didn't think it was gonna lead anywhere.

And you know, we pretty much had free running room.

- [Torsten] Yes, that's the man who co-invented TCP/IP

about 50 years ago.

That's their original academic paper.

You can think of TCP as the backbone of the Internet.

But back then, there were many competing technologies.

- There was a very big battle over the protocols.

TCP/IP didn't just win by default.

It won through attrition by basically being better,

simpler, easier to deploy

than all of the other proposals.

- [Torsten] More scalable.

- And more scalable.

And it had a lot of competition

from phone companies that tried to make the Internet

a closed, metered, controlled system.

They tried to do what people

are trying to do today with blockchains,

which is take the open decentralised network

and turn it into this sterile, closed corporate system

where they can charge by the minute and be in control.

- [Torsten] The Internet's ultimate victory

has a dirty little secret.

The men in charge of promoting it

were employees of the military

with the muscle and the cash to beat the competition.

- And then there's email.

- Email?

I heard that's really neat.

- [Torsten] Email was perhaps

the Internet's first killer app.

Then in the early 90s,

Tim Berners-Lee introduced the World Wide Web

as a 20 page proposal.

Soon, there were browsers that made it more accessible

and user-friendly for the general public.

(electronic music)

- I think that the Internet

is going to be one of the major forces

for reducing the role of Government.

The one thing that's missing,

but that will soon be developed,

is a reliable e-cash.

- [Torsten] Still, few understood the potential

of this new tech.

- From people who thought it would just be

the world's greatest library,

to some of the early cypherpunks,

who are the direct forefathers of crypto,

and certainly blockchain-type ideas,

who thought much as today,

that it would create kind of a Commons

that was outside of the direct control

and normal laws of Governments.

- [Torsten] That's ironic because the US Government

funded it in the first place.

The spiritual forefathers of crypto

who built the early Internet

thought it was a new technology

for global freedom of expression

and a blank canvas upon which they could build their dreams.

Boy, that sounds familiar!

And the media?

They didn't quite know

what to make of this new thing either.

But sure enough, they found juicy stories

about the dark side of it.

- Which was the Internet is full of criminals,

and paedophiles, and pornographers.

And it's too dangerous to use your credit card on it.

It's full of scams.

We're seeing the exact same story now.

- We envision technology as if it were autonomous,

as if it were simply outside of human and social experience.

But we see our technologies

that become shaped by commercial interests,

by political an regulatory infrastructure,

by actors who are acting for many reasons, right?

- Where do you want me?

- [Torsten] Remember Bob?

The big telecoms wanted his thoughts

on a little idea they were kicking around.

- They had a meeting

where they trying to figure out

how they could buy the Internet.

If they couldn't kill it,

well why not own it?

- I got asked that myself

by an executive at a large information company.

It was probably in 1990 if they could buy the Internet.

(scoffs)

- I remember asking them

well, why don't you buy the world economy,

then you can own everything.

Why don't you buy the weather,

then you can control that too.

- [Torsten] As the Internet's momentum and hype grew,

investors threw money at entrepreneurs

and shady characters.

(soft music)

- The joke in the Dotcom era

was that you put a dotcom behind your company

even if it had nothing to do with the Internet.

And the venture capitalist just throw money at you.

- [Torsten] It took a few decades and hype cycles,

but the wild Internet was eventually domesticated,

co-opted by trillion dollar companies

and then fundamentally transformed how we shop,

work, and communicate.

(soft music)

Speaker's Corner in London's Hyde Park.

For 150 years, this has been a safe place to stand

on a soapbox to sell your ideas,

preach the Gospel,

badmouth the king, or promote communism.

Today, with the World Wide Web,

we can stand on giant, digital soapboxes

using Facebook, Twitter, YouTube.

We can share our ideas,

or start a fight, with anyone on the planet.

- Well, almost anyone.

Of 65 countries studied,

China has the least free Internet,

worse than Iran, Cuba or Syria.

A police force of more than two million cybercops

and the world's most sophisticated

Artificial Intelligence system

keep China's web content clean and users in check.

So sorry to break it to you,

but there's no longer a World Wide Web.

Welcome to the Splinternet.

No, it's not just in China.

- [Narrator] In Russia, Wikipedia is illegal.

Facebook is outlawed in Bangladesh.

There's no WhatsApp in Dubai.

Twitter was banned in Turkey

after news about Government corruption spread.

And Saudi Arabia shut down

the region's largest news services,

Al Jazeera and the BBC.

Meanwhile, in India, the entire web was turned off

100 times last year.

(soft music)

- [Torsten] To be fair,

some of the censorship is to prevent terrorist recruitment,

or to stop violent mobs from hurting people.

But I think Government's control over the Internet

has gone just a little too far...

- Hello, I'm from the Australian Government.

Do you have something to hide?

We've taken the UK's fascist spying law

and made it even more fascist.

To test this shit fuckery,

we chose Australia,

the weakest of the Five Eyes alliance,

thanks to our lack of a Bill of Rights.

So international data requests

will now be funnelled through us,

compromising not just Aussies,

but all of you fuckers too.

You're welcome!

(soft music)

- Hold on,

Satoshi turned money into code,

code is just letters and numbers,

which is speech, right?

So money, now is speech,

which is a pretty powerful idea if you think about it.

But if Bitcoin is this uncontrollable,

uncensorable technology. Can the blockchain

also enable global free speech?

(soft music)

- [Narrator] In some places, it already does.

One Chinese student tried to report a sexual assault,

and was silenced by her college.

But she knew that she can attach a message

into the metadata of an Ethereum transaction.

So she spent 15 cents

and now her letter outlining her story

and the threats she received

is on the public Ethereum blockchain

where it will remain unchangeable forever.

(soft music)

- [Torsten] The early cryptopioneers

wanted to democratised money.

Finance 2.0, if you will.

But now, the believers in the blockchains

have their eyes on a bigger prize:

They want to decentralise everything.

Web 3.0.

Facebook without the propaganda.

Twitter without the terms of service.

Reddit without the censorship.

Online identity without the hacks.

Internet browsing without tracking software.

Websites without the advertising.

- We pay with either attention or privacy.

So we either have advertising thrown at us,

our attention is monetized,

or we pay with micro violations of our privacy.

- [Torsten] And that is why the internet today

is the ultimate surveillance economy.

One privacy tool is the Brave browser.

It doesn't store data

and pays users and content publishers

in their basic attention tokens.

(electronic music)

- What most people in the crypto space

are probably most excited about

is this notion that we can create

these kinds of user-owned decentralised networks.

You can, for instance, offer file storage

in the way that an Amazon does,

or that you could offer search,

you know, the way Google does,

but do it in a peer-to-peer fashion

without this behemoth at the centre extracting rents.

And do it in a way where all the people

that are users of it can benefit.

- Blockstack is the next evolution in computing.

We've seen three main eras of computing before.

We had mainframes that were these large computers

that everyone depended on.

Then we got desktops where users were in control,

and they owned their own computers,

and their data and information.

And then we saw cloud computing

where we're dependent on these large companies

running services for us.

And we're about to embark

on this major shift in computing

called decentralised computing

where users are getting back in control.

(soft music)

- And they really could some day compete with,

if not take down some of the big tech giants,

like the Facebooks and the Googles and the Amazons

that we know.

(electronic music)

- [Torsten] That's a tall, tall order.

- It is, it is, but I mean who would've thought

at the beginning of the Internet

that Wikipedia would beat out Encarta.

- [Torsten] These Web3 promises sound good,

but my professional network is on LinkedIn.

My personal photos are on Instagram.

If I deleted my accounts,

I'd lose everything!

These services aren't just walled gardens,

they are digital prisons.

- Data is locked up in several companies.

And we don't own it.

The companies own it.

But they use the data

to mine it, to advertise to us,

to sell us things,

to manipulate us,

to change our behaviour,

and Ocean Protocol is the answer

to freeing up the data

and giving the power back to individuals.

- [Torsten] So how do you plan to do that?

- It's essentially an operating system

on top of Ethereum

that allows for people to share data,

storage, algorithms,

and computation in a way that preserves privacy.

- [Torsten] It's too early to tell

whether projects like these can succeed.

But I do like the ideal of digital property rights.

Wouldn't it be nice if companies

paid us in cryptocurrency

when they use our data?

And if we control who has access to it

instead of our digital overlords.

And then there is the question

of our most precious information,

our very identity.

- If you take the history of mankind,

a lot of blood has been shed

getting to democracy, right?

The idea that every man has a vote in the world.

And you know, I take it kind of personally

because I was born in South Africa during apartheid,

you know, a child of Indian immigrants.

And we were not allowed to vote.

- [Torsten] Vinny tells me that in the United States alone

there are 14,000 different paper forms of birth certificates

issued by local authorities.

There are mistakes on them

and even identity theft starting from birth.

- All your information is already out there.

You know, there's five hacks a day happening,

so how do you prove that you are who you say you are?

(soft music)

- [Torsten] Our crypto celebrity Andreas

has 10 imposters on Instagram.

Ryan Gosling's alter ego

is committing financial fraud in Bulgaria.

And who knows what's happening

with your compromised information?

(soft music)

Blockchain-based services like Civic's identity.com,

or Microsoft's Ion say they can give us control

of our identity and protect it.

- Currently, we are having our reputation,

our history with different systems

and different companies, like Facebook and Twitter.

With the blockchain, the core of important information

sits on that trusted system

which we control and we can take from wherever

we want to go to something else.

- [Torsten] Meanwhile, Vitalik has inspired thousands

of software developers to build is vision

of decentralised finance,

but early in Ethereum's history,

something went wrong

with one of the first smart contracts

called the DAO.

- The DAO went like this,

they wanted a completely

"the Decentralised Autonomous Organisation".

They wanted a science fiction dream

of an independent computer program

that was immune to human influence.

So what they actually did was build a forthcoming disaster.

- [Torsten] The problem?

Some sloppy code left their safety deposit box wide open,

and somebody just helped themselves.

(soft music)

- It allowed them to pilfer $50 million

from this smart contract.

And that's why when I say it's not even clear

whether or not it was a hack, you know,

this smart contract allowed them to do that.

You know, what happened was the majority of the community

did decide to roll back the blockchain

and to pretend like the DAO never happened.

- [Torsten] Yep, you heard that correctly.

The top decision makers forked Ethereum

into two separate networks,

one where the money was gone,

and a new one where the money

was restored to it's original owners

breaking the first rule of cryptocurrency,

never alter the blockchain.

(soft music)

- Immutability last only as long

as the big boys haven't lost money.

- [Torsten] Just like Bitcoin,

Ethereum also experienced scaling problems.

When a decentralised app called Crypto Kitties,

I'm not kidding, went viral,

and the kitties bred like rabbits in it's blockchain,

the system ground to a halt.

The network is now being upgraded.

But there are many competitors

who claim that their blockchains are faster,

fairer, and more scalable.

The next shakeout will sure be interesting to watch.

- It's never easy to admit that,

that you've been fooled.

Maybe I've been fooled.

Maybe?

- [Torsten] The crypto community

doesn't agree on much of anything,

except when it comes to this guy.

- Hello, my name is Dr. Craig Wright.

I'm the chief scientist of nChain Limited.

- On the balance of the evidence,

Craig Wright almost certainly is not Satoshi Nakamoto.

- The proofs that he gave were not real proofs.

In the end, he either chickened out

or didn't actually have the proof.

- Craig Wright obviously seems to be a scammer.

- I'm happy to say that Craig Wright is a fraud.

- I know he's controversial.

No one really changes the world

without being bold, without disrupting peoples' ideas,

an without drawing a little controversy around the way.

(soft music)

- [Torsten] But the majority of industry

says Craig is crazy or a conman.

- So Craig, kindly join us on stage.

- [Torsten] And that giving him screen time

is irresponsible.

(soft music)

- And I'll say this quite frankly

because I've got more money than your country.

- [Torsten] But I was in the area

and just couldn't resist.

(soft music)

(doorbell rings)

(soft music)

A few quick facts,

Craig is the person

who claimed to be Satoshi Nakamoto on the BBC.

But his cryptographic proof didn't check out,

and since then, many just see him as an imposter.

- I'm the guy with a law degree

that used to work for federal police

and military intelligence.

(electronic music)

- You would actually be the perfect super villain

for us because everybody

kind of doesn't believe you, hates you.

What do you say to your critics?

- Do I start with a muahuahua?

Many people are hated early on

because they're not understood.

If it doesn't have a use,

it shouldn't have a value.

Right now, practically everything is a Ponzi.

I don't particularly like Ethereum.

It's a dead end.

They can say whatever they want about ERC-20

except practically everything they're doing

that they want to solve, I solved years ago.

Decentralisation was never the point of Bitcoin, ever.

I was called a fool then,

and I'll be called a fool again.

And every single time I'll be right.

I picked up "Mastering Bitcoin" the other day,

and I opened page one.

And I went this is wrong.

Silkroad was the worst thing to ever happen to Bitcoin.

- You seem to think that nobody else

has anything interesting to say.

You've already solved the problems many years ago.

That's kind of the vibe that I'm getting here.

- Fairly much, yes.

- [Torsten] Okay.

Turns out, Craig's playbook is patents.

Some say he's a patent troll.

- Well, I've got a bucket list bit

which is to beat Edison, which

as silly as it sounds

came from a Simpsons episode.

To beat Mr. Edison,

I need to get 1,085 (patents).

And right at the moment,

I'm on white paper 1,074.

- [Torsten] For each white paper,

he claims to file about 1.1 patents.

- The first 163 will be very shortly public.

Next year, people are gonna start seeing

that we have hundreds of patents,

and everything changes.

We file PCT and keep them secret as long as we can.

- There's a huge philosophical disagreement

between myself and Craig.

So I think patents

are Government granted monopoly.

- [Torsten] The big brains and big egos

who broke away from Bitcoin

couldn't hash out their differences.

So there was another split.

Craig's new coin also claims to be the 'real' Bitcoin.

And he wants to enable blocks a million times larger,

updating and storing this giant blockchain

will be impossible for normal computers.

I just can't figure this guy out.

Is he a genius, a madman, a fraud?

Maybe all three?

- And a lot of the things he says are very,

are just wrong technically.

- However, I did calculate

that nChain spent tens of millions of dollars

to develop and file these patents.

And some have been granted.

What's the point of having a war chest full of IP

if they aren't going to enforce it?

So basically what I'm looking at

is stuff that nobody's ever really seen in the community.

- [Craig] That's correct.

Yes.

- As soon as the price of Bitcoin

and the cryptocurrencies went higher,

what did most people do?

All they did was start adopting

all the worst behaviours of bankers,

scamming the market,

centralising wealth in a few hands.

- [Torsten] Hmm, I think that's called human nature.

- So everyone wants to change the world

simply because they're not in the position of power.

As soon as they get into that position,

they do exactly the same thing.

- [Torsten] So guys like you will build a better future

and we can trust you guys better than the bankers?

- You don't have to trust us.

That's the beauty.

We're building a trustless,

decentralised system that gives power to people.

(soft music)

- Trustless sounds like there's no trust.

But actually it means we don't need to trust you.

I think the better word should be trust-free..

About one third, or maybe half of all the cost

of all the transactions are paid to establish trust

between trading parties.

Like we're paying for lawyers.

We're paying auditors.

We're paying even police, even regulators,

Government to build trust,

to ensure everything will be enforced.

So trust is quite expensive.

Blockchain is the first time

that we saw some technology

that can eliminate the cost

or reduce the cost of trust dramatically.

Magical things will happen.

- [Torsten] Trust may be expensive,

but it's also in short supply.

All around the globe,

people have been losing faith in the media,

institutions, and Governments.

So what if this new technology

could fix one of society's biggest issues?

But the question remains:

What if you are cheated?

What if your password is stolen,

and the money,

the contracts,

your identity is gone?

If code is law,

who administers justice?

(soft music)

Aren't you worried that the promise of decentralizing power

is kind of in jeopardy with you and Charlie

and Vitalik and Craig

as such central figureheads?

- Yeah, I really wish

there weren't public figures or leaders.

I want everyone to lead themselves,

but sadly that's not the world we live in.

If you're gonna look to a leader,

you know, choose your leader wisely.

(soft music)

- But just how different are they

from our current political, financial,

and business leaders?

Are their systems really resistant to corruption,

immune to manipulation,

and worthy of our trust?

(soft music)

Maybe that's why the best bet is on the only project

without a figurehead:

Bitcoin doesn't care about human drama,

bad press, or what anyone thinks.

Yeah, sure, it hasn't succeeded as a global currency yet,

but in the past decade,

it has been the world's best performing financial asset.

So we're back to where we started:

The genius who vanished.

(electronic music)

- With Satoshi being gone from Bitcoin,

Bitcoin is really a very decentralised network and currency.

- He was intelligent enough to know that

a system without a father

was gonna be much more robust

than a system with a father.

(electronic music)

- No father maybe,

but without leaving a will,

the kids are now fighting over the meaning of his invention,

and the inheritance,

projecting their fears and fantasies onto his legacy.

(soft music)

For some, it's money for the Internet

that can replace middlemen

and bank the unbanked.

And maybe a tool for illicit trade,

or is it digital gold?

A totally new asset class.

A bet against the bankers.

And insurance against inflation.

Protection from corrupt politicians.

And a weapon against the state.

Maybe the end of money as we know it.

For some entrepreneurs, it represents a shortcut

to fund their dreams.

A platform for fairer finance.

Which is why incumbents fight it.

Some say public blockchains

are just slow and useless databases.

While big business is busy building private blockchains

to boost efficiency.

Or maybe this decentralised technology

is a new protocol layer for the Internet

upon which we can build a better web

to dethrone the tech giants,

reclaim free speech,

protect online identities,

and facilitate free trade in a borderless, digital economy.

Oh, and a tool to rebuild trust in our societies,

and yes, maybe even save the planet.

That's a never ending list of cryptopian ideas.

(soft music)

Isn't this a bit too much to ask

of a nine page document?

(soft music)

Yeah sure, the Internet and the Web

started out as white papers too.

But it took decades before it's infrastructure was built,

became user friendly,

and ready to scale globally.

- We kind of domesticate the wild potential

of technologies into what's familiar.

And we dramatically underestimate,

or under imagine

what that technology may eventually do.

- [Torsten] It'll be the users,

maybe billions of them,

who will adopt this technology without even knowing

what a blockchain is or how it works.

Because here's the thing:

The average users don't care about the wires

that move their money quicker,

don't know about the software

that moves this movie or that picture,

what will move them

are services that'll make their days a little brighter,

their chores a little lighter,

and their lives a little richer.

♪ Dude's got suits ♪

♪ Dude's got a tie and a big smile ♪

♪ And he's pitching me some blockchain ♪

♪ Supply chains are broken ♪

♪ Do we need his token ♪

♪ There's a pain in my brain ♪

♪ and I'm going insane ♪

♪ I don't want no blockchain ♪

♪ That one plays chess at his desk ♪

♪ poses for the press ♪

♪ The price of his coin just tripled ♪

♪ I just stare into the Ether, take a breather ♪

♪ 'cause I don't wanna cause a Ripple ♪

♪ Don't wanna cause a Ripple ♪

♪ I won't trust him with my money ♪

♪ Will never trust him with my life ♪

♪ Well I have been told ♪

♪ That my life is controlled ♪

♪ But Bitcoin ain't Gold ♪

(rock music)

♪ Talks Bretton Woods ♪

♪ That guy speaks code ♪

♪ Runs a full node ♪

♪ This is new money production ♪

♪ of illicit goods ♪

♪ This is a weapon of math destruction ♪

♪ This is a weapon of math destruction ♪

♪ This is a weapon of math destruction ♪

♪ That lady's quick on her feet ♪

♪ Lit in her a tweets ♪

♪ Says she takes on the haters ♪

♪ and nothing can break her ♪

♪ The Web could be much safer ♪

♪ And our Freedom quite greater ♪

♪ And it's all in this white paper ♪

♪ All in this white paper ♪

♪ I don't trust them ♪

♪ With my money ♪