Bitcoin and the Banks – Five Stages of Grief by Andreas M. Antonopoulos


[ORGANISER] The next person we have coming up
is someone I have looked up to for quite a while. Whenever I [need to know] how to explain a problem
in Bitcoin, it is easy to just go through his videos. He explains things so perfectly. He is the author of ‘Mastering Bitcoin,’ and
spoke in front of the Canadian Senate recently. It [received] a lot of attention. I’m sure most
of you have taken a look at what he said there. It was an amazing talk. I haven’t seen too many senate
hearings, but it was the first time I saw them clapping, with a look on their face like, ‘We just
listened to something really special.’ Andreas [Antonopoulos], the author of
‘Mastering Bitcoin’ and an amazing speaker. He is one person that actually has the chance to
change so many minds by speaking to governments, being able to talk in a way that makes things very simple,
[but also] makes people think about it in a positive light. Andreas, come on up! [Applause]
[ANDREAS] Wow, this is amazing for a meetup. I apologise, I didn’t realise this was a
bring-your-own-chair event. [Laughter] As you see, the others each brought a chair and
even color coordinated, but I forgot to bring mine. I will pace, which will drive
the videographers crazy, but if you have seen my videos,
you know I don’t do podiums. So, welcome everyone! This is really exciting,
probably one of the largest meetups I have done. I think maybe the largest one was in London, but
you are definitely giving them a run for their money. It is really exciting to see all of this energy
in Canada with cryptocurrencies. A big thanks to my host, Anthony Di Iorio, who organised
this [event at a] lovely space. Let’s get started. How many of you are here for the first time, or
been [recently] introduced to Bitcoin? A few people. How many of you are pretty familiar with Bitcoin?
How many of you own bitcoin? [Audience raises hands] How many of you are coding with Bitcoin?
Alright, fantastic. I want to talk about splitting hairs
and the five stages of grief. [Laughter] I know you thought I was coming
here to talk about Bitcoin; I want to talk about Bitcoin from the public perception. Three years ago, I would go places and tell
people about Bitcoin. They had never heard of it. They didn’t know what I was talking about. I wouldn’t ask people “have you heard of Bitcoin?”
because that was a silly question to ask. I would say, “Let me tell you about something exciting.”
A year later, people started hearing about Bitcoin. If I was in a technology-heavy environment
— basically, if I was surrounded by geeks — I would ask, “Have you heard of Bitcoin?” Gradually it started getting to the point where
I could ask that question of, say, a taxi driver. Get into a taxi… “Have you heard of Bitcoin?” There was this gradual transition [to] mainstream
awareness and people start hearing about it. Of course, what they’re hearing is not: “it is one of the most amazing decentralized
consensus networks and payment systems ever.” What they hear about is: “DRUGS ON THE INTERNET!”
[Laughter] “I was at a conference talking about bitcoin,” you say to the average person the street. They will look at you and take a very subtle but firm step
away, just in case you throw cocaine at them. [Laughter] The mainstream awareness right now is,
we are all a bunch of degenerates, porn addicts, drug users, potentially terrorists, though they’re
not sure. It depends. Some of us, certainly. Yeah, in this room! This is the mainstream perception. This is the first stage: denial.
Denial happens with all innovative technologies. It is that desire to dismiss change, especially
if that change is strange and scary. We were talking about banks recently, and the media.
We are seeing that they’ve moved from denial to anger. Angry about the terrible things you can do,
because Bitcoin is now all about “funding ISIS.” [Laughter] Who here has contributed to ISIS recently? Sorry, I raised my hand there. I pay taxes in the
United States; I don’t know if you have noticed, but ISIS is driving M1 Abrams tanks and Humvees
with the American flags hastily sprayed off. So, strictly speaking, yes: I have funded ISIS through
the U.S. Department of Defense, in U.S. dollars, by leaving behind a lot of nice equipment,
pallets of U.S. dollars, and things like that. When I fill up my car [with gas], that money goes
to Saudi Arabia; I fund ISIS that way too, oops! But I’ll tell you this: I have never funded ISIS in bitcoin,
so let’s keep that straight. [Laughter] That’s the kind of question that comes up, right?
We have gone from denial to anger. Now it is not just “we don’t want
to hear about this Bitcoin thing,” because it’s strange and possibly young
people are interested in it. [Laughter] Now it’s scary! We need to emphasise the scariness.
You don’t speak about Bitcoin in polite company. “Have you heard about Bit-?” “Oh no, I [will not
become] involved in that kind of stuff!” [Laughter] That’s the second stage of grief: anger.
Now we move into the third stage of grief. This is really exciting, because this is
where things get really silly and fun. Bargaining. You start off with “Bitcoin is irrelevant.”
When Bitcoin refuses to die for three years, so you can’t say it is irrelevant anymore. It is worth $10 billion, it is tradeable over
the internet, people [become] excited about it, and [launch] start-ups with $500 million in investment. That doesn’t sound irrelevant anymore. You drop that storyline and go to anger,
where it is not “irrelevant” but “dangerous.” Now we move into bargaining. The new line is:
“Well, blockchain technology is really promising.” “But bitcoin the currency is just weird and volatile,
you don’t want to touch that.” We’re splitting hairs. This is the third stage of grief: bargaining. This is becoming the meme of 2015. A lot of companies are trying to do
this triangulation, trying to split hairs, trying to say, “We will take the blockchain
but you can leave that bitcoin stuff behind.” “Have you started a Bitcoin research group?”
“Oh no, we don’t do that stuff.” “We have a blockchain research group at
our bank, studying blockchain technology.” This is really hilarious. The first thing it reveals is,
they don’t really understand Bitcoin. You can’t just cleave off the ‘blockchain
technology’ and say, “This is revolutionary!” Because it is not. ‘Blockchain’ on its own,
is not revolutionary. What do I mean by that? Some of you are looking at me funny.
Why am I saying the blockchain is not revolutionary? Because the blockchain is a ledger.
How old are ledgers? Thousands of years old. In fact, the very first writing that we discovered around
the world — on tablets, stone, papyrus — are ledgers. If you have a page of papyrus, the very first
page ever created, what do you write on it? You write how many goats your neighbour owes you,
or how many vats of wine you sold to someone. And that is a ledger. There is nothing
revolutionary about [ledger] technology. If you summed up all the vats of
wine on the first page of papyrus, and then copied that number to the
top of the second page of papyrus, you are linking together these “blocks” of transactions. Well, that is a blockchain. It is not really interesting
technology. It has been around for ages. What is really interesting is a decentralized blockchain.
That is fascinating. A decentralized blockchain, with no central authority, no counter-party
responsible for recording information. That is astonishingly disruptive and a revolutionary
technology. That [would] change so many industries. But that is not what they are researching in the
‘blockchain research department’ of a big bank. They are researching is ledgers and trying to say,
“We like this blockchain idea, but can we do it… without any mining, decentralization, open access
protocols, anarchic chaos, [‘be your own bank’] crap?” “Can we just get a blockchain more like Visa?”
[Laughter] Bargaining, the third stage of grief. What is this grief about? One of the [most] entrenched, monopolistic, exploitative
industries that exists in the world doesn’t like disruption. In banking, disruption cuts into the profit margin. Bitcoin is disruptive; Bitcoin is not just a bit disruptive. Bitcoin [doesn’t say], “Hey, maybe we [will
compete with the other] payment networks.” Bitcoin isn’t like PayPal, which [bankers] co-opted
and gradually morphed into a baby Visa. [Laughter] Bitcoin refuses to be co-opted in that way,
because it has certain pesky characteristics: decentralization, open access, [open-source] protocols… you know, all the stuff they are trying to cut off and
remove so they can turn it into [another] baby Visa. Bitcoin refuses to go away, despite all the smears, bad
language, and [accusations] of funding ISIS and drugs. Bitcoin is extremely disruptive
in a way we haven’t yet realized. Even people who are [interested in] Bitcoin
don’t really understand what is going on here. Let’s look back a few years.
Do you remember the dawn of MP3? I actually heard about MP3 two years before Napster
came out, when it was [still] an obscure [algorithm]… from the Fraunhofer Institute in Germany. They designed this lossy compression algorithm
that was [very] effective, but I didn’t get it. I didn’t see that [it would] do anything [interesting].
Gradually, it started eating away at the music industry. With the invention of Napster, it turned every
computer into a desktop music station. Suddenly, the music industry was threatened. They fought Napster, Napster turned into Kazaa,
Kazaa turned into Limewire; they fought Limewire, Limewire turned into Gnutella;
they fought Gnutella and got BitTorrent. Then they gave up. They couldn’t fight
anymore, because it was decentralized. Bitcoin started that way, where BitTorrent
left off, in the “you can’t squash this” mode. MP3 destabilized the music industry.
[How much is] the music industry [worth], $100 billion? Peanuts. Apple swallowed it in a couple of years. When Bitcoin starts disrupting the banking industry,
it [will] apply something we call “disintermediation.” Disintermediation is when an industry you painstakingly
built over a hundred years, becomes obsolete overnight. Disintermediation is when you and I want to do
something, and someone [offers a service]… to help us do that thing, but
we don’t need them anymore. When you [have] disintermediation in the music industry,
it cuts record labels out of the sweet deals, [but] it allows customers to work directly with artists,
and the record companies do not like that. But that is still a little industry [in comparison]. When we start disintermediating
the financial services industry, entire multi-billion dollar layers
will evaporate overnight. Bitcoin is incredibly disruptive because of all those
little things they pretend are not really important. What comes after bargaining? Depression. [Laughter] It is a great word, because financial depression already
happened in 2008. I think we are about to see a replay. The financial industry [will not be ready for] this fight. They are going in leveraged up to their eyeballs,
with the worst reputation in two hundred years. Everyone under 18 years old thinks that
banks are the worst thing ever invented, and are responsible for stealing their jobs
— because they did. When you have an entire generation that hates you,
exactly the generation that [will] adopt this technology, and you go into this fight leveraged up to
your eyeballs, depression sets in pretty quickly. Some of the banks [will] be smarter
and skip right over to acceptance. We saw this with the Internet.
At first, everyone was banding together. The phone companies said, “We will not let this
thing eat our long-distance market!” [Laughter] I remember when I used to call home
to Greece from my college in London. To [have] a ten-minute conversation,
I would literally [need] a stack of coins… and feed them into the meter every ten seconds or so. My entire family would line up on the other end of the
call and parade themselves in front of the telephone: “Hello Andreas, this is Uncle John. How are you?”
“Very well, thank you.” “Yes, here’s your Auntie Maria.” “Oh, hello Maria…” and so on, fifteen seconds per person,
carefully allocated, moving [down] the line. Keep the line moving, people! Because I just
spent £8 to make a fifteen minute phone call. When I testified in front of the
Australian Senate, they said, “This [was] really difficult to arrange [but] we thank you
for speaking to us from such a great distance today.” My last words to the Australian Senate were: “Just remember, phone companies didn’t write the rules
for the internet, and that is why I could do this today.” Because trust me, if phone companies
had written the rules for the Internet, there would be a little slot inside of my Mac Air
and I would need to feed quarters into it… [Laughter] every ten seconds during the Skype calls
I make, just to preserve the long-distance market. When that was happening, eventually some
companies decided they [would] break ranks, and turn themselves into internet service providers. This [will] be a lot harder to do in the banking industry.
Bitcoin is a very difficult and bitter pill to swallow. The idea that banks [will] simply ‘do a bit of blockchain’
and fight this disruption, is ludicrous on its face. ‘Doing a bit of blockchain’ doesn’t
serve the other six billion [unbanked]. ‘Doing a bit of blockchain’ doesn’t unleash the torrent
of innovation that comes with open-access protocols. Most importantly, ‘a bit of blockchain’ with a centralized
counter-party in the middle of every transaction… takes us right back to the world we live in today,
where control over money is control over freedom… and most of the world lives as slaves. Bitcoin [will] change that. Thank you. [Applause]

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