[AUDIENCE] Hi, good morning Andreas.
I am enjoying your talk very much. I have a skeptical question. As you can hear, I’m from
Europe, where we still trust our government. [Laughter] [ANDREAS] I’m Greek originally. I would put
a question mark next to that, but… [Laughter] [AUDIENCE] Well, I’m from the Netherlands, so we
still trust it. My question is- I like your analogy… [that bitcoin is like] foreign currency. But when I arrive back at Schiphol airport,
there is a sign at customs which says, “If you carry more than ten thousand dollars,
euros, or whatever, you must declare it.” I think that is a good thing to have, because
there are all kinds of anti-money laundering [rules]. How would this actually work? Who would create
that trust and guardianship in the Bitcoin world? [ANDREAS] That world is gone.
I’m [sorry] to tell you that world is gone. When I go through an airport, I am transporting zero
currencies. Bitcoin doesn’t have a physical location. I don’t actually have Bitcoin on my phone,
hardware wallets, or other devices. I have cryptographic keys. Bitcoin lives on the
blockchain, propagated everywhere in the world. When [you or] I arrive at Schiphol, the bitcoin
is already in the Netherlands waiting for me. I didn’t transport it across the border.
It was already there. It is already everywhere. I’m moving, but my money
is global and always global. There is really no such thing as “transmitting” money
in Bitcoin [as you do with a wire transfer]. [When you spend], you declare a change of ownership
for [some] money in this global network. [It doesn’t physically move]. The whole framework
of laws around money transmission is obsolete. You do not transmit money anymore. It has reached
a level of abstraction where, as Microsoft would put it, “your money is in the cloud.” That means the message on the customs
board doesn’t have any practical meaning. When I have this discussion with regulators and
law enforcement agencies around the world, their immediate reaction is that I’m
questioning their authority to do this. “But we have a mandate from a
democratically elected government.” “You can’t tell us that we no longer have the authority
to do this.” I do not question their authority to do this. I very much question their means to do this. There is a very big difference when
suddenly the authority is ever-present, but the means [to exercise it]
have disappeared completely. Regulators are the first group to be disrupted by this
technology. It has removed their control of money flows. [In Bitcoin, money doesn’t] flow
[in the way they are used to]. This will force us to face a world in which money
exists universally and can change ownership… without ever being [physically] transmitted,
and borders are completely meaningless. If the same customs area said, “Please do not
bring any data,” [or “Please declare your data,” you would look at that and think it was silly. My data isn’t really here. I can leave my USB
sticks behind, but my data is in the cloud. What happens when money is only data? That is what this technology does.
Bitcoin is data, and it is in the cloud. It isn’t being [physically] transported.
Basically, those restrictions no longer work at all. I do sometimes have customs officials asking
me about [whether I] have bitcoin in my bag. I say, “No, I don’t,” which is the honest answer.
I do not actually have bitcoin in my bag. When I first started travelling across
borders [while] in the Bitcoin space, I was very reluctant to say the ‘B’ word at customs,
as it is one of their domains [of control]. I found a [good] approach is to go into full
pitch [mode], and then they will leave you alone. “So, what do you do [for work, sir]?”
“Bitcoin. Have you heard about it?” “It is this amazing peer-to-peer system that allows you-”
“Okay, welcome to the Netherlands, sir. Go ahead.” Just overwhelm them with enthusiasm.
They hate that. [Laughter] [AUDIENCE] A related question: in your view, what will be
the geopolitical impact of [cryptocurrencies], especially when it comes to pegged
cryptocurrencies or rogue nations? [ANDREAS] Yes, the geopolitical impact of
[cryptocurrencies will be] absolutely enormous. Over the last fifty years, we have converted money
from being a store of value, medium of exchange, and unit of account, into a system of control
and [a tool] in a global geopolitical game. When you have national money,
or what I call ‘flag money’… Do you remember the old airlines [which]
had a flag on the tail? Those are obsolete. And now it is happening to money. The idea that money becomes a system of control… to play geopolitical games, through embargoes
and currency controls, is a relic of the industrial era. It is being rapidly obsoleted by this technology,
which has radical geopolitical implications. It removes the ability of sovereigns
to control the monetary supply, removes the ability of central banks to take entire
populations hostage on a crazy hyperinflation drive… into disaster, as we are seeing now in Venezuela,
Brazil, Argentina, Cyprus, and Greece, etc. In all of those cases, the initial reaction is to apply
currency controls, to stop the population from fleeing, and keep them all bound into this hostage experiment. That game is over. It is not yet visible; only a tiny sliver
of the population can actually escape the controls. But right now in Venezuela, we are seeing the largest
surge in [the buying and usage] of bitcoin in the world, [due to] their hyperinflation problems. Only a tiny percentage of the
population can escape it now, but what happens when that [increases
to] 10%, 15%, 20%, 25% of the population? The entire hyperinflation experiment goes wrong and
the currency control system is fatally undermined. This has enormous geopolitical implications, yes.
Your initial reaction to this [may be], “We shouldn’t.” “We mustn’t.” “We can’t.” And yet it is [happening].
That is the basis we [must] start with.