Introduction to the Internet of Money

Good evening, everyone! It’s such a pleasure to be here. This is my first time in Sweden and I’m enjoying
every moment of it… except for the weather. [Laughter] But other than that, fantastic! It’s so good to be at a conference about the
internet, because I remember my first internet… conference. It was in 1992. There were about one hundred people there;
all of them were either computer scientists or computer science students. Despite the fact that we were telling them
the entire world was about to change, no one believed us — at least, no one believed me
because I was 19 years old, awkward and shy. That wasn’t working so well. But it taught me one thing: it taught me to
trust my instincts. Because, in fact, it did change the world. My second book is called
“The Internet of Money.” The reason for that is because the technology
I’m going to talk about today is about to transform the world in equal measure. It will also transform the internet itself. Bitcoin, an invention created on January 3rd
2009 by an anonymous creator. Unleashed as an open-source project, built
by a community of volunteers. Run as a peer-to-peer network. Derided, laughed at, and ignored for the first
five or six years. But not so much anymore. People are beginning to pay attention, just
like with the internet. Things that were previously unthinkable are
now thinkable. People are beginning to notice that this is
something more than what they are told. And what are they told? Drug dealers! Pornographers! Criminals! Guess what? That’s what they said at the first conference in 1992. They were wrong then and they are wrong now. Every time you meet someone like a dentist
or a hairdress who uses bitcoin, it undermines that silly narrative. Bitcoin is a protocol, and what better stage
to talk about a protocol. The moment you start talking about Bitcoin
and thinking about Bitcoin, it brings up a very difficult question: what is money? Most of us, from all the conversations I’ve
had with thousands of people around the world, have no idea what money is or how it works. It’s one of those technologies that is so
deeply embedded in our culture that it has become completely invisible to us. In fact, we don’t even need to think about
money unless it stops working. In some countries, they realise that it stops
working and then everybody has interesting things to say about what money is. What is money?
At its very basic level, money isn’t value. In fact, you use money to get things of value
(products or services), but there is no value in the money itself. Money isn’t a construct of authority; we seem
to think that these days, because all of our money comes from certain authoritative sources. Some guy with a crown says “this is your money,”
and it’s your money. That’s the authority it comes from. But what if money could be created without
an authority? What if money could be created simply through
use? It turns out that what money really is, is
a language. Money is a language that human beings created
to express value to each other. As a language, it’s one of the fundamental
constructs of civilisation that allows us to exceed what’s known as the Dunbar number. The Dunbar number is the maximum number of
individuals who can operate in a tribe on the basis of kinship, of acquaintance. If you want two tribes to work together, you
need some common bond. These bonds have included culture, language,
religion, and money — a fundamental construct that allows us to exceed the scale of a single
tribe and engage in commerce with others on a greater scale. As our money has evolved in its scale, it
has allowed us to collaborate and engage in commerce on a greater level. Money is also, ironically, a system of control. Controlling money confers great power to those
who control it. As a result, kings and governments have always
held a very tight control over money, pretty much like how they used to hold it over religion
for the same reasons. Now that has changed. On January 3rd 2009, the world changed because
some person(s) created a peer-to-peer protocol. A flat network with no central servers, all
clients, that is able to express money as a content type. As internet professionals, you may understand
what I mean when I say “money as a content type,” money that is expressed purely as data,
transmitted using any communication medium that can convey information. A bitcoin transaction doesn’t need to be transmitted
over the Bitcoin network, although that’s a convenient way to do it. You could encode it in Skype emojis. You could write it up and put it in a Craigslist
ad. You could post it on Facebook in the background
of a picture of kittens playing with yarn. Money as pure information on a network that
is simultaneously uncensorable, open to anyone, neutral, and global. There are no borders on this new technology,
just like there are no borders on the internet. Everyone can access it because it is not a
product, it is not a company. You do not need to register for an account. You simply download a client. A Bitcoin client is very much like a web browser,
the user interface that ‘speaks’ the protocol to other Bitcoin clients out there. As soon as you download that one application,
you can join a global economy; that global economy is open to anyone of any race, religion,
creed, ethnicity, age, and gender in the world. For most people, this concept hasn’t yet quite
sunk in. The children born today may not know a world
in which banks exist, a world in which paper money exists, any more than the young people
in our industry today have no idea what the world used to look like before the internet. How many of you here remember libraries and
looking up reference cards? Okay, you’re over 40 years old. So am I. Gotcha! The children born today may never drive a
car, never have a world without the internet, never know a world where banks control money
and is issued only by kings or nation states. Money will be an integral protocol of the
internet as a content type that can be transmitted by anyone, anywhere. But that’s not enough. Let’s make it more fun. Every form of money, until today, has to have
a person behind it. Money can only be owned and managed by people,
or people together forming an assocation – a legal fiction called the corporation. But Bitcoin is a protocol where autonomous
agents can own and manage money themselves. No people required. Imagine a corporation with no directors, no
shareholders, no employees, running entirely based on scripted machine learning or maybe
just a few simple heuristic rules, that operates autonomously of any human action, managing
budgets in the amounts of billions of dollars. At this point in the audience, we have a split. Some people are thinking, ‘Oh no! That sounds terrible. What if it’s a virus? What if it’s intelligent ransomware that self-propagates
and buys Amazon Web Service systems so that it can grow when it’s successful? What if it starts running A/B testing on itself
by hiring programmers to make it better?’ Yeah, all of that is going to happen. But what if it’s an intelligent charity that
detect the emergence of a natural disaster, that automatically and instantaneously diverts
large funds directly to the people most in need without human intervention? And, unlike most charities today, 100% of
the funds donated go to those in need. The world is about to change. Self-driving cars? How about self-owning cars? Cars that are not owned by a corporation,
but cars that _are_ a corporation. Cars that pay for their electricity or gas,
maintenance and leasing fees by giving rides to human beings who pay them in cryptocurrencies. Imagine software such as intelligent articles
that propagate across the internet as content and expand their reach because people read
them. As a result, they’re able to buy more hosting
services so they can further expand their reach. This is not the money of your grandparents. It’s not the money of your parents. This is money that is fully programmable,
scriptable, with capabilities that can be finely tuned. You can specify who can access it and when,
how it can be dispersed. A whole new field has opened up which is now
called “smart contracts.” This system allows people to program the behaviour
of entire systems that can also manage money. “Money” is such a narrow word to describe
this, because we use things all the time that kind of look like money but aren’t really
money. What about loyalty points, tokens, subway
cards, airline miles? What about the expression of a Justin Bieber
fan with full access to the catalogue of music, as a token? What about all of the other brands that can
be turned into tokens and made into a global exchangeable system directly on the internet
through this protocol? On January 3rd 2009, the world changed. Since then, more than a thousand other cryptocurrencies
have been created using the same recipe, almost all of them open-source. They’re expanding in all directions, exploring
every possible niche of this ecosystem, every tiny variation in capabilities and features,
creating new markets, raising funds for thousands of start-ups around the world. Thousands of software engineers and developers
are training to use this technology. The internet itself is changing very rapidly. Now we have autonomous agents that are using
money on the internet; these are, in many cases, beyond the control of any jurisdiction. What are the large corporations going to do
with this new magical, open, decentralised, neutral, borderless, censorship-resistant
network? They’re going to say, “Great! We’d like that… but could you take out the
open, decentralised, neutral, borderless, censorship-resistant properties and package
it with a service-level agreement (SLA), a twelve-month license, and control? Control for us.” They will take the internet and they will
make intranets. They will make closed gardens of boring, stale
content that is fundamentally insecure and sits in the backyard of corporations adding
a tiny bit of value. Outside the participation of the global community,
insulated from the wave of innovation that is happening all around us. They will create these intranets, they will
claim victory, they will turn around and they will say, “We invented Blockchain.” They will be wrong and they will fail. The real principle, the real exciting thing
about this technology, is not the blockchain, which is a database artefact created out of
this protocol. It is the ability to achieve distributed consensus
among parties that don’t trust each other, across great distances, without any central
party, authority, or intermediary. That consensus from the outside looks chaotic,
messy, and weird. Well, everyone in this room already knows
something that is open, flat, weird, and not understood by corporations: the internet. We already did it once, we’re going to do
it again. This time, we’re going to bring the entire
world with us. In the background of this grand story, there
is another story that’s playing out. After 25 years of the internet, it still takes
three to five days to send money from here to a country that’s not in Europe. It will still cost you $30-40 to send money. That’s only if the country you’re sending
it to isn’t a poor country, in which case it will cost far more and take far longer. A giant network of centralised, closed, corrupt
systems that are sucking money out of the poorest people on this planet. In 2017, 2.5 billion people do not have access
to banking. That means they have zero access to banking
and are entirely cash-based. That’s only counting heads of household — not
their spouses, not their children. Clearly they don’t ‘matter.’ That’s according to the International Monetary
Fund and World Bank. Imagine what happens if you bring banking
to an app, to everyone who has a $20 Android smartphone. Three-and-a-half to four billion people are
on the internet today; just over one billion people among them have banking and full access
to financial services. We’re going to bring it to the other six billion
fast. This is going to change the world faster than
the spread of cell phones. Imagine a $20 Android landing in a village
in Kenya. It’s no longer just a communications device,
it’s a bank. Not a bank account, but a bank. It can ‘wire’ and receive funds from anywhere
in the world. It can do lending or receive loans for a mortgage,
to buy seeds for a field, to bring disaster relief. It can internationally connect to every person
on this planet. We can do this within the next ten years. The world will radically transform when you
bring the capability of broad economic inclusion to everyone in this world. You would think that banks want to do this? You’d be wrong. It’s not really profitable serving people
who have little money, little connectivity, no access to ID, in oppressed countries with
terrible governments. Also, in most of those countries, banks _are_
criminals and criminal organisations. Or really quite indistinguishable from the
local mob. So how do we fix that? Up to now the approach for all of these technologies,
whether it was PayPal or any of the others we’ve seen slowly emerge in financial technology,
was to carefully and politely ask for permission. Bitcoin is not asking for permission. We “forgot” to do that. And we will proceed in (un)banking the entire
world without asking for anyone’s permission. This protocol is now spreading. If this one gets shut down, a 14-year-old
with a copy of my book can rebuild it in a weekend, in any programming language, and
launch it again with a new name. Again and again until we succeed. The world is now connected. Finance is now an application and money is
a content type. Welcome to our new planet. Thank you.

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