Video - Bitcoin and the Banks - Five Stages of Grief

In this talk, Andreas examines the rise of "the blockchain" as an attempt by the banking status quo to dilute the disruptive potential of bitcoin by removing it's most interesting features. He also added the relevance and Bitcoin's efficiency why it survives in the society.


Anthony Di Iorio: So the next person we've got coming up is somebody that I've looked up to for quite a while. Whenever I want to think how to explain a per turn problem or certain thing in Bitcoin, it's easy to go through his videos and just he explained things so perfectly and so well. He's the author of mastering Bitcoin. He spoke in front of the Senate in Canada recently and it was something that got a lot of attention. I'm sure most of you have taken a look at what he said there. It's an amazing talk.

And one of the first times--I haven't seen too many Senate hearing, the first time I've actually seen them clapping and actually really, really look up, look on their face like we just listened to something really special. Andreas, author of mastering Bitcoin, amazing speaker, and he's one person that actually has the chance to change so many minds going and speaking to governments and be able to talk in a way that makes things very simple and actually makes people think about it in such a positive light. Andreas, come on up.

Andreas M. Antonopoulos: Wow. This is pretty amazing for a meet-up. I apologize that I didn't realize this was a bring-your-own-chair event. So as you see the others they brought the chair each, even color-coordinated. I forgot to bring mine. So I'm just going to pace which is going to try the video people crazy. But if you've seen one of my videos, you know I don't do podiums. So welcome, everyone. It's really exciting. This is probably among the largest meet-ups I've ever done.

I think maybe the largest one was in London, but you're definitely giving them a run for their money and it's really exciting to see all of this energy in Canada with crypto currencies and big thanks to my host Anthony Di Iorio who organized this and for this lovely space. So let's get started. How many of you are here for the first time or being introduced a Bitcoin for the first time? All right, a few people. How many of you here are pretty familiar with Bitcoin? And how many you own Bitcoin? And how many of you cooed* 00:02:37 Bitcoin? All right, fantastic. Okay. So I want to talk about splitting hairs and I want to talk about the Five Stages of Grief. And I know you thought I was coming here to talk about Bitcoin, but I want to talk about Bitcoin from the perspective of his public perception. So three years ago, I would go places and tell people about Bitcoin and they never heard of it and they didn't know what I was talking about. And so I want to ask people, have you heard of Bitcoin, because that was a silly question to ask, right.

I would say let me tell you about something really exciting. Then a year later, people started hearing about Bitcoin so far was in a technology heavy environment. Basically, if I was surrounded by geeks, I'd be like "Well, have you heard of Bitcoin?" And they gradually started getting to the point where I could tell ask that question of same taxi driver. Get into a taxi, "Have you put a Bitcoin?" And this is gradual transition where you see mainstream awareness and people start hearing about it. Now, of course, what they're hearing is not one of the most amazing technologies in decentralized consensus networks and payment systems ever. What they hear about is drugs on the internet, right. So have you heard of it?

"I was at a conference talking to people about Bitcoin," and if you say that to the average person on the street they're going to look at you and then they're going to take a very subtle but firms that away from you, just in case. They're going to, I don't know, throw cocaine at the most. So the mainstream of partners right now is that we're all a bunch of degenerates, porn addicts, drug users, potentially terrorists.

So we're not sure it depends. Some of us certainly, yeah, in this room. And this is the mainstream perception. This is the first stage, denial, right. And denial happens with all innovative technologies. It's that that desire to dismiss change, especially if that change is strange and scary. We're talking about banks recently and the media. And what we're seeing now is they've moved from denial to anger, so angry about the terrible things you can do, right. Because Bitcoin is all about now, it's all about funding ISIS, right. So who here has contributed to ISIS recently? Okay. Sorry, I raised my hand there because you see I pay taxes in the United States. I don't know if you've noticed, but ISIS is driving M1A 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 and pallets of dollars and things like that.

And when I fill up my car, that money goes to Saudi Arabia. I also fund ISIS that way. So, oops, but I'll tell you this: I've never funded ISIS in Bitcoin. So that's keep that straight. But that's the kind of question that comes up, right. So we've gone from denial to anger. Now it's not just that we don't want to hear about this Bitcoin thing because it's strange and weird and possibly young people are interested in it. But because now it's scary, so we need to emphasize the scariness. And so now you don't speak about Bitcoin in polite company. "Have you heard about Bitcoin?" "Oh, no, no. I'm not getting involved in that kind of stuff." So that's the second stage of grief, anger. Now we move into the third stage of grief and this is the most really exciting because this is where things get really silly and fun. And this is bargaining, right, bargaining. So you start off with Bitcoin is irrelevant, then Bitcoin refuses to die for three years. So you can't say it's irrelevant anymore because it's worth $10 billion at some point.

It's traded all over the internet. People start getting excited about it. You know, 500 startups, $500 million in investment. That doesn't sound irrelevant anymore, so you drop that storyline, you go to anger. And so it's not irrelevant, it's dangerous. And now we're moving to bargaining. So now the new line is, well, the blockchain technology is really promising. But Bitcoin, the currency, that's just weird and volatile you don't want to touch that, right. So splitting hairs, this is the third stage of grief, bargaining. And this is becoming the mean of 2015 because now a lot of companies are trying to do this triangulation trying to split hairs, trying to say, "Well, we'll take a bit of blockchain, but you can leave that Bitcoin stuff behind." "So have you started a Bitcoin research group?" "Oh, no, no. No, we don't do that stuff." We've got a blockchain research group in our bank and we're studying blockchain technology.

So we're bargaining. And this is really hilarious because the first thing it reveals is that they don't really understand Bitcoin. You can't just cleave off the blockchain technology and say, "Oh yeah, this is revolutionary." Because it's not blockchain on its own is not revolutionary. What do I mean by that? Because some of you looking at me funny at this point why am I saying that the blocking is not revolutionary. Because the blockchain is a ledger. Blockchain is a ledger. How old the ledger's? Thousands of years old. In fact, the very first writing that we have discovered around the world on tablets, on stone, on papyrus, our ledgers. So if you have a page of papyrus, the very first page ever created, what do you write?

I'll let you write how many goats your neighbor owns you, right. Or how many vats of wine you sold to someone? And that's a ledger. There's nothing revolutionary about this technology. Now if you sewed up all of the vats of wine on the first page of papyrus and then you copy that number to the top of the second page of papyrus, now you're linking together these blocks of transactions. Well, that's a blockchain. And it's not really interesting technology. It's been around for ages. What's really interesting is a decentralized blockchain. Now that is fascinating.

A decentralized blockchain with no central authority, a decentralized blockchain that does not have a counterparty responsible for recording information on that decentralized blockchain, that is astonishingly disruptive and revolutionary technology, that changes so many industries. But that's not what's they're researching in the blockchain research departments of the big bank. Well, their researching is ledger's and what they're trying to do with these Ledger's is say, well, we kind of like this blockchain idea, but can we do it without techniques of mining and the decentralization and the open protocols and open access APIs. And all of that on archaic chaos everybody gets to be a bank crap. Can we just get a blockchain more like visa? Bargaining, the third stage of grief. And what's this grief about? Well, this grief is about: is one of the most entrenched uncompetitive monopolistic sucking consumer exploitative industries that exist in the world, banking. And that industry doesn't like disruption because disruption cuts into the profit margin.

And Bitcoin is disruptive. Bitcoin is not just a bit disruptive, Bitcoin isn't just a, hey, maybe we're going to have some competition from the payments networks. Bitcoin isn't like PayPal which they were able to co-opt and gradually morph into a baby visa. Bitcoin refuses to be co-opted in that way because it has certain pesky characteristics: decentralization, open access, open protocols, you know all the stuff they're trying to kind of cut off, remove, so they can turn it into a baby visa. And Bitcoin refuses to go away despite all of the smears and all of the bad language and all of the implications about that funding ISIS and drugs and things like that. Bitcoin is extremely disruptive in a way that we haven't yet realized. And even the people who are into Bitcoin don't really understand what's going on here. Let's look back a few years. Do you remember the dawn of MP3? I actually heard about MP3 about two years before Napster came out when it was an obscure protocol from the Fraunhofer Institute in Germany. And they designed this lossy compression algorithm that was really effective. And I didn't get it. I didn't see that this was going to do anything.

But gradually, it started eating away at the music industry. And then with the invention of Napster, it turned every computer into a desktop, music station. And suddenly, the music industry was threatened. And so they fought Napster and Napster turned into Kazaa. They fought Kazaa, Kazaa turned into LimeWire. They fought LimeWire and LimeWire turned into Gnutella. They fought Gnutella, they adopt BitTorrents and then they gave up because they couldn't fight it anymore because it was decentralized. Bitcoin started that way. Bitcoin started where BitTorrent left off in the you-can't-squash-this mode. MP3 stabilized the music industry. What's the music industry? $100 billion peanuts.

Peanuts, Apples swallowed it in a couple of years, right. When Bitcoin starts disruptive the banking industry, it's going to start applying something that in technology 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 there's someone who helps us do that thing and suddenly we don't need them anymore. Now when you do disintermediation in the music industry, it cuts the record labels out of the sweet deals and it allows customers to work directly with artists.

It allows artists to publish their music directly. And the record companies don't like that. But it still it's a little industry. When we start disintermediating the financial services industry, entire layers which are currently multi-billion dollar industries are going to evaporate overnight. Bitcoin is incredibly disruptive. And it's disruptive because of all of those little things that they pretend are not really important. So what comes after bargaining? Anyone?

Unidentified Male: Depression.

Andreas M. Antonopoulos: Depression, which is a great word because financial depression already happened in 2008. And I think we're about to see a replay of that particular thing because the financial industry is not going into this fight, ready for this fight. They're going into this fight leveraged up to their eyeballs with the worst reputation they've had in 200 years with everyone under 18 thinking that banks are the worst thing ever invented and responsible for stealing their jobs because they kind of did. And when you have an entire generation that hates you, and that's exactly the generation that's going to adopt this new technology. And you go into this fight leveraged up to your eyeballs, depression sets in pretty quickly.

Now some of the banks are going to be smarter and they're going to skip right over and go to acceptance. We saw this with the internet. At first, everyone was banding together. The phone companies were like, "We will not let this thing eat our long-distance market."

I remember when I used to call home to Greece from my college in London. And to make a ten-minute conversation, long-distance degrees, I would have to get literally a stack of coins and feed them into the meter every 10 seconds or so. My entire family would line up on the other end of that call and they would parade themselves in front of the telephone in do the, "Oh, hello, Andreas. This is Uncle John. How are you?" "Very well, thank you, yes." "And here's your Auntie Maria." "Hello, Aunt Maria." And 15 seconds per person carefully allocate it's moving the line, keep the line moving, people, because I just spent eight pounds sterling to make a 15-minute phone call.

When I testified in front of the Australian Senate, they said this is really difficult to arrange and we thank you for speaking to us from such a great distance today. And my last words to the Australian senate was, "Just remember that the phone companies didn't write the rules for the internet and that's why I could do this."

Because trust me, if the phone companies had written the rules for the internet and the side of my Mac* 00:17:57 there'd be a little slots, and I would have to feed * 00:18:00. The 10 seconds of the Skype calls I made just to preserve the long-distance market. And when that was happening eventually some of the companies decided they were going to break ranks and turn themselves in to Internet service providers. Now this is going to be a lot harder to happen in the banking industry because Bitcoin is a very, very difficult bitter pill to swallow.

The idea that banks are simply going to do a bit of blockchain and fight this disruption is ludicrous on its face because doing a bit of blockchain doesn't serve the other six billion, because doing a bit of blockchain doesn't unleash a torrent of innovation that comes from open protocols and open access, because most importantly a bit of blockchain with a centralized counterparty 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 live as slaves. And Bitcoin is going to change that. Thank you.


Written by Andreas M. Antonopoulos on February 8, 2016.