This talk was given at a local TEDx event, produced independently of the TED Conferences. Dug Campbell explains why Bitcoin is not just the money of the Internet, but it’s the Internet of money.
He has been avidly following the impact of technology on society since the late 90’s and he’s convinced that the cat’s out of the bag when it comes to digital currency. As well as working as Product Marketing Manager at Skyscanner, he writes on how digital networks continue to influence the modern world. Oh, and he’s pretty sure the robots are coming, but doesn’t want to give an exact date.
Transcript
Transcriber: Elisabeth Buffard Reviewer: Denise RQ I want to speak to you today about Bob because I'm worried about Bob. Now, Bob is a very hardworking individual: indeed, he actually has had to travel to find his work, so he doesn't live close to his wife and family. In fact, he lives in a different country and sends his money back. But I'm not so worried about the fact that he has to work his long hours, although it would be nice if he didn't.
The things I'm worried about is the trust that he has to place in the system. And it is a system in which every time he sends his money home, he can expect some of that money to just disappear. When it's 414 billion dollars sent home to developing countries, and sometimes the bank charges have upped to 25%, we're not talking spare change here. Why can't Bob, with his own money, transfer whatever he likes to whoever he likes, in an age of email and instant communication?
Sounds strange, does it not? Well, he can! And, in fact, we all can, and the way that we can do it is by something called 'bitcoin.' Now, many of you will have heard about bitcoin, perhaps in the press, they tend to have lots of stories about... words, involving words such as anonymity, volatility, even criminality.
But the reality is that the stories the press tend to publish about bitcoin are often not the full picture. So, sure, yes, they talk about it being a new form of digital money, kind of like the email and cash combined, a way that you can transfer value immediately from one point to another, directly, instantaneously, across the web. And, sure, they might mention that, in some cases, the government and the banks have no control over this new form of currency. But that's where they tend to leave it.
And that's a pity because in actual fact, it's far more than that. So today I want to talk to you about trust, and the fact is that in a digital world, low trust transactions are hugely important. Many years ago, we used to live in communities where we did business face to face: we would go down to the local shop and pay cash, we knew the people we did business with, but as the time went on, and the economy grew, gradually this position changed because businesses realized, with the advent of the Internet, that they would be able to transact at distance and whilst this was exceptionally useful for us, as consumers, very convenient it came at a cost and that cost was personal trust could not scale. So we had a problem, so we turned to the banks and the large financial institutions, and we asked them to create a solution which they willingly did.
They came up with a big record which would say exactly who owned what which they kept behind lock doors. We had to pay them for the privilege of using it, but that was fine, and always good with the world. And then, in 2008, a paper was published by an unknown, called Satoshi Nakamoto, and over night, we suddenly discovered that we didn't actually have to trust this third parties any more because if we chose, we could adopt a new currency, a currency that was based on a digital age, one which was based on breakthroughs in computer science, and a network that was protected by security. And a network where every additional computer that was added would increase the power, and it had to be powerful, and it had to be resilient because on every single computer was contained a record of every single transaction that would ever be carried out or had ever been carried out using bitcoins.
It's a powerful concept. And, indeed, the network has become increasingly powerful, and in short time since launching, we now have a computing network that is more powerful than the combined power of the top 500 supercomputers in the world. By putting this network together, voluntarily, we've discovered a financial system which is incredibly resilient because it has no centralized organization which can be vulnerable to attack, or influence. All very interesting, but as soon as you start playing around with money, people don't necessarily like it.
There's a lot of power involved, and people are understandably attached to money, it's one of man's first technologies after all, along with the wheel and fire, and they are somewhat suspicious that there was such a growth in the value of this technology. So, for the first ever transaction that took place was accepted to be in May 2010, when a programer in Florida paid 10,000 bitcoins to get a couple of pizzas. To put that in perspective, 10,000 bitcoins at today's prices, approximately, is 6.5 million dollars. It's an incredible position that we are in now but it doesn't really matter how people argue about, "Is it a currency or is it money?" because the reality is that either will do.
In fact, the real invention is the fact that we have an invention that underpins the currency, and this invention is truly revolutionary. When you create a networking of computers is important that the computers will be able to speak to each other, they need to learn a language so that they can communicate easily, and once that --language, that rule, the protocol-- is in place then others can go off and build technologies on top of that level. For example, you might not know too much about HTTP or, indeed, smtp, but I can guarantee you that you know about websites, and that you've used email. All of this comes together to create a technology that is incredibly powerful, and now we have to work out what are we going to do with it because it's so powerful that it fundamentally changes the way that we can approach the development of value.
It gives us for the first time, the ability to transfer a unique digital asset from one point to another, instantaneously, without cost. Impressive stuff. But it's also impressive because it chooses a mirror, a total open mirror of what's happening in the rest of society because there's a big fundamental power shift taking place. What's happening is there's a shift from centralized bureaucratic hierarchies of organizations to technology-driven distributed networks of individuals.
And this is happening all over the place, so this is important because bitcoin has applied this concept of decentralization to money, but in the same way, across society, we have a position whereby a centralized organization is developed to solve a problem individuals didn't think they could solve themselves. It's historically true; think of media, think of the television and the news services that we expect. An individual generally couldn't walk around and collect so much information and then share it on a international scale, so we relied on media organizations which grew up to fill the gap. But with the advent of the Internet and social media, suddenly, you had a blogger; for example, during the Arab Spring you had exactly the same power to publish an article directly to the world from a mobile and to break a new story as an international TV channel.
This is incredible disruption, and it's happening all around the globe. Back in 1989, I vividly remember my dad returning from the office - he was clutching a VHS video if you remember those - and it was all about the information superhighway, and I remember vividly sitting on the floor in the room looking at this video that evening and watching as this pulse of cheaply colored graphics flew across the screen and a narrator spoke of stories of this magical future where information would transfer instantly from place to place, just like that. But I'll be lying if I were to stand up here to say to you today that I could honestly see all of the innovation and the inventions that would come as a result of the creation of the Internet. Of course I couldn't, of course I couldn't see the Facebooks, the Googles, the services that we used every single day.
We are at a similar place with bitcoin and its very early days. In the same way that the first TV programs were no more than us pointing cameras at people reading scripts just as they've done on the radio. So, we don't know where this could take us; however, we do have some indication because what has been created by this protocol, by this set of rules is the ability to transfer a unique digital asset from one place to another, instantaneously, without the involvement of a third party creating expense. And we can apply that in so many places now because with the safe secure transaction that we can't challenge, because it is all recorded on a central place, we can start to transfer property.
And once we start to transfer property then things get really interesting. You may have heard of a thing called "the Internet of Things," it's basically the way that physical objects are increasingly having sensors embedded within them that enables them to be able to communicate with wireless networks. As a result, there are more connected devices on the planet at the moment than there are people - which is pretty incredible already - but what the Internet of Things brings is digital identity to objects. What bitcoin does is it brings an economic identity.
Now things get interesting because now, for the first time, we can have computers, we can have machines, transacting with other machines directly, no third parties; they can transact with individuals or companies. This has never been possible before. You might have heard B2B or B2C this is M2B, M2C, machine. And we start to herald a new age because we have the facility to build this and to welcome the arrival of autonomous agents.
Autonomous agents are effectively computers that own themselves, bear with me, and what they need to do is to have the capacity to receive and send money, so they can buy the services that they need to keep themselves alive. An example would be a self-driving car. It could go out, trade itself on the network, have passengers jump in, jump out, pay it in bitcoin; the car could then use that digital currency and pay a garage directly for a service that it needs, such as the MOT. Crazy stuff perhaps, but let's bring it back to the present day why is bitcoin important now?
Well, it's important now if I ask you this one question which is, who do you trust with your personal data? Because the reality is I'm not asking: "Do you trust somebody to be honest or a company to be honest to look after your details?", I'm asking whether you trust them to be 100% secure for hacking. And year on year, the incidences of hacking and data leakage are increasing massively, you just need to look at what happened to the US chain Target a couple of months ago when up to 70 million costumers lost personal details including credit card details, home addresses, telephone numbers, names, the lot. You can't trust someone else with your details, is it almost impossible but yeah, we hand them out when we make credit card transactions.
If those customers had been using bitcoin that would not have happened because with bitcoin, in exactly the same way as if you were using cash, you do not tie you identity to a transaction. However, let's not pretend that this innovation is all about shopping. It is far bigger than that, and the reason it is bigger is because 1 billion people in this world have access to banking facilities. That means that 6.5 billion are prevented from accessing the global financial community.
Bitcoin changes that in an instant, suddenly, it gives everybody the capacity to act as their own bank, it gives them access to a currency that is not restricted, doesn't care who they are, doesn't care where they live, and can be accepted around the world. This is truly revolutionary because this brings these individuals into play, all of a sudden. Think of the capacity that individuals, that families, the communities have now, the potential to work themselves out of the state of poverty. And you might say: "Well, how is this going to happen?
How will they adopt the technology?" 87% of the people in Africa have a mobile phone at present, according to the Bill & Melinda Gates Foundation. Nearly 7 out of every 10 people in Kenya regularly use their mobile device to send or receive money. And M-Pesa, which is a hugely successful mobile money platform, in sub-Sahara in Africa, has now included a bitcoin wallet. So let's not pretend this is not going to happen; whether is bitcoin or another cryptocurrency behind it that's secured by the same mathematical certainty, this will happen because the advantages are far too powerful for them to ignore, a faster, cheaper, more immediate, instant transfer that can't be challenged.
So while you might say in this country it's little more than a diversion, and it's just digital money, I would quote the entrepreneur Andreas Antonopoulos who says: "Bitcoin is not money for the Internet, bitcoin is the Internet of money" because bitcoin provides mankind with the ability to reach agreement on a massive scale. It's never been possible before and money is just the first way that we can do this. I would say that there is no other option in reality for so many other people around the world, and like the early days of the Internet, sure, the technology may be a little bit clunky now, not too user-friendly, but there the similarities cease, this time it will be different, this time each of us has a mobile phone in his pocket completing the network and enabling Bob and millions of others all around the world to be able to do something significant with this time and this money that will be saved. It is up to us as the passive change accelerates to watch, to learn, and to take on board precisely what these innovations are creating so that we can come together and we can collectively help to shape the future over rules, over our communities, and over our society, for the collective sake of us all.
And that's why bitcoins are much more than money. Thank you. (Applause)