[AUDIENCE] Hi Andreas. I just wanted to ask you
a question about your organic metaphor…
of the decentralized network developing a resistance
to attack, which made me think of TCP/IP technology…
and how that was invented to be bomb-proof.
It was like a mesh, you could blow a hole in the mesh
and the information would [route] around the hole.
You have characterized the confrontation between
the old hierarchy and the new decentralized world,
what do you think of the irony of that
technology falling into public hands?
Is it possible that there is a cooperative
aspect to that confrontation as well?
The old hierarchy, at a subconscious level,
will cooperate with this evolution.
[ANDREAS] Some [parts] will, some [parts] won’t.
Again, I will now over-use this metaphor, but…
If you look at what happened on the internet, for the very
first decade or so, phone companies absolutely hated it.
They wrote the propaganda for the media about
how the internet could never replace phones, etc.
Today, every single phone call we make, especially
long-distance calls, is carried over the internet.
The vast majority of the phone networks,
the same ones that resisted the internet,
are now running on top of the internet.
So what happened? Was it the largest
telecommunications companies that adopted this first?
No. It was the third tier companies, the ones
that could not compete with the large companies…
[in terms of] capital, access to
legislators, and marketing budgets.
They said, “Well, we can’t play the game on your terms.
But we will use this internet thing to [out-compete] you.”
I predict we will see a bifurcation of the financial
industry, and we are already seeing that happen.
When we say “banks,” what do we mean?
There are different types of banks.
There are banks that deal primarily with consumers:
checking [accounts], savings, and [everyday] payments.
This is what most of the world’s regional banks are.
They [offer] loans, checking, [basic] currency [services].
They are not really bad in many cases.
They can offer some good services.
I have [even] had some conversations with
very large banks from developing nations.
They do not fear Bitcoin, but see it as an opportunity to
expand services to populations they don’t reach today.
Then there is the other kind of bank
which doesn’t really have customers.
You may notice that these banks are
gradually dropping consumer accounts…
focusing primarily on investments,
large concentrations of wealth,
gaming the stock market and other international
markets where they have significant advantage.
What do these banks do? They don’t fund consumers
or loans, because that is not profitable [enough].
They don’t care about expanding their services.
They fund oil companies to destroy the rainforest.
They fund warmongers to create dictatorships.
They fund large corporations to [get ahead].
Those banks will have a problem with Bitcoin.
You can see it in the way they speak about Bitcoin.
To them, this is inconceivable. They are now
[transitioning] through the five stages of grief.
It started with denial. “Heh, Bitcoin.
Just go and play, you little hackers.”
Then they noticed that [Bitcoin] wasn’t going away.
They became angry. “Criminals, pedophiles, terrorists!”
“The world will end if we allow normal
people to control their own money.”
Next comes bargaining: “We don’t like Bitcoin,
but the blockchain [is nice].” [Applause]
“That open, decentralized, borderless, peer-to-peer,
innovative, and open-access system you built?”
“Well, we can build one that is not open, decentralized,
borderless, innovative, or open-access.”
“We will completely control the blockchain.”
They are missing the point. Those are not features to
avoid, they are the features which make it powerful.
They are bargaining. I can tell you, it will not work.
Blockchains suck at the [tasks] banks want to do.
The use of a blockchain, with a decentralized
consensus algorithm, is inefficient [by design].
Because inefficiency is the price you pay to get freedom.
If you don’t care about freedom, why take inefficiency?
Just install a [standard] database [instead].
After bargaining comes the depression.
This will be a financial depression. More than 50%
of the world [lives in] what they call a “black market.”
More than four billion people are cut off.
Which economy do you want to serve
with your network-centric currency?
The big one, or the little one
that is broken, corrupt, and dying?
In the end, that will be the depression stage,
hopefully followed by the acceptance [stage].
Some companies will do very well by playing
in the game of network-centric currencies,
using them to expand access [regardless of] borders,
to be able to trade internationally and empower people.
[They will side with] the majority.
The [rest of the] banking system are dinosaurs.
They operate on ’70s technology. The dinosaurs
have enormous contempt and disdain for…
the little furry mammals running around their ankles.
They spend time squashing these little mammals that
are insignificant, but then there is a meteor in the sky.
Once the dust settles, we the mammals win.
This is a confrontational system, but
not because we are confronting anyone.
We are creating opportunities
that some do not want to see.
“During times of universal deceit, telling
the truth becomes a revolutionary act.”
The revolution is not in what you say,
it is the fact that you go against the lies.
Bitcoin and many of the technologies that [come]
with it, are doing that on a global scale today.
I don’t look for confrontation. Look for inspiration
and positive energy so we can create a community.
The banks are really irrelevant in this conversation.