Trust Machine: The Story of Blockchain (2018) Movie Script

[low hum]
[sirens wailing]
[flames crackling]
LAURI LOVE: I'm Lauri Love.
I'm a electrical engineerstudent and activist,
internet busybody, [chuckles]believer in freedom
and autonomy andopportunity and franchise,
and try to do the thingsthat I can do to help those.
We're here at the site of theGrenfell Tower atrocity, where
people burned to their death.
So there's a few
hundred people here
to have a silent walk to markthe fact that there's still
unfinished business here.
And that happened in aself-organized, decentralized
And one of the benefits
of the internet,
as long as we
maintain that freedom,
is that there's low
barriers of entry
to being involved
in a protest action
or in a community responseto address a problem.
And we'll need that whenthe things that we rely on
to address problems fall short.
And increasingly,they're seeming to do so.
A lot of people usetechnology on a daily basis.
They don't really understand it.
They don't understand the waythat it can be used to control,
or it can be used to liberate.
When we use Twitter or
when we use Facebook,
we're not really the users,we're not really the customers.
We're the product.
Every day that you're
on that internet,
on that social network,you're being strip mined.
Your consumption
habits, your choice
of what entertainment
to watch, tie
down to a fixed identity
that's correlated
with your purchasing.
You are being monetized
on a daily basis,
and there's no informed
bargaining there
because people didn't understandthat this was potentially
a system of control
until it became one.
The internet is now a
tool of the accumulation
of central power.
What that means is we're
in a precarious position
if we don't take back someof that freedom and autonomy.
The blockchain enables differentkinds of pattern and structure
to grow.
It enables you to collaborate,not just on the level of ideas,
but on the level ofvalue and value creation.
Gives you an actual power toeffect change in the world.
And it's going to
scare the shit out
of some very powerful people.
[atmospheric music]
also told people
that it can trade at $100,000before it trades to zero.
If you're stupid enough to buyit, you'll pay the price for it
one day.
I don't personally
understand it.
Who cares about Bitcoin?
NEWS ANCHOR: Bitcoin's rollercoaster ride has seemingly
come from virtually nowhere andinto the public consciousness,
of course, over the
last couple years--
MAN: If you're a
modern criminal,
chances are you've used
to buy guns, drugs,
and even launder money.
MAN: So there is a
use case for Bitcoin--
if you're a criminal.
Great, great product.
I mean that.
MAN: I don't know
who started it.
Who's actually there?
Is it ISIS?
MAN: Bitcoin is still in
that sort of dark period
that most people
don't understand it,
but are willing to trade
because they think--
MAN: Make no mistake.
This is the Wild West.
There are now 1,300
MAN: Don't want to
see investors make
the mistake of getting
in here if they
are getting into somethingthat's fraudulent.
MAN: --no consumer protection.
MAN: --going up in thenext three to five years.
MAN: Is it a risk?
Why not make a buck?
[cash register ding]
MAN: --biggest--
MAN: Why not make a buck?
MAN: I don't understand it.
MAN: Why not make a buck?
MAN: We don't know--
MAN: Why not make a buck?
MAN: The charts are ugly.
MAN: Why not make a--
why not make a-- why not
make a-- why not make a buck?
MAN: The underlying technology,it's called blockchain.
MAN: --Bitcoin price
might be in a bubble,
but I think the blockchaintechnology behind it
is here to stay.
MAN: The next generation
of the internet.
NARRATOR: The informationage is only in its infancy,
and yet we have
already seen a barrage
of disruptive technologies.
Perhaps the most captivating andpolarizing of these innovations
is cryptocurrency
and blockchain.
Do they represent
a revolution that
will drive the next
phase of this era,
or are they a sham createdby overzealous hackers
and fraudsters?
To find the answer
requires going
back to the early days
of the internet itself.
[projector whirring]
1970s, early 1980s.
One of the beautiful
things about internet
back in those days, there was nocentral point of control in it.
If you could talk
anybody on the Net
into being your
neighbor on the Usenet,
then you could get copiesof any message they got.
[phones dialing]
It was sort of like a forum,but distributed worldwide.
You could post
messages in couple
of hundred different
topic areas,
and that message would
go into your computer.
And then the next time
it made a phone call out
to one of its
neighboring computers,
that message would
get transferred.
So it would spreadthroughout the whole network.
LAURI LOVE: There was a
very utopian ideal dream
with the internet.
It was a realized ideal
of not being vested
in centralized
power or authority,
but being a network that is opento all that anyone can access.
The internet was democratized.
NEWS REPORTER: A goal of theproject is to permit everyone--
young and old, rich and poor--
to be linked through
computer networks.
BILL TAI: There was a rapidadvance in the '80s and '90s.
Sort of, like,
private internets.
And then, boom, the wholepublic thing just exploded.
the warning signs
when the first centralizedservices were introduced.
The negotiation changed betweenthe user and the provider
of the service.
Imagine if you bought a house,and the basement was locked,
and only the original buildingcontractor had the key.
If you needed to make a
change, repair anything,
you had to go to him.
You're at that person's mercy.
NARRATOR: The internet becamean integral part of our lives,
upending many establishedforms of business
and promising a connected,democratized world
through social networks.
Criticism began to grow
as the internet became
more centralized.
While its worldwide
user base expanded,
power was being concentratedin only a handful
of giant services and platforms.
But in 2008, everything
started to change.
We're in the midst
of a serious financial crisis.
I cannot underscore enoughhow serious an issue this is.
NARRATOR: Amid a world economyon the verge of collapse,
a theoretical manifesto emergedby a pseudonymous creator named
Satoshi Nakamoto.
While some have been
falsely identified
as Bitcoin's creator--
I just believe that somebodyput that fictitious name
in there.
NARRATOR: --and othershave claimed to be Satoshi
in the flesh--
So you're going to show methat Satoshi Nakamoto is you.
NARRATOR: --the true identityof Satoshi is still unconfirmed.
MARK JEFFREY: We don't knowwho Satoshi Nakamoto really is.
Satoshi Nakamoto might
be Satoshi Nakamoto.
It might be the NSA.
It might be a company.
It might be a smallwoman living in Arkansas.
We literally have no idea.
thing seems clear--
whoever created Bitcoin andits underlying technology
had their sights set onupending centralized power
on the internet and beyond.
ALEX: How would you explainthe appearance of Bitcoin?
Well, I think
what's interesting
there is suddenly thisthing came out of nowhere.
It actually made a lot of newtypes of transaction possible
that wouldn't have
been possible before.
This website called
Silk Road was starting
to actually use
cryptocurrency to do
these illegal transactions.
And it also brought Bitcoinonto everybody's radar.
CHUCK SCHUMER: You want heroin,opium, cannabis, ecstasy,
psychedelics, stimulants.
You name it, they have it.
people were panicked.
A lot of people
in law enforcement
didn't really know
what to do about this.
They thought that this wasgoing to completely undermine
all of our legal systems
and our law enforcement.
And to a certain extent, it did.
Government needs to payattention to this technology.
This was made all the
more clear last month,
when federal law enforcementtook down and seized
an online marketplace
called the Silk
Road, on which many illegalproducts and services were
bought and sold via Bitcoin.
LAURA SHIN: What'sinteresting is that Bitcoin,
it's proven that you can createa currency out of software,
and people will value
it, and will use it.
NARRATOR: In April of 2013,Bitcoin's value swells.
Many call it a Ponzi
scheme and a bubble.
REPORTER: What do you thinkof the Bitcoin bubble stories?
Cover of the Financial
Times yesterday.
You know, bubble's aneasy term to throw around.
The question, really, you haveto ask about Bitcoin is, is it
going to move beyond justbeing this freak show reserve
currency story of the
online world to being
a real, viable, long-termtransactional currency?
REPORTER: And you say yes.
I say it's very possible.
[ominous music]
LAURI LOVE: What Satoshi didwas solve one of the biggest
unsolved problems indistributed systems theory,
which is the Byzantine
generals problem
is that you have a
system that's not
being centrally orchestrated.
[battle noises]
How do you keep it in consensus?
If you're going to useit for electronic assets,
then the thing you want
everyone to agree on
is that something's
only been spent once.
That's been called the
double spend problem.
And it had already been provedthat this problem cannot be
Nakamoto came up
with a solution
called the blockchain.
A lot of people are
like, well, what's
the blockchain versus Bitcoin?
The blockchain is
the flux capacitor
that makes Bitcoin possible.
DOC BROWN: This is what makestime travel possible-- the flux
each cryptocurrency
has its own blockchain.
And the blockchain
is basically a record
of all the transactions.
There's a lot of
magic and crypto
mysticism around the blockchain,but really, the answer
is it's simply a record
of all the transactions,
and it's constructed
in such a way
that cheating is not
possible, and that there
is no central server.
[birds chirping]
SPIROS MICHALAKIS: Myname is Spiros Michalakis.
I am a quantum physicisthere at the CalTech Institute
for Quantum
Information and Matter.
The amazing thing
about the blockchain
is how it takes some
localized information
and decentralizes
it in a global way
throughout the whole system.
And this is actually
very similar to how
we try to protect
quantum information
from the environment bytaking the local information
and encoding it in a veryglobal way, almost like--
as we call-- in a fractal waythroughout all these tendrils
where you have an initialseed, and then it would spread.
And each part of
this fractal is one
of the users of the
blockchain making sure
that the whole
thing is consistent.
Each block contains
some transaction data.
Each block in the
chain is verified
and contains informationfrom the block before it.
This transaction
history has an integrity
that comes from this idea.
And so if you want to
mess with the chain,
you cannot just mess
with any one block.
You have to mess with
all of its history.
[fast-paced electronic music]
It's an amazing way
of decentralizing
this information.
VINAY GUPTA: Decentralizedmeans the computers
are all over the world.
If one of them blows up,another one takes its place,
and you never really notice.
The network continues
to function.
And it's not owned or run bya single organization, kind
of like the internet itself.
But blockchain isn't
really a thing.
Blockchain is a process.
SPIROS MICHALAKIS: If youwanted to reverse this process,
it would be the same as tryingto take every atom of smoke
and try to reverse until itcame back to its original state
and place.
It's very difficult to do.
Even with the advent
of quantum computers,
we don't believe that
we can reverse this.
--losses on that, which
is key for people who boughtBitcoin near the end of 2013
as it ramped up to a
peak of about $1,200.
It's currently trading
for less than $600,
depending on where
you look to try and do
a Bitcoin transaction now.
NARRATOR: Regardless of thevolatility, Bitcoin's run-up
in value catches theattention of technophiles
and crypto fanatics
across the globe.
Anyone can use
their own equipment
to produce cryptocurrency ina process known as mining.
It was the beginning
of a digital gold rush.
MAN: --recognizes
all nine cards.
While that's initializing--it takes a while--
I'll take over the rig.
This is the rig here.
This is 9 RX 580,
8 gigabyte models.
SPIROS MICHALAKIS: Miningis using computational power
to try to verify one
of these transactions.
MAN: My plan is-- becauseI have more over there.
My plan is to actually--
SPIROS MICHALAKIS: Getting alot of different individuals
out there--
SPIROS MICHALAKIS: --andgiving them an incentive--
for example, in
the Bitcoin case,
by giving them a
part of a bitcoin.
NARRATOR: It's a race
to validate transactions
on the blockchain
and be rewarded
with freshly-mined bitcoins.
The more computational
power you have,
the better chance
you have to succeed,
which requires a lot ofmachines, and a lot of energy.
When we were there,
he said his rigs were
making $8 million
worth of Bitcoin a month.
I'm a smiling guy right now.
It's crazy.
It's the largest mine
in North America,
and most of the
rest of the world.
it's incredibly loud.
My God, how many
machines are there?
[speaking icelandic]
INTERPRETER: There areover 10,000 graphic cards
on this side alone.
More than the world's
biggest supercomputer.
[speaking mandarin]
was genius enough
to bend the rules of the
framing of the question.
How do you actually
make sure that this is
the right transaction history?
And it's introduced
an economic incentive
to keep that consensus, whichunderpins the blockchain.
users of the blockchain
maintain its integrity--
MAN: I have more cards to come.
SPIROS MICHALAKIS:--instead of having to have
trust in one central authority.
MAN: I got it running
at 30 megahash
across nine cards stable.
SPIROS MICHALAKIS: And that iswhere the cryptographic idea
comes into play.
Cryptography has been somethingthat has been going on
for a very long time.
From the ancient Greeks,
where they would just
shave somebody's head,they would write something
on the top of the head,
let the hair grow,
and then send them
on their merry way.
And on the other side, thereceiver of the message
would know to decrypt themessage by shaving their head.
[dynamic music]
JOHN GILMORE: Cryptographyis at the heart
of a bunch of important things.
It's at the heart
of mathematics.
Many important
questions in mathematics
have related to issues thatcryptography brings up.
How do you negotiate
with your enemies?
How do you exchange messageswith your ambassador who is
sitting in a foreign country?
It has a lot to do with
the conduct of war.
The Allies had made some
advances in cryptography
during World War
II that shortened
the war by multiple years.
SPIROS MICHALAKIS: Nowwe've gotten better at this,
but it's still what we call
classical cryptography.
Everything that is encryptedis encrypted in that way.
In the blockchain,
each one of the blocks
is protected using classicalcryptographic protocols.
MARK JEFFREY: With theinvention of the blockchain,
your trust is now in math--
the laws that
underpin the universe.
Blockchain is
basically a tool to rid
the world of a lot ofcorruption and unfair advantage,
and a lot of people arestarting to realize that that's
what this is, and
they're starting
to squawk about it right now.
personally understand
the value of somethingthat has no actual value.
You're stupid enough to buyit, you'll pay the price for it
one day.
I've also told peoplethat it can trade $100,000
before it trades to zero.
Tulips bulbs traded for $75,000once, something like that.
In the 17th century,
in Holland, tulips
became so popular
an entire business
could be bought with them.
The entire country.
It was, of course, tulip mania.
So what does Buffett
not like right now?
That would be Bitcoin.
He says that Bitcoin right nowlooks a little bit tulip-like
to him.
I wouldn't be surprised
if it's not around
in 10 or 20 years.
Everybody who's in it saysblockchain is so secure.
They act as if, look, nothing'smore secure than this.
It doesn't serve anysocially useful function.
This market doesn'tproduce even more tulips.
MAN: I haven't seen that
chart since the tulip.
We ought to just go backto what we always have had.
What happened to gold?
I find generally thatpeople that say those things
are people that don't reallyunderstand the technology.
I just don't know how much
homework they've done.
REPORTER: Can you givethem tenths and hundredths
of a bitcoin?
that they're--
You can, right?
What about the
mining of Bitcoin?
They have the picks,and they have the shovels.
REPORTER: Well, they're sellingit to the blockchain as--
the whole blockchain
ridiculous, is it not?
REPORTER: It's absurd.
MELISSA LEE: You have JamieDimon speaking about Bitcoin
just moments ago, makingsome very harsh comments.
You see the reaction there.
Down by 1.7%.
Here's what he said.
REPORTER: --people like JamieDimon calling Bitcoin a fraud.
MELISSA LEE: --worse
than tulip bulbs.
He would fire any trader tradingBitcoin for being stupid.
And Bitcoin won't end well.
like Jamie Dimon,
who say that it's a bubble.
He's starting to see peopletake money out of his bank
and put it into Coinbase.
Of course he's going
to say that stuff.
So you got to look at
who's the messenger.
individuals probably
have other motives to wantthe blockchain to fail.
It's the same thing, I guess,as having a car company that
has been using gas
say that, ah, hybrids
or totally electriccars, they're just a fad.
LAURA SHIN: It is true
that these technologies
do represent a threat to them.
If they have done the research,then they will pretty quickly
figure out that
these are probably
going to disrupt
their business models.
NARRATOR: He deposits hispaychecks in the bank.
It is added to the amountof his credit in the bank.
BILL TAI: If you think aboutthe function of a bank,
the bank is really just aledger of who owns what when.
It's essentially
cloud storage of money.
That's what a bank is.
You have to put your
money somewhere,
and then the bankhandles moving it around.
And it takes days to figure
that out, in their case.
And if you have
another system--
--if you can
automate all that--
--so all the assets and allthe people around the assets
already know who ownswhat when whenever it is--
--store their money themselves
and allows them to move
their money instantly--
--all the time--
--in any amount anywherein the world as easily
as transmitting an email--
--what is the
purpose of a bank?
--why do you need JPMorgan?
Why do you need Jamie Dimon?
The need for them
vanishes from the world.
[birds chirping]
likely years away
from blockchain-based
replacing our current financialsystem, if they do at all.
But today, in
nations like Kenya,
cryptocurrencies areproviding financial freedom
and empowering people to createincome in a struggling economy.
MAN [ON RADIO]: --analystssay it will take a long time
for the economy to recover.
EUGENE MUTAI: The first timeI heard of cryptocurrency, it
didn't make sense to me at all.
It didn't make
sense to me, money,
like a form of digital
money, and that's not
controlled by the government.
[girl babbling]
But I started miningcryptocurrencies June, mid-June
last year.
[light atmospheric music]
This cryptocurrency mining rigis just an ordinary computer
with a lot of graphic cards.
It's open air so that--
because it's generating a lotof heat, so that it can be
dispensed easily.
And so just down here--
My mining income is
actually really good.
My current earnings per monthput me at a middle class level.
There's a lot of cryptocurrencybeing moved around
by just Kenyans.
There's some form
of restrictions
from the government,
who still think it's
a Ponzi scheme or a bubble.
But it will bank the unbanked.
It enables the people who didn'thave this financial support
before can finally access it.
Especially in Africa, wherewe're sitting at more than 60%
of unemployment.
I think cryptocurrencies
are here to stay.
Blockchain is one of the biggestbreakthrough technologies
to ever exist to date.
And now we completelystart thinking about money
in a very different way.
NARRATOR: As the popularityof Bitcoin grows,
so does the number ofminers, and soon, there's
an explosion of
REPORTER: So let me
get this straight.
You took Bitcoin and you justchanged the font to Comic Sans.
And we put a dog on it.
NARRATOR: But Dogecoin
was only the beginning.
Everything from Jesus Coin,TrumpCoin, and UFO Coin.
Of course, porn gets in thegame with Titcoin and even
[bleep] Token.
Most of these are scams
or Bitcoin copycats,
raising the chorus of
naysayers who dismiss
the entire space as a joke.
NARRATOR: But to agrowing number of people,
blockchain is no joke.
They believe thistechnology has the potential
to upend everything from WallStreet to Silicon Valley.
[light electronic music]
REPORTER: Tim Draper
recently beat out
44 other bidders at the USgovernment's Bitcoin auction
last week.
Are you that much of a believerin the virtual currency?
I am very excited
about Bitcoin
and what it can
do for the world.
We're here at Draper
University Hero City.
There's a university
across the street,
and an incubator andaccelerator here with a network
of venture capitalists.
It's a whole ecosystem.
But blockchain is very specialbecause it's a new thing.
And it allows a whole
new form of creativity
that we can all benefit from.
It's amazing what
the blockchain will
be able to do over
the next 10, 15 years.
Insurance, banking, real estate.
Any of those industriesthat really hasn't caught up
to the new way of operating,
those are all fair game.
Even venture capital.
By having it being
a perfect ledger,
it becomes the accountant.
It becomes the lawyer.
It's like a bureaucrat
that is incorruptible.
you take nothing else
away from this talk, I actuallywant you to remember that,
while blockchain technologyis relatively new,
it's also a continuation
of a very human story.
going through one
of the greatest transformationsin the history of the world.
Hang on for the ride.
This is going to be awesome.
This is bigger
than the internet.
In my mind, this isbigger than the internet.
We are now entering afurther and radical evolution
of how we interact and trade.
NARRATOR: It took time beforethe finance and technology
sectors saw cryptocurrencyand blockchain as potentially
disruptive, while the USgovernment felt threatened
from the earliest
days of Silk Road,
and maintained an aggressivelydefensive position.
[traffic noise]
STEVEN MNUCHIN: We are veryfocused on cyber currencies.
We want to make sure thatbad people cannot use these
currencies to do bad things.
[ominous music]
MAN: If you canestablish another payment
system via cryptocurrencies,that gives us less control
over putting sanctions
on their economy.
No one can impose
sanctions on Bitcoin.
It allows North Korea a lot ofleeway to move money around,
to collect money, to storemoney to do the things
that Kim Jong-un wants to do.
There's been talk
about Iran doing this.
Obviously, Russia might
start getting involved.
[speaking russian]
MAN: It does complicate
the narrative.
And this first step is somethingthat not only New York,
but DC should be
paying attention to.
stable nations,
cryptocurrencies provide
a more urgent use
as a crisis currency thatcan help to circumvent
broken financial policy.
Venezuela is one such country.
And now to the continuingpolitical and economic crisis
in Venezuela.
REPORTER: With inflation
through the roof,
with jobs, cash, food,
and medicine scarce,
many Venezuelans have lostfaith in their politicians,
and they're increasingly lookinginwards, organizing themselves
in the hope of a better future.
GABRIEL: We have a very activecommunity of Bitcoin here.
It started around 2
and 1/2 years ago.
Many millions ofVenezuelans fled the country
because of economic turmoil.
They were scared.
Because we have
capital controls.
We have hyperinflation.
The prices keep going
up and up and up.
The IMF is predicting
that by the end of this year,Venezuela's inflation rate
could get as high as 13,000%.
LAURI LOVE: Bitcoin says,there's another way.
There's another way.
It's not going to inflatebecause we can't inflate it.
And that gives you
some assurance.
That gives you
incredible freedom.
MAN: [speaking spanish]
NARRATOR: Most cryptocurrencies,including Bitcoin,
are designed with a fixedsupply, and to be deflationary.
But Venezuela's government istaking all possible measures
to prevent further subversionof their economic power
by cracking down on
miners and creating
a cryptocurrency of theirown that they can control.
government has a plan
to pull the country out
of a deepening crisis,
and it involves cryptocurrency.
Venezuela launched a newoil-backed digital currency
This Bitcoin-esque virtualcurrency is called the Petro.
their fears of it
being too radical
and revolutionary,
there's a attempt to put thegenie back in the bottle.
This is also a means toexercise control over it.
GABRIEL: When I found out
about cryptocurrencies,
I could find my
means to live here.
There are so many opportunitiesby doing cryptocurrency.
NARRATOR: Whatever the
fate of cryptocurrencies
and their ability to disruptpolitical and economic power,
governments will
likely fight back
against any attempt toloosen their grip on control.
Governments are
threatened by this.
They're concerned about
criminal activity.
Bad people.
Things like kidnappings beingpaid with ransoms of Bitcoin.
Bad things.
And there is kind of
a long-term threat that
if something like
Bitcoin can exist,
even if they shut this one down,now that proof of concept's out
there, maybe there could beanother one, and another one,
and maybe you can't
put this idea away.
Hackers, they basically hadthis kind of idealistic vision.
NARRATOR: It's hard to
pinpoint exactly where
and when the hacker
movement got started.
Early hackers believed thatinformation and tools should
be free, and they openlyshared their work with others.
widespread proliferation
of open source technologies likecryptocurrency and blockchain
was exactly what hackers hadenvisioned from the beginning.
Hacker movements
like the cypherpunks
were driven by their
love of technology
and their strongly-held
beliefs, from the right
to privacy to the
freedom of information.
JOHN GILMORE: We all thoughtthat learning and teaching
about computer
security was essential
if we were going to have
networked computers.
It was important for privacy.
It was important for society.
MATTHEW GREEN: They said,maybe I could actually
build this kind of
ideal civilization
where cryptography andcomputers can actually make
us more secure than we were.
This movement came
a little bit out
of the political and alittle bit out of the tech.
It was the people
working illegally
in the underground who'vemade most of the advances.
MAN: The liberal arts majorswhose only computer time
available was if they gummedup the locks and snuck
into the building late at nightbecause they weren't allowed
to sign up for this stuff.
STEVE WOZNIAK: I was pretty muchlike the rest of the hackers.
I felt that I was something.
The rest of the world didn'tthink microcomputers were
going to amount to anything.
I just thought I had a
neat one for my house.
I'm going to show others.
I'm going to even help
them build their own.
JOHN GILMORE: What Satoshiwas trying to do was say,
how can we make a currencythat won't be completely run
by the government?
And he tried to do itwith software, with code.
Released that software
for free, and everybody
who makes bitcoins runs aversion of that software now.
NARRATOR: Some argue that thecomputer revolution could not
have happened without
that hacker ethic.
MATTHEW GREEN: But thegovernment, years ago, they
decided that hackers were goingto break into every computer
and launch nuclear missiles.
And so they passed
this incredibly strong,
vague, poorly-defined law calledthe CFAA, the Computer Fraud
and Abuse Act.
ALEX: Tell us about your case.
international fugitive,
in the words of the
Department of Justice,
because I'm perceived as beingrepresentative of this attempt
to undermine the authorityof the US government.
REPORTER: Lauri Love,
who has Asperger's, is
accused of stealing huge amountsof data from US agencies,
including the Federal Reserve,the Department of Defense,
NASA, and the FBI.
American authorities
want the 31-year-old
to stand trial in the Statesover charges of cyber hacking.
His lawyers say it could resultin a sentence of up to 99 years
in jail if convicted.
TOR EKELAND: The ComputerFraud Abuse Act, aka the CFAA,
has been called the
worst law in technology.
And the courts are
all over the place.
And it allows private partiesto essentially say, listen,
you violated our
terms of service,
you've signed on to Facebook,you lied about your age,
bang, you've just
committed a felony.
[ominous music]
Aaron Swartz gotprosecuted under the CFAA
for downloading a bunch
of academic articles
out of basically
a closet at MIT.
They went after him real hard.
REPORTER: The charges
could have landed him
in prison for up
to 35 years, along
with a million-dollar fine.
But with prosecutorspressing serious charges,
Swartz hanged himself Fridayat his Brooklyn apartment.
problem with these laws
is there's a lot ofprosecutorial discretion.
And so if the government wantsto go after somebody like Aaron
Swartz, they can do that.
And sometimes, you see
people being extradited,
put in prison potentiallyfor years and years
for doing something that, if ithappened in the physical world,
we'd probably call
kind of a minor prank.
TOR EKELAND: Lauri's a
very interesting case,
because what he's
alleged to have done
there is participate
in an operation called
Op Last Resort.
So Anonymous hacked the UnitedStates sentencing guidelines
website and replaced thefront page of that website
with a game of Asteroids.
They didn't do any real harm.
What this was is
this was a protest
of what happened to Aaron,and the abuses of the DOJ
in prosecuting computer crimes.
NAOMI COLVIN: When Aaron Swartztragically took his life,
there was a widespread sensethat US judicial system wasn't
working very well for peoplewho are involved in information
activism, or people whoare active on the internet.
NARRATOR: The internet saw therise of decentralized protest
movements, from Occupy
and Anonymous in the US
to the Arab Spring
in the Middle East,
where the internet was
literally turned off
to squash the revolts.
As the internet became
more centralized,
it became easier to disruptthese forms of protest.
But blockchain-based
represent a new potentialfor decentralized protest
and the freedom of information.
AARON SWARTZ: There's a battlegoing on right now-- a battle
to define everything
that happens
on the internet in terms
of traditional things
that the law understands.
There are a lot of people,a lot of powerful people
who want to clamp
down on the internet.
We can't let that happen.
It's a sort ofdisgusting and sick irony
that for allegedly
being part of a protest
on those kind of issues, Lauri'snow facing exactly the same.
MATTHEW GREEN: Some peoplewho are security researchers
and ethical hackers,
they say, well, I
want to poke at somethingbecause I'm curious.
And then, of course, there'sthe US government side, which
is a combination of, well,you could have done damage,
and, we're really embarrassedthat this was able to happen.
And sometimes, you see
a huge overreaction.
Department of Justice
launched a bullshit prosecutionover some young kid,
and the full weight of
the federal government
was brought against him.
And he killed himself
because of it.
That's what should be punished.
But instead, we've
got them trying
to throw somebody in jail for100 years who protested that.
--thank for coming
on the program.
Thanks for having me.
How do you respond, in broadterms, to these accusations?
Well, what I'm hoping is ifthe extradition is refused,
I'll have the
opportunity to respond
in court, which is theway these things are done.
The problem for
me is there's been
no evidence provided
over the three years
that I face these allegations.
INTERVIEWER: Are you a hacker?
LAURI LOVE: Yeah, Idescribe myself as a hacker.
A hacker someone who usestechnology, takes it apart,
and he puts it together
in interesting ways.
And I also work promotingnew technologies,
such as blockchain technologiesthat could create a better
financial system.
think you're going
to see government
always trying to control
any kind of
technology that allows
for decentralization, becausethat's a threat to their power.
REPORTER: A judge ruled todaythat he can be extradited
to America to stand trial.
Lauri Love, who's 31 and suffersfrom Asperger's syndrome, now--
LAWYER: --Lauri's caseto the secretary of state
for an order for extradition.
We're extremely disappointed
by that decision.
In fact, most of
the written judgment
is all about the defense case,because the prosecution didn't
actually call any evidence.
It is my belief
that it is not fair
or just that our boy, who'sgot mental health issues,
can be taken away from hisfamily or his support network.
Although he's lost
today, this isn't
the end of the legal
road for Lauri Love.
He still has the right togo to the court of appeal
to seek to have this
decision overturned.
NARRATOR: While Lauri
awaited a decision,
blockchain technology
was developing fast,
and a new crypto assetexploded onto the scene--
You are a platform
that would be best--
Like a decentralized
worldwide web.
REPORTER: Is there any--
OK, sorry.
My brain is smoking right now.
Give us a real-worldexplanation for what that means.
was a great application,
and we were all very
excited about that.
We saw how powerful that
first use case-- money--
could be.
Basically of the people, by thepeople, for the people money.
But the Bitcoin blockchainwas really just designed
for that one use case.
The entire Bitcoinnetwork is in the service
of this one application.
So Vitalik Buterin
wrote some white papers,
and his key insight was,instead of putting a new pocket
calculator button at everynode of a peer-to-peer network,
why not put a full
computer there?
And thus, Ethereum was born.
Ethereum basically
asked a simple question,
which is, why can't we putprograms into the blockchain?
The blockchain can store data.
It can store transactions.
Why shouldn't it store programs?
And if we put a program
into the blockchain,
why shouldn't it run atthe same level of security
as a bitcoin transaction?
LAURA SHIN: Ethereum is whatthey call a smart contracts
platform, which enables you tocreate more programmable money.
Smart contracts can disruptreal estate transactions,
the legal industry,
things in insurance.
It's just much more
complex processes
that you can run on
Ethereum over Bitcoin.
Essentially, the technologyis a trust machine.
Everybody using it can trust it.
And so you can start
building systems
that are different
from the old systems.
BILL TAI: Civilization
as we know it today is
a blip on a very long timeline.
Technology is a
series of waves that
builds one upon the other withaccelerating speed and size
and depth.
You used to make computersout of things that
look like little light bulbs.
And that wave was
totally changed
when it became littlegranular pieces that were
stuck on a piece of silicon.
That created the computer wave.
And then we had
the phone system,
a very long physical wire.
When people figured out thatyou'd take the conversation
and chop it up into littlebits, deconstruct it
to its basic element, andthen flow those things
over the lines and
reconstruct them,
they basically created thefoundation for the rule set
that became the internet.
So you could do everything.
Blockchain is the third
wave of our lifetime
that is a totalreconstruction of behavior.
Identity, assets, governance.
Those are going to change.
NARRATOR: Blockchain's
true believers
envision an entirely newepoch in human civilization.
Critics see deluded evangelismin the latest passing techno
fad, while some are
just hoping to strike
it rich in the frenzy
of crypto mania.
But whatever one thinks
of this technology,
brilliant minds
are hard at work,
inspired by blockchain's
and how it can be used
to address the world's
most pressing problems.
BILL TAI: If you think ofthe power systems today,
think about what happenedwith Hurricane Irma blowing
through the Caribbean.
[wind howling]
Now you've got the nationstate of Puerto Rico, millions
of people that don't havepower for four to six months.
NARRATOR: The situation inPuerto Rico isn't unique.
The majority of the
world's power grids
are centralized, and remainvulnerable to everything
from bad weather
to cyber attacks.
We're in this transition
from the old world
of centralized power
based on fossil fuels
with high emissions
to a future world of
clean distributed power.
And the question is,
how do we get there?
A microgrid.
And my definition ofmicrogrid is really simple.
It's any system that
can stand on its own.
NARENDRA MODI: As the developingworld leaps billions of people
into prosperity, the
world must turn to sun
to power the future.
a really large interest
in microgrids as a way toelectrify the developing world.
So rather than
install what would
be the traditional largeinfrastructure that connects
everyone, like the waythe US and other countries
electrified, you can start justby electrifying certain areas
in isolation.
These are sort of little
grids, microgrids.
And what you need there issome element of control.
There has to be
something there that's
balancing the amount
of energy you have
and the amount of energy thatpeople are trying to consume.
What we can do is take
control algorithms
and push them out
into the blockchain.
Basically it becomes
and as someone wants to jointhe microgrid, all they need
is one of these little hardwarenodes, and they're good to go.
Our first project's calledthe Brooklyn Microgrid.
It was an attempt
to take what was
until then theory, somethingwe'd put in white papers
and PowerPoints, andactually have a real project
we can point towards.
Brooklyn Microgrid
is in the middle of
Gowanus and Park Slope.
This is perfect for a
community solar setting,
so people on both
sides of the pond
can participate in apeer-to-peer market here.
REPORTER: The Brooklyn
Microgrid project,
a small power grid made up ofhouses on President Street.
It's using blockchain,the underlying technology
of cryptocurrency like Bitcoin,to decentralize and share
right now, we're
testing our hardware
in about 60 houses.
So these are basically
the small meter box.
Our technology is
using blockchain
to count the electrons that isbeing put back onto the grid.
And we collectively pooleveryone's green energy source,
and we put it on
a ledger, and let
everyone know in
the communities,
guess what, this is the amountof energy that's been produced
in your neighborhood.
And if you want to buy energythat's local, that's green,
why not buy it from
your neighbors?
BILL TAI: Blockchain allowsthe economic incentive
for every person that's
got space on the roof
to stick a little solar
generator on there,
or something else, and
interconnect, and be
a supplier in a marketplace.
A peer-to-peer energy gridwhere all of the elements
were interconnected, and
you'd have resiliency.
And the next hurricane thatblows through, part of the grid
might be gone, but you'd
still be up and running.
NICK BEGLINGER: Even though I'ma climate guy for the last 10
years, I kept on reading
about blockchain.
And we have quickly found thatit's not one particular area
that blockchain could reallyhelp implementing the Paris
But really, that there's a wholeplethora of different topics
one can and should go into.
Blockchain is really
the perfect tool for
the distributed energy
future we're moving towards.
there is a huge problem.
Bitcoin is using morepower than 158 countries,
which is not a good thing forcurrency network to be doing.
But it doesn't mean that thisis the future of cryptocurrency.
So I think the way weshould look at those things
is, when you give engineersa simple problem to solve,
or a straightforward problemto solve, they will solve it.
That is Dare Henry,
and it's meant as a form ofcombining heat and computation.
So when you're running
processes on a computer,
usually, we try to
remove that heat,
whether it's through a fanor with some centralized air
Heat's usually a bad thing.
But if you flip
that on its head,
and you try to run thecomputer as hot as possible,
and then you take
that heat and use it
towards space heating
and water heating,
we can actually increase
the productivity
of our computation.
I'm a firm believer thatthe efficiency of the system
is only going to get better.
Right now, it's
horribly inefficient.
I think the amount of
energy being consumed
by these computers
just to mine Bitcoin
is not a sustainable
model moving forward.
I don't think what we have todayis where we're going to land.
and climate are not
the only real-world
issues being examined
with blockchain-based
One of the biggest problemsfacing the average citizen
in the digital age is privacyand security, which at its root
is an issue of identity.
Here too, there are innovatorshoping that blockchain
will provide solutions.
reputation and identity
is sort of bestowed uponpeople by a few main providers,
so Equifax being one.
MORGAN WRIGHT: Look, thisis the nuclear explosion
of identity theft opportunity.
Look, they've got names, date ofbirth, social security numbers,
A lot of damage can be done.
More than 21 million Americanshad personal information
stolen from government
files in a data breach
that was six times as largeas originally disclosed.
--big story.
Potentially tens of
millions of Americans
are at serious risk
of identity theft
again after this country'ssecond-largest health insurance
company, Anthem Insurance,got hit this time
by a massive electronic attack.
MAN: How does this continueto happen at, arguably,
the companies that
should be thinking
about this kind of
problem the most?
MICHAEL SENA: They have provenunable to securely protect
your data.
So all of your data
is being stored
in one central place that isinsecure and easy to hack.
Your identity is now
lost on the internet
amongst the millions of others.
Our system actually
turns that on its head.
uPort is a self-sovereignidentity and user-centric data
What that actually means isthat you control your data.
No one else.
Basically, identity
without middleman.
And so I as a user can justregister my own identity
and directly control it.
NARRATOR: With our
personal data exposed--
and in some cases, beingsold to the highest bidder--
protecting our identity andeverything that comes with it
is more urgent than ever.
Zuckerberg, would you
be comfortable sharing withus the name of the hotel
you stayed in last night?
[nervous chuckle]
Uh, no.
DICK DURBIN: If you'vemessaged anybody this week,
would you share with us
the names of the people
you've messaged?
Senator, no, I
would probably not
choose to do that publicly here.
DICK DURBIN: I think that maybe what this is all about.
Your right to privacy,
the limits of your right
to privacy, and how much yougive away in modern America
in the name of, quote,
"connecting people
around the world."
blockchain companies
attempt to address the issuesof identity and privacy,
the global refugee
crisis has prompted
some of the largest
and most powerful
humanitarian aid organizationsto pursue solutions
with new technology.
CHRIS FABIAN: I'm Chris Fabian.
I run a small team in UNICEFcalled UNICEF Ventures.
UNICEF is a huge 12,000-personorganization that advocates
for and pushes for the rightsof the world's most vulnerable
And our team is a tiny
startup within that.
We've been working on
how we build up identity
in places for people who
don't have an identity.
One of the things
that we're testing now
is whether or not
we can use tokens
to provide some de facto
identity to refugees
or other unbanked people.
We're starting off with afew small tests in Ireland,
and hopefully, we're then goingto be testing that same token
in Lebanon and in Jordan.
[atmospheric music]
There are 55 million kids whoare on the move because of war
and violence, and
those kids don't
have a sovereign governmentto issue an identity card.
So how do we make
sure that they're
part of a global ecosystem,a global economy?
And you can't do thatwith old traditional ways.
You could imagine
a scenario where
you have somebody who's traveledthrough Europe as a refugee,
and they started in Syria,and they ended up in Ireland.
If they're a teenager,
they've probably
gone through five
paper identifications
at each country.
But if they had a token thatcould inscribe each time they
went through a registration,like, hey, I did this,
I was there, then you wouldn'tneed to necessarily issue
a new ID each moment.
You have one number thatlinks you to your identity.
This shows that
they had a history.
And you might then be morelikely to give them a job.
You know this person didn'tjust pop up out of nowhere.
And so for us, the token
is an electronic version
of that existence trail.
Being able to count
something that we know
is happening, being
able to count it
in an authentic
and auditable way,
and be able to do that publicly.
It's an accounting tool.
It's a ledger.
But if we can reduce the painpoints on the poorest people,
we give them a little bitmore time in their life.
And time is the most valuablething any of us have.
name is Houman Haddad,
and I work for the UnitedNations World Food Program.
The World Food Program
is the world's largest
humanitarian organization, andits mission is to end hunger.
We're in the Zaatari
refugee camp,
which hosts 75,000
Syrian refugees who have
fled due to the conflict there.
Currently, we're in one of thesupermarkets that essentially
provides groceries tothe people who live here.
What is special about what isgoing on in this supermarket
is that all thetransactions are actually
authorized and recorded
on a blockchain network.
It is through a projectcalled Building Blocks, which
is WFP's implementation
of blockchain
technology towards
humanitarian assistance.
[light instrumental music]
For the most part, this
is a normal supermarket.
You walk in.
There is the usual groceryitems that you expect.
You pick them up, you go tothe cash, they are scanned.
But at the time that
you want to pay,
instead of paying with
a card or with cash,
you pay with your eyes.
That returns a special code, andyour entitlements on Building
Blocks are tied to that code.
So without having anyphysical device or a need
to memorize a password,
the people we serve
can efficiently and effectivelymake their purchases.
What we've done
with Building Block
is essentially taking allthis accounting portion
and put it on blockchain.
And because we're authorizingevery transaction ourselves,
we essentially have areal-time record of everything
that happens, so
we're not as reliant
on third-party service
providers, such as banks
and mobile money companies.
We believe blockchain
has a lot of potential
to help WFP better do its work.
Some of the ideas are
not fully developed yet,
but we have just
started our journey.
We are doing a lot ofthings for the first time.
Everything is very
new and exciting.
And we do want to move
forward with blockchain.
NARRATOR: One area
of global culture
that was completely upendedby the arrival of the internet
was the manufacture
and distribution
of music and other media.
REPORTER: This freshman atPalm Beach Atlantic College
used to download songs fromhis favorite bands on Napster.
Now he thinks the musiciansare getting too greedy.
CHARLIE ROSE: Artists andthe recording industry
want the website shut down.
REPORTER: Federal court
ruled Monday Napster
must stop allowing music fansto swap copyrighted material.
Napster users had downloadedan estimated 200 million songs.
an action filed
by the legendary heavy
metal group Metallica.
Hang on.
It's not about money.
It's about control.
It's really about the control.
MAN: We've all seen what'shappened to the music industry
with new technology.
INTERVIEWER: Can an artistsurvive on Spotify income?
I think that streaming--
I'm absolutely
sure that streaming
will be the dominant
way that artists
will get paid in the future.
MAN: They're not going
to make any money.
MAN: What can artists do buttake what Spotify gives them?
MAN: 0.00006 of a cent.
I might have left
a zero off there.
Is something like that nowhappening to movies and TV?
Netflix has its
own business model.
ANNOUNCER: Streaming
video online.
WOMAN: Many people are gettingtheir content these days
on streaming services.
WOMAN: The movie
industry is really
facing a crisis right now.
MAN: Being able to compensatethe rightful creators
is a big--
NARRATOR: A new model for thedistribution and compensation
for art and artists
is badly needed,
and some believe blockchaincould lead the way.
Spin me around again
and rub my eyes.
Three years ago, I heard
the word "blockchain"
for the first time, and
I went through looking
what this thing was about.
[SINGING] When busy--
I feel like this
blockchain revolution,
there's an opportunity for us torethink the music industry how
we would like it
to be, so people
could do business easierwith our songs, and with us.
We did an early experimentwhere we did direct payments
using smart contract for thisone song called "Tiny Human."
You know, a kind
of pay-as-you-use,
taking a little bit at a time.
[light music]
A Spotify or an
iTunes has to deal
with 200 individual
to send money to aroundthe world for one artist,
and that's crazy.
There's many
applications which I
feel could spring out of this.
One of them could simply
be, how could artists
give really easilytoward a disaster relief?
Then there's some acknowledgmentof that going to something.
So you actually become--
you become a beacon for whatyou stand for that's not
disconnected to the song.
[SINGING] Hide and seek.
One of the many positive things,I think, that came from Napster
is that there is this, look,you see what happened then
if you don't embrace change.
This is going to
happen to you again,
but a million times worse.
[SINGING] --and seek.
I believe in the
power of blockchain
to put something
forward that's really
going to enable us to have aflourishing music ecosystem.
[SINGING] Oh, oh.
Thank you everyone, ah--thank you, everyone, thank you
for this amazing feeling.
[upbeat electronic music]
it's very simple.
Trying to be financiallystable and independent, not
beholden to any gatekeepers
and intermediaries,
and able to make music
with 100% freedom.
In the beginning, I was tiedto some smaller label that
were trying to do it
the old school way,
and I was very
frustrated with that.
So I just ended up leaving andputting my entire discography
on Pirate Bay.
I just want to think
about making good art.
Once you really realize what adecentralized technology means,
you can't think of the futurewith technology any other way.
You could tokenize
anything, you know?
That's why ever
since I found out
about blockchain and Bitcoinabout four years ago,
I've been waiting to utilizethis revolutionary technology
to change our industry.
I'm really excited to be
able to be a part of it.
It's like stocks 2.0.
MAN: We are go for launch.
[upbeat electronic music]
NARRATOR: In November of2017, at a show in Zurich,
Gramatik launched the token
for his own blockchain.
The token allows
the buyer to share
in the revenue of Gramatik'sintellectual property,
creating a direct andequity-based relationship
between artist and fan.
GRAMATIK: The success
of the platform
is way more important to methan the success of my token,
because the platformactually has the potential
to change the industry.
My token is just
enabling me to make art.
That's what's most excitingabout the whole idea.
Being completely autonomous andfree to make your art the way
you want it without
anybody controlling you.
That's what you dream about.
NARRATOR: Most of the
investors are already
committed members of the
cryptocurrency space,
so the question remains whetherblockchain technology is
a panacea or a case
of wishful thinking.
REPORTER: AllegedBritish hacker Lauri Love
has been given the
green light to appeal
his extradition to the US, wherehe's wanted for cyber hacking.
How are you feeling about it?
I'm really happy
that we got this news
and not the other
news that would mean I
would be getting
kidnapped imminently.
So we're very thankful for it.
So all we're asking
for in this appeal
is that the UK
jurisdiction applies.
I've never been to America.
It's not that I've
escaped from there
after committing some crimes.
Any crimes, if they
were committed,
were committed in the UK, and wehave computer crime laws here,
and we have perfectly
functioning courts.
So I'm just asking
for what anybody else
in a similar position
would expect,
and that's to be tried inthe courts of the country
where they live.
I'm happy to have
my day in court
once I see some
evidence against me,
because so far, no evidencehas been produced by the USA
about my involvement.
NARRATOR: Lauri's case receivedwidespread press in the UK--
REPORTER: The family
are well-known locally,
and-- it would
seem-- well-liked.
NARRATOR: --but saw littleattention in the US,
except amongst the technologycommunity and the more critical
political journalists.
will over-indict
people to begin with, as theyhave done in Lauri Love's case.
Anyone who's indicted willgo through a certain level
of due process violation.
And anyone who's
imprisoned in the US
will find that they haveno recourse to the courts,
although they're
technically supposed to.
The prison authorities
will work to stymie
the process of an inmate, forinstance, complaining about not
getting medication, beingheld legally in the shoe,
in the hall, for months on end.
Problem with the
US justice system
is that it's one of those thingsthat no one actually seriously
asserts that it works properly.
LAURI LOVE: I'm facing
being extradited
to a country I've never
visited, and they'd
like to lock me up for 99 yearsbecause the US government has
stamped its mark on the
internet while trying
to say that this
is about freedom,
and trade, and nice things.
So we have a battle now.
REPORTER: No date has yetbeen set for the appeal.
[atmospheric music]
NARRATOR: By the end
of the summer of 2017,
Bitcoin, Ethereum, and theentire cryptocurrency market
continues to climb
to all-time highs,
blindsiding the establishment.
I don't understand
what's behind Bitcoin.
I can't see any intrinsic value.
NARRATOR: Meanwhile,
the Trump administration
intensifies the government'saggressive stance
on the internet and
new technologies,
repealing net neutrality, aset of regulations intended
to maintain an open internet.
But several companies
are fighting back
against excessive corporateand government control
of the internet using
blockchain technology.
JOHN LYOTIER: If you looked atthis whole centralized system
we're living in, everythinggoes up and across the ISP,
and that's just not right.
That's really what
we want to change.
We let people transmitinformation back and forth
without using the internet.
The internet itself is
one giant mesh network.
It has centralized nodes
that connect everybody
to each other.
But as soon as somebody canstart controlling that layer,
it's not a decentralized system.
But in our perspective,
what we look at as
mesh is really much more of adevice-to-device communication
without having to go upto those central servers.
So my phone broadcasts signal,and your phone receives signal.
There's no internet, no
ISP in the middle of us.
But we didn't quite realizehow much of a threat we were.
Not just to the telecom
companies-- anybody
who's basically built
their livelihood off
of the centralized system.
They're all threatened by thisnew decentralized ecosystem
that can evolve.
There's no need for a lotof these players and people
to exist in the first place.
That's really what thisdecentralized movement's all
NARRATOR: While some lookto decentralize the internet
and exchange of
information, others
look to decentralized systemsof financial exchange.
[traffic rumbling]
Finance proliferates
into all of society.
But currently, the
way to trade assets
is through
centralized exchanges.
Centralized exchangesare run by a third party.
At AirSwap, we're building
a decentralized exchange
which allows you to just swapvalue with anyone globally
on a peer-to-peer basis.
These projects are a littlebit different than most, maybe,
For a token launch, you
need a group of people
to be behind you to
get this thing through.
NARRATOR: In October
of 2017, AirSwap
launched its own token sale,otherwise known as an ICO.
An ICO is an initial
coin offering,
which takes its name fromthe standard IPO, when
a company takes itselfpublic on the stock market.
An ICO will allow the publicto buy into the company
directly, and
potentially provide
the company with
much-needed financing
and support in order to survive.
MICHAEL OVED: Been at this for72 hours straight, actually.
The past three days
were power naps.
It's like finals week in collegeor anything super intense.
NISSA SZABO: So the sale
opens in 15 minutes.
We're just preparing
the communication
that's all going to go
out right at that time.
We'll be sending
to email, social--
you know, Twitter, Facebook--as well as the Telegram channel.
Hey, someone's claiming
they're a staff member
and they're not.
We should ban them.
"J Sitio."
I got it.
Somebody is posing as us.
And they're asking people tosend-- to contribute here.
MAN: There are still
scammers in the room.
Take them out.
Yeah, I'm trying.
MAN: Can we--
WOMAN: Can we block them?
MAN: Yes.
In AirSwap Official.
Announce that we're
being flooded.
I don't know if we can.
MAN: What was going onthere are two Google ads--
just some more scam websites.
Those are fake.
And then that's the real one.
We just need a
single source of truth
for a list of offending sitesso we can track these things.
these are the same kind
of people that are justscamming people around the web.
Every token launch in thelast 12 months or something
will have a problem withpeople trying to steal funds
from the users, the customers.
There's tons of accounts.
I'm banning all of them.
MAN: How do I--
MAN: This is only
going to get crazier.
MAN: Yeah, this is fucked up.
[dramatic music]
we're in the main sale.
People are just
anxious right now.
They want to get in.
We actually thought we wouldget about 5,000 submissions.
We ended up getting
18,000 in 24 hours.
So that's about $12million the current price.
People are not popping
champagne bottles today.
Today is not the end game.
It's really just the beginning.
[ominous music]
How you doing?
Hey, did you change something?
MAN [ON COMPUTER]: No problem.
MARK JEFFREY: There we go.
Much better.
MAN [ON COMPUTER]: I justfinished watching the video
that you sent along.
Looks really cool.
Oh, cool.
Thank you, man.
Appreciate that.
In the developing world,
people have no 911,
so we're looking at usingcryptocurrency, tokens,
the blockchain world,
in order to create
an economic framework fordecentralized 911 worldwide.
So we created a currency
called Guardium.
So you can think of it as thisnew worldwide public utility.
In the video, it
said that you guys were tryingto have a token sale November
15th or something, but
that's changed now.
We did.
We pushed it back
to January 22, just
for a whole bunch of reasons.
Technical volatility
of the market
was just crazy at
the time, and there
were like five or six things.
everyone in the world
knows the words Bitcoin
and cryptocurrency.
What had been dismissed
since its inception is
a global phenomenon,
a kind of crypto land
rush, both by financial
investors and start-ups
creating their own ICOs.
And with that rush comesmassive speculation and hype.
MAN: Why not make a buck?
Check out crypto.
Dash digital cash.
MAN: Oh, please, please, please.
CHARLES PAYNE: Make no mistake.
This is the Wild West.
There are now 1,300
not to mention any
number of companies
that claim to be in the
blockchain business.
MAN: Initial coin offerings.
Obviously a lot ofopportunists out there either
creating their
own bespoke coins,
or just essentially tryingto rebrand themselves
as a blockchain or Bitcoin play.
MAN: We have several
examples where
people are trying
to adopt the lingo
of Bitcoin and other
to try to enhance the valueof stocks that have nothing
to do with it.
NARRATOR: Celebrities jumponboard the ICO craze.
Everyone from Paris Hilton--
That's hot.
NARRATOR: --to Floyd Mayweather.
It's the one and only, yourman Floyd "Money" Mayweather.
You see right there?
Get my card out.
My Centra card.
I'm doing big things.
MAN: And this is
the strange thing
that I really don't
understand, is
in the midst of news
of this lawsuit,
the token price has gone up.
[cash register ding]
One thing's for sure.
We're in a really
crazy market right now.
There are some really
interesting things
that only these
kind of distributed
decentralized systems can do.
But people are not necessarilybuying these currencies
because of the tech.
They're buying them becauseof other factors, like money.
NARRATOR: This flood
of ICOs and speculation
suggests that cryptocurrenciesand blockchain-based
technologies will likelyrequire some form of regulation
in order to survive.
Companies like Omega One,another decentralized exchange,
are trying to navigate
this unstable terrain.
MAN: I don't know
about Omega One.
ALEX KEEGAN: So he's actuallyprobably putting on, supporting
through Omega One, and
watching the exchange
to see if he can
see it happening?
MAN: Yeah, exactly.
MAN: There's no doubt.
regulatory environment
is pretty uncertain.
MAN: He's got his
two monitors open.
Basically, trading
is really dangerous
and really expensive.
There's an interesting
dynamic where
it's hard to provide goodprotections to token holders
because there isn't a regulatoryframework for that exact thing
A lot of what people
have done, I think,
is just try to create no legalobligation to a token holder.
So at a high level, you
see regulatory reactions
that make sense, from
different countries.
In China, they want to
crack down on Bitcoin.
And they're a situation
where, much more
than it is the case in the US,this ICO market got really hot.
So we already know that
in the last few months,
China has banned local
bitcoin exchanges
and also cracked down on ICOs.
SKY GUO: The Chinese
central government,
they fear that becauseit's kind of decentralized,
that they cannot
fully control it,
that it may cause
financial crisis.
The technology
itself, of course, it
needs innovation and progress.
But it also needs some
kind of regulation,
because right now, the ICOplace is full of scammers.
US, this obviously
is a thing that needs
some kind of regulation.
There is a question of
which regulatory body is
going to regulate which things.
If a utility token isn't
a security, what is it?
LAURI LOVE: There are
attempts to understand
in the traditional
economic, government,
legal frameworks, what is this?
--then some of them lookkind of like currencies.
Is it a currency?
Is it an asset?
Maybe that's a commodity.
Do you pay
capital gains on it?
And how can we stop thethings that we don't like?
But fraudulent tokens
don't help people.
NARRATOR: It's clear
that whether or not
one believes in the validityof blockchain technology,
it faces many obstacles, andquestions remain unanswered.
Will blockchain
really help solve some
of our most pressing issues?
Will cryptocurrency survivetheir inevitable regulation?
It's still too early
to know for certain,
but that's not stopping anyonefrom forming an opinion.
MAN: We have these criteria fordetermining what a bubble is.
Bitcoin is a bubble.
It's certainly a bubble.
But is it a bubble?
Bring up the chart here.
Here's the bubble in the making.
WOMAN: We could be in a bubble.
MAN: I think it looks like abubble, smells like a bubble,
acts like a bubble, and
feels like a bubble.
MAN: Bubble.
It is a bubble.
WOMAN: Bubble.
MAN: Bubble.
MAN: Bubble.
WOMAN: Bubble.
MAN: Clearly a bubble.
MAN: The tulip bubble is
the first and largest.
Bitcoin has now supplantedthat as the largest
financial speculativeepisode in human history.
My name is Mr. Bubble,and you can watch me pop.
MATTHEW GREEN: Now, the questionis how much of that value
is going to stick around.
If there's a
correction, will people
run off and find
other things to do?
It's not really clear
what's going to happen.
But I think a lot of thisstuff is going to go away.
There's going to be
a lot of wreckage.
In the '90s, we suddenly had theordinary person start getting
access to the web, and allof these new technologies
and new companies popped up.
REPORTER: For the customer,Amazon only exists
on the computer screen.
And then there's the
boss, Jeff Bezos.
What kind of kid were you?
I was nerdy.
That hasn't changed, by the way.
REPORTER: Maybe it
was his intensity,
or maybe it was
the way he talks.
Listen to the way he describeshis company's business plan.
We believe that this is acritical category formation
MATTHEW GREEN: And everyonekind of overestimated.
They said, well, the internet'sgoing to be the future.
We're all going to bedoing all of our shopping
and all of our communicationover the internet by tomorrow.
REPORTER: If you'd bought $1,000worth of Amazon stock in 1997,
it would be worth between$30,000 and $60,000 today.
Is this investing,
or is it gambling?
Right now, with
the frenzy we've had,
to me it feels much
more like gambling.
Because it's crazy.
Well, I don't
find it rational,
to be honest with you.
It went up almost
1,000% last year.
When have you seen
anything comparable?
MAN: Nothing.
MATTHEW GREEN: And so allthese companies arrived,
and of course, immediately,there was a huge bubble.
Has the 1990s boomshattered old assumptions
about how the economy works?
REPORTER: But investors
keep flooding in.
MAN: It's not going to stop.
But what you could
have is a decline
in these stocks of 50%, 75%.
[bell ringing]
REPORTER: Closing bell mightas well have been an alarm,
so savage was the selling.
A points drop never beforeseen on the US market.
MATTHEW GREEN: And 90% ofthem, 95% of them all failed.
Looks like the bubble burst.
BART SIMPSON: Bubbles can burst?
MATTHEW GREEN: But thething about that, obviously,
is that it didn't end up thatthe internet was worthless.
We are doing our
shopping online.
REPORTER: And it's gettingreally nasty out there,
it seems to me.
The Barnes & Noble
bookstore is so big,
it makes look tiny.
just took a little bit
longer than the people whohad originally visualized
this thought it would, and maybethere was a little exuberance,
and so now we're seeing
that actually happen.
I have a word that
I use to describe
the tendency of markets tobecome bubbles and pop and then
become bubbles again.
The word that I use todescribe that is capitalism.
They're all in
business to make profit.
Of course they make a profit.
And it's a good thing.
That's the incentive thatmakes capitalism work.
[atmospheric music]
NARRATOR: As cryptocurrencyvalues continue
to soar to
unprecedented heights,
there's widespread speculationabout the future of blockchain
The opinions are sohyperbolic and contradictory,
it becomes almost impossibleto parse fact from fiction.
VINAY GUPTA: So you get upto kind of where we are now.
We're sort of midway
through the process.
Bitcoin is well-establishedas a reality.
Everybody's comfortable
with Bitcoin's existence
to some degree.
What is it?
It's a bank account that storesmagic internet money that
comes from the centralbank of the internet, which
is a decentralized database
which is everywhere
and nowhere maintained
by a bunch of people
you don't understand.
But the funny thing
is that if I describe
to you how your governmentworks, it's even worse.
So every four years, we hold apopularity contest regionally.
We pick the person that ismost likable on television,
more or less regardless
of their values.
We know nothing about
them, so they could
be a person playing a role.
And then we assemble
these people
into large groups that
get to decide who lives
and who dies every day.
So don't assume that becausethe new stuff is weird,
it's any weirder
than the old stuff.
The old stuff is just weirdstuff you got used to.
REPORTER: How do you
respond in broad terms
to these accusations?
difficult to face
very serious allegations
for three years
and not have any due process.
The issue is, if I were tobe extradited to America,
there'd be no day in court.
REPORTER: Can you get your headround this figure of 99 years?
very poor conditions
in US prisons for people withmental health difficulties.
I think that I would be atrisk of dying, unfortunately.
REPORTER: That's a seriousfear for you, isn't it?
Do you have any steer
from your legal team
about what the outcome ofthe extradition hearing
is going to be?
LAURI LOVE: I would hopethat the judge has enough
to make the correct decisionto refuse the extradition.
[ominous music]
[disco music]
the next Aaron Swartz?
Who's the next Lauri Love?
The ones who sincerely wantinformation to be free.
In a certain sense,
the more things change,
the more things stay the same.
NARRATOR: The battle
lines are drawn
between the fight fordecentralization and internet
freedom and centralized systemsand institutional control
with no clear path forward.
now, there's no way
of figuring out how
everything in the world
works without having some kindof centralized governance.
The question is whethercentralization of functions
turns into
centralization of power.
The unfortunate truth isthat centralization is often
very efficient.
And often, what
centralization does
is it pulls people up beyondwhat they would do otherwise.
But what blockchain
provides is a way
of getting hundreds ofmillions of individual actors--
whether they're people,
companies, agencies,
charities-- all to cooperateon the same global databases
without requiring there tobe a centralized authority,
and that is more or
less unprecedented.
It's a technology
that changes the way
that we govern ourselves.
And the hope is
that the blockchain
will allow people to
run their lives in a way
where they're not constantlybeholden to bureaucracies
or monopolies.
If we've got a fair
world in which we
have a genuine
accountability, where
we can see who the
bad actors are,
everybody can see
what's happening,
and everybody is
responsible, this
will produce a better world.
But if you get
decentralization where
nobody can see what's goingon and nobody is responsible,
you've got a worse world.
So we've got to thinkreally carefully about what
it is we're trying to stop.
And what we're trying
to stop is simple.
We're trying to stop
the abuse of power.
This is the second part ofthe decentralization story.
And the world is changing.
NARRATOR: Lauri must now waitfor the High Court's decision
on his appeal that wouldallow him to avoid extradition
to the United Stateswith no guarantee of when
that word will come.
And at the same time, themarket value of Bitcoin
and other cryptocurrenciescontinues to soar,
fueling both the evangelists--
You think we have
volume in Bitcoin now?
NARRATOR: --and naysayers.
There is all this hype aboutblockchain, saying, OK, maybe
Bitcoin and cryptocurrenciesare a bubble or a fad,
but blockchain is reallya revolutionary industry.
It's been around for 10 years.
The only application,
just a bunch
of cryptocurrencies
that are a scam.
MAN: --markets I've ever seen.
MAN: --and this is just abubble, as several of your--
ALEX: So where is
this all going, John?
It's still an
experiment in process.
I think we're going
to see a lot of motion
in different directions.
We're going to see evolution,and chaos, and an arms race.
Some governments will
try to co-opt them.
Others will fight
it tooth and nail.
BILL TAI: You can
feel the energy.
The internet and
and the ability forinformation to flow freely
across communities,
is redefining things
because you present a fabricwhere everybody knows what's
going on if they want to.
IMOGEN HEAP: The future,it needs to be transparent,
it needs to be fair.
We're in a global time.
But the systems aren't
really coping very well
with this phenomena.
We have to reinvent ourselves.
this kind of field,
there's always going to bepeople trying to innovate
and people trying
to standardize.
And the struggle between theinnovators and the standards
people is always
going to be there.
But if you can't
innovate, you're
rolling backwards every day.
The blockchain has existedfive years ago today,
and in five years, will bethree completely different
generations of technology withtotally different capabilities.
LAURA SHIN: Here we have thistechnology that is really
all about decentralization.
But will we end up with thisdecentralized blockchain world?
Whether or not that
will actually pan out
is a big question.
always finds a way
to revert to its lowestcommon denominator, which
is kind of greedy,
and nasty, and fierce.
But when we were all on theinternet at the very beginning,
that was amazing, and
there was a moment
where that thing was
real, and pretty pure,
and wasn't co-opted.
I think we have that same thingin the space of blockchain
technology in general.
At least for a
moment, I think we can
use it to do something good.
NARRATOR: As many predicted,the cryptocurrency market
pops, losing over half thevalue of 2017's all-time high,
with Bitcoin plummeting from$20,000 to below $7,000.
While many abandon
ship, the true believers
hold course, firm
in their resolve
that there's a future in
blockchain technology.
The Bitcoin bloodbath
continues as the cryptocurrencycollapses to a critical level.
How bad could the carnage get?
Our Bob Pisani's at the
NYSE with the latest.
Hi, Bob.
BOB PISANI [ON TV]: Oh, thecharts are ugly, Melissa.
It was another rough
day for Bitcoin,
which has gone on
a complete round
trip from a little over$9,000 at the end of November
to $20,000 in mid-December--remember that-- and all the way
back down.
This is what technicians calla head and shoulders pop,
and it's a very negative--
J. CHRISTOPHER GIANCARLO:I'm the father of three
college-aged children--
a senior, a junior,
and a freshman.
During their high
school years, we
tried to interest them
in financial markets.
We haven't been able to piquetheir interest in the stock
I guess they're
not much different
than most kids their age.
Well, something changed
in the last year.
Suddenly, they were all
talking about Bitcoin.
They were asking
me what I thought,
and should they buy it?
One of their oldercousins, who owns Bitcoin,
was telling them about itand they got all excited.
And I imagined that maybemembers of this committee
may have had some
similar experiences
in your own families of late.
It strikes me that we oweit to this new generation
to respect their enthusiasmabout virtual currencies
with a thoughtful and balancedresponse, not a dismissive one.
My 30-year-old niece, whobought Bitcoin years ago,
and she's an HODL, shesays, I'm going to own it.
I don't know what's
going to come of it,
but I want to hang onto it.
And she's not a fraudsteror a manipulator.
She's just a kid,
and believes in it.
And I was fascinated
talking to her.
And I think she representsa lot of folks that think,
there's something in this.
I want to hold on to it.
[traffic rumbling]
[atmospheric music]
[applause and cheering]
REPORTER: How do you feel?
We're very happy and
relieved, and we're
very thankful for the HighCourt, for the judges,
for their wisdom
and discernment.
I'm thankful for
all of the support
that we've had without which I'mnot sure I would have made it
this far.
This decision obviously
affects my life.
But the reason that I've
gone through this ordeal
is not just to save myself frombeing kidnapped and locked up
for 99 years in a countryI've never visited,
but it's to set a precedentwhereby this will not happen
to other people in the future.
You know, as we saw with theearlier part of the story
about the internet in
general, it was great,
and people who
make a lot of money
from things not being greatcame over, and took it over,
and recentralized it, andmonetized it, and it was bad.
The mathematics is on our side.
What's not on our
side is human nature.
You can be bound by the system,or you can mold the system
and change it.
And it's incumbent upon usto embrace the accelerated
pace of change, because powerand institutions have inertia.
They will use the
new technologies
once they understand themto solidify their power.
But if the internet
allows people
to reach their full potentialwith cryptography, with Bitcoin
and blockchain, then we'll win.
[upbeat electronic music]
One, two!
One, two, three, hey!
Hi, Alex!
Hi, Alex!
We're celebrating not
getting extradited!