Bitcoin: Bankers Worst Fear (Mini-Documentary)

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Transcript

Imagine, right now, in one instant the money in your wallet, checking, or investment accounts could purchase only one tenth or one hundredths of what it could yesterday. How would your life be affected? Could this even realistically happen? Well, who is in control of your money and how the US dollar works? Not you! Did you decide in 2008 to help bailout large failing banks? Probably not; but your government did. Did you notice how prices rose for gas and food after this? Our crisis was witnessed by the world, by our creditors. Yet our government borrowed more money. And the Federal Reserve printed more dollars.

All of these events changed the value of each dollar you have. At any moment another event could happen that changes the value of these dollars more dramatically. So how can you protect yourself? You may have been told to store wealth in real estate or gold and silver. These are good places to store wealth, but you cannot buy groceries or goods directly with these assets because they aren’t currency. You can’t transfer the value easily or efficiently for real world transactions. There is a form of currency that does not deal in dollars, and that is actually inflation proof. It is the bankers’ worst fear.

“Why is gasoline so expensive?”
“Telling us which food brands are ready for the uptick in cost”
“The United States has just lost its top notch Triple A Credit Rating”
“Eighteen people have been charged in what may be one of the nation’s largest credit card fraud rings.”
“What some are calling fool’s gold, its the virtual currency called-“
“It is a kind of holy grail of payments”
“We’re asking whether or not this currency has any longevity, let alone any legitimacy.”
“How can I hedge against inflation and other government manipulation. One thing I did was to buy Bitcoins. What are they?”
“I don’t really know that much about bitcoin.”
“Bitcoin is a purely online currency with no intrinsic value. “
“It is digital currency which you can then use to buy things online.”
“Bitcoin”
“Bitcoin”
“Bitcoin”
“Bitcoin”
“Bitcoin.”

“What is Bitcoin?”

Bitcoin, first introduced in 2009 as a relatively new technology in today’s ever changing world. Bitcoin is a digital currency, a revolutionary tool that is changing people’s lives, as did smart phones, ebay, YouTube (Oppa Gangnam style!)

“Gangnam style!”

And even the internet itself

“You can communicate with people who live anywhere in the world by typing on the keyboard”
“You’ve got mail!”

The bitcoin network facilitates the instantaneous transfer of value across any distance over any borders to any place on earth. Specifically it allows any person in any place with an internet connection to receive and transfer value. To send $8000 Western Union would charge you $336. In contrast any value of Bitcoin can be transferred with a fee of no more than 2 cents at today’s exchange rate. Besides being able to transfer wealth instantly, bitcoin is highly valuable, because in its specially designed software, the supply of currency units, also called Bitcoins, is increased at a steady rate.

New Bitcoin creation will only cease in the year 2140 with a total of 21,000,000 bitcoins. As of September 2013 there exists in circulation over 11,500,000, over half the supply that will eventually be mined. Mining Bitcoins is the process by which new Bitcoins come in to existence. They are created in blocks, and currently 25 bitcoins are mined per block. Blocks are generated about every 2 minutes as regulated by the software code and the sent computer that mined them. The best miner is the one with the most computational power, but it is also based on luck who wins the award. A rough estimate would put the total number of Bitcoin miners at 100,000. This mining process is more specifically known as hashing.

Future Money Trends: Alright Emmanuel, let’s start out with your website.

Emmanuel Abiodun: Cloudhashing.com

When did you get the idea to create a hosted mining cloud hashing service?

When my wife decided to throw all my computers in the attic. I started off mining bitcoin using computer, so I had a few computers sitting around and running permanently, so the guests could not come around and spend time just because the room was super hot. Like they’ll get heat stroke. It was just costing a lot of money for electricity. So I invested in ASIC (Application-Specific Integrated Circuit). Then upon my investment in ASIC I had a lot of friends who were interested. So at that point I thought you know let me, they’re all computer illiterates let me manage this for them. So upon that it kind of spiraled in to a business. So we started in April of this year and we’ve been selling what you call bitcoin mining contracts ever since.

Did it bother you that we don’t know who created it?

I first heard about in 2010. I didn’t think it was a good idea because I just couldn’t see how it could take off in to the mainstream. And lo and behold three years the value just skyrocketed and I thought oh my goodness I missed out on a golden opportunity on the advent of something great here. I think the very fact that I didn’t know who created it kind of raised a lot of questions. Realistically that didn’t matter, the math itself and the proof of work itself is a super secure currency.

It may be hard to trust such a new strange and exciting system like bitcoin. Some, mainly computer technology enthusiasts, already see bitcoin as more secure than email, online trading, and your eTrade account.

Trace Mayer: So what made you trust bitcoin?

Well, that’s a great question.

Do you use the internet?

I do

Do you trust it?

I pretty much have to.

You trust the internet, you don’t necessarily trust everyone on the internet?

No

Right, but you trust the internet. You go in and type in on your browser and you get walmart.com and you trust that’s WalMart. And there are legitimate actors on the internet right like amazon.com. I’m sure you’ve bought stuff there. Well bitcoin is very similar. It is computer code that is a protocol.

Like email, people would otherwise not normally assume anyone in this case can see, delete or otherwise access their email account without their permission or password. There is one exception in that your email account can shut down your account otherwise spy on you at the NSA’s request.

Why should people start taking a serious look at it, who want to get off the government’s radar?

I think it’s a very important thing. One thing that we don’t really fully appreciate is the level of surveillance that we’re under. And now all of your transactions are being databased, archived, stored, and they are going to be search-able forever. And you don’t know who’s going to be in power in four years, and eight years, and twenty years, and you don’t know what they’re going to do with that information. And why do they have that information in the first place? Bitcoin allows you to take control of that and have it not even appear.

This brings us to the topic of centralization. Bitcoin is decentralized, this means there is no central authority that can stop any bitcoin transaction and the same goes for the bitcoin system as a whole. No one can lock or freeze a bitcoin while they’re addressed, like a bank account. No one can arbitrarily create more bitcoins that the software program was designed to make. No one can change the software without the majority of the entire network of users accepting a change. Programmers of the bitcoin software are thus limited in their scope of changes as to what the market is driving.

Future Money Trends: Max Wright, he wrote a book called Bitcoin Revolution. A lot of people are fearful that the government is going to attack it.

Max Wright: With regards to resisting government violence, I think bitcoin is a really really unique, to me its a unique currency in all of history. It has never happened before. So in the analogy that a lot of bitcoin advocates use is in regards to Napster. We all know Napster was a great file sharing tool, but it was run out of a central server and a company. There was a CEO to arrest, there was a company to arrest. And the government can send in men with guns and force them to unplug the server. Service is over.

Bitcoin, in the same way BitTorrent solved the problem for Napster, it was decentralized, there was no one to arrest, you’d have to put a police man in every you know bedroom in every house in the country on the planet to bring down bit-torrent, so too with bitcoin. There is no one to arrest, there is no CEO. It is a distributed peer to peer network that authorizes and guarantees the sanctity of the network. And so for that reason it is incredibly resilient to violence, and I find it very very interesting that at a time when we’re going to, my expectations, we’re going to go to a currency crisis and currency wars like we’ve never seen before.

Future Money Trends: I’m here with Jim Rickards, he’s the author of Currency Wars. I’ll just throw it out there, bitcoin what are your thoughts.

One of my least favorite topics because I’m really skeptical of bitcoins. I’ve actually read the technical papers, I’ve spoken to a lot of people about it. It is cool technology, there’s good encryption, the block chain method of validating, the fact that it’s decentralized and dispersed. You can fire a drone missile at a bit coin server and it doesn’t matter because there’s another one over here. So I understand all that and it’s cool stuff and it does attract libertarians and it does attract technophiles.

Now that you know what bitcoin is, you should recognize how digital currency is a threat to the current banking system and institutions. In 2008 bankers profited from the very financial crisis they created. Imagine you had the opportunity to not participate in a government monopolized currency system. Bitcoin can be your way out of the corruption. Banks will hate it but they can’t stop it. Bitcoin can be the solution to a multitude of problems.

Firstly, inflation. Our current money supply currently grows because it is based on debt and continual government overspend. U.S. money supply has actually multiplied over 10,000 times over the past 200 years. This explains why purchasing power has significantly lowered, why a coke in 1959 costs a nickel and is now about 20 times that. The supply of Bitcoin only increases at a specific rate that will never change, this means that it is inflation proof. This also prevents thefts. If you hold cash not only would you worry about someone stealing your wallet, but the government has been known to confiscate cash at airports and also at police stops.

“He had an encounter at the TSA, otherwise known as the transportation safety administration, in which they not only wanted to know who he was, who did he work for, how did he get the money he had on him, and what did he plan to do with that money.”

“$4700, why do you have all this money?”

Back in 2012, Mischa’s friends, were driving her cash across country when Nebraska state troopers booked them for speeding. Officers then got permission to search the car. In the back they found two bags filled with cash, and then arrested the Dairy’s believing the money was ill gotten.”

You cannot steal bitcoin in a bitcoin wallet without knowing someone’s password. You can copy and store your wallet in an unlimited number of locations with internet access, just like email. With bitcoin it is much easier to move your money as we noted earlier. It’s also easier to keep your transaction private should you want to remain anonymous from your peers or even the government. Your name is not connected to your bitcoin address unless you choose to through a 3rd party service that uses bitcoin. That government would need to know and control the entire internet to track or stop bitcoin payments.

Lastly, a great benefit for bitcoin is the ease of starting your own business. You can set up a bitcoin address to receive money or products or services within seconds, versus trying to comply with all your countries’ regulations, creating a bank account, etc. You also don’t have to worry about fraudulent payments, because bitcoin transactions are irreversible. Your business would not have to pay large fees to credit card companies either. A customer can simply use a cell phone app to send payments to you if your business has a storefront, like a bar or a restaurant. Bitcoin is already accepted on many online websites for products and services including freelance work, donations to organizations, pizza shops, auctions, electronics, web hosting, domain registration, bio storage, music, clothing, graphic design, and even some massive retail outlets like bitcoinstore.com

Future Money Trends: Alright I’m going to go to bitcoin store, I’m going to purchase a laptop, and I want to show you guys just how easy this is to do. You’re going to have a lot of items on here but we’re going to pick a laptop because that’s what we need. You can see that you have a lot of different things you can buy, digital camera, desktop PC, web cams, all kinds of stuff you can also search for. But we’re looking for a new laptop. And you can see that this is just like any other store that would accept U.S. dollars.

You’ve got this notebook here, you can add to cart. Here’s the cart, proceed to checkout, just like if you went to best buy. You can register or you can check out as a guest, I’m going to check out as a guest today. The next step is to input your information, we’ll simply input our information. Our next step is our shipping method. Put payment method is going to be bitcoin. Place order. Ok, so we would just scan this with our phone, or we would use new address to pay it, and once you do that you can put that in your bitcoin wallet and the transaction is complete.

Today is September 22nd and we’ll see how fast they ship it out. It’s only been two days and there’s free shipping. We ordered it on the 22nd of September and we received it on the 24th. So you’ve got all your accessories, brand new, same price as amazon, I didn’t pay anything extra for it. That was easy, let’s see what else I can do with bitcoin. Alright, so I’m on Bitmint.net and I’m going to sell my old TV. A lot of my friends were giving me crap so I ended up getting this new TV. I’ve had this TV for gosh, 10 years now, its a 62 inch. Sweetheart! Some Africans from Ghanna want to buy our TV with bitcoin!

Over 1000 people attended the bitcoin conference in San Jose in May 2013. The bitcoin forum has over 100,000 members discussing bitcoin. Payment process or bitpay currently has thousands of merchants using our services to accept bitcoin payments on their websites. As of September 2013, the value of bitcoins created has reached $1,500,000,000 as determined by the free market. Bitcoin seems to be growing at a rapid rate, maybe even outpacing the government’s ability to regulate it. When the financial crimes enforcement network of the department of the U.S. treasury announced that virtual currencies are subject to the same rules as other currencies, the price didn’t crash. In fact it went up from there, as if attempts to regulate bitcoin don’t matter.

James Rickards: This idea that somehow you’re escaping government scrutiny or that you’re outside the government matrix or whatever is just not true. Mal Cox was attacked by the government of course there’s Silk Road now arrested in May, so the government, the government is watching everything you do.

Dave Scotese: There was a lot of exchange popping up, and they started getting hammered, and I mean with all the laws and banks closing their accounts and stuff like that. And that made it difficult, but then in comes local bitcoins. They let people, individuals, advertise whether they want to buy or sell, and those individuals hook up with each other, and that makes bitcoin a lot easier. Buying bitcoins is getting easier, selling it I guess is getting easier too.

G. Edward Griffin: There’s no reason in the world that a privately issued currency couldn’t be issued and served maybe even better because it’s totally, then its totally beyond the temptation of politicians to start meddling with the rules. It’s beyond the reach of political temptation.

Now picture a world where you’re in control of your money. Where you’re free to spend any amount,  small or large, anywhere in the world and your identity is safe. Your money can not be diluted by government creating it out of nothing and giving it away to banks, special interests, towards wars, or in foreign aid. You can help stop selfish banking interests, you can shape your destiny. And we don’t even have to end the current system, we just merely need to bypass it.

Future Money Trends: Thank you for watching our video. Go to our website at bankersworstfear.com to receive your free report on how you can start opting out of the current monetary system. You’ll also receive full guest interviews, as well as exclusive analysis from Future Money Trends.

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