This Giant Beast That is the Global Economy (2019) s01e07 Episode Script
Is Money Bullshit?
1
This thing we call
the global economy
has been around for a long time.
Here, we see early traders trying
to settle on a price for,
I'm gonna say, clubs?
Things got only
slightly more civilised
when we invented
something called money.
Now, I know you may think
you know what money is,
but do you?
We spend all our lives
trying to get it,
but what has inspired such divine
faith in a piece of paper?
Is it intrinsically valuable?
Or is it all just a big
lie, like when your kid
gives you a coupon for a back rub.
The secret behind money
is the big mystery
at the centre of the
global economy.
We all use it every day,
but have you ever
stopped and asked why this doesn't
represent money, but this does?
Or even?
Whether you like it or not,
we're all connected by money.
I'm Kal Penn, exploring
this giant beast
that is the global economy.
What if you didn't trust anyone?
What if you thought believing
in money was dangerous?
So dangerous that you were sure
it would eventually
get you killed.
Then you might be like
preparedness experts
Jane and Rick Austin.
They've built this
isolated hidden compound
to get ready for a worldwide
financial collapse.
When we have a total
financial breakdown,
people's first concern
is gonna be eating.
80% of the population will
be dead in two months.
People will literally
be killing each other
and eating each other for food.
So the people that'll be left,
the 20% will be people
like us that grow our own,
and the really, really,
really bad psychopaths.
And you're prepared
We're prepared for whatever
happens, however it happens.
Rick and Jane left
everyone else behind
to grow and raise everything
they need to survive.
If the shit goes
down, they are ready
to go off-grid and be
entirely self-sufficient.
This is the secret
garden of survival.
I call it the secret
garden of survival
because everything is
really kinda camouflaged.
Most people wouldn't
know what food is
unless it had a label and
it was in a package.
If you looked down
here, you'd just
kinda look and say, well,
this property is abandoned,
there's nobody here,
nothing to see here,
go on to something else.
Oh, so it's designed
that way purposely?
It's designed that way, yeah.
In a grid down situation,
money isn't gonna
buy you any food when
there's no food to buy.
Everything we have
here is our currency.
Was the desire to
do this because of
a lack of trust in
what the dollar is?
Yes.
It's only worth what
people think it's worth.
And at some point, it may
not be worth anything.
What drove Rick and
Jane to this life?
What made them give up
restaurants and grocery stores
to take on hours of daily labour
just to meet their basic needs?
So I'm gonna go in
the refrigerator
and I'm gonna have fun.
For years, Jane
worked in an office,
but like many other
Americans, she and Rick
were hit by the 2008
financial downturn.
Now, she's Survivor
Jane and today,
she's making her own goat cheese.
We were like the majority
of consumers out there.
We bought and we worked and
we bought and we worked.
And what really got our attention
was the housing market bubble.
Our gated community
home that we actually
paid premium so that we
could be in a nicer area,
started turning into
multi-family renting.
Crime started going
up, the neighbourhood
started going down, and
then the stock market,
right behind it.
My 401k, I was losing
about $7,000 a month.
- That's a lot of money.
- But it was a lot for me
It's a lot of money
to most people.
Because I had worked
a long time, and I
was told that
I could either quit my
job or I could die.
Those are the only ways I was
gonna get my 401 money out.
So we took a huge leap of faith
and decided to head for the hills.
We stay up here on the
mountain so our way
to get the word out is to
have a YouTube channel.
As you can see, an off-grid home
doesn't have to look like one.
I've designed and built every
building on this property.
I created what I call
the Hiney Hydrant,
which is a portable bidet.
And it eliminates the need
to have to buy toilet paper.
Even though we live off-grid,
we're not just surviving.
We're thriving.
I was used to going
to the shopping mall.
I couldn't do that any more.
I had to figure out, how
can I make my own make-up?
I'm gonna be honest with you,
this isn't natural, okay?
The barn needs painting, okay?
I'll tell you, the
goats don't care,
but the old goat does.
Okay, so I just want
to let you know.
I had to make my own
make-up, out of food.
We don't need money,
we don't need anything
except for what we have.
And it seems like, wow,
you just kind of,
your whole life is food.
Huh. And I'm living pretty good.
Jane and Rick have
voluntarily formed
a community of two,
servicing their own needs.
No outsiders welcome.
Let it stretch, there you go.
But what if my idea
of giving up money
doesn't also include
defending my family
against the flesh-eating masses?
Especially if I can't
even make cheese
well enough to survive.
Let me just tell you,
you're gonna die.
What if you're not looking for
an isolated mountain
home, but still
want to live without money?
The 2008 financial crisis
that sent Rick and Jane
to the hills dealt a crushing blow
to America's housing market.
But the economic
effect was global.
Brutal shockwaves
extended to Europe,
where entire economies
were decimated.
Eventually, things got
really bad in Spain
after massive bank failures
sent unemployment soaring,
and people took to the
streets in protest.
The financial crisis
left many people
in Oviedo without
much money to spare.
So Sergio Martin created
an experimental,
barter-based market
where community members
directly trade goods and
services without using money.
What's up?
It's an economy made by people,
for the people,
and with the people.
We all have needs.
And we all have resources.
So, we have to use barter,
imagination, talent, resources
- I like that.
- To get by inside this place.
That's interesting.
So you're offering this
idea of going back
to a trust-based
community where somebody
has a good or service that
they're directly giving to you.
Yeah.
How does it work?
How do you get dollars? Or Euros?
You work for it.
What can I do? What
talents do you have?
What resources can
I take advantage?
For example, food
is very important.
This weekend, I felt like making
bread with my new oven I built.
And today I'm selling bread.
So I love this idea, obviously,
and I'm way into it.
The reason I was wracking
my brain was like,
I'm an actor, and I have
some teaching experience,
but we're not here long enough
for me to teach a class.
I'm wearing these clothes,
I have old socks on
We don't want you to be
naked after getting
there are holes in my pockets,
nobody's gonna want this jacket.
Do you have any film from you?
Any like, DVDs?
- Yes. Would be nice.
- I do, actually.
Okay, so we do have
one, thank you.
So this is a DVD.
This I hope will make you laugh.
This is a very nice
plan for my evening.
- So thanks a lot.
- Okay, good, cool.
And now, I would
give you something.
For example, you could take
this one, which is very nice.
Smell. This is called Melissa.
- Melissa?
- Melissa.
That does smell like Melissa.
- Yes. Really?
- What? No.
No?
I don't know, there's
somebody named Melissa
who's watching and she's a little
weirded out right now, because
I was a little creepy.
It does smell good, though.
- Really?
- Yeah.
And also I could
give you some bread?
Do you like this one?
Yeah, that's a nice
looking loaf of bread.
- Yeah, looks nice.
- It's heavy.
This is gonna fill somebody up.
Several people. This
is for a family.
Yes. This is real bread.
So, are you happy?
- Yes.
- Me, too.
Great, but I could still trade
this for something else.
- Yeah, of course.
- Okay.
Okay, so if I wanted to
barter this for this,
what are these, soap and lotion.
Hello.
Can I interest you in some
Melissa for your soaps?
They would smell amazing.
People would love them.
You get the fragrance.
Like, smell this,
it smells amazing.
- The bread.
- The bread? Okay.
This is really well-made.
Yes, because it's all handmade.
Awesome.
Okay, alright, I will
trade you for this one.
Thank you. Thank you.
You sure you don't
want some Melissa?
And these girls.
What do you have?
Let's see, tell us.
T-shirts, books.
Good.
Did you make all these shirts?
Yes.
They're nice, they're very nice.
Can I interest you
in some Melissa?
I think no.
A plant?
Okay. We tried.
Alright. Thank you.
This is where bartering
hits a wall.
A wall that can't be paid for
with a nice-smelling plant.
Economic systems don't
thrive when you can
get stuck with something
nobody wants.
So it looks like I'm going
home with Melissa tonight.
To build a global
economy, it seems like
you need something to exchange
that everybody wants.
Across the globe and
throughout history
there's been one
rare, heavy element
that people have
always been drawn to.
Seduced by.
Driven mad by its
glittering shine.
Willing to do anything
to get their hands on
Gold.
You're a nervous guy.
Around this much gold, yes.
You're standing
currently in the only
centre in London where
you can buy a gold bar,
sell a gold bar, test
it, but best of all,
having bought it you can store
it on site in a gold vault.
We wouldn't normally take
a client down there,
- but fancy a little look?
- Yes.
Come on, let's go.
Three decades of experience
make Ross Norman
London's gold guru.
He says the gold in
his vault is safe,
but he can't say the
same for the cash.
I'm about to make you very rich.
I hope you can appreciate this.
I'm about to give
you $100 trillion.
- Congratulations.
- Thank you so much.
You're now the owner of $100
trillion, Zimbabwe money.
Oh, yeah, okay, this is worthless.
But do you know what? It goes on.
Yugoslavia, I can't
even count the notes.
$10 million Deutsche Marks
from the Second World War.
Turkish lira, how
many notes is that?
It's only half a
million Turkey lira.
Cash always goes to its
intrinsic value, zero.
They're great as a
medium of exchange
but through time, it erodes.
So how does gold differ?
It's got a 4,000 year history.
What economists call
purchasing power parity.
If you'd bought an ounce of gold
in the time of Jesus Christ,
you'd have bought a
suit of clothing.
Bought an ounce of gold in
the time of Henry VIII,
you'd have bought
a suit of armour.
An ounce of gold today
is about $1,300, £1,000.
You can get suited and booted
on Savile Row in
London for £1,000.
The point being, there's
a world preserve.
It buys the same things
throughout history.
- Cash doesn't.
- What's in there?
You have the key in there, and I'm
so distracted by this
key, because I'm like,
- what's in the box?
- I'm gonna show you something
I'm gonna show you something.
Let's have a quick look in here.
What I've got in here is,
clients come here to
store their value.
Ooh.
Hands off.
You're in a safe deposit box.
Now, consider in this country,
the average wage is about £28,000.
In cash terms, that's £28,000.
These are £50 notes, okay.
The equivalent in
gold, take it here.
Is a kilo of gold.
That's $45,000.
This is heavy.
It's twice as dense as lead.
Is this pure gold?
99.99% pure.
May I take that back?
If you have to.
Throughout history, we had to
attach value to an element
that was reliable.
On opposite sides of the world
they came to the same conclusion.
Do you remember the
name Marco Polo?
- Yeah.
- In the 1200s,
he went from Europe, where
they used gold as cash,
he discovered in Japan and China
they were also using gold as cash.
South America, a
thousand years ago.
So across the world, relatively
isolated communities,
all attached to one element, gold.
People and gold have had
a pretty stable
long-term relationship.
So why aren't we still
using gold as money?
Gold.
Even on this black and
white reel it shines,
right off the screen.
None in the modern world has had
a more extraordinary relationship
with gold than America,
the sweetheart consumers
of the global economy.
For the better part
of the 19th century,
America flirted with
the gold standard.
We made it official in 1900,
legally declaring that
each bill was worth a set
amount of gold held in reserve.
Gold-crazed citizens
were emancipated
from the burden of lugging
around heavy coins and bars.
Put away that wheelbarrow, Jasper.
The US gold standard
held down inflation
and made the dollar reliable for
trade with foreign nations.
America was sitting pretty,
until the Great Depression pulled
the rug right out from under us.
Economic hardship puts
a bellyful of stress
on the gold standard.
The Federal Reserve couldn't
source the supply of gold
required to print more bills
to stimulate the economy.
That marked the beginning of
the end for the gold standard.
In 1971, President Nixon
nixed it for good.
I'm in our nation's capital,
where I spent a few years
working for President Obama.
You're welcome.
I'm here to meet an old friend
at Martin's Tavern in Georgetown,
which has a long
history of hosting
some of DC's biggest
power players.
I'm excited that we're
sitting down together.
We worked together for
a couple of years.
Austan Goolsbee knows
a thing or two
about why gold got kicked
to the curb by the global economy.
Austan also worked
at the White House.
We don't have the
gold standard now,
and there's not any
country on Earth
that has the gold
standard any more,
because it didn't work.
The people that usually
advocated gold standard
have in mind, I don't
trust the government,
I don't trust any individual
in the government
to decide how much
money there should be.
They'll probably
print too much money
and we'll have hyperinflation.
And only gold, which
is in fixed supply,
will give us the
stability that we need.
Now the only thing about that is
the gold's not in fixed
supply when they find,
you saw those old
pictures of the guy
with the coveralls,
he's in Alaska.
They discover a bunch
of gold, it's like
they've flooded the
market with money.
You haven't replaced
that there are
decisions being made about
how much money to print.
Russian miners and South
African gold miners,
they're the ones who determine
how much money's in the economy,
rather than somebody
in the government.
The actual paper on which a dollar
or $10 or $100 is printed,
if a dollar is a dollar,
does the paper actually
cost a dollar?
Does a $100 bill cost
more than the dollar?
What you are identifying, we don't
have a commodity money
system any more.
Instead, we have fiat money.
We print the money, and then
we tell you what it's worth.
Like is it meaningless?
Is money totally bullshit,
is it meaningless?
If you pull out your
dollar and you look at it,
it says, this note is legal tender
for all debts, public and private.
It's a promise from the government
that you could use that
to pay your taxes.
That's what makes it fiat money.
It just means the government
says, this is a dollar.
If they print a $100 bill,
on one cent of paper,
and they say this is worth $100,
will you give me $100
worth of coconuts,
you know, for this? And they will.
You'll go outside, somebody
will take $100 bill,
just because the
government, by fiat,
declared that that's
what it's worth.
So it's a system of trust.
It's a system of trust,
and it has to be.
Because you have to
trust if I'm giving you
something other than a
barter, this for that,
to say, yes,
this abstract thing
represents value,
then we can use it to trade.
And there's always the temptation
that whoever's in power,
would say, well, while
no one's looking,
let's print a whole bunch of money
and pay off all of our,
whatever debt we have.
If you abuse that, the
markets and the people
who use the money,
they will notice.
And when that happens, they
will begin to flee your money.
Stable governments are
basically the last
safe house that we have.
So, the government wants
me to trust their money,
and their money wants me
to trust someone else.
I suppose having a faith
in our institutions
is easier than carrying
around a heavy metal
or a potted plant,
but can I choose
to place my faith some place else?
Is there an option that doesn't
depend on a government
decree or banks?
That would change the world.
And we all know where
to go for that.
I took the initiative in
creating the internet.
The internet has excited us.
And then there's email.
Email, I heard that's really neat.
And changed our lives
over and over.
You launched Facebook
in your dorm room?
Yeah.
Will the next big internet
innovation remake money?
It is the hottest
currency in the world.
- Bitcoin.
- Bitcoin.
Some of the biggest influencers
of the last two decades
are looking at
a whole new way to
get rich online.
You know, people have made
fortunes out of Bitcoin,
some people have lost
money out of Bitcoin.
Bitcoin was the first
digital currency.
It is also referred to
as a cryptocurrency.
Its aim is to free us from
blind faith in institutions.
And a legion of devotees
have come forward
to declare crypto the
future of money.
This is a financial innovation
that is not going anywhere.
Jeremy Gardner's early interest
in Bitcoin and other
cryptocurrencies
made him into a globetrotting
millionaire by age 25.
Now he's focused on spreading
the cryptocurrency gospel
as king of the Crypto Castle.
Hello, welcome to
the Crypto Castle.
Thank you.
I thought it was going to
look like a legit castle.
It's always a disappointment
for people that aren't prepared.
Well, let's start here.
This is more of like, a
man den trading cave,
this is Tony.
Hey, Tony, how are you?
- Kal, nice to meet you.
- Frequent house guest.
The house started
as a three-bedroom,
but we quickly turned it
into a lot more than that.
We turned this into a
bedroom right here,
I don't think it's available.
Got another bedroom back here.
My dream was to someday
build a gym in here,
but then I remembered I
didn't like exercise.
Probably the most unique
component is the guest bedroom.
- Got two bunk beds.
- Oh, that's cool.
And so this allows us to host
all sorts of interesting people.
How long have people
been living here
as the Crypto Castle?
When I moved to San
Francisco four years ago,
there was no gathering point
for the crypto community,
because back then
it was very small.
And so I really wanted to find
a space that could really
host larger groups.
So the Crypto Castle isn't so much
a castle as a frat
house-styled flophouse
for Jeremy's crypto crew.
How many people live here?
Depends on the day.
Okay, today?
Today I think we
have six or seven.
So you're, this is an
incubator space, basically?
Yeah, and not like the show
"Silicon Valley" per se,
more in that it's an
incubation of ideas.
Because of all the
interesting people,
there's this kind
of rapid ideation
constantly just trying to come up
with new ways to
think about things,
and companies have
been founded here,
you know, Augur, which I founded
which is first company here,
which is like worth
$600 million today.
None of the team's here any more,
but you know this is
where that was founded.
Here, I don't know if
she's in her room,
but Jing is the executive dir
We're coming in.
- What?
- This is Jing.
- Nice to meet you.
- Nice to meet you.
Jing is one of the most
badass women in crypto.
How did you end up
living in this house?
I mean, that's like
my first question.
I started doing
crypto stuff in 2012.
I was an art student at the time,
attending a women's college,
and then I went to this
Bitcoin conference
with 300 men and four women.
And I was like, what
is this nerdy world?
And I was hit by this
horrible sense of FOMO,
so I switched majors
to computer science.
Oh, wow, from art to
computer science?
Yeah, yeah. FOMO is real.
This is a house full of dropouts.
Much to my Asian parents' dismay.
Yeah, I'm sure.
What's Bitcoin, Bitcoin
is not real money.
Jing is probably one of the most
well-tapped people
when it comes to
the technical community in crypto,
because, you know,
I deal a lot more
with the entrepreneurs
and other investors.
But Jing knows all the
brilliant programmers
that actually make this
technology possible.
Jeremy and Jing believe that
cryptocurrency is the
future of money.
All they have to do is explain
what the hell it is
to the rest of us.
How would you explain
what's Bitcoin,
how does any of this work?
Sure. Do you smoke hookah?
No, I'm good, but feel free.
Bitcoin is a form
of electronic money
to move about in a
decentralised way.
The system enables
you to trust this
Engage with me,
because we've created
a system of trust,
that exists online
that doesn't require anyone to go
and mediate transactions.
And that's what makes this
technology so revolutionary.
It's totally virtualised.
So no bank, no governments
are necessary.
Literally you and me
can transact something
that we both hold valuable
without relying on anybody else.
How is that ownership
assigned to individuals?
Like how do you know how
much of that you have?
What Bitcoin introduced
to the world
was this notion of a blockchain,
which is a distributed
database with nodes,
little validators, all
around the world.
It makes it impossible to hack,
and Jing may have
more to add to this.
I wanted to add something.
- Please.
- Go ahead.
So, it's called a blockchain,
and you can visualise it like this
ledger of transactions
and who owes who what.
All of this data is put in a file,
- and that's a confirmed block.
- Okay.
- Did I confuse you more?
- No, not at all.
I'm just making sure
that I understand
everything you're saying.
I'm just gonna text a
friend real quick.
Dearly beloved, we are here today
to explain the blockchain.
Confusing thing, the blockchain.
It's a decentralised ledger
for digital transactions
that stays on the
internet forever.
And forever is a mighty long time.
But I'm here to tell you
it's like something else.
And look, this isn't
a perfect analogy,
but think of traditional financial
transactions like a wedding.
Two parties come
together and exchange
something of value, like a ring.
Or, formerly, goats.
And, traditionally,
these holy transactions
have relied on a
licence from a state
and an ordained official
to verify them,
like a priest or a
justice of the peace,
or a captain of a
ship for some reason.
I'll turn this ship around.
You bet you will.
That is what made
them centralised.
The official, like
me, is comparable
to the bank or credit company
which traditionally
verifies the transaction.
But we're millennials.
We don't traditionally anything.
Well, alright then.
If standard financial transactions
are like a traditional wedding,
then blockchain
transactions are like
a millennial spiritual
union ceremony,
and they don't need
an officiant like me.
For some reason, kids today don't
really trust the financial system.
They are satisfied to
make this exchange
in front of these
trusted witnesses,
who verify the transactions
by taking pics,
tagging the bride and groom,
and posting them online,
accessible to everyone
on the internet.
So if I lose my phone
somehow, it doesn't matter.
Cashew cheese?
Fuck no.
I mean, if you look
at millennials,
we've lived through
a post-9/11 world
that's growingly
Orwellian, and then
lived through the Great Recession.
If you're my age, you don't
really trust the government.
You don't really trust banks.
What we're creating is something
that transcends the
national economy.
We're creating something
that is supernational.
Something that is global and
accessible to everyone.
I tell young people, you know,
you should have 20 to 30% of
your net worth in crypto,
because the upside
is so exponential,
whereas the downside,
especially for a young person
that can go and make more
money, is fairly negligible.
As long as you
believe the internet
is gonna exist in the future,
crypto assets are gonna
be a part of that.
- Brah.
- There you go.
- Shit, my mouth is full.
- There we go.
You actually smoke hookah
all the time, or
I do.
One of my investors saw
Jeremy, and she said to him,
"You look ridiculous."
I don't remember that.
For the crypto kids,
cryptocurrency is a
next gen solution
that will revolutionise
the world economy
through a borderless
currency that is
free from control by governments
or financial institutions.
So future.
I'm in.
Now I've just got to
find me some Bitcoin.
Anyone can buy Bitcoin on a
cryptocurrency exchange,
but before that happens,
the coins have to be
digitally created on the network.
There's no physical
treasury to mint them
or Federal Reserve controlling
the supply like paper money.
Instead, Bitcoin introduced a way
to digitally generate a finite
number of coins with
computing power,
a process called mining.
Now crypto mines have popped
up all over the world.
They run powerful
computers 24/7 in a race
to generate and hoard
cryptocurrencies.
This one belongs to Petr Svoboda.
I'm here to find out how
he turned crypto mining
into a business model.
Oh, wow.
The sound is from the
fans in each one?
To keep it cool?
Yes. It's very hot.
What's the difference between
these machines and these?
These machines are specialised
machines for mining bitcoin.
- And other cryptocurrencies.
- Okay.
Different algorithms.
How many rooms like
this do you have?
There are five rooms.
- Five rooms like this?
- Yes, yes.
That's cool.
Can you explain how mining works?
It's better for me, will
be to explain it in Czech.
Okay, perfect. My Czech is great.
Working the algorithms
Well, it's the uncle rib nose
Skinny poor check Danno
something something
Okay, I lied, I don't
really speak Czech.
But I'm hoping there's someone
smarter than me who
can explain all this
in English and like I'm five.
Remember how the blockchain is
the digital record of
Bitcoin transactions?
Well, mining is how the Bitcoins
are created and awarded
in the first place.
The miners in the
analogy are the guests,
who verify the transactions
by taking pics,
tagging the bride and groom,
and posting them online.
Bitcoin is created as an
incentive for the miners
to build and maintain
the blockchain.
Okay everybody, time
to catch the bouquet.
Bitcoin is awarded
to one lucky miner.
Don't feel bad for the miners who
didn't catch the Bitcoin bouquet.
Bitcoin transactions are
happening constantly,
which means mining is a never
ending wedding season.
The more they work to
maintain the blockchain,
the more Bitcoin bouquets
they have a chance to catch.
Bitch.
Because crypto mining
takes so much energy,
mines like this are being
built where energy is cheap,
like China, Iceland, and
here in the Czech Republic.
And it's not just
Bitcoin they're after.
There are already thousands of
other cryptocurrencies out there.
Litecoin, Ethereum, Tether,
EOS, Stellar, PotCoin,
the list goes on and on.
You must have a crazy
electricity bill.
Yes. I think we spend about
60 thousand US Dollars.
60,000 US dollars a
month. On electricity.
Yes, per month.
- Yes.
- Wow.
That's a lot of money.
Can you tell me the
average person,
how much they buy and invest?
Yes, about 30 thousand US Dollars.
- 30,000 US dollars?
- Yes, yes.
- Each? Okay.
- Each.
And how many machines
is that usually?
It's for eight machines.
Oh, that's eight machines,
is 30,000 US dollars?
Dude, this is amazing.
And you have five
rooms of machines.
Yeah.
Are there a finite
amount of Bitcoins?
- Yes, yes.
- There are.
So when they're all found,
then what happens?
Nobody know.
Before I blow all my
money on something
that I only understand
through wedding metaphors,
I want to meet someone
who can explain
how cryptocurrency
actually gets its value.
Jackson Palmer was a
marketing manager
and coding enthusiast
whose attempt to poke fun
at the cryptocurrency
boom totally backfired.
- How are you?
- Nice to meet you.
These dogs are pretty amazing.
They are.
These are the dogs on the coin
you started, right? Dogecoin?
That's right, I put
the dog on the coin.
Yeah, these are the Shiba Inus.
Back in 2013, I was really
into cryptocurrency,
noticed there was one
coming on the scene
every month or so,
and at the same time
I was really into the Doge meme.
D-O-G-E.
Your Doge?
What are you talking about?
The Doge meme was
born when a picture
of a dog with a
soul-piercing gaze,
posted by a Japanese
kindergarten teacher,
rose to internet fame.
Jackson took it from there,
tweeting what he
intended as a joke.
Investing in Dogecoin, pretty
sure it's the next big thing.
You hadn't created the coin yet.
Hadn't created it at all.
What happened with the tweet?
The tweet started going viral,
and so I ended up buying the
domain name, dogecoin.com,
and just slaps the Doge
meme on top of a coin
and said, it's a
parody cryptocurrency.
What happens when you
create a currency?
It doesn't actually
really involve anything
but putting the code out
there for people to run.
It's the same with
Bitcoin or Litecoin
or any of these things.
You just put up an application
that people can run and
if enough people run it,
then it becomes a
network around it.
Yup, it's that easy.
And even though Jackson is
the creator of Dogecoin,
he never mined it or
made any money on it.
But he did have a front
row seat for Doge's rise
as an instant and
inexplicable sensation.
In about 24 hours,
we started realising
that there was all
this hashing power,
all this computing power, pointed
at the Dogecoin network.
I'm like, oh no,
what have we done?
It's a thing. Next thing I know,
it's a $2 billion economy.
Whoa.
That's when things
got a little Doge-y.
Dogecoin's valuation
soared on hype
fuelled by a lovable mascot.
And I thought my love
of dogs was irrational.
Hello.
And so you started a coin and
yet you are a crypto sceptic.
I'd call myself a
crypto rationalist.
Ooh, okay, crypto rationalist,
that's actually
better, I like that.
I think there's a lot of hype
and a lot of value being attached
to this stuff, with
very little substance.
Cryptocurrency should be valued
on its actual merit and
not the hype cycle
that says it's gonna be the
biggest thing in 10 years time.
How do humans scale something
like cryptocurrency,
and at what point
does it flip from
being speculative
to being an actual thing?
That's the technical term, by
the way, "an actual thing."
An actual thing? Okay.
I think it's an
interesting challenge.
I think, because
the price is going
up and down all the time,
it doesn't really incentivise
people to spend it,
because the currencies
are so volatile.
Jackson's concerns
really point out
that cryptocurrency is
still in its infancy.
Nobody knows what
it'll grow up to be.
In fact, its volatile
price over the last year
follows almost the exact
path of the dot-com boom
that turned out to be a bust
when the internet
was in its infancy.
Crypto is still a
speculative asset,
more like an investment
in a start-up
than hard cash in your pocket.
But there are people
all over the world
trying to change that.
James Howells saw the
potential of cryptocurrency
before almost everyone else.
He was one of the
first crypto miners,
making a fortune in Bitcoin.
Now James is in on the
race to figure out a way
to make cryptocurrency usable
for everyday purchases.
Is this your doing?
Yeah, I've actually put
this into this store,
I'm using this as a test store,
because I'm selling this product
to businesses around the world.
He's developed an app he hopes
will make crypto as
easy to use as cash.
Grab a Lucozade.
I'll grab some crisps.
The app draws from a
user's digital wallet,
which tracks how much
Bitcoin cash you own.
Yeah, now what?
I'll just play on Bitcoin Cash
please, if that's alright.
This is the Bitcoin Cash Wallet,
so I've got Bitcoin
Cash preloaded.
The merchant has got a solution
where they give me
a QR code to pay.
I scan that and swipe to send,
and then the merchant knows that
he's actually received his funds
and they are secure
in his wallet now.
I assume Visa and Mastercard
don't like Bitcoin,
because that circumvents
their fees.
Yeah, it puts them
out of business.
People can transact without
those third-party services.
You shouldn't be
paying third-party
just to put your money to
somebody's else's hand.
Yeah, true.
The potential of Bitcoin
transactions is exciting.
No bank fees, no loose
change, or long receipts.
And your crypto is
safe and secure,
because the only way to use
it is with a private key,
a string of 64 random
letters and numbers
that is impossible to guess.
The only thing that could
possibly go wrong,
is if you somehow lose your key.
Like, hypothetically, you
stored it on a hard drive
and you accidentally throw it away
and it ends up in the
bottom of a landfill.
I mean, then you're just fucked.
But how likely is that?
So how does one accidentally
throw away a hard drive?
I had a rather
unfortunate incident
where I spilled a glass of
lemonade onto my laptop.
But I actually kept the hard
drive from that laptop,
because I knew it had
my wallet on there,
my Bitcoin Wallet and my
keys, my private keys.
And basically it was just a
case of a mistaken identity.
The wrong hard drive was
put into the black bag
and since then, the
valuation of my drive,
$65 million today.
Holy shit.
Yeah.
If that happened to me,
I would never throw anything away
ever again, in my life.
But James has a plan
to find his fortune.
By cross referencing
landfill records
with the day he threw
out his drive,
he can narrow his search to
an approximate location.
But the town council
won't let him dig.
In the UK, there's never been
a permit to excavate
a landfill issued,
so we're in uncharted territory.
There's been a number of searches
of landfill for police inquiries,
for you know, murder
investigations
and things like that.
So just murder somebody first,
and then you should be
able to get your key back.
I mean, the fact that I cannot get
$50-odd million
worth of coin back,
Proves that Bitcoin is secure.
So if you had written that key
down on a piece of paper,
you would've been okay?
Then I would still have it, yeah.
If I had that key, I
can spend my coins.
I could set a machine,
a supercomputer,
to continually guess every
single code for my wallet.
The problem with that
is there is more
possible combinations
than there are
particles in the universe.
So I would need a couple
of suns worth of energy,
actual suns worth of energy,
and a couple of billion
years in order to crack it.
That, to me, is what gives
Bitcoin its security
and that is why I trust
in this technology
as the future of money.
Yeah, so if you wanna jump in,
we can go to the landfill
and I can show you
where this multimillion
dollar hard drive is buried.
All these people with
all their money,
they trust that all
of the other people
will also believe
in the same money.
It's a chain of trust, unbroken.
So what should you trust?
Your government?
A shiny metal?
A computer code?
Or none of the above?
Looking at this just
gives you a scale.
Oh wow, yeah.
And that goes down
underground as well.
Time will tell how
expensive a blunder
James' tossed hard
drive really was,
but who can blame him for trusting
in a new way forward
and holding out hope
for his future digital fortune?
For now, this is as
close as he can get.
In 10 years time, there's
a very good chance
that that drive is worth
a billion dollars.
And I can't even walk
across there to dig it up.
Action.
I'll turn this ship around.
I'll turn this ship around.
I'll turn this ship around.
I'll turn this ship around.
Try it drunk.
I'll turn this ship around.
Cut, perfect.
This thing we call
the global economy
has been around for a long time.
Here, we see early traders trying
to settle on a price for,
I'm gonna say, clubs?
Things got only
slightly more civilised
when we invented
something called money.
Now, I know you may think
you know what money is,
but do you?
We spend all our lives
trying to get it,
but what has inspired such divine
faith in a piece of paper?
Is it intrinsically valuable?
Or is it all just a big
lie, like when your kid
gives you a coupon for a back rub.
The secret behind money
is the big mystery
at the centre of the
global economy.
We all use it every day,
but have you ever
stopped and asked why this doesn't
represent money, but this does?
Or even?
Whether you like it or not,
we're all connected by money.
I'm Kal Penn, exploring
this giant beast
that is the global economy.
What if you didn't trust anyone?
What if you thought believing
in money was dangerous?
So dangerous that you were sure
it would eventually
get you killed.
Then you might be like
preparedness experts
Jane and Rick Austin.
They've built this
isolated hidden compound
to get ready for a worldwide
financial collapse.
When we have a total
financial breakdown,
people's first concern
is gonna be eating.
80% of the population will
be dead in two months.
People will literally
be killing each other
and eating each other for food.
So the people that'll be left,
the 20% will be people
like us that grow our own,
and the really, really,
really bad psychopaths.
And you're prepared
We're prepared for whatever
happens, however it happens.
Rick and Jane left
everyone else behind
to grow and raise everything
they need to survive.
If the shit goes
down, they are ready
to go off-grid and be
entirely self-sufficient.
This is the secret
garden of survival.
I call it the secret
garden of survival
because everything is
really kinda camouflaged.
Most people wouldn't
know what food is
unless it had a label and
it was in a package.
If you looked down
here, you'd just
kinda look and say, well,
this property is abandoned,
there's nobody here,
nothing to see here,
go on to something else.
Oh, so it's designed
that way purposely?
It's designed that way, yeah.
In a grid down situation,
money isn't gonna
buy you any food when
there's no food to buy.
Everything we have
here is our currency.
Was the desire to
do this because of
a lack of trust in
what the dollar is?
Yes.
It's only worth what
people think it's worth.
And at some point, it may
not be worth anything.
What drove Rick and
Jane to this life?
What made them give up
restaurants and grocery stores
to take on hours of daily labour
just to meet their basic needs?
So I'm gonna go in
the refrigerator
and I'm gonna have fun.
For years, Jane
worked in an office,
but like many other
Americans, she and Rick
were hit by the 2008
financial downturn.
Now, she's Survivor
Jane and today,
she's making her own goat cheese.
We were like the majority
of consumers out there.
We bought and we worked and
we bought and we worked.
And what really got our attention
was the housing market bubble.
Our gated community
home that we actually
paid premium so that we
could be in a nicer area,
started turning into
multi-family renting.
Crime started going
up, the neighbourhood
started going down, and
then the stock market,
right behind it.
My 401k, I was losing
about $7,000 a month.
- That's a lot of money.
- But it was a lot for me
It's a lot of money
to most people.
Because I had worked
a long time, and I
was told that
I could either quit my
job or I could die.
Those are the only ways I was
gonna get my 401 money out.
So we took a huge leap of faith
and decided to head for the hills.
We stay up here on the
mountain so our way
to get the word out is to
have a YouTube channel.
As you can see, an off-grid home
doesn't have to look like one.
I've designed and built every
building on this property.
I created what I call
the Hiney Hydrant,
which is a portable bidet.
And it eliminates the need
to have to buy toilet paper.
Even though we live off-grid,
we're not just surviving.
We're thriving.
I was used to going
to the shopping mall.
I couldn't do that any more.
I had to figure out, how
can I make my own make-up?
I'm gonna be honest with you,
this isn't natural, okay?
The barn needs painting, okay?
I'll tell you, the
goats don't care,
but the old goat does.
Okay, so I just want
to let you know.
I had to make my own
make-up, out of food.
We don't need money,
we don't need anything
except for what we have.
And it seems like, wow,
you just kind of,
your whole life is food.
Huh. And I'm living pretty good.
Jane and Rick have
voluntarily formed
a community of two,
servicing their own needs.
No outsiders welcome.
Let it stretch, there you go.
But what if my idea
of giving up money
doesn't also include
defending my family
against the flesh-eating masses?
Especially if I can't
even make cheese
well enough to survive.
Let me just tell you,
you're gonna die.
What if you're not looking for
an isolated mountain
home, but still
want to live without money?
The 2008 financial crisis
that sent Rick and Jane
to the hills dealt a crushing blow
to America's housing market.
But the economic
effect was global.
Brutal shockwaves
extended to Europe,
where entire economies
were decimated.
Eventually, things got
really bad in Spain
after massive bank failures
sent unemployment soaring,
and people took to the
streets in protest.
The financial crisis
left many people
in Oviedo without
much money to spare.
So Sergio Martin created
an experimental,
barter-based market
where community members
directly trade goods and
services without using money.
What's up?
It's an economy made by people,
for the people,
and with the people.
We all have needs.
And we all have resources.
So, we have to use barter,
imagination, talent, resources
- I like that.
- To get by inside this place.
That's interesting.
So you're offering this
idea of going back
to a trust-based
community where somebody
has a good or service that
they're directly giving to you.
Yeah.
How does it work?
How do you get dollars? Or Euros?
You work for it.
What can I do? What
talents do you have?
What resources can
I take advantage?
For example, food
is very important.
This weekend, I felt like making
bread with my new oven I built.
And today I'm selling bread.
So I love this idea, obviously,
and I'm way into it.
The reason I was wracking
my brain was like,
I'm an actor, and I have
some teaching experience,
but we're not here long enough
for me to teach a class.
I'm wearing these clothes,
I have old socks on
We don't want you to be
naked after getting
there are holes in my pockets,
nobody's gonna want this jacket.
Do you have any film from you?
Any like, DVDs?
- Yes. Would be nice.
- I do, actually.
Okay, so we do have
one, thank you.
So this is a DVD.
This I hope will make you laugh.
This is a very nice
plan for my evening.
- So thanks a lot.
- Okay, good, cool.
And now, I would
give you something.
For example, you could take
this one, which is very nice.
Smell. This is called Melissa.
- Melissa?
- Melissa.
That does smell like Melissa.
- Yes. Really?
- What? No.
No?
I don't know, there's
somebody named Melissa
who's watching and she's a little
weirded out right now, because
I was a little creepy.
It does smell good, though.
- Really?
- Yeah.
And also I could
give you some bread?
Do you like this one?
Yeah, that's a nice
looking loaf of bread.
- Yeah, looks nice.
- It's heavy.
This is gonna fill somebody up.
Several people. This
is for a family.
Yes. This is real bread.
So, are you happy?
- Yes.
- Me, too.
Great, but I could still trade
this for something else.
- Yeah, of course.
- Okay.
Okay, so if I wanted to
barter this for this,
what are these, soap and lotion.
Hello.
Can I interest you in some
Melissa for your soaps?
They would smell amazing.
People would love them.
You get the fragrance.
Like, smell this,
it smells amazing.
- The bread.
- The bread? Okay.
This is really well-made.
Yes, because it's all handmade.
Awesome.
Okay, alright, I will
trade you for this one.
Thank you. Thank you.
You sure you don't
want some Melissa?
And these girls.
What do you have?
Let's see, tell us.
T-shirts, books.
Good.
Did you make all these shirts?
Yes.
They're nice, they're very nice.
Can I interest you
in some Melissa?
I think no.
A plant?
Okay. We tried.
Alright. Thank you.
This is where bartering
hits a wall.
A wall that can't be paid for
with a nice-smelling plant.
Economic systems don't
thrive when you can
get stuck with something
nobody wants.
So it looks like I'm going
home with Melissa tonight.
To build a global
economy, it seems like
you need something to exchange
that everybody wants.
Across the globe and
throughout history
there's been one
rare, heavy element
that people have
always been drawn to.
Seduced by.
Driven mad by its
glittering shine.
Willing to do anything
to get their hands on
Gold.
You're a nervous guy.
Around this much gold, yes.
You're standing
currently in the only
centre in London where
you can buy a gold bar,
sell a gold bar, test
it, but best of all,
having bought it you can store
it on site in a gold vault.
We wouldn't normally take
a client down there,
- but fancy a little look?
- Yes.
Come on, let's go.
Three decades of experience
make Ross Norman
London's gold guru.
He says the gold in
his vault is safe,
but he can't say the
same for the cash.
I'm about to make you very rich.
I hope you can appreciate this.
I'm about to give
you $100 trillion.
- Congratulations.
- Thank you so much.
You're now the owner of $100
trillion, Zimbabwe money.
Oh, yeah, okay, this is worthless.
But do you know what? It goes on.
Yugoslavia, I can't
even count the notes.
$10 million Deutsche Marks
from the Second World War.
Turkish lira, how
many notes is that?
It's only half a
million Turkey lira.
Cash always goes to its
intrinsic value, zero.
They're great as a
medium of exchange
but through time, it erodes.
So how does gold differ?
It's got a 4,000 year history.
What economists call
purchasing power parity.
If you'd bought an ounce of gold
in the time of Jesus Christ,
you'd have bought a
suit of clothing.
Bought an ounce of gold in
the time of Henry VIII,
you'd have bought
a suit of armour.
An ounce of gold today
is about $1,300, £1,000.
You can get suited and booted
on Savile Row in
London for £1,000.
The point being, there's
a world preserve.
It buys the same things
throughout history.
- Cash doesn't.
- What's in there?
You have the key in there, and I'm
so distracted by this
key, because I'm like,
- what's in the box?
- I'm gonna show you something
I'm gonna show you something.
Let's have a quick look in here.
What I've got in here is,
clients come here to
store their value.
Ooh.
Hands off.
You're in a safe deposit box.
Now, consider in this country,
the average wage is about £28,000.
In cash terms, that's £28,000.
These are £50 notes, okay.
The equivalent in
gold, take it here.
Is a kilo of gold.
That's $45,000.
This is heavy.
It's twice as dense as lead.
Is this pure gold?
99.99% pure.
May I take that back?
If you have to.
Throughout history, we had to
attach value to an element
that was reliable.
On opposite sides of the world
they came to the same conclusion.
Do you remember the
name Marco Polo?
- Yeah.
- In the 1200s,
he went from Europe, where
they used gold as cash,
he discovered in Japan and China
they were also using gold as cash.
South America, a
thousand years ago.
So across the world, relatively
isolated communities,
all attached to one element, gold.
People and gold have had
a pretty stable
long-term relationship.
So why aren't we still
using gold as money?
Gold.
Even on this black and
white reel it shines,
right off the screen.
None in the modern world has had
a more extraordinary relationship
with gold than America,
the sweetheart consumers
of the global economy.
For the better part
of the 19th century,
America flirted with
the gold standard.
We made it official in 1900,
legally declaring that
each bill was worth a set
amount of gold held in reserve.
Gold-crazed citizens
were emancipated
from the burden of lugging
around heavy coins and bars.
Put away that wheelbarrow, Jasper.
The US gold standard
held down inflation
and made the dollar reliable for
trade with foreign nations.
America was sitting pretty,
until the Great Depression pulled
the rug right out from under us.
Economic hardship puts
a bellyful of stress
on the gold standard.
The Federal Reserve couldn't
source the supply of gold
required to print more bills
to stimulate the economy.
That marked the beginning of
the end for the gold standard.
In 1971, President Nixon
nixed it for good.
I'm in our nation's capital,
where I spent a few years
working for President Obama.
You're welcome.
I'm here to meet an old friend
at Martin's Tavern in Georgetown,
which has a long
history of hosting
some of DC's biggest
power players.
I'm excited that we're
sitting down together.
We worked together for
a couple of years.
Austan Goolsbee knows
a thing or two
about why gold got kicked
to the curb by the global economy.
Austan also worked
at the White House.
We don't have the
gold standard now,
and there's not any
country on Earth
that has the gold
standard any more,
because it didn't work.
The people that usually
advocated gold standard
have in mind, I don't
trust the government,
I don't trust any individual
in the government
to decide how much
money there should be.
They'll probably
print too much money
and we'll have hyperinflation.
And only gold, which
is in fixed supply,
will give us the
stability that we need.
Now the only thing about that is
the gold's not in fixed
supply when they find,
you saw those old
pictures of the guy
with the coveralls,
he's in Alaska.
They discover a bunch
of gold, it's like
they've flooded the
market with money.
You haven't replaced
that there are
decisions being made about
how much money to print.
Russian miners and South
African gold miners,
they're the ones who determine
how much money's in the economy,
rather than somebody
in the government.
The actual paper on which a dollar
or $10 or $100 is printed,
if a dollar is a dollar,
does the paper actually
cost a dollar?
Does a $100 bill cost
more than the dollar?
What you are identifying, we don't
have a commodity money
system any more.
Instead, we have fiat money.
We print the money, and then
we tell you what it's worth.
Like is it meaningless?
Is money totally bullshit,
is it meaningless?
If you pull out your
dollar and you look at it,
it says, this note is legal tender
for all debts, public and private.
It's a promise from the government
that you could use that
to pay your taxes.
That's what makes it fiat money.
It just means the government
says, this is a dollar.
If they print a $100 bill,
on one cent of paper,
and they say this is worth $100,
will you give me $100
worth of coconuts,
you know, for this? And they will.
You'll go outside, somebody
will take $100 bill,
just because the
government, by fiat,
declared that that's
what it's worth.
So it's a system of trust.
It's a system of trust,
and it has to be.
Because you have to
trust if I'm giving you
something other than a
barter, this for that,
to say, yes,
this abstract thing
represents value,
then we can use it to trade.
And there's always the temptation
that whoever's in power,
would say, well, while
no one's looking,
let's print a whole bunch of money
and pay off all of our,
whatever debt we have.
If you abuse that, the
markets and the people
who use the money,
they will notice.
And when that happens, they
will begin to flee your money.
Stable governments are
basically the last
safe house that we have.
So, the government wants
me to trust their money,
and their money wants me
to trust someone else.
I suppose having a faith
in our institutions
is easier than carrying
around a heavy metal
or a potted plant,
but can I choose
to place my faith some place else?
Is there an option that doesn't
depend on a government
decree or banks?
That would change the world.
And we all know where
to go for that.
I took the initiative in
creating the internet.
The internet has excited us.
And then there's email.
Email, I heard that's really neat.
And changed our lives
over and over.
You launched Facebook
in your dorm room?
Yeah.
Will the next big internet
innovation remake money?
It is the hottest
currency in the world.
- Bitcoin.
- Bitcoin.
Some of the biggest influencers
of the last two decades
are looking at
a whole new way to
get rich online.
You know, people have made
fortunes out of Bitcoin,
some people have lost
money out of Bitcoin.
Bitcoin was the first
digital currency.
It is also referred to
as a cryptocurrency.
Its aim is to free us from
blind faith in institutions.
And a legion of devotees
have come forward
to declare crypto the
future of money.
This is a financial innovation
that is not going anywhere.
Jeremy Gardner's early interest
in Bitcoin and other
cryptocurrencies
made him into a globetrotting
millionaire by age 25.
Now he's focused on spreading
the cryptocurrency gospel
as king of the Crypto Castle.
Hello, welcome to
the Crypto Castle.
Thank you.
I thought it was going to
look like a legit castle.
It's always a disappointment
for people that aren't prepared.
Well, let's start here.
This is more of like, a
man den trading cave,
this is Tony.
Hey, Tony, how are you?
- Kal, nice to meet you.
- Frequent house guest.
The house started
as a three-bedroom,
but we quickly turned it
into a lot more than that.
We turned this into a
bedroom right here,
I don't think it's available.
Got another bedroom back here.
My dream was to someday
build a gym in here,
but then I remembered I
didn't like exercise.
Probably the most unique
component is the guest bedroom.
- Got two bunk beds.
- Oh, that's cool.
And so this allows us to host
all sorts of interesting people.
How long have people
been living here
as the Crypto Castle?
When I moved to San
Francisco four years ago,
there was no gathering point
for the crypto community,
because back then
it was very small.
And so I really wanted to find
a space that could really
host larger groups.
So the Crypto Castle isn't so much
a castle as a frat
house-styled flophouse
for Jeremy's crypto crew.
How many people live here?
Depends on the day.
Okay, today?
Today I think we
have six or seven.
So you're, this is an
incubator space, basically?
Yeah, and not like the show
"Silicon Valley" per se,
more in that it's an
incubation of ideas.
Because of all the
interesting people,
there's this kind
of rapid ideation
constantly just trying to come up
with new ways to
think about things,
and companies have
been founded here,
you know, Augur, which I founded
which is first company here,
which is like worth
$600 million today.
None of the team's here any more,
but you know this is
where that was founded.
Here, I don't know if
she's in her room,
but Jing is the executive dir
We're coming in.
- What?
- This is Jing.
- Nice to meet you.
- Nice to meet you.
Jing is one of the most
badass women in crypto.
How did you end up
living in this house?
I mean, that's like
my first question.
I started doing
crypto stuff in 2012.
I was an art student at the time,
attending a women's college,
and then I went to this
Bitcoin conference
with 300 men and four women.
And I was like, what
is this nerdy world?
And I was hit by this
horrible sense of FOMO,
so I switched majors
to computer science.
Oh, wow, from art to
computer science?
Yeah, yeah. FOMO is real.
This is a house full of dropouts.
Much to my Asian parents' dismay.
Yeah, I'm sure.
What's Bitcoin, Bitcoin
is not real money.
Jing is probably one of the most
well-tapped people
when it comes to
the technical community in crypto,
because, you know,
I deal a lot more
with the entrepreneurs
and other investors.
But Jing knows all the
brilliant programmers
that actually make this
technology possible.
Jeremy and Jing believe that
cryptocurrency is the
future of money.
All they have to do is explain
what the hell it is
to the rest of us.
How would you explain
what's Bitcoin,
how does any of this work?
Sure. Do you smoke hookah?
No, I'm good, but feel free.
Bitcoin is a form
of electronic money
to move about in a
decentralised way.
The system enables
you to trust this
Engage with me,
because we've created
a system of trust,
that exists online
that doesn't require anyone to go
and mediate transactions.
And that's what makes this
technology so revolutionary.
It's totally virtualised.
So no bank, no governments
are necessary.
Literally you and me
can transact something
that we both hold valuable
without relying on anybody else.
How is that ownership
assigned to individuals?
Like how do you know how
much of that you have?
What Bitcoin introduced
to the world
was this notion of a blockchain,
which is a distributed
database with nodes,
little validators, all
around the world.
It makes it impossible to hack,
and Jing may have
more to add to this.
I wanted to add something.
- Please.
- Go ahead.
So, it's called a blockchain,
and you can visualise it like this
ledger of transactions
and who owes who what.
All of this data is put in a file,
- and that's a confirmed block.
- Okay.
- Did I confuse you more?
- No, not at all.
I'm just making sure
that I understand
everything you're saying.
I'm just gonna text a
friend real quick.
Dearly beloved, we are here today
to explain the blockchain.
Confusing thing, the blockchain.
It's a decentralised ledger
for digital transactions
that stays on the
internet forever.
And forever is a mighty long time.
But I'm here to tell you
it's like something else.
And look, this isn't
a perfect analogy,
but think of traditional financial
transactions like a wedding.
Two parties come
together and exchange
something of value, like a ring.
Or, formerly, goats.
And, traditionally,
these holy transactions
have relied on a
licence from a state
and an ordained official
to verify them,
like a priest or a
justice of the peace,
or a captain of a
ship for some reason.
I'll turn this ship around.
You bet you will.
That is what made
them centralised.
The official, like
me, is comparable
to the bank or credit company
which traditionally
verifies the transaction.
But we're millennials.
We don't traditionally anything.
Well, alright then.
If standard financial transactions
are like a traditional wedding,
then blockchain
transactions are like
a millennial spiritual
union ceremony,
and they don't need
an officiant like me.
For some reason, kids today don't
really trust the financial system.
They are satisfied to
make this exchange
in front of these
trusted witnesses,
who verify the transactions
by taking pics,
tagging the bride and groom,
and posting them online,
accessible to everyone
on the internet.
So if I lose my phone
somehow, it doesn't matter.
Cashew cheese?
Fuck no.
I mean, if you look
at millennials,
we've lived through
a post-9/11 world
that's growingly
Orwellian, and then
lived through the Great Recession.
If you're my age, you don't
really trust the government.
You don't really trust banks.
What we're creating is something
that transcends the
national economy.
We're creating something
that is supernational.
Something that is global and
accessible to everyone.
I tell young people, you know,
you should have 20 to 30% of
your net worth in crypto,
because the upside
is so exponential,
whereas the downside,
especially for a young person
that can go and make more
money, is fairly negligible.
As long as you
believe the internet
is gonna exist in the future,
crypto assets are gonna
be a part of that.
- Brah.
- There you go.
- Shit, my mouth is full.
- There we go.
You actually smoke hookah
all the time, or
I do.
One of my investors saw
Jeremy, and she said to him,
"You look ridiculous."
I don't remember that.
For the crypto kids,
cryptocurrency is a
next gen solution
that will revolutionise
the world economy
through a borderless
currency that is
free from control by governments
or financial institutions.
So future.
I'm in.
Now I've just got to
find me some Bitcoin.
Anyone can buy Bitcoin on a
cryptocurrency exchange,
but before that happens,
the coins have to be
digitally created on the network.
There's no physical
treasury to mint them
or Federal Reserve controlling
the supply like paper money.
Instead, Bitcoin introduced a way
to digitally generate a finite
number of coins with
computing power,
a process called mining.
Now crypto mines have popped
up all over the world.
They run powerful
computers 24/7 in a race
to generate and hoard
cryptocurrencies.
This one belongs to Petr Svoboda.
I'm here to find out how
he turned crypto mining
into a business model.
Oh, wow.
The sound is from the
fans in each one?
To keep it cool?
Yes. It's very hot.
What's the difference between
these machines and these?
These machines are specialised
machines for mining bitcoin.
- And other cryptocurrencies.
- Okay.
Different algorithms.
How many rooms like
this do you have?
There are five rooms.
- Five rooms like this?
- Yes, yes.
That's cool.
Can you explain how mining works?
It's better for me, will
be to explain it in Czech.
Okay, perfect. My Czech is great.
Working the algorithms
Well, it's the uncle rib nose
Skinny poor check Danno
something something
Okay, I lied, I don't
really speak Czech.
But I'm hoping there's someone
smarter than me who
can explain all this
in English and like I'm five.
Remember how the blockchain is
the digital record of
Bitcoin transactions?
Well, mining is how the Bitcoins
are created and awarded
in the first place.
The miners in the
analogy are the guests,
who verify the transactions
by taking pics,
tagging the bride and groom,
and posting them online.
Bitcoin is created as an
incentive for the miners
to build and maintain
the blockchain.
Okay everybody, time
to catch the bouquet.
Bitcoin is awarded
to one lucky miner.
Don't feel bad for the miners who
didn't catch the Bitcoin bouquet.
Bitcoin transactions are
happening constantly,
which means mining is a never
ending wedding season.
The more they work to
maintain the blockchain,
the more Bitcoin bouquets
they have a chance to catch.
Bitch.
Because crypto mining
takes so much energy,
mines like this are being
built where energy is cheap,
like China, Iceland, and
here in the Czech Republic.
And it's not just
Bitcoin they're after.
There are already thousands of
other cryptocurrencies out there.
Litecoin, Ethereum, Tether,
EOS, Stellar, PotCoin,
the list goes on and on.
You must have a crazy
electricity bill.
Yes. I think we spend about
60 thousand US Dollars.
60,000 US dollars a
month. On electricity.
Yes, per month.
- Yes.
- Wow.
That's a lot of money.
Can you tell me the
average person,
how much they buy and invest?
Yes, about 30 thousand US Dollars.
- 30,000 US dollars?
- Yes, yes.
- Each? Okay.
- Each.
And how many machines
is that usually?
It's for eight machines.
Oh, that's eight machines,
is 30,000 US dollars?
Dude, this is amazing.
And you have five
rooms of machines.
Yeah.
Are there a finite
amount of Bitcoins?
- Yes, yes.
- There are.
So when they're all found,
then what happens?
Nobody know.
Before I blow all my
money on something
that I only understand
through wedding metaphors,
I want to meet someone
who can explain
how cryptocurrency
actually gets its value.
Jackson Palmer was a
marketing manager
and coding enthusiast
whose attempt to poke fun
at the cryptocurrency
boom totally backfired.
- How are you?
- Nice to meet you.
These dogs are pretty amazing.
They are.
These are the dogs on the coin
you started, right? Dogecoin?
That's right, I put
the dog on the coin.
Yeah, these are the Shiba Inus.
Back in 2013, I was really
into cryptocurrency,
noticed there was one
coming on the scene
every month or so,
and at the same time
I was really into the Doge meme.
D-O-G-E.
Your Doge?
What are you talking about?
The Doge meme was
born when a picture
of a dog with a
soul-piercing gaze,
posted by a Japanese
kindergarten teacher,
rose to internet fame.
Jackson took it from there,
tweeting what he
intended as a joke.
Investing in Dogecoin, pretty
sure it's the next big thing.
You hadn't created the coin yet.
Hadn't created it at all.
What happened with the tweet?
The tweet started going viral,
and so I ended up buying the
domain name, dogecoin.com,
and just slaps the Doge
meme on top of a coin
and said, it's a
parody cryptocurrency.
What happens when you
create a currency?
It doesn't actually
really involve anything
but putting the code out
there for people to run.
It's the same with
Bitcoin or Litecoin
or any of these things.
You just put up an application
that people can run and
if enough people run it,
then it becomes a
network around it.
Yup, it's that easy.
And even though Jackson is
the creator of Dogecoin,
he never mined it or
made any money on it.
But he did have a front
row seat for Doge's rise
as an instant and
inexplicable sensation.
In about 24 hours,
we started realising
that there was all
this hashing power,
all this computing power, pointed
at the Dogecoin network.
I'm like, oh no,
what have we done?
It's a thing. Next thing I know,
it's a $2 billion economy.
Whoa.
That's when things
got a little Doge-y.
Dogecoin's valuation
soared on hype
fuelled by a lovable mascot.
And I thought my love
of dogs was irrational.
Hello.
And so you started a coin and
yet you are a crypto sceptic.
I'd call myself a
crypto rationalist.
Ooh, okay, crypto rationalist,
that's actually
better, I like that.
I think there's a lot of hype
and a lot of value being attached
to this stuff, with
very little substance.
Cryptocurrency should be valued
on its actual merit and
not the hype cycle
that says it's gonna be the
biggest thing in 10 years time.
How do humans scale something
like cryptocurrency,
and at what point
does it flip from
being speculative
to being an actual thing?
That's the technical term, by
the way, "an actual thing."
An actual thing? Okay.
I think it's an
interesting challenge.
I think, because
the price is going
up and down all the time,
it doesn't really incentivise
people to spend it,
because the currencies
are so volatile.
Jackson's concerns
really point out
that cryptocurrency is
still in its infancy.
Nobody knows what
it'll grow up to be.
In fact, its volatile
price over the last year
follows almost the exact
path of the dot-com boom
that turned out to be a bust
when the internet
was in its infancy.
Crypto is still a
speculative asset,
more like an investment
in a start-up
than hard cash in your pocket.
But there are people
all over the world
trying to change that.
James Howells saw the
potential of cryptocurrency
before almost everyone else.
He was one of the
first crypto miners,
making a fortune in Bitcoin.
Now James is in on the
race to figure out a way
to make cryptocurrency usable
for everyday purchases.
Is this your doing?
Yeah, I've actually put
this into this store,
I'm using this as a test store,
because I'm selling this product
to businesses around the world.
He's developed an app he hopes
will make crypto as
easy to use as cash.
Grab a Lucozade.
I'll grab some crisps.
The app draws from a
user's digital wallet,
which tracks how much
Bitcoin cash you own.
Yeah, now what?
I'll just play on Bitcoin Cash
please, if that's alright.
This is the Bitcoin Cash Wallet,
so I've got Bitcoin
Cash preloaded.
The merchant has got a solution
where they give me
a QR code to pay.
I scan that and swipe to send,
and then the merchant knows that
he's actually received his funds
and they are secure
in his wallet now.
I assume Visa and Mastercard
don't like Bitcoin,
because that circumvents
their fees.
Yeah, it puts them
out of business.
People can transact without
those third-party services.
You shouldn't be
paying third-party
just to put your money to
somebody's else's hand.
Yeah, true.
The potential of Bitcoin
transactions is exciting.
No bank fees, no loose
change, or long receipts.
And your crypto is
safe and secure,
because the only way to use
it is with a private key,
a string of 64 random
letters and numbers
that is impossible to guess.
The only thing that could
possibly go wrong,
is if you somehow lose your key.
Like, hypothetically, you
stored it on a hard drive
and you accidentally throw it away
and it ends up in the
bottom of a landfill.
I mean, then you're just fucked.
But how likely is that?
So how does one accidentally
throw away a hard drive?
I had a rather
unfortunate incident
where I spilled a glass of
lemonade onto my laptop.
But I actually kept the hard
drive from that laptop,
because I knew it had
my wallet on there,
my Bitcoin Wallet and my
keys, my private keys.
And basically it was just a
case of a mistaken identity.
The wrong hard drive was
put into the black bag
and since then, the
valuation of my drive,
$65 million today.
Holy shit.
Yeah.
If that happened to me,
I would never throw anything away
ever again, in my life.
But James has a plan
to find his fortune.
By cross referencing
landfill records
with the day he threw
out his drive,
he can narrow his search to
an approximate location.
But the town council
won't let him dig.
In the UK, there's never been
a permit to excavate
a landfill issued,
so we're in uncharted territory.
There's been a number of searches
of landfill for police inquiries,
for you know, murder
investigations
and things like that.
So just murder somebody first,
and then you should be
able to get your key back.
I mean, the fact that I cannot get
$50-odd million
worth of coin back,
Proves that Bitcoin is secure.
So if you had written that key
down on a piece of paper,
you would've been okay?
Then I would still have it, yeah.
If I had that key, I
can spend my coins.
I could set a machine,
a supercomputer,
to continually guess every
single code for my wallet.
The problem with that
is there is more
possible combinations
than there are
particles in the universe.
So I would need a couple
of suns worth of energy,
actual suns worth of energy,
and a couple of billion
years in order to crack it.
That, to me, is what gives
Bitcoin its security
and that is why I trust
in this technology
as the future of money.
Yeah, so if you wanna jump in,
we can go to the landfill
and I can show you
where this multimillion
dollar hard drive is buried.
All these people with
all their money,
they trust that all
of the other people
will also believe
in the same money.
It's a chain of trust, unbroken.
So what should you trust?
Your government?
A shiny metal?
A computer code?
Or none of the above?
Looking at this just
gives you a scale.
Oh wow, yeah.
And that goes down
underground as well.
Time will tell how
expensive a blunder
James' tossed hard
drive really was,
but who can blame him for trusting
in a new way forward
and holding out hope
for his future digital fortune?
For now, this is as
close as he can get.
In 10 years time, there's
a very good chance
that that drive is worth
a billion dollars.
And I can't even walk
across there to dig it up.
Action.
I'll turn this ship around.
I'll turn this ship around.
I'll turn this ship around.
I'll turn this ship around.
Try it drunk.
I'll turn this ship around.
Cut, perfect.