VICE (2013) s06e03 Episode Script
A Revolution in Ruins & New Kids on the Blockchain
1 What do you think would be - a positive step forward? - That's a great question.
It seems like there is something valuable to be able to talk about problems.
- Economic development.
- Housing.
- Injustice.
- Accountability.
- Violence prevention.
- Responsibility.
Hello.
You are actively working towards finding solutions together.
I want to believe that somewhere, there's answers.
If you could design a superhero, what would it be? - This isn't your show, Iris, it's mine.
- OK, I'm sorry.
(LAUGHS) SHANE SMITH: This week on Vice: Chaos fills the power vacuum in Libya.
(MAN SPEAKS) Oh shit.
(EXPLOSION) - (CROWD CHANTING) - Libya! Libya! Libya! (HONKING) SHANE: And then, the global race to capitalize on cryptocurrency.
- (SHOUTS) - You're 23 years old, and you're saying sentences like, "Usually, the central banks want to talk with me.
" - Mmm.
- (SPEAKING RUSSIAN) (THEME MUSIC PLAYING) (CROWD SHOUTING) They're saying that right now, it's time for change.
(CHEERING) Seven years ago, the US played a crucial role in the liberation of Libya from long-time dictator Muammar Gaddafi.
(CROWD SHOUTING) However, in the resultant political vacuum, hundreds of warring militias have splintered the country into competing power centers.
Today, the internationally backed Government of National Accord, or GNA, is accused of being unstable, corrupt, and struggling to control its shrinking sphere of influence.
Making matters worse, Libya's political chaos and vast Mediterranean coastline has made it an epicenter for the mass-migration issue facing Europe and the world today.
So, we sent Isobel Yeung to Libya to see how the failed state is dealing with this growing crisis.
ISOBEL: We're about 10 nautical miles or so off the coastline of Libya, and the Libyan coast guards that we're with have just received a call from the Italians saying that there are rubber dinghy boats out here somewhere full of migrants.
It's extremely choppy out here today, so we're trying to scour the oceans right now and to find them before it's too late.
(MAN SPEAKS FOREIGN LANGUAGE ON RADIO) (CREWMAN SHOUTS) Hey! Hey, hey, hey! (PEOPLE SHOUTING) (SPEAKS FOREIGN LANGUAGE) (ISOBEL SPEAKS) (PEOPLE SHOUTING) (CRYING) (SPEAKS FOREIGN LANGUAGE) ISOBEL: I think they're taking you back to Libya.
Libya.
ISOBEL: With the global migration crisis overwhelming Europe, in 2016, the EU came up with a new $215 million plan to pay Libya to contain the problem.
This strategy means that Italian warships are now responsible for diverting thousands of migrants a year back to a struggling Libyan state.
(ISOBEL SPEAKS) (SPEAKING FOREIGN LANGUAGE) ISOBEL: This lawlessness has plagued the country since Gaddafi's downfall, and, today, Libya is fractured into rival governments.
The UN and Western allies are backing the Government of National Accord, or the GNA, which controls the capital, Tripoli.
But with a failing economy and mounting insecurity, the GNA is struggling to maintain its hold.
Libyans are increasingly frustrated and desperate for change.
(CROWD CHANTING) (ISOBEL SPEAKS) (SPEAKS FOREIGN LANGUAGE) (SPEAKS FOREIGN LANGUAGE) (SPEAKS FOREIGN LANGUAGE) (ISOBEL SPEAKS) - (SIRENS WAILING) - (HORNS HONKING) At the heart of Libya's turmoil is a broken economy.
Financial infrastructures have collapsed, and the Libyan dinar has plummeted 600 percent in the last three years.
(INDISTINCT CHATTER) ISOBEL: There's about 500 people or so waiting here.
The line's going around the block, trying to get ahold their salaries, because there's such a major cash-flow problem in the country.
So how does it work? You have to line up and try and get a ticket to maybe get money out? (SPEAKS FOREIGN LANGUAGE) ISOBEL: That must mean that some months you go without your salary.
ISOBEL: With a weak government and deep-rooted discontent, conditions have been ripe for terrorist organizations to thrive.
In 2015, thousands of ISIS fighters established their biggest stronghold outside of Syria and Iraq.
They ruled the coastal city of Sirte for two years, terrorizing the local population.
(GUNFIRE) After a seven-month-long battle, ISIS was finally defeated with the help of US airstrikes and a ground offensive led by militias funded by the GNA.
We're with the biggest coalition of militias here in the west.
These guys were responsible for driving ISIS out of Sirte back in December of 2016, and now they're continuing to patrol the city.
We're headed to the very eastern point of Sirte, where there's the biggest threat of ISIS's return.
And what is the security situation at the moment? I mean, how much of a threat is ISIS? (SPEAKS FOREIGN LANGUAGE) ISOBEL: So, since you guys kicked ISIS out of Sirte, they've been regrouping right outside of it? ISOBEL: Who do you guys answer to? I mean, for the last few years, you've come under the jurisdiction of the GNA, right? (MAN SPEAKS FOREIGN LANGUAGE) I heard that in the last few months, you guys haven't received a salary.
Is that true? ISOBEL: The risk of not paying these militias is that they could look elsewhere for sources of income.
In 2014, the National Oil Corporation, or NOC, Libya's largest oil producer, was attacked by militias fiercely opposed to the GNA.
We spoke to the chairman of the NOC, Mustafa Sanallah.
How much money is Libya losing from the current situation in terms of the security surrounding the oil? - $126 billion US? - Yes.
Yeah.
Yes.
- In how long? - (MUSTAFA SPEAKS) ISOBEL: So, if you can just sort out the security situation - MUSTAFA: Yes.
Yes.
- then you'd get - (ISOBEL SPEAKS) - MUSTAFA: Yeah, yeah, yeah, yeah.
I guess this is what happens when oil gets caught up in politics.
ISOBEL: Sanallah is considered one of the only well-respected neutral voices in Libya, but to keep the oil industry functioning, he must work with a government struggling to maintain control and hundreds of militias vying for Libya's most valuable resource.
How much of Libya's political situation and power struggles that seem to be going on across the country how much is that down to who gets to control the oil? How rampant is smuggling, including oil smuggling, here in Libya? ISOBEL: The GNA has reportedly paid militias to act as coast guards to stop illegal smuggling.
Some of these militias have themselves been accused of working in the illegal migrant trade.
The GNA has been accused of working with smugglers to prevent migrants from reaching Italy.
Is the GNA guilty of paying those very people who are guilty of some of these criminal activities? I'm not accusing you of doing that, - but I'm asking whether the GNA is.
- No, no.
- ISOBEL: You're being very careful - (BOTH LAUGH) very careful not to answer that question.
ISOBEL: But the GNA does deal with militias.
Here in the smuggling hub of Sabratha, this militia group is led by Abd Al-Rahman Milad, who goes by the name "Bija.
" Besides fighting for control over territory in western Libya - Oh shit.
- (EXPLOSION) he also being paid by the GNA as a coast guard to to stop the smuggling.
(GUNFIRE) Bija took us out to pick up a boatful of migrants trying to make their way to Italy.
(BIJA SHOUTS IN FOREIGN LANGUAGE) How do your men treat the migrants when they come across them? Obviously, we've seen reports that they're less than kind towards them.
(SPEAKS FOREIGN LANGUAGE) (MAN SPEAKS) (BIJA SPEAKS) ISOBEL: So, you know who the smugglers are? ISOBEL: While we were with him, Bija began taunting one of these smugglers.
(BIJA SHOUTS IN FOREIGN LANGUAGE) ISOBEL: But Bija himself has been accused by the UN of smuggling migrants.
He denies these charges.
(BIJA SPEAKS FOREIGN LANGUAGE) - MAN: Huh? - (BIJA SPEAKS) ISOBEL: With allegedly corrupt militias like these taking full advantage of a government payroll (SPEAKS FOREIGN LANGUAGE) Libya has descended from a place of hope, just seven years ago, to a largely lawless country.
We sat down with Taher El-Sonni, a senior adviser to the GNA, to ask about his vision of Libya's future.
It's very hard to see a state that is failing its people quite like yours is.
I mean, the economy is a complete mess, the social services don't work, the militias have more control than perhaps even your government.
Do you recognize the urgency to address these issues right now if the country is to move forward? There is hope, because we do see a momentum that even the people are fed up of this kind of chaos.
This is something that we have inherited.
It is something that we're trying to manage.
It will take some time, though.
The militant force who is responsible for liberating Sirte from ISIS and is continuing to protect Sirte at the moment, they're saying that they haven't been paid for the last few months.
Are you concerned that given the dire state of the economy at the moment, that these forces, whether you call them militias or not, are gonna turn against the GNA? Why did you call it a militia? That that's the question.
- You call them the army? - This is you have to No.
When the fight happens, of course we had organized forces, and there was, what you call them, the support forces.
You want to call them armed groups.
You want to call them militias.
Name it as you wish, but in the end of the day, it was under the full control and umbrella of the GNA and ministry of defense.
The issue of salaries it's a financial crisis we're all facing.
We've spoken to a lot of people, and a lot of people have said that the problem is the GNA, and they can't see a future of Libya with the GNA in power.
The GNA was meant to be in a temporary period, until the constitution comes out and there is proper elections for a steady state.
This frustration is totally accepted and recognized by us.
I I will not fool Libyans and say that we are the best government, but we are the best available government.
(CROWD SHOUTING) Bitcoin, Ethereum, and Ripple are just a few of the hundreds of cryptocurrencies that have exploded in the last year, turning novice investors into overnight millionaires and sparking a media frenzy.
NEWSWOMAN: Bitcoin surging to another all-time high today.
The numbers are phenomenal.
700 to 800 cryptocurrencies now exist.
Bitcoin over the last week has had a $13 billion market cap.
That's more than US steel, and that's bigger than Twitter.
But as these currencies go from black market to mainstream, nation-states around the world are looking at how to capitalize on this technology's ability to decentralize economies and gain a competitive advantage in today's markets.
So we sent Michael Moynihan to Iceland for an up-close look at this new technology.
(HELICOPTER WHIRRING) (OVER COMM) Marco Streng has made millions in cryptocurrency.
He started mining Bitcoin in his dorm room.
Nearly a decade later, the 28-year-old college dropout turned a single wheezing computer into a lucrative cryptomining empire.
MARCO: What you're seeing here is the Enigma facility, which is the largest Ethereum mining facility in the world.
And it was an exciting time.
It was years ago when we came here and, uh, and built this, and now we're expanding and expanding further and further, because the demand is growing.
Everyone is ramping up the capacity.
MICHAEL: If you have the money, you always buy cryptocurrency.
Last year, Bitcoin peaked at almost $20,000.
Or you can earn it by running a cryptocurrency mine, a network of computers that serve as the backbone of the cryptoeconomy.
Yeah.
(MARCO SPEAKS) (MICHAEL SPEAKS) (MARCO SPEAKS) (MARCO SPEAKS) MICHAEL: Tens of thousands.
Mining operations like Marco's were made possible by pseudonymous programmer Satoshi Nakamoto, who in 2009 created Bitcoin, a decentralized digital currency run by no one entity and beyond the control of any one government.
But Nakamoto, whose true identity remains a well-guarded secret, faced an obvious problem: If no physical currency exists, who tracks the ownership of a digital coin? To solve this, he created the blockchain, software that records and stores information, like who owns a Bitcoin, on a decentralized ledger shared across millions of computers.
It can't be changed, and it's nearly impossible to hack.
(MARCO SPEAKS) (MICHAEL SPEAKS) It's a scam.
It's a bubble.
It's going to burst.
Everyone's gonna lose all their money.
For some crypotcurrencies, it's most likely true, but I see real value in, for example, Bitcoin or Ethereum.
The underlying technology is phenomenal.
I've had people tell me this, that this is the most revolutionary technology that we've seen since the widescale adoption of the Internet.
Very comparable to the beginning of the Internet.
At the beginning, it was just a protocol, very abstract, but now, I mean, we're nearly doing everything in the Internet.
NEWSWOMAN: Blockchain, which some are comparing to the early days of the Internet it sounds confusing, but listen up.
It introduces so many opportunities, so many unique business models.
People say blockchain could end companies as we know them.
For regulators, it is certainly a concern.
You have things like the SEC.
You have FinCEN.
You have the IRS.
MICHAEL: But while the business world scrambles to exploit it and governments rush to regulate it, countries like Russia see a very different opportunity.
MENENDEZ: My sense of cryptocurrency is largely driven to evade US sanctions and to undermine sovereign currencies both of them are a challenge to the national interests of the United States.
PUTIN: We need to search for unconventional solutions.
These are the people who will build our new future and live there.
(APPLAUSE) MICHAEL: One of those unconventional solutions is the Ethereum blockchain, created by a man named Vitalik Buterin.
(MAN SPEAKING RUSSIAN) MICHAEL: Raised in Canada to Russian parents, Vitalik is the blockchain movement's biggest celebrity.
If blockchains are, and as transformative as the proponents are saying they are, then that would imply that, eventually, we'll see hundreds of millions of people using it in some way or another.
MICHAEL: Vitalik created the Ethereum blockchain when he was just 21 years old, and it's cryptocurrency, the Ether, is second only to Bitcoin.
Its market cap increased by over 10,000% in 2017.
(MAN SPEAKS RUSSIAN) MICHAEL: Vitalik is on a global campaign to raise awareness of his creation and its potential applications for business, finance, and government.
(MAN SPEAKS RUSSIAN) (APPLAUSE) Where are we going now? We are going to Kazan, which I understand is the capital of the Republic of Tatarstan in Russia.
You know, I've met government people from Canada, US, UK, Russia, China, Taiwan, Singapore, mmm, Thailand.
Usually, the central banks want to have a chat, and like why not? But you're 23 years old, and you're saying sentences like, "Usually, the central banks want to talk with me.
" That's not That's very rare, I would probably say.
- Umm, hmm.
Okay.
- I'm older than you, and nobody wants to talk to me.
- Umm - Hi.
Am I riding with you guys? Did we is that No, I think you're you're riding in this car.
MICHAEL: So, we're behind a very nice Mercedes that we're not allowed to be in because it's a VIP car for Vitalik, who's treated like something of a rock star here.
The Kremlin rolled out the red carpet for Vitalik, hoping their prodigal son would return home.
- (WOMAN SPEAKS RUSSIAN) - VITALIK: Uh-huh.
- Uh-huh.
- (WOMAN SPEAKING) WOMAN 2: Right now, we're going to the Unified Presentation Center of the Republic of Tatarstan.
- (FIREWORKS EXPLODE) - Oh shit.
This is the place where we make wow effect.
So, the government of Kazan is pulling out all the stops for Vitalik.
We are in what appears to be hour three of a never-ending tour of the city, and what this has to do with blockchain is anyone's guess.
MICHAEL: The Russian government's hope is that Vitalik's technology can be as transformative for their own finances as it has been for his.
So, I heard about Bitcoin for the first time in maybe February 2011, and eventually I found a guy who was willing to pay me five Bitcoins per article for writing articles for his Bitcoin blog.
And what was Bitcoin worth at the time? Each Bitcoin was $0.
8.
$0.
8, so you get five per article, and now that would be $5,000 an article - Right.
Mm-hmm.
Yeah.
- more or less.
Okay.
You know, being a high school guy without much money, I thought $1.
5 an hour was a fairly reasonable wage.
- so I, uh - (CHUCKLES) That was a good deal to you, - $1.
5 an hour? - Yeah, totally.
- Yeah.
Fight for 1.
5! - (BOTH LAUGH) Explain to me why this technology is so transformational that people think it'll change the world.
Mmm.
Because they represent kind of epochal changes in the options that we have for interacting with each other.
With Bitcoin, it's, uh you don't need banks to send money anymore.
It's just something that happens directly peer to peer.
And Ethereum extends that to making digitally enforceable agreements.
That changes whole industries, doesn't it? And It hasn't yet, but we'll see.
(GROUP SHOUTS) MICHAEL: What is it about Vitalik? Why are you so interested in in blockchain? Because Tatarstan is considered to be the innovative republic.
MICHAEL: You want to be the sort of Silicon Valley of Russia.
Exactly.
That's what we are trying to do.
And Vitalik seems like a guy that could help you do that, right? He is considered to be like an "I hero," let's say, for young people.
Is that something that the Kremlin and Moscow is is happy about? - Yes.
I think so.
Yeah.
- MICHAEL: It is? MICHAEL: The Kremlin arranged for Vitalik to meet one of Putin's powerful surrogates, Tatarstan President, Rustam Minnikhanov.
(SPEAKS RUSSIAN) VITALIK: Mm-hmm.
Mm-hmm.
Mm-hmm.
(VITALIK SPEAKS) (RUSTAM SPEAKS) Mm-hmm.
(VITALIK SPEAKS) (MICHAEL SPEAKS) (VITALIK SPEAKS) (WOMAN SPEAKS) (VITALIK SPEAKS) (WOMAN SPEAKS) (ALL LAUGH) MICHAEL: In expectation of his arrival, the president arranged a hackathon for Vitalik in hopes that he might inspire a new generation of Russian tech leaders.
So, we're at a government-sponsored blockchain hackathon where Vitalik is the star guest and one of the judges.
- (VITALIK SPEAKS RUSSIAN) - (PEOPLE SHOUT) - (SHOUTS) - (APPLAUSE) (ROMAN SPEAKING) A lot of your very smart Russians come to work in America, too.
MICHAEL: But this is something that Russia can lead in if you get in early with blockchain.
- We hope.
We hope.
- That's kind of the idea, isn't it? MICHAEL: In 2016, the Kremlin was on the verge of banning cryptocurrency transactions, but that hostility has turned to opportunity.
Putin, alongside rogue regimes in Iran and Venezuela, realized that an anonymous, virtually untraceable currency could provide an opportunity to evade crippling international sanctions.
When you were at the St.
Petersburg Economic Forum, - you were pulled aside by President Putin.
- VITALIK: Mm-hmm.
What was that like? What did he want to talk about? I introduced to him what Ethereum was and what I was doing, and it seems like he was willing and supportive of like anything that we can do to make the Russian economy better.
MICHAEL: As US lawmakers are working out how to regulate cryptocurrencies, Russia is making major moves to integrate it, not only in an effort to avoid US sanctions, but to undermine the power of the dollar in international trade.
Sergey Gorkov was trained by the FSB as a Putin confidant and currently serves as head of Russia's largest state investment bank, which was hit with sanctions by the Obama administration in 2014.
He recently signed a deal with Vitalik in support of a new blockchain research institute.
Tell me why the bank is so particularly interested in blockchain.
(SPEAKS RUSSIAN) MICHAEL: What would you tell a country who hasn't embraced blockchain technology? (SERGEY SPEAKS)
It seems like there is something valuable to be able to talk about problems.
- Economic development.
- Housing.
- Injustice.
- Accountability.
- Violence prevention.
- Responsibility.
Hello.
You are actively working towards finding solutions together.
I want to believe that somewhere, there's answers.
If you could design a superhero, what would it be? - This isn't your show, Iris, it's mine.
- OK, I'm sorry.
(LAUGHS) SHANE SMITH: This week on Vice: Chaos fills the power vacuum in Libya.
(MAN SPEAKS) Oh shit.
(EXPLOSION) - (CROWD CHANTING) - Libya! Libya! Libya! (HONKING) SHANE: And then, the global race to capitalize on cryptocurrency.
- (SHOUTS) - You're 23 years old, and you're saying sentences like, "Usually, the central banks want to talk with me.
" - Mmm.
- (SPEAKING RUSSIAN) (THEME MUSIC PLAYING) (CROWD SHOUTING) They're saying that right now, it's time for change.
(CHEERING) Seven years ago, the US played a crucial role in the liberation of Libya from long-time dictator Muammar Gaddafi.
(CROWD SHOUTING) However, in the resultant political vacuum, hundreds of warring militias have splintered the country into competing power centers.
Today, the internationally backed Government of National Accord, or GNA, is accused of being unstable, corrupt, and struggling to control its shrinking sphere of influence.
Making matters worse, Libya's political chaos and vast Mediterranean coastline has made it an epicenter for the mass-migration issue facing Europe and the world today.
So, we sent Isobel Yeung to Libya to see how the failed state is dealing with this growing crisis.
ISOBEL: We're about 10 nautical miles or so off the coastline of Libya, and the Libyan coast guards that we're with have just received a call from the Italians saying that there are rubber dinghy boats out here somewhere full of migrants.
It's extremely choppy out here today, so we're trying to scour the oceans right now and to find them before it's too late.
(MAN SPEAKS FOREIGN LANGUAGE ON RADIO) (CREWMAN SHOUTS) Hey! Hey, hey, hey! (PEOPLE SHOUTING) (SPEAKS FOREIGN LANGUAGE) (ISOBEL SPEAKS) (PEOPLE SHOUTING) (CRYING) (SPEAKS FOREIGN LANGUAGE) ISOBEL: I think they're taking you back to Libya.
Libya.
ISOBEL: With the global migration crisis overwhelming Europe, in 2016, the EU came up with a new $215 million plan to pay Libya to contain the problem.
This strategy means that Italian warships are now responsible for diverting thousands of migrants a year back to a struggling Libyan state.
(ISOBEL SPEAKS) (SPEAKING FOREIGN LANGUAGE) ISOBEL: This lawlessness has plagued the country since Gaddafi's downfall, and, today, Libya is fractured into rival governments.
The UN and Western allies are backing the Government of National Accord, or the GNA, which controls the capital, Tripoli.
But with a failing economy and mounting insecurity, the GNA is struggling to maintain its hold.
Libyans are increasingly frustrated and desperate for change.
(CROWD CHANTING) (ISOBEL SPEAKS) (SPEAKS FOREIGN LANGUAGE) (SPEAKS FOREIGN LANGUAGE) (SPEAKS FOREIGN LANGUAGE) (ISOBEL SPEAKS) - (SIRENS WAILING) - (HORNS HONKING) At the heart of Libya's turmoil is a broken economy.
Financial infrastructures have collapsed, and the Libyan dinar has plummeted 600 percent in the last three years.
(INDISTINCT CHATTER) ISOBEL: There's about 500 people or so waiting here.
The line's going around the block, trying to get ahold their salaries, because there's such a major cash-flow problem in the country.
So how does it work? You have to line up and try and get a ticket to maybe get money out? (SPEAKS FOREIGN LANGUAGE) ISOBEL: That must mean that some months you go without your salary.
ISOBEL: With a weak government and deep-rooted discontent, conditions have been ripe for terrorist organizations to thrive.
In 2015, thousands of ISIS fighters established their biggest stronghold outside of Syria and Iraq.
They ruled the coastal city of Sirte for two years, terrorizing the local population.
(GUNFIRE) After a seven-month-long battle, ISIS was finally defeated with the help of US airstrikes and a ground offensive led by militias funded by the GNA.
We're with the biggest coalition of militias here in the west.
These guys were responsible for driving ISIS out of Sirte back in December of 2016, and now they're continuing to patrol the city.
We're headed to the very eastern point of Sirte, where there's the biggest threat of ISIS's return.
And what is the security situation at the moment? I mean, how much of a threat is ISIS? (SPEAKS FOREIGN LANGUAGE) ISOBEL: So, since you guys kicked ISIS out of Sirte, they've been regrouping right outside of it? ISOBEL: Who do you guys answer to? I mean, for the last few years, you've come under the jurisdiction of the GNA, right? (MAN SPEAKS FOREIGN LANGUAGE) I heard that in the last few months, you guys haven't received a salary.
Is that true? ISOBEL: The risk of not paying these militias is that they could look elsewhere for sources of income.
In 2014, the National Oil Corporation, or NOC, Libya's largest oil producer, was attacked by militias fiercely opposed to the GNA.
We spoke to the chairman of the NOC, Mustafa Sanallah.
How much money is Libya losing from the current situation in terms of the security surrounding the oil? - $126 billion US? - Yes.
Yeah.
Yes.
- In how long? - (MUSTAFA SPEAKS) ISOBEL: So, if you can just sort out the security situation - MUSTAFA: Yes.
Yes.
- then you'd get - (ISOBEL SPEAKS) - MUSTAFA: Yeah, yeah, yeah, yeah.
I guess this is what happens when oil gets caught up in politics.
ISOBEL: Sanallah is considered one of the only well-respected neutral voices in Libya, but to keep the oil industry functioning, he must work with a government struggling to maintain control and hundreds of militias vying for Libya's most valuable resource.
How much of Libya's political situation and power struggles that seem to be going on across the country how much is that down to who gets to control the oil? How rampant is smuggling, including oil smuggling, here in Libya? ISOBEL: The GNA has reportedly paid militias to act as coast guards to stop illegal smuggling.
Some of these militias have themselves been accused of working in the illegal migrant trade.
The GNA has been accused of working with smugglers to prevent migrants from reaching Italy.
Is the GNA guilty of paying those very people who are guilty of some of these criminal activities? I'm not accusing you of doing that, - but I'm asking whether the GNA is.
- No, no.
- ISOBEL: You're being very careful - (BOTH LAUGH) very careful not to answer that question.
ISOBEL: But the GNA does deal with militias.
Here in the smuggling hub of Sabratha, this militia group is led by Abd Al-Rahman Milad, who goes by the name "Bija.
" Besides fighting for control over territory in western Libya - Oh shit.
- (EXPLOSION) he also being paid by the GNA as a coast guard to to stop the smuggling.
(GUNFIRE) Bija took us out to pick up a boatful of migrants trying to make their way to Italy.
(BIJA SHOUTS IN FOREIGN LANGUAGE) How do your men treat the migrants when they come across them? Obviously, we've seen reports that they're less than kind towards them.
(SPEAKS FOREIGN LANGUAGE) (MAN SPEAKS) (BIJA SPEAKS) ISOBEL: So, you know who the smugglers are? ISOBEL: While we were with him, Bija began taunting one of these smugglers.
(BIJA SHOUTS IN FOREIGN LANGUAGE) ISOBEL: But Bija himself has been accused by the UN of smuggling migrants.
He denies these charges.
(BIJA SPEAKS FOREIGN LANGUAGE) - MAN: Huh? - (BIJA SPEAKS) ISOBEL: With allegedly corrupt militias like these taking full advantage of a government payroll (SPEAKS FOREIGN LANGUAGE) Libya has descended from a place of hope, just seven years ago, to a largely lawless country.
We sat down with Taher El-Sonni, a senior adviser to the GNA, to ask about his vision of Libya's future.
It's very hard to see a state that is failing its people quite like yours is.
I mean, the economy is a complete mess, the social services don't work, the militias have more control than perhaps even your government.
Do you recognize the urgency to address these issues right now if the country is to move forward? There is hope, because we do see a momentum that even the people are fed up of this kind of chaos.
This is something that we have inherited.
It is something that we're trying to manage.
It will take some time, though.
The militant force who is responsible for liberating Sirte from ISIS and is continuing to protect Sirte at the moment, they're saying that they haven't been paid for the last few months.
Are you concerned that given the dire state of the economy at the moment, that these forces, whether you call them militias or not, are gonna turn against the GNA? Why did you call it a militia? That that's the question.
- You call them the army? - This is you have to No.
When the fight happens, of course we had organized forces, and there was, what you call them, the support forces.
You want to call them armed groups.
You want to call them militias.
Name it as you wish, but in the end of the day, it was under the full control and umbrella of the GNA and ministry of defense.
The issue of salaries it's a financial crisis we're all facing.
We've spoken to a lot of people, and a lot of people have said that the problem is the GNA, and they can't see a future of Libya with the GNA in power.
The GNA was meant to be in a temporary period, until the constitution comes out and there is proper elections for a steady state.
This frustration is totally accepted and recognized by us.
I I will not fool Libyans and say that we are the best government, but we are the best available government.
(CROWD SHOUTING) Bitcoin, Ethereum, and Ripple are just a few of the hundreds of cryptocurrencies that have exploded in the last year, turning novice investors into overnight millionaires and sparking a media frenzy.
NEWSWOMAN: Bitcoin surging to another all-time high today.
The numbers are phenomenal.
700 to 800 cryptocurrencies now exist.
Bitcoin over the last week has had a $13 billion market cap.
That's more than US steel, and that's bigger than Twitter.
But as these currencies go from black market to mainstream, nation-states around the world are looking at how to capitalize on this technology's ability to decentralize economies and gain a competitive advantage in today's markets.
So we sent Michael Moynihan to Iceland for an up-close look at this new technology.
(HELICOPTER WHIRRING) (OVER COMM) Marco Streng has made millions in cryptocurrency.
He started mining Bitcoin in his dorm room.
Nearly a decade later, the 28-year-old college dropout turned a single wheezing computer into a lucrative cryptomining empire.
MARCO: What you're seeing here is the Enigma facility, which is the largest Ethereum mining facility in the world.
And it was an exciting time.
It was years ago when we came here and, uh, and built this, and now we're expanding and expanding further and further, because the demand is growing.
Everyone is ramping up the capacity.
MICHAEL: If you have the money, you always buy cryptocurrency.
Last year, Bitcoin peaked at almost $20,000.
Or you can earn it by running a cryptocurrency mine, a network of computers that serve as the backbone of the cryptoeconomy.
Yeah.
(MARCO SPEAKS) (MICHAEL SPEAKS) (MARCO SPEAKS) (MARCO SPEAKS) MICHAEL: Tens of thousands.
Mining operations like Marco's were made possible by pseudonymous programmer Satoshi Nakamoto, who in 2009 created Bitcoin, a decentralized digital currency run by no one entity and beyond the control of any one government.
But Nakamoto, whose true identity remains a well-guarded secret, faced an obvious problem: If no physical currency exists, who tracks the ownership of a digital coin? To solve this, he created the blockchain, software that records and stores information, like who owns a Bitcoin, on a decentralized ledger shared across millions of computers.
It can't be changed, and it's nearly impossible to hack.
(MARCO SPEAKS) (MICHAEL SPEAKS) It's a scam.
It's a bubble.
It's going to burst.
Everyone's gonna lose all their money.
For some crypotcurrencies, it's most likely true, but I see real value in, for example, Bitcoin or Ethereum.
The underlying technology is phenomenal.
I've had people tell me this, that this is the most revolutionary technology that we've seen since the widescale adoption of the Internet.
Very comparable to the beginning of the Internet.
At the beginning, it was just a protocol, very abstract, but now, I mean, we're nearly doing everything in the Internet.
NEWSWOMAN: Blockchain, which some are comparing to the early days of the Internet it sounds confusing, but listen up.
It introduces so many opportunities, so many unique business models.
People say blockchain could end companies as we know them.
For regulators, it is certainly a concern.
You have things like the SEC.
You have FinCEN.
You have the IRS.
MICHAEL: But while the business world scrambles to exploit it and governments rush to regulate it, countries like Russia see a very different opportunity.
MENENDEZ: My sense of cryptocurrency is largely driven to evade US sanctions and to undermine sovereign currencies both of them are a challenge to the national interests of the United States.
PUTIN: We need to search for unconventional solutions.
These are the people who will build our new future and live there.
(APPLAUSE) MICHAEL: One of those unconventional solutions is the Ethereum blockchain, created by a man named Vitalik Buterin.
(MAN SPEAKING RUSSIAN) MICHAEL: Raised in Canada to Russian parents, Vitalik is the blockchain movement's biggest celebrity.
If blockchains are, and as transformative as the proponents are saying they are, then that would imply that, eventually, we'll see hundreds of millions of people using it in some way or another.
MICHAEL: Vitalik created the Ethereum blockchain when he was just 21 years old, and it's cryptocurrency, the Ether, is second only to Bitcoin.
Its market cap increased by over 10,000% in 2017.
(MAN SPEAKS RUSSIAN) MICHAEL: Vitalik is on a global campaign to raise awareness of his creation and its potential applications for business, finance, and government.
(MAN SPEAKS RUSSIAN) (APPLAUSE) Where are we going now? We are going to Kazan, which I understand is the capital of the Republic of Tatarstan in Russia.
You know, I've met government people from Canada, US, UK, Russia, China, Taiwan, Singapore, mmm, Thailand.
Usually, the central banks want to have a chat, and like why not? But you're 23 years old, and you're saying sentences like, "Usually, the central banks want to talk with me.
" That's not That's very rare, I would probably say.
- Umm, hmm.
Okay.
- I'm older than you, and nobody wants to talk to me.
- Umm - Hi.
Am I riding with you guys? Did we is that No, I think you're you're riding in this car.
MICHAEL: So, we're behind a very nice Mercedes that we're not allowed to be in because it's a VIP car for Vitalik, who's treated like something of a rock star here.
The Kremlin rolled out the red carpet for Vitalik, hoping their prodigal son would return home.
- (WOMAN SPEAKS RUSSIAN) - VITALIK: Uh-huh.
- Uh-huh.
- (WOMAN SPEAKING) WOMAN 2: Right now, we're going to the Unified Presentation Center of the Republic of Tatarstan.
- (FIREWORKS EXPLODE) - Oh shit.
This is the place where we make wow effect.
So, the government of Kazan is pulling out all the stops for Vitalik.
We are in what appears to be hour three of a never-ending tour of the city, and what this has to do with blockchain is anyone's guess.
MICHAEL: The Russian government's hope is that Vitalik's technology can be as transformative for their own finances as it has been for his.
So, I heard about Bitcoin for the first time in maybe February 2011, and eventually I found a guy who was willing to pay me five Bitcoins per article for writing articles for his Bitcoin blog.
And what was Bitcoin worth at the time? Each Bitcoin was $0.
8.
$0.
8, so you get five per article, and now that would be $5,000 an article - Right.
Mm-hmm.
Yeah.
- more or less.
Okay.
You know, being a high school guy without much money, I thought $1.
5 an hour was a fairly reasonable wage.
- so I, uh - (CHUCKLES) That was a good deal to you, - $1.
5 an hour? - Yeah, totally.
- Yeah.
Fight for 1.
5! - (BOTH LAUGH) Explain to me why this technology is so transformational that people think it'll change the world.
Mmm.
Because they represent kind of epochal changes in the options that we have for interacting with each other.
With Bitcoin, it's, uh you don't need banks to send money anymore.
It's just something that happens directly peer to peer.
And Ethereum extends that to making digitally enforceable agreements.
That changes whole industries, doesn't it? And It hasn't yet, but we'll see.
(GROUP SHOUTS) MICHAEL: What is it about Vitalik? Why are you so interested in in blockchain? Because Tatarstan is considered to be the innovative republic.
MICHAEL: You want to be the sort of Silicon Valley of Russia.
Exactly.
That's what we are trying to do.
And Vitalik seems like a guy that could help you do that, right? He is considered to be like an "I hero," let's say, for young people.
Is that something that the Kremlin and Moscow is is happy about? - Yes.
I think so.
Yeah.
- MICHAEL: It is? MICHAEL: The Kremlin arranged for Vitalik to meet one of Putin's powerful surrogates, Tatarstan President, Rustam Minnikhanov.
(SPEAKS RUSSIAN) VITALIK: Mm-hmm.
Mm-hmm.
Mm-hmm.
(VITALIK SPEAKS) (RUSTAM SPEAKS) Mm-hmm.
(VITALIK SPEAKS) (MICHAEL SPEAKS) (VITALIK SPEAKS) (WOMAN SPEAKS) (VITALIK SPEAKS) (WOMAN SPEAKS) (ALL LAUGH) MICHAEL: In expectation of his arrival, the president arranged a hackathon for Vitalik in hopes that he might inspire a new generation of Russian tech leaders.
So, we're at a government-sponsored blockchain hackathon where Vitalik is the star guest and one of the judges.
- (VITALIK SPEAKS RUSSIAN) - (PEOPLE SHOUT) - (SHOUTS) - (APPLAUSE) (ROMAN SPEAKING) A lot of your very smart Russians come to work in America, too.
MICHAEL: But this is something that Russia can lead in if you get in early with blockchain.
- We hope.
We hope.
- That's kind of the idea, isn't it? MICHAEL: In 2016, the Kremlin was on the verge of banning cryptocurrency transactions, but that hostility has turned to opportunity.
Putin, alongside rogue regimes in Iran and Venezuela, realized that an anonymous, virtually untraceable currency could provide an opportunity to evade crippling international sanctions.
When you were at the St.
Petersburg Economic Forum, - you were pulled aside by President Putin.
- VITALIK: Mm-hmm.
What was that like? What did he want to talk about? I introduced to him what Ethereum was and what I was doing, and it seems like he was willing and supportive of like anything that we can do to make the Russian economy better.
MICHAEL: As US lawmakers are working out how to regulate cryptocurrencies, Russia is making major moves to integrate it, not only in an effort to avoid US sanctions, but to undermine the power of the dollar in international trade.
Sergey Gorkov was trained by the FSB as a Putin confidant and currently serves as head of Russia's largest state investment bank, which was hit with sanctions by the Obama administration in 2014.
He recently signed a deal with Vitalik in support of a new blockchain research institute.
Tell me why the bank is so particularly interested in blockchain.
(SPEAKS RUSSIAN) MICHAEL: What would you tell a country who hasn't embraced blockchain technology? (SERGEY SPEAKS)