Good morning. I'm extremely grateful to be here in Dubai.
It's my first trip, and I've travelled a lot the last six or seven days,
so everyone is getting me at like 80% energy,
which is probably very fortunate for everyone in the audience.
In the past 12 months I have travelled a lot,
not just across the United States and Europe but really around the world.
I have flown over 300,000 miles, having conversations with delegates
like this one, with regulatory bodies,
with young students in universities,
in the pursuit of answering a question around
what really drives people and their motivations?
You know, we spend our entire lives in the pursuit of money
so that we can facilitate choices.
And I think it's kind of interesting
to take a little time to reflect about the future of money.
And so today I hope to share with you a little bit more about what we're learning.
So, once again my name is Nicolas Carry,
and I co-founded a company called Blockchain,
which is a key innovation that you'll be hearing a lot more about very soon,
and today I'll share some stories with you.
My company is one of the fastest growing technology companies in the world,
routing about a hundred thousand users a week,
and we now do business in over a 140 countries in the world.
All of the software we build is open source.
So you'll see a lot of photography in this presentation,
it was taken by myself and family members
while I travelled around the world this year.
I have a kind of an unusual family,
my mother's French, my father lives in South America,
my sisters spent the last few years in Morocco,
so I went to visit her and got to see how she was living there as well.
So, this photo was taken there.
Imagine a world with completely frictionless payments,
a world where you can send value from a fly fishing lodge
in southern Patagonia all the way to Singapore
instantly, basically for free.
Imagine a completely frictionless payment platform where users come first;
an open payment network that anyone on earth could participate in.
Well, I'm often asked to talk about Blockchain,
and I'm often asked to answer the question
'what is Bitcoin?' and it's really hard to talk about one
without talking about the other.
So, today I'll start with answering this question: What is Bitcoin?
Bitcoin is massively misunderstood, and that's OK.
Just like a lot of things that are new, they're complex and confusing,
but over time we can understand their utility.
So, Bitcoin is a technology;
it's a financial protocol for value transfer,
and it's the largest distributed computing project in the world.
It's also a transaction network.
Now, for a transaction network to function it needs 3 things,
you have to have a currency, you have to have a trusted ledger
so you can track the provenance of transactions and the chain of title,
and you have to settlement with a high degree of certainty.
Meaning you have to have trust in the system.
Now, Bitcoin has all of those things,
and it stores all the transactions in something called the Blockchain.
So, what is the Blockchain?
You're going to hear about this a lot, it's a conversation
that's happening here in Dubai, it's happening in London,
in New York , in Singapore, and around the world.
It's one of the most important innovations in computer science, period.
The Blockchain is basically a spreadsheet in the cloud.
And as a transaction network it's fundamentally different
than the ones we rely on every single day.
Now we use transaction networks a lot,
like Visa, MasterCard and PayPal.
But these are proprietary, they're centralized databases
with centralized risk.
The Blockchain, the Bitcoin Blockchain,
which is what I'll be primarily talking about today,
is a decentralized network,
with copies of that spreadsheet in the cloud all over the world;
in fact, there are thousands and thousands of them.
And the core innovation of this invention,
is that when an update happens to the spreadsheet,
it happens simultaneously in all of the copies.
This is really important;
if one of those copies gets corrupted or burns to the ground,
the network can continue to process transactions instantly.
This is entirely different from the type of transaction networks we're used to,
and it's vastly more efficient.
So, once again, Bitcoin is not a company,
it's not centrally controlled,
and it's not bound to jurisdictions in a conventional sense.
It's a global and open payment platform for value transfer.
It is based on peer-to-peer technology,
we use these things all the time;
there's a little company that was based out of Luxembourg called Skype,
that put peer-to-peer telephony into all of our pockets,
and actually most of the phone calls in the world
happen over this technology now.
The interfaces for these things have changed a bit,
but the expectations have changed a lot.
People expect to be able to call someone instantly anywhere on earth
nearly for free now, and I can tell you the perceptions
around value transfer are changing too.
So, today, Bitcoin transactions happen between individuals,
between companies, and soon between machines.
And like to talk a little bit more about some of these opportunities.
But for those of you that have never seen a Bitcoin transaction,
you can find me after this presentation wandering the halls
and I'll set you up with a Bitcoin wallet.
In just 30 seconds you can download an open source, free application
and put it on your phone,
that will completely replace your need for a banking relationship.
Let that settle in for just a moment;
ten thousand lines of open source computer software
can be placed on any Smartphone the world,
and then you can send value and transact with anybody else,
using the world's largest peer-to-peer payment network.
And it's amazing, it doesn't care what the color of your skin is,
what your credit score looks like, what your gender is;
it's as easy as signing up for an email account.
So, just like with email, if I wanted to send someone an email,
I would need to know their email address,
in Bitcoin, there're Bitcoin addresses,
and you can show one to anybody, and then they can send you a transaction.
When that transaction gets sent,
it gets broadcast to that spreadsheet in the sky,
with copies all over the world.
This is a live feed of transactions on the Bitcoin Blockchain right now,
and there are thousands of transactions happening every minute.
People frictionlessly sending value from one place, across the border,
instantly, as easily as an email, for nearly no fee.
So, the history of Bitcoin is quite spectacular,
and there're some great books you can read,
there's one by a New York Times bestselling author,
it's called "Digital Gold" and a chronicles all the drama
and the interesting things that have happened in the last few years.
Most importantly, it was introduced as a white paper in 2008;
some early cryptographers and computer scientists
started to dedicate their time, investing in this project
and building scale into it.
In 2010, the world's first transaction in a market price
was set for the digital currency,
when someone sold 10,000 Bitcoins for two pizzas.
These are now the world's most expensive pizzas ever,
they're valued about five million dollars.
In 2011, some venture capital started to come into the space
and that's when we founded my company.
Exchanges were formed, merchant processors,
and companies all over the world started to accept Bitcoin,
curiously, as a form of payment.
Many of these companies you know of: Wikipedia, WordPress,
Overstock, Dell, Microsoft, all accept Bitcoin as a form of payment.
Why do you think they would do that?
Well, they can accept an instant form of payment from anywhere in the world
that's purely digital, that has no fees, no base fees,
zero chargeback risk.
And this is why all those companies started to accept Bitcoin.
Last year, instead of votes of confidence,
you had huge money pour into this industry,
and I'll explain why in a moment, but large firms have started
to put nearly a billion dollars into this technology,
because it's going to reshape value transfer in the future.
The economics of Bitcoin are pretty interesting.
The coins that people mine, which explain in a moment,
are released predictably. So, unlike centralized banking,
where we wonder what the inflation rates will be set
by the central banks and lending rates,
this whole thing is regulated by mathematics,
and it's entirely predictable;
there will be 21 million Bitcoins at some point in the future,
and they come into circulation and get lent out, essentially,
to the people that maintain the network.
They are known as Bitcoin minors,
but they'll be more than enough, 21 million doesn't sound like a lot,
except they're divisible by up to 8 decimal points,
so, they'll be something like four quadrillion units
if this ever becomes very, very big.
So, the whole system is secured by super advanced cryptography
and mathematics, and I won't go too much into that today,
because that gets really boring.
But this is a moment for us
to think a little bit about this time in space where we are today.
You know, human beings have invented all kinds of things to improve our lives;
we used to live in caves and we used to dig holes with sticks,
and then we invented shovels, we built roads and we paved them.
You know, we can improve and optimize our environments,
why can't we make a better form of money?
What properties would we want our money to have
for the age of the Internet?
Well, I submit you need your money to be easy to divide and combine,
it would need to be counterfeit proof,
it will need to be highly durable, so it shouldn't corrupt
if it gets wet or burns.
It should be digital, so you can send it anywhere in the world, instantly,
basically for free, and lastly and most controversially,
maybe it would have a scarce and known supply, like oil or gold.
We know that things that have scarcity and are useful have value.
Bitcoin has all of these properties designed into it,
and it's such a nice form of money the people are using it
without any coercion at all, which is why more and more people
every single week are transacting on the Bitcoin Network.
So, where are we today?
Well, it's only been a few short years
and this is still very early on in the project.
You're quite seriously some of the first people in the world
to be hearing about these ideas.
So, what you're looking at there is the volume of transactions.
A lot of people want to hear about what the price of Bitcoin is,
and I find that to kind of be an exhausting conversation.
I'm far more interested in the number of transactions
that are happening on the network, and you can see there
that the number of them is growing.
So, what? Why is everyone curious and interested about this?
Well, we have for the first time
the world's first scarce digital commodity.
It's borderless and frictionless and it's purely digital
and it's the world's first payment network with zero counterparty risk.
So, what is the scope that this project is starting to tackle?
There are 7.7 trillion dollars in annual credit card fees
and credit card transactions globally.
This costs consumers hundreds of billions of dollars.
Did you know that last year the rate of online fraud
outpaced rate of online e-commerce growth?
This is kinda surprising to people;
credit cards are an atrocious security design for the internet.
They are a pool-based system, every single year we hear
more and more about how centralized data repositories get compromised.
When you pool a lot of personal data for people
or collect a lot of valuable information or their credit card details,
you increase the incentives to breach those services.
So, we need a new system.
Just a few weeks ago I was in New York City, in Bryant Park,
which is when the wealthier districts, and there is a pond there,
and there were some children throwing quarters, making wishes,
and I hope that they were thinking about their futures.
There was also a homeless person picking up those coins.
You know, in the United States, one of the wealthiest countries in the world,
20.1% of US households are actually under banked.
It's a surprising figure.
You know, we talk about financial inclusion,
there are 2.5 billion people on Earth
that don't have access to financial services whatsoever.
Goldman Sachs recently produced a report that said that 33 percent of millennials
do not expect have a bank account in the next five years.
Combine the millennials with 2.5 billion people
and everybody that's getting access to the Internet on their Smartphones,
and you can start to see where we're headed.
What if the parents of two young Thai children
had access to a better financial system
that was more open and more equal than the hedge fund managers
in Canary Wharf?
So, I like photography,
and a few years ago I used to have to develop my pictures.
Now, no one who's born on earth
is going to ever know what that means anymore,
because I can just take a picture with my camera, on my phone,
instantly broadcast it to all of my followers,
and we know that Kodak is now bankrupt.
I used to have to drive my car to go get a VHS tape
and put that in the machine and hope that I could get a movie
that wasn't corrupted. But now I can download
any music or any content or any film I want instantly
to nearly any device and many times for free.
And we know what happened to Blockbuster.
So, I travel quite a bit and sometimes I forget important birthdays
like my mother's, but now, thankfully, I have a calendar reminder
and I can send her an email and make sure I keep that relationship intact.
So, whether we're consuming content or sharing experiences with our loved ones
or keeping in touch with friends and family,
the digital world is part of our DNA now
and I submit its probably best not to have our head stuck in the sand
on this issue, because money can be digital too.
So, this is a quick overview of the places we're doing business.
Every blue shaded country has at least 10,000 wallet users
where people have basically built a bank on their phone,
and, on a peer-to-peer basis, they're sending value
back and forth between each other.
When people ask me what is Bitcoin all about,
I say and tell them that Bitcoin is honestly an open opportunity
to participate in a financial protocol than anyone can choose to innovate on.
Completely permission-less innovation.
You know, you'll hear a lot of fantastic stories,
some of them are pretty exaggerated, in the media
about what the Bitcoin is and how it can be used,
and there's been some pretty insane stories.
But I like to say that really things are coming at me
from a different light and a different perspective.
There is so much opportunity to do a better job.
The fact that it's faster for me to probably collect all these chairs
and FedEx them to New York,
than it is for me to send a wire transfer from Dubai to New York,
is kind of indicative of how poor the problem is today.
So, we can build something better.
Here's kinda where we are.
In the very early days, we had the pioneers,
the computer scientists and the people with expertise
in cryptography that built this system,
then came some builders, they created commercial companies
to create software that would make it easier for people to use Bitcoin,
and now that we have a Blockchain
that allows us to track the provenance of digital transactions,
we're gonna be able to innovate and build some incredible applications.
And I'm going to talk a bit more about those now.
So, once you have a transaction network with immunity of record-keeping,
so, the Bitcoin Blockchain can never be reversed;
once a transaction is written to it, it's there forever.
You can build all kinds of other things on top of it other than digital money.
Let's talk a bit about a few of those.
How about an identity management system
that allows people to have custody of their personal data
on maybe a smartphone, like a passport,
and they credential into systems but only share the specific things
that the other party needs. So, for example if I want to
download a song from Apple, all they need is payment information,
they don't need to know anything else about me.
And using a system like this, you'd be able to do that.
In fact, in governance this is really exciting,
you could build fully transparent voting systems
and instantly be able to pulse your citizenry
on different topics and issues.
We expect voting and identity management systems to be very, very exciting.
Asset tracking seems like a really obvious one.
There's a company that is registering millions and millions of diamonds
onto the Bitcoin Blockchain,
so that when you sell them on third markets, you'll be able to know,
with 100% certainty, that that diamond was sourced ethically,
that the geological fingerprint of that diamond is true,
and that the person who has a certificate for it has the authority to sell it.
But it's not just diamonds, it might be artwork,
it could be properties, it could be a lease to your house,
it could be stocks and bonds.
This is why Nasdaq is experimenting with Blockchain technology.
Supply chains. You know, we have all kinds of problems today
because we don't know where things are coming from,
and we don't know that during the course of their trip to market
that things came in the right way.
We could actually use the Bitcoin Blockchain
to timestamp the delivery of goods and services and foods,
and make sure that we have transparency in our supply chains.
Payment rails are kind of the most obvious one,
but here is a map of every single place in the world
where someone has a smartphone and is using Facebook.
In every single one of those places, if someone has a smartphone,
they can also download an app that allows them
to financially transact with anyone else in the world now.
Store value. So there are many places that don't have financial systems
quite as nicely as the ones we kind of participate in
here in Dubai and in the West.
There are places with high inflation,
with weak trust in institutions,
where peoples' savings have been wiped out time and time again.
As a hedge, people can use Bitcoin in places where
currencies are collapsing, like Argentina or Cyprus or Greece or other countries,
and simply store some value and protect it against the corruption
of financial services.
Now, this is probably one of the most fantastic ideas,
but remember, once you have digital money,
you have programmable money.
So, smart contracts are very, very exciting.
Let's look just a little bit into the horizon and into the future.
Imagine a world where you're running late to the airport,
and the Hyperloop isn't quite yet built, but it's coming,
and so, you pay your self-driving, autonomous car a little bit extra
so that it can negotiate with all the other cars on the road
and get out of the way, so that you can get to the airport on time.
Or, maybe, you get home and your refrigerator is out of milk.
Well, no problem, your refrigerator has a Bitcoin wallet,
it calls up Amazon, it negotiates for the cheapest value
of the best organic milk possible,
a drone, that is sitting on someone else's roof,
goes and picks it up, it drives over to your house,
flies rather, it drops off the milk,
and a geolocational trigger triggers, the payments are all made,
and everybody gets compensated.
This is kind of getting to the Internet of Things.
Before you can have an Internet of Things,
you have to have a payment network that can do micro transactions,
you have to have a payment network that can facilitate
not a few dozen transactions a minute or a few hundred,
but hundreds of millions of transactions a minute.
You need a global, open payments platform.
So, where are we today? Nearly a billion dollars has been invested
by venture capital and growth funds across the range in the industry,
some of the largest technology companies in the world
are using and accepting Bitcoin as a form of payment,
and I anticipate that that will continue to grow this year.
So, in passing in short, I know there's a lot of curiosity on this topic,
and I'm hopeful that you were able to learn a little bit more about something
that is keeping me awake every single night
and I'm very grateful to come here and share with you
a little bit more about what I've been learning. So, thank you.