[AUDIENCE] I have a two-part question.
Both are related to social norms. Before digital currency and before centrally control currencies, people [would] barter, still even today. I see that Bitcoin will perhaps promote more of
that barter of services, in exchange for bitcoin. That is one question: is this really nothing but to
promote more barter of services across the globe? The second question is, given the bitcoin
currency requires [technological resources], [such as] access to computers and a network, would it still leave billions of people behind who don’t
have access to these technologies? Thank you. [AUDIENCE] Those are two very good questions. In mainstream economics, barter is considered
an oddity because it only scales to very small levels. There is a close correlation between barter and
Dunbar’s number. Is anybody familiar with that? Dunbar’s number is a [theorized limit for the number
of people one can maintain social relationships with], [especially] without a [common] language or currency. It is an [upper] limit on [cohesive] social organisation,
[which varies based on the task: survival vs. business]. [Anthropologists] observed this in primates. The largest troop of chimpanzees that you will see,
before they start fighting and split into two tribes, is about a hundred and fifty members of the species. That is called Dunbar’s number.
We see that [limit] in human populations, too. It is why you feel [more] at home in the village,
because everybody knows everybody. It is [the threshold under which] you can have
[cohesive] social organization without intermediaries. Barter only scales to that, because barter creates
this complexity of pricing [goods] and services… in other [goods] and services. If you are a hairdresser [in a barter economy] and
want to cut hair for chickens, you must figure out… what the exchange rate is between [them]. Then if you want to get an oil change at the garage, you
need the exchange rate for haircuts and oil changes. [To live effectively], you must keep a complicated matrix
of exchange rates between all the [goods] and services. We found the solution to that more than
four thousand years ago, called money. Turns out that if you just dominate everything in
money, you have one exchange rate for everything. The best [feature] of money is when it doesn’t
have intrinsic value or commodity use. Bananas aren’t good money because
[they spoil easily and] you [can] eat them. Gold is good money because there is not much you
can practically do [with it], other than [make] jewelry. Why is money really useful as an abstract form?
Because money is a language. Money is a means of communicating value
to each other. It is a linguistic construct. It arises out of civilizations that have
the ability to communicate [effectively]. We can teach primates, dolphins,
and elephants [how to use money]. But money [as a social construct] is a uniquely human thing, as an emergent [property] of civilization. Money is useful [when] it has no value other than
[as a way to] exchange for things which do have value, intrinsic value, for example, the things that you eat. Bitcoin is not a barter system. Bitcoin is the first form of completely
digital money which responds to inputs, can be [evolved and] constrained
through programmatic technology. For example, you can [enforce a condition] in Bitcoin… [where coins] are only spendable
if you 2-of-3 digital signatures. In a governance system, you can say, ‘In this account,
the CEO and the CTO must sign in order to spend.’ That is a simple smart contract, what we call
[a multi-signature scheme] in this space. This is a lot more than barter. [Your second question] relates to [access to] technology.
I agree with you that there are prerequisites. Of course, right now, the people who use this technology
are primarily educated, technologically literate, and fairly affluent. But that is not how it [will] always be. I think one of the great parallels to [the adoption
of bitcoin], is the development of cell phones. I don’t know if you remember, but I got my first
cell phone in 1991, and it was [pretty] big. It lasted about fifteen minutes for a call, on one battery
charge, and I [needed] to be near a station to use it. I [looked] so cool and I was in college. [Laughter] We had just emerged from a time where, in order to have
a portable telephone, you needed to install it in a car. We had migrated past the suitcase size
that you had to carry with a little headset. Finally, we had reached full portability.
It was a status symbol [at the time]. Who thinks a cell phone is a status symbol today? Today, it is more of a status symbol to
have your assistant carry your phone. The most powerful people in the world
don’t answer phones, or carry phones. They have an army of people carrying phones for them.
The status symbol is to leave it behind. Who has cell phones now? The Nokia 3000 has been produced by the billions; you will find it in the furthest parts of the Brazilian
Amazon basin, the tiniest village in Sub-Saharan Africa, which have nothing else besides
a solar panel and [this] Nokia phone. The sound of civilization arriving in the world
today is [the ‘Grande Valse’ Nokia ringtone]. Remember that sound? That is how [cell phones] evolved. What if we
can [develop] Bitcoin to work on those devices? We are seeing this happening with Android devices.
The average price for the cheapest Android phone… is about $25 today. Most experts believe that after three [more] years,
you will be able to buy a full Android smartphone… with an ARM Cortex microprocessor for about $1. What happens when this $1 device is simultaneously
a Western Union-like remittance terminal, a Wells Fargo-like wire transfer station,
and a Bloomberg-like terminal for stock trading? What happens when that device is a bank?
You can hold it in your hands and be a banker. We will not leave billions behind, [unlike actual banks]. We will deliver [bank-like software] to the pockets
of 7.5 billion people with this technology. The goal of Bitcoin is not to bank the world,
the goal of Bitcoin is to de-bank all of us.