>>Fred Ehrsam: So how is all of this made
possible? Bitcoin solved for the first time this very famous computer science problem
called the Byzantine Generals Problem. In short, what that means for bitcoin is that
any two people in this room can transact in a peer-to-peer nature. And if you think about
all of the transactions you’ve done in your life to this point, that’s never been true.
Think about transferring, let’s say, $100 from your Bank of America account to somebody
else. You need Bank of America in the middle as a trusted intermediary to help you perform
that transaction. That’s what bitcoin removes. It removes the need for this trusted third
party. So in that example, you need Bank of America
to go in and say, yes, debit $100 from account A and credit $100 to account B. And what are
they doing? They’re going in the background to their closed, proprietary ledger of transactions
and making a journal entry. So what does that mean for transactions as
we go forward in the world? As a result, you can kind of think about bitcoin like email
for payments in a sense. It, by nature, is fast. It just takes a couple seconds for a
transaction to confirm. It’s cheap. Since you’re just moving data around, it costs almost
nothing to perform a transaction. And, by nature, it’s international, again, much like
the Internet. It’s borderless by nature, because you’re simply altering data.