[Music] hello everyone welcome to this course on
bitcoin and blockchain this is the first lesson and it's all about money what is
money and why do you need to know how money works in order to understand
bitcoin it's because a lot of people who criticize bitcoin and cryptocurrency say
that cryptocurrency has no intrinsic value no value in it and and they say whereas the
dollar and the euro have value so we are going to see today that this is not true and you will
be able to understand even to have a clever answer to these people and this is very important for
you to understand so um let's go before we start i'd love to emphasize that we are like imagine
that we are in 1993 why 1993 because imagine today is not 2021 and we are talking about bitcoin this
is 1993 we are talking about something new which is called the internet so we are more or less at
the same stage it's a very very early days and everybody talks about that but really no
one knows a lot of people in the media say a lot of things which are not true so this
course actually is going to help you to have your own opinion about that so please
remember that this very very early days so we are going to study in bitcoin the coin side
which is not the technical aspect the technical aspect we will see that in the chapter two which
is more blockchain but now i want to talk about theoretical approach and uh and consideration
about what money is what bitcoin is how can we compare bitcoin to uh the euro dollars or
gold and so it's a kind of preparation for you so let's really really start
with the heavy heavy stuff this title here is bitcoin is the sixth great
innovation of money for the moment i don't want you to go beyond that remember when i said in
the general introduction i'm going to give you uh slides who are going to i'm going to present
this slide sometimes i'm going to ask you to pause and to reflect on what i'm asking you to do so
for instance now i will ask you to pause and think what is the most important word in this title
bitcoin is the sixth great innovation of money obviously it's not bitcoin so look at it
it's not money either look at it and tell me what would be for you the most important
important word because it's going to give you a characteristic of what money is so pause
and i will give you the answer after that well okay so when we talk about uh [Music] innovation okay so i will go back to the other
one later on so let's do this pre-analysis uh of the title which is going to give us a lot of
uh answers for what money is about and uh what bitcoin afterward is about so when someone says
bitcoin is the sixth great innovation of money you should ask your yourself so what
do you innovate actually on what okay so the answer is you innovate when
you've got a technology okay so the first massive answer and uh and clue about
money in bitcoin is that bitcoin and money are technologies so this is really
when i i first learned that i was shocked say oh my god so money the thing you've got in your
pocket is a technology it's one of the oldest technologies like going back to 5 000 years
ago okay like 3 000 years before christ with mesopotamian society civilization okay so
it's really really ancient so it's a technology and you would say okay uh so when you create
the technology so i'm going to uh to ask you to pause again when you create a technology you
answer you try to answer with this technology a problem so what was the problem this
money technology was trying to resolve pause look in the internet if you
want have a think and once once you you think you have an answer i'm giving you my
answer okay so pause and see you in a minute right okay so for instance train technology so why do
we invent it do we invent or have the necessity to invent like the the train because people wanted
to to move from point a to point b a lot of stuff because they wanted for instance to sell 20 cows
to a market which was like 60 kilometers from where you are so you put your cows in a train
it's fast etc etc so the train technology was answering an issue a problem the money
technology was answering the issue of value okay so it was resolving the exchange
of value so it's a little bit theoretical so let's go back let's go to an example okay so for
instance imagine um you are in a village a small village so i'm going to change my i'm going to
put here or i'm going to put here imagine you are living in a village okay and you've got a
cow one cow and your neighbor has got like a shoemaker he's got shoes so what are you going
to do with that every morning the shoemaker is going to ask you for milk because he has kids and
is say okay if you give me uh over two days three liters of milk i will give you like one one pair
of shoes okay so at the beginning you say yes but after a while when you've got like 30 pairs of
shoes you just said look i don't need more shoes i can't give you my milk okay so you've got a
problem here so what money did but someone else clever came with a piece of metal or a seashell
and say okay why don't we abstract the value of a cow and we abstract the value of a pair of shoes
okay and this abstraction of value you we put it in a third object which is the piece of
metal or the the seashell okay and we decide all together that this piece of metal is
going to have one is going to be one in value and this value we are going to be able if you put
30 or 100 of this coin is going to be like a cow if you put 20 or 30 you will be able to have
a pair of shoes so you have to understand that money works because our brain we are very clever
species our brain is able to abstract value from things value because we need to exchange
things okay we are social animals and this value we put it in an object which is per se has no
value like a c shell okay but we imagine all of us that this is one in value and the group
is going to accept that so thanks to that you are going to be able to to buy stuff which is
not milk or shoes but you can buy anything you want so it's a clever invention but what you
have to understand with that okay is that uh you need two things okay in order for any
kind of money to work you need first i said your brain doing an attraction of value in
believing trusting that this third piece could be metal or seashell is going really because
this magic if you think of it is going to contain value okay a unit of value so you you abstract
value okay but not only that so you you abstract the value but as well in order to to to to to
sell or to exchange you need a group of people believing that this is real and you all believe
in it so money is as well the fact that you believe that the money is worth something
so you need a social construct so it's first abstraction of value and second social construct
okay very important for you to remember so now you can define money and say okay i know what money is
about it's just like abstraction of value and then in order for the value to work be in a group of
people could be 20 50 or 20 million or 200 million you need a social construct this social construct
is going to tell you or is going to help you to believe that what everything believe is true is
true for you as well so it's very very in a way if you think of it money is uh it's a
technology which answer the problem of value and is abstracts value from things we see we saw
and this abstraction must be accepted by everyone in the group or in the country or in the continent
okay but you need to think as well that it's very fragile because suddenly you can stop believing
you can stop her trust that this piece of paper you've got in your pocket is worth what it says
it's worth and it happened for instance in the weimar republic for instance the dutch mark nobody
at one point believed that it was worth anything okay so uh this is very very important
the notion of trust within the concept of money is paramount is the basic one it's
very very important to remember that and i think we are done with that i can do one
more thing which is this because i skipped it right so bitcoin went through
six great innovation all right and each of this innovation was innovating on a
technology which was trying to exchange value and find new form uh more modern of uh of money
so for instance it started really really early early on like 10 000 years ago maybe
like uh beads stones shellfish tobacco tobacco it was more like in the american
revolution in the 18th century you know virginia for instance but for instance shellfish you've
got the famous crory uh shellfish which you take something which is rare and this is the last
point of my uh of today's lesson is that apart from the abstraction of value the the social
construct this third thing this piece of metal of seashell must be scarce and scarcity you will
see with bitcoin is very very important so if you look at this uh six we we started
as a civilization with shellfish and then very quickly we got to precious metal
then paper paper means like uh 1000 years after christ the chinese invented
the paper money and then in our uh society he went a little bit after and then
plastic which is the credit card you've got where imagine plastic is like even magic so how do
you believe so it has to be a social construct how do you believe that this piece of plastic means
that you've got value in it you must as a group believe that okay started in 1942 i think with
uh dinners club in in new york and then today you've got the electronic money all your all your
money your euros or dollars are on a bank account which is on the internet is all electronic money
90 of all money today is electronic okay only 10 is cash and then you had bitcoin so as a really
quick uh conclusion money is something which must be scarce okay and we will see why bitcoin is
so scarce is why is so expensive today must be in your head a social construct and an
abstraction of value meaning that you have to believe that this piece of wood this
piece of uh quarry this anything actually is worth value that you are going to
to exchange and get stuff with it so if you understand this concept you are really
ready for bitcoin which is going to be next maybe not but two or three lessons
ahead thank you so much bye-bye
