bitcoin bitcoin bitcoin for the first time since the dawn of the internet we are experiencing a technology breakthrough so huge it will change everything that technology can be broken down into one word bitcoin bitcoin is the poster boy of this technological revolution called blockchain now the problem is there are so many distortions lies scams frauds misperceptions about bitcoin and blockchain and crypto that trustworthy information is hard to find even worse there are lots of bad actors in this industry spreading misinformation to push their own agendas now this really gets under my skin i think everybody should understand what this technology is so they can prepare for a world where it exists all around us that's why i put together this presentation to explain bitcoin and blockchain in a way that everyday people can understand so let's break this down today a i'm going to describe what bitcoin is b i'm going to describe what blockchain is and c i'm going to explain why it exists what problems it solves and explain what's happening in this space so you can start to keep up with this exploding industry let's take it down a notch what is money it's important to understand how it fits in to the entire 10 000 year history of money and really how it fits in with the evolution of every single industry that we're starting to see and what we'll begin to see is that every innovation in the history of money solves the problems of the type of money we had before so first history of money how did money start if i needed some food but and i was making the shoes in my little village i could trade a pair of shoes for some rice and this is bartering now i'm over simplifying how bartering occurred 10 000 years ago but this is the very rough idea but there's all sorts of problems with bartering what if i only need some food do i trade half a pair of shoes or what if i had to move what if my village was attacked and everyone has to move do i carry all my bags of rice with me that'd be too heavy i suddenly have to start from scratch so there's no way to store money let's take it even a step back further what is money first money is a store of value we use it to keep track of how much value we have or how much we are worth so we're able to store all the value we've worked hard for in this form of this thing called money the other thing money is good for is as a medium of exchange put simply we use it to buy and sell things so bartering quickly got replaced by coins people started using coins made from rare metals because these metals are rare they are hard to mine and therefore good to use as a store of value and then how would you avoid problems like forgery well you know it depends what face was carved into the coin and you could also measure the weight of the coin so so many ounces of gold equaled a certain amount of value so precious metals and coins became the form of money for several thousand years but again there still was a lot of problems with this one is what if one country was able to mine a lot of gold there was a lot of gold underneath the ground and another country there was no gold so then the second country would have to go to war with the first country to get some gold so what was the result of this well you had europe sending quote-unquote explorers over to north america and essentially wiping out every single kingdom in north america in order to get the gold so what happened then does gold really solve all your problems not really because gold was often forged the gold was hard to store it's like if you accumulated great wealth what were you gonna do store all of your gold in one massive castle if you were incredibly wealthy while some people did do that how would you pay somebody in gold if i had to buy something in china and i'm sitting in the u.s what am i going to do send the gold bar to china and hope that they don't open it up in the mail and and steal it from me and there's all sorts of ways in which my gold could be messed with if i'm paying with a lot of uh precious metals for some item so precious metals basically didn't work so what happened well countries like the united states as an example but every country started to replace precious metals for their coins with paper money so in the united states we replace precious coins with dollar bills and i'm taking a look right now at the one dollar bill one dollar bill almost makes it seem like this fake contract like we've got george washington staring at us and you know there's all this mythology about george washington never lying so we've got to trust the one dollar bill their signatures are here like it's a contract on the back of the dollar bill there's eagle and then there's in god we trust so hey we've got to trust one or the other but originally you could go to the federal reserve in the united states and exchange this dollar bill for a dollars worth of gold but that also had a lot of problems one problem is it's really easy to forge paper money another problem with money is that it used to be backed by gold so for every dollar in circulation there was at least one dollar worth of gold soreness safe somewhere maybe fort knox to back that dollar's value but the problem is the united states started to spend a bunch of money on all sorts of things one is they went to war in vietnam for absolutely no reason at all and spent hundreds of billions maybe you know trillions of dollars in today's money on a war with no purpose at all and they didn't have enough gold to pay for it and then under lyndon johnson he also just started all of the so-called great society with all these social improvement programs like you know welfare and and medicare and so on he was making commitments he simply did not have the money to pay for so what nixon did was solve that problem by saying look i guess we don't need it gold anymore for this paper money and you're just gonna have to trust that paper money is good because the united states is good and period that's it but is paper money really trustworthy now before i explain bitcoin i need to first explain the underlying technology blockchain every bitcoin has associated with it what's called a blockchain here's what a blockchain is it's simply a list of all the transactions that ever occurred so when i send money to joe and joe sends money to mary and mary sends money to dave and dave sends money to ellen all of those transactions are stored on the blockchain and the entire list keeps growing and growing so eventually parts of the list are put on this network of computers that are spread all over the world in every single country no one knows where they are it's all what's called decentralized and it's through this network of computers that we could then validate that a transaction is real because the way the blockchain works is that mary can't send money to ellen unless the blockchain says mary at some point got the money so what this means is thanks to the blockchain there is a record of every single bitcoin transaction ever made we can track every single piece of bitcoin all the way back to 2009 when the very first bitcoin transaction took place can i change the blockchain on my bitcoin to look like i have a lot of money the answer is no because when i send money to joe all these computers from all over the world are checking all the transactions all the way back to the very first one if there's an error while the computers are checking their own versions of the blockchain and the blockchain i just sent to them then the transaction won't go through so this prevents any kind of double spending forgery stealing and so on okay let's back up a second without blockchain technology we rely on banks to do all of this work banks have middlemen middlemen take their cut middlemen often have middlemen and you end up losing money now the blockchain cuts out all the unnecessary steps making transactions cheaper faster and less complicated and less prone to human error now are you starting to see why this whole blockchain technology is a big deal okay now that i've explained how blockchain technology works let's take a closer look at bitcoin itself bitcoin is the granddaddy of all digital currencies bitcoin is not just this crazy investment scheme data back currencies solve the problems caused by paper money bitcoin can't be forged you can't double spend bitcoin i can't spend my bitcoin in one store and then go across the street and spend it in another store bitcoin and many cryptocurrencies have a fixed supply maximum there will be 21 million coins quote unquote minted this means no one could go out and just print new bitcoin without your permission when you buy a bitcoin you know exactly how many bitcoins will exist between now and the end of time 21 million that number will never change now with the us dollar there's not a fixed supply with the euro there's not a fixed supply with the yen there's not a fixed supply when the central banks print more money this causes inflation we rely on our governments to manage this printing responsibly but unfortunately this doesn't always happen and can cause what's called hyperinflation there's all sorts of examples ranging from venezuelan 2016 greece in 2013 argentina over the decades russia in 1997 all of asia in the 90s all of south america in the 80s and most famously germany in the 1920s i mean inflation in venezuela was up like i don't know 250 percent in 2016.
People were standing on lines with like carts of of venezuelan money and while they were standing online the money was even getting cheaper in value so inflate hyperinflation is a critical problem that many governments and countries have and many currencies have so that's that's an important thing to know that when you buy bitcoin there's not going to suddenly be a trillion more bitcoins printed making the bitcoin in your pocket that you just spent your hard-earned money for worthless one other thing i want to explain that's really important about bitcoin so i just gave you the point of view from the history of money but now i want to look at how every single industry in the world has evolved and why money also is evolving money has to evolve just like every single industry has to evolve medicine if you were sick a thousand years ago here's what you would do first off you would assume maybe you committed some kind of sin or you had bad karma or whatever and that's why you were sick you would blame it on the gods so that was medicine a thousand or two thousand or three thousand years ago several hundred years ago we started to develop the kind of science of medicine if you got sick instead of going to your priest you would now go to your doctor you would go to your doctor and say i keep having a fever and a rash and whatever and the doctor then might put leeches on you and leech all your blood out and the human medicine had so many errors it keeps cha every three years everything you thought was the right way to be healthy turns out to be the exact opposite so medicine as run by humans is constantly changing but now when you're sick what do you do you go to the doctor but the doctor says hey i don't know what's wrong with you let's do a bunch of tests and they you get an mri an ekg an eeg they do all this blood work then your doctor gets back your lab results and essentially the data is what tells the doctor what you might be sick from and the data will more often than not recommend a solution even surgeries now are being accomplished by robots so we've gone from theism a belief that a higher power will solve our problems to humanism a belief that a human will solve our problems to dataism a belief and trust that the best way to solve our health problems is through data okay let's take a look at another example war so war a thousand years ago two countries would go to war what would they do the day before the war they would have a huge sacrifice and they would pray to their gods and whosoever god was the strongest that would determine who would win the war a couple hundred years ago it was more about humanism whoever had more humans on the ground and more bullets and more weapons that's who would win the war but now war is fought every single day on the battleground of dataism every single day all of computers everywhere all over the world are constantly being attacked again theism a belief that the stronger god will win the war humanism however many humans you have on the ground that will win the war dataism that's how right now every war is actually being fought education first we would get all our education from again religious studies the shaman would tell us why the weather is this way or why people die or what happens when people die and this would be our entire education then we went to around the renaissance we went from theism to humanism so we went to universities and we learned the beginnings of science and math and philosophy and the arts and literature and so on and now we're going more and more to dataism for one thing so many thousands of courses are online and are essentially your progress is tracked in a data-driven way as opposed to a professor deciding if you're good or bad and not only that what you need to learn next and the types of courses that are designed specifically for you are often driven by artificial intelligence so again no professors in the middle but artificial intelligence might decide oh james needs to know a little bit more about this he's good at this let's build this course for him so even education is going from theism to humanism to dataism bitcoin isn't the only digital currency as a matter of fact i would say there is about 200 billion dollars worth of legitimate digital currencies right now and why do i say legitimate there are many other digital coins other than bitcoin you might have heard of ethereum you might have heard of litecoin there's over a thousand different digital currencies the big question is why do we need more than one coin why can't we just have bitcoin well the same question could be asked about paper dollars why are there us dollars and why are there canadian dollars and why are there mexican pesos why couldn't it all be just one big currency the answer is with paper money we have what's called geographic borders the us is different than canada just sort of for arbitrary geographic reasons and so we have canadian dollars and we have us dollars and then we have a border with mexico so we have mexican pesos and american dollars but with so it's it's just arbitrary those borders but with cryptocurrencies there are what i call problem borders so bitcoin has some problems also for instance bitcoin focuses a lot on privacy but there are still some privacy issues so coins like z cash or monero for instance solves some of these problems and a problem border exists that creates a new cryptocurrency in this case a privacy border there might be other types of crypto borders like uh or crypto problems like for instance a problem of speed of transaction or a problem of using bitcoin for more legal purposes all these problem borders create new cryptocurrencies but most of those cryptocurrencies are either total scams or they're worthless there will be a flush of all of those currencies knowing the legit currencies will create a once-in-a-lifetime investment opportunity you see right now the global market value of paper money is 200 trillion dollars but the global market cap of cryptocurrency is only 200 billion i believe over the long run cryptocurrency will in fact overtake paper money and reach 200 trillion dollars in global market cap bitcoin and these other digital currencies will slowly overtake paper money as they solve more and more of the problems of paper money that's how we will go from 200 billion in supply to 200 trillion in demand which is why i think this is a once in a lifetime opportunity so you see all the problems that bitcoin solves and that blockchain solves you see that bitcoin is backed by thousands of years of science and we know that changes are coming which is going to help bitcoin eventually replace paper money and once it does all we're going to see at that point is the price going straight up and so i'm cautioning people to be aware of the scams and the frauds but know that cryptocurrency in bitcoin is definitely in the future thanks so much for watching today i hope this presentation was helpful if you enjoyed this presentation please leave a comment and subscribe to the channel and if you want to read more of my content head on over to my blog at jamesalture.com
