♪ emily: i'm emily chang in this is "the best of bloomberg technology," where we bring you our top interviews from this week in tech. coming up, the fallout spreading through technology. our conversation with arm holding ceo science eaters. plus, highlights from the coverage on the ground at the consumer electronics show. in the next hour, you will hear from the ceo of nissan and sony's ceo. and gopro takes a dive. with the ceo

after they cut their forecast and slashed jobs. first, to the lead. the continued fallout over the microchip security flaw affecting nearly all work devices. this week, microsoft said fixes for the vulnerabilities may significantly slow down servers and personal computers. in a post on tuesday, the company suggested they could be more substantial than intel previously indicated. microsoft is also temporarily suspending some updates to windows operating systems that use chips that are freezing or not putting up. the intelht at ces, ceo tried to reassure people their data would be safe. >> the security is job number one for intel and the industry. primary focus of our decisions and discussions have been to keep our customers' data safe. as of now, we have not received any information that these exploits have been used to obtain customer data.

emily: we broke it down with ian king, who covers the chip industry. with, intel was very much, we are all in this together, everything will be fine, nothing to see here, move along. now we just heard from brian krzanich admitting that maybe things are a little worse than we said. that microsoft came out and said, we are finding problems . so really, this industrywide effort to put a brave face on it and say the problem appears to be fragmenting. emily: what is like results saying? >> that in certain circumstances, it appears as though the slowdowns as a result of these remedies are being put in place are worse than had been previously thought. emily: so talk about what exactly this means. if the fix doesn't work, then what? >> it's a choice, right? you fix it and your computer

doesn't work, or you don't and you are vulnerable. so you buy more servers to make up for their performance, you struggle by with the corporate system that doesn't work? there are all these ugly alternatives. emily: we also have an update from arm. they are saying 5% of their chips are affected, luckily it is not 100%. what does that mean? >> this is important. arm is in every smartphone. right? many more chips based on arm technology are saying since 1991, 120 billion chips using our technology are out there, only about 5% are vulnerable to one of these potential exploits. they are saying it isn't a huge deal. emily: we have headlines crossing the terminals about senators urging the department of justice to investigate brian

krzanich's share sale. we talked about this last week. you mentioned it was a planned share sale but he is now down to the minimum of his holding. do you expect more to happen? >> as we discussed at the time, intel's stands is this has been in place for a long time, this is why companies do this, knownr this problem was to intel before the plan was put in place. people are looking at this and maybe this kind of the regular excuse executives always use to ensure themselves against this accusation, may that doesn't stand up in this case. that is what has led to senators putting pressure on the fcc to have a look at it. emily: we also have a headline hey don't expose any exploitable vulnerability related to intel, either of the meltdowns. what does this mean? >> they are just adding to a list of companies that said, look, no problem here.

biggest among those is probably google, we have patched, everything is ok. we are getting conflicting information here, and what we have to find out, and what we are working on, what is the truth, and what's a parent is a lot of people don't know yet. we will honestly be seeing a lot of -- emily: what's next? what are they waiting for? >> we need to see these patches deployed, we need to see what material impact it will have. it impacts how intel. emily: as a consumer, should you download the patch or not? >> this has been one of the consistent messages. if you are an average pc user, if you have a fairly modern system, one in the last couple years, you don't have anything to worry about. emily: that was ian king. one company feeling the heat from the chip flaw, arm

holdings, which is at the heart of the most major local phone components. 5% of chips made using this design are to the potential hardware hack. we spoke with arm holdings ceo simon seekers in las vegas, and asked how concerned consumers should be about these issues. issue,s a very serious but it is one the industry as a whole is taking seriously, one we are taking seriously. we are thinking about our future designs and how to mitigate against issues such as this. we are working closely with partners to make sure the software mitigation we have developed over a series of months are distributed, that people are using them, installing them correctly, that we provide the maximum safety to any user of our electronic systems. emily: how long before remedies are fully in place? >> well, it is going to depend on which system, which type of device you are talking about. for some, it is relatively

straightforward, but in other cases, there is a vast number of companies involved in the supply chain to get products to market, so it may take some time. it will be case-by-case, and it is going to be up to the toividual oems, who need take on the software and getting pushed out. take,y how long that will it's hard to say, but everybody is on this. is a huge sense of urgency. emily: android updates are pushed much more haphazardly than apple, which means some older phones might be left stranded. how much of a concern is that? you feel android is more at risk? aboutl, one of the things those older devices is they contain less sophisticated are muchs, which i mus less susceptible to these issues we're seeing here. there are a vast number of android devices using cpu's from arm which are susceptible at all

to the security issue. it's not an over characterization to say everyone is at risk. emily: when it comes to the actual hardware, is there a fundamental way for you to redo your chip architecture to avoid this? >> the hardware features can dictate how much risk there is, so going forward, for anything that is easy to work around, we are going to do that. some of the more sophisticated features, it's about the combination of hardware and software that determines if there is a risk or not. i think what you are going to see going forward is tighter guidelines on how to write software to use microprocessors in the safeway. -- in a safe way. what this episode has shown is that we are in a new world of security, and security changes over time, and the definition of what safe looks like has changed. we have had a fundamental

rethink. emily: i'm curious how much of a wake-up call this has been for you. has a raised any concern that the chip industry is too concentrated? mean, in terms of a wake-up call, security is something we take very, very seriously. we always have. we have been looking at the deployments of arm processors, safety critical systems, security critical systems, for many years. we have always been looking at and thinking about how might a hacker get into a system. trying to stay two steps ahead of how bad actors will try and exploit the system, try to learn as much as we can from the research proposal. this is another case of a security tool that has been uncovered. it is different because it is much more hardware fundamental than others in the past, and many security issues are down to

software and the way the software is written. it is a little different. i think one thing to take away from this whole incident is the way the industry has come together and collaborated in a really positive way. the issues around competition have been put aside as industries work together. that is a positive thing, because there are going to be new issues in the future, and the industry needs to react in the same way. emily: do you think the way the industry has consolidated so much over the last several years could actually be a negative, especially when considering how widespread this flaw is? >> i guess there's two ways of looking at it. you can say there's a lot of consolidation, a relatively small number of points of failure. on the other hand, with the relatively small number of parties involved, it is much easier to coordinate a response. one of the reasons we are seeing it taking care of is because of

because of theis diversity of the manufacturers involved. emily: that was arm holdings ceo simon segars. apple is facing a french criminal probe on that is a company deliberately slowed battery performance on older iphones. this follows allegations from consumer groups. a preliminary investigation began last week for "programs and deceit." and here in the u.s., a member of congress is also speaking out. johnson wrote a letter -- john ume wrote a letter asking about how apple is handling customer complaint. he says he was disappointed with their response. >> we just think they have been sufficiently transparent. there are a lot of customers and consumers who have noticed the changes in some of these apple devices and the fact that they would have these devices degraded in terms of capability

without them knowing why i think is what you're trying to get. emily: more news for apple, an activist investor is purging apple to create ways for parents to restrict children's access to their mobile phone. they want the company to study the effects of major usage of mental health. -based field of mesmerizing qualities of the iphone could fuel a public health crisis. joins up, carlos ghosn's us next to talk about the future of automotive's, from ridesharing to electric cars. and if you like bloomberg news, check us out on the radio. you can listen to us on the bloomberg radio app, bloomberg.com, and on sirius xm. this is bloomberg. ♪

emily: more news out of the consumer electronics show in las vegas this week. amazon's alexa service will be available in certain toy you and lexus cars sometime this year. the voice-activated virtual assistant will let drivers and

passengers get directions, control entertainment, and other functions in the car via voice command. mitsubishi announced a new venture capital fund with plans to invest $1 billion over the next five years. the chairman and ceo joined us from the event in las vegas to talk about the find. take a listen. >> you know, we have so many things to do for the next six years, which is about the transformation of the car. and i don't think we can do it alone. i think we will need a lot of innovation and creativity coming and we think the way we are organized today is not sufficient. that is why we came with a new organization, which is a horporate venture capital w will invest up to $200 million per year, which adds up to more than $1 billion, in order to support our efforts, transforming the car into electric, autonomous, and

connected. emily: investing just hit the highest level since thedo dot com boom. how much competition is there to develop and deploy the kind of technology that you were trying to develop? >> oh, there's a lot of technology out there. i am receiving a lot of people, hearing a lot of ideas. we have to be very careful, because it means that there are a lot of interesting ideas, but how many of them are going to survive, be able to be implemented, executed, at a reasonable price consumers are willing to pay? that is where the challenge is. we are talking about $1 billion over the midterm, and let's not forget that the alliance has been investing $50 billion. $1 billion over $50 billion is about 2% of our export.

emily: so will you really be reading peoples brains, using that to help them drive their cars? anwell, this is, i think, illustration that this is not only about autonomous driving, which means that the driver can drive whenever he wants, but also the car will have the driver be effective. enhanced driving. what we want is on top of the autonomous driving and what we call enhanced driving experience, the car has the driver be a better driver, be much safer, and optimize the experience. think -- what do you when do you think we will have fully autonomous cars on the road, and when will people use them? >> i think it is going to be down the road, within the next four years. are we talking about

massmarketing? i'm not talking about ready to use, but we already have products working very well. it may take three to four years before the regulations allowing to be massmarketed, before we make sure the system is totally robust in any condition. i would say 2021, 2022. emily: wow, that soon. how do you see u.s. tax reform impacting auto demand? do you think there will be a shift toward the luxury segment? is should support activity and spending and consumption, which means that i think this is going to be good for the auto industry in general. support and incentives for zero emissions cars have been maintained. it is also very good news for electric cars. i think it is very positive as a

business person. emily: what are you hearing out of nafta negotiations? do you think there could be a deal that won't raise the price of cars significantly? >> you know, it is very difficult to predict. field, we have to be prudent, watch carefully what's going on, try as much as possible to give the different policy makers data and facts in order to make the best decision for their own company, from the united states and mexico. that is what carmakers can do, make sure the revision of the policy is in the best interest. week" onceiness wrote a story that if -- president has announced he will be attending davos. what do you think the president

-- think of the president attending this global event preaching america first? >> i think it is going to be extremely interesting. davos is the place where many people meet to discuss important subjects that matter for countries, that matter for people. the more people participate, particularly people with high power levels, the more interesting it is, and the more it gives meaning to davos. i welcome this opportunity. emily: carlos ghosn. still had, sony has had some big moment at the box office this year thanks to smashes like "spiderman" and "jumanji." but the ceo says they aren't stopping there. he joins us later this hour. this is bloomberg. ♪

emily: china has entered the top five in u.s. patents for the first time ever. chinese inventors received 11,241 u.s. patents last year, a

28% increase over the same period in 2016, according to a report by ifi claims patent service. china ranks behind the u.s., japan, korea, and germany overall. and gopro's challenges are coming to a head. the company missed fourth-quarter sales guidance, signaling that revamped cameras and price increases are sparking revenue growth. shares tumbled on the news, leading to its worst performance in a year. at an a is the likely next up for the camera maker, but the ceo spoke to bloomberg's selina wang and tonight reports they have higher jpmorgan for a potential sale. take a listen. >> jpmorgan is, in fact, our banker, but we have not engaged them to help us sell the company. said, if there were an opportunity for gopro to partner up with a larger organization that could help us scale, the

company's scale or brand reach, that is something we would consider, but it is not something we are actively engaged in at the moment. >> do you think you will want to actively engage in this? is there some catalyst you see coming? have any potential suitors reached out? >> well, i will answer the question -- what we engage in something like this? this is something we explore from time to time, as it is our job to grow the business in the most strategic way possible, and that is definitely one way to do it. so it is not a new topic at gopro, but i can't share any more information than that. >> can you talk a little bit about organizations that you would love to work with, if theoretically something did work at in terms of a sailor partnership? i can think of any number of consumer electronics company that gopro could fit well into. how are you thinking about it? >> well, i am not going to go

into too much detail, but i would say that being a company that is enabling people to capture and share themselves and exciting ways, gopro is a very social company, and we have one of the strongest brands in the world that is very well regarded for our ability to help people capture and share their active lifestyles. we are primarily focused on spreading our brand and spreading our hardware and software solutions to reach as many consumers as possible. to us, scale is very important. >> shifting gears to today's announcement, it seems like gopro is steadily continuing to narrow its vision. the entertainment unit shutdown, now the drum businesses closing. how should we understand the product roadmap, and diversification of gopro? >> i think what you are seeing from us is that we are listening to our customers more and more. developmentting in

of products and solutions that our customers want from us. whereas in the past, i'm even on record as having said in the past that one of the things that makes gopro strong is that we are our customer, and in the past we developed products we really wanted, and that seemed to resonate well with the market. we realize now that we are in the business to build products for our customers, and we need to identify what they want and go and inventor them. and that can be difficult, because yo as you are inventing new solutions, because cymer doesn't know what they want. but it is our job to read the data, understand the trends, and bill for our customers. our customers love t the entertainment that we produce today, but they didn't need us to become a hole blown entertainment business. our customers have told us they really love buying our cameras from us, and a passionate number of them wanted to buy drugs, the majority wanted to buy gopro's

that connect to a great app, and that is what we are investing in moving forward. >> to have been several rounds of layoffs over the past year, and with this most recent reduction, there are still 1000 employees. should we expect to see further reductions to reach that target level of operating expenses? >> no. the reductions, which involve headcount reduction, get ousted the necessary sub $400 million gopro tot will allow be profitable in the second half of 2018, and we are seeing good starts for the products. as long as sales trends continues as forecasted, we feel like we will be in good shape. emily: that was gopro ceo nick woodman, speaking with selina wang. coming up, as a longtime netflix executive, she pushed forward the thinking that employees are adults and deserve freedom. and somehow, it worked.

we speak with patty mccord,. next a reminder, all episodes of "bloomberg technology" are live streaming on twitter. this is bloomberg. ♪

emily: welcome back to "the best of bloomberg technology," i'm emily chang. during her 14 year tenure at netflix, paddy mccourt helped to define the modern workplace. she was one of the authors of the famous 124 page missive called "netflix culture: freedom and responsibility" that has been 1 viewed 15 million times. -- buteka and val silicon valley has not always been the image of maturity. cutting the cord just published a new book this week and joined us from new york. that wedn't just assume would have a great culture that would stick around and be the same forever. we realized that we could inundate and evil the culture of

the company, at the same time we were innovating and evolving the product itself. cases,now, in some having the right rules when it comes to netflix means having no rules, like unlimited vacation, which is the policy. do you think it is more about hiring the right people or creating the right structure? >> it is absolutely both. if you create a structure that says you need people who have -- you like a lot of responsibility, they like to have a lot of judgment in their work, they want to make their own decisions, then you have to hire those people that like to do that. and it is not everybody. i wrote my book not as a the more about what we did at netflix, i wrote my book because i think some of those rentals we applied apply to everyone at work today, and we can all think about work differently going forward. emily: looking at silicon valley specifically, we have seen many

examples where the industry has tolerated really jerks, or so they are called, looking at the former uber ceo. when you look at that situation, obviously, he helped build a $70 billion company, but what went wrong? >> i think people get enamored in their own success. a lot of these companies received lots of money, and it was a growth at all cost scenario. when you grow fast and are rewarded for doing that, then you assume that you are doing it right. these things happen when things are going extraordinarily well, and we had a bit of a different circumstance and netflix, because of the time we started coming up, we didn't have a lot of money, we didn't have a lot of freedom to go out outside the boundaries because we had a lot of work to do. sometimes i think it happens because you are kind of overcompensated. you have so many people doing so many things that you stop paying

attention to good discipline and good efficiency. emily: part of the problem is that this idea of the young, brash founder or engineer or product guy is a stereotype that people buy into, whether it is investors who fund them or companies that hire them. how problematic is this idea, that is what is ideal? >> i think it is problematic across a lot of industries. i consult now to small startups and large corporations, and i talked to people around the world, and i see it over and over again. some of it is human nature. when you are successful, you think, i want to surround myself with other successful people, and i want to be smart and articulate, and i want them to be fast on their feet, i want them to be just like me. like hires like hires like hires like. but what is really interesting, i got interviewed earlier in the week, the woman was asking me

about how interesting it is that so many of these men who were fired for sexual harassment charges are being replaced by women. i said, isn't it funny? i hear in the silicon valley all the time that the reason we can't have women in management position -- there is not enough qualified women to take the jobs. in each of these cases, the women are already in the room. she was sitting right next to him, matt lauer, at his desk. i don't think we have to look that far to find qualified, capable women at our workforce. emily: amen ot that. i want to ask you about another silicon valley issue, that a lot of companies from facebook to google provide these amazing perks, meals around the clock, transportation services, gym services, you can bring your pet to work, you can get your hair cut at work. netflix, as i understand it, was fairly light on these kind of perks and encouraged people to

go home when you are done. do you see anything problematic about this sort of campus mentality? >> i've got to tell you, it is pretty sweet here at bloomberg in new york. [laughter] emily: we do have some fancy stuff. i don't get to bring my dog to work, but other than that. >> i think anything can go overboard. i worked in the silicon valley for over 30 years, and i have seen the pendulum swing more than once. the problem for me with too many perks and taking care of people from everything from their laundry to their transportation, you have to figure out what things makes the company efficient and effective and what things treat people like children. i understand the trade-off people make. i understand the transportation issue in the bay area, and we don't have the infrastructure you have here in new york, for example, to get people around. but some of it just seems silly

to me, and it might be just because i've seen the richmond times -- the rich times and the poor times. i want to link what we do and how we treat people to our tocesses as businesses, and the delight that we give our customers and our clients, and if you focus on that, then you rethink some of that stuff. that correlation that people assume, that if i make employees extraordinarily happy they will be extraordinarily successful, i'm not sure i really buy that. emily: patty mccord, author of "powerful: building a culture of freedom and responsibility." most companies don't expect police to regularly rate their offices, but uber isn't most companies. this week, we learned in order to foil raids, they developed a secret tool they call ripley. it allows uber to lock down equipment in foreign offices to thwart police raids, according

to people with knowledge of the system. they would routinely use ripley from spring 2015 to late 2016. coming up, our conversation with turner ceo john martin. what he has to say about the potential at&t/time warner merger, next. and we asked the sony ceo if the entertainment giant plans to sell its tv or movie studios. this is bloomberg. >> for now, this strategy is, as i said before, show up are more should picture business, and make sure with any of the deals we make concern the future, that we are in the drivers seat, and not in a situation where we have to give up the assets we have grown over the years. ♪

emily: the u.s. expansion plans had a serious bump in the roads, between a chinese court maker

and at&t due to what people say his political pressure. they had been set to launch their new flagship smartphone with at&t in february. at&t's cancellation comes weeks after the u.s. senate and house intelligence committees reportedly said letters to the was arguing that huawei security threat. the company showed off their new smartphone earlier this week. and now we had back to the consumer electronics show in las vegas. while there, we caught up with sony ceo kazoo a hawaii. he says he wants to be a consolidator, so we asked to they might be targeting. take a listen. >> to strategy right now is really to make sure that we have a very strong operation, first and foremost, before we start looking at options. as these assessments come up, we will enter into them, but we need to make sure that we set up our own studio.

emily: let's talk about the broader strategy. was that involve better ip, better distribution, better tieups in asia, a focus on more niche movies, for example? >> i think you get some great points. the first thing we really need to do is look at the ip library we have, "spiderman" being one of the greatest. we have a lot of other ip's, makenji," for example, and sure that we go back into our library and take advantage of the ip library we have. i think there is also a lot of potential for tapping guitar videogame ip, the first party software we have, and those are questions on going as well. it is also making sure that we have the right kind of financing as we go into motion picture production, to make sure that we have the appropriate producer fees and take sure we control

production costs, which is another way we focus on it. emily: you guys are a stakeholder in spotify. i'm curious, what do you think directly,lan to list and the sony have any intention of selling shares? >> at this point, we have not made any determinations in that regard, and obviously it is spotify's decision to go into the public market. i think that over time, it will give them more ability to really make their business going forward. emily: the music landscape is shifting dramatically. i'm curious what your thoughts on, where your expectations are, for you to pay music services and how that will impact the record industry at large. ,> i think with youtube spotify, any of the other online services that we have deals with, it's really going to make sure that the music industry, the recording music industry,

continues to grow, and that we give artists more opportunities to get their music out to consumers through these services. i actually think the music services are an important inflection point toward further you werend i think -- talking about the decline of physical distribution, but streaming and online services -- i think it's a great time to be in the music business. emily: sony atv recently made a deal with facebook. what is the motivation for that deal, and what do you think facebook's intentions in music are? >> i think that with other online players, they are also looking to make music a part of their service that they provide for the customers. i think it is a very competitive edge that a lot of the other providers have, with everything we do in terms of how we enjoy

content. emily: so looking out through 2018, what do you think is the biggest risk to economic growth this year? that from a sony perspective, we want to make sure that whether it is multilateral or bilateral discussions happening between countries and territories that there is a free flow of content, products, and data, as well as people. every time there is an tissue or some -- an issue or some hindrance, that will impact our business in a negative way. i just want to make sure that in these discussions the free trade of services is at the forefront of everything we talk about. ceos: so sony traditionally have a six-year tenure. you are coming into your six-year this year. i'm curious what your own plans are and what your intentions are

for this year. i serve at the pleasure of the board and shareholders. as you know, we are just completing our second, three-year mid range planning session, a third as of april. we need to make sure we plan and execute accordingly. emily: that was our interview with the sony ceo, kazuo k hiraei. we also caught up with john martin and asked about at&t's possible merger with time warner, and where he spoke -- and whether he spoke with the entertainment folks about the priorities of the deal gets done. take a listen. >> i think the benefits of turner, and more broadly speaking time warner connecting with at&t, is right now premium content companies are racing. we are trying to pick up more scale technology, more data,

more ability to reach our fans, and know the fans are, and at&t's data, their skill tech platform, i think it will enable us to have significant advertising opportunities that we -- it will supercharge the strategy turner has been on. in addition, at&t, directv subscribers, and the tens of millions of mobile customer relationships are going to provide us new and innovative ways to get our content and products directly to mobile customers. for the next five to 10 years, the fastest growth in video consumption will be through mobile. those are going to be the priorities, drive advertising, make it addressable, find out who our fans are, and reach more and more people over more and more devices. emily: there are major regulatory challenges, however. what role do you think president trump's disdain for cnn played in the doj' review of the deals?

>> i really have no idea. i can't possibly speculate. it would be inappropriate for me to speculate. fortunately for me, i am focused on running turner, and we have teams of incredibly capable people who were working diligently to make sure the deal closes, and we fully expect that it will. we can't wait to get going. emily: fox news and msnbc have made gains on cnn, largely driven by sean hannity and rachel maddow. what can cnn do to button that trend, and what do you think -- and do you think the modern model is sustainable? >> i think cnn's model is sustainable. if you look at the three networks you just mentioned, all ratings are up. cable news ratings in 2017 were the highest they have been in years. and yes, depending on the andicular climate, depending on what the particular subject matter is, it might be

possible that msnbc does a little better or it might be possible that fox news does better, but cnn completed its best year in 2017 ever. a record year. 10 cableen the top network for 40 years in a row. the cnn business model has never frankly, ier, and don't think there has never been a more important time for cnn's place as it relates to journalistic integrity, and what it means not only to the country, but the world. i am incredibly proud of what the leadership is doing and what journalists are doing every day. we have no plans on changing, trying to be the best journalistic organization in the world. emily: at&t has talked about slicing up shows, making them more adjustable for a global audience. is that something you would consider doing? >> absolutely. i think it is something we would do with or without at&t. i think the ability to break traditional longform

formats to shorter shows, making them available on mobile devices, might be changing the windowing of our shows, making them available on alternative devices before they show up on linear tv. -- we have of this to stay connected and engaged with our fan base, and we will be experimenting with a lot of different ways to do that. emily: that was turner ceo john martin. coming up, the crypto craze in 2017 seems to have died down due to regulation concerns. what to expect from digital currencies in the new year, next. this is bloomberg. ♪

emily: dropbox is said to have filed confidentially for an ipo in the united states, and goldman sachs in jpmorgan will look at the listing, privately valued at $10 billion. dropbox offers filesharing and cloud storage services. on aec is cracking down

hong kong-based company that benefited from 2017's cryptocurrency fever to the tune of a 900% stock surge. they are suspending trading in shares of ubi blockchain due to "unexplained market activity." the company, lacking in revenue and a product, reached a $3 billion market cap before concerns about executive history were raised in a story by bloomberg news. we were joined by the managing partner of connecticut capital, who started investing in bitcoin in 2013 when it saw its first major rally, and since started a venture capital firm in blockchain technology. joining us from new york, the author of the story, cory johnson. indicative oflly how the entire market is reacting to the phenomenon of bitcoin and blockchain and cryptocurrency, and i think it is important to note out if this story that the sec did step in, and i think it is a good thing

they did, to investigate. there has not been any sign of wrongdoing, but they are adding guideposts, they are adding some type of structure to the market to try to grow it in a more safe and i think sustainable way. as far as gdi, they are doing what they are doing. i think what we are seeing in 2018 is really the year of that coin and cryptocurrency trading becoming a social phenomenon. >> what does that mean? >> i was in new york, in line at a bagel shop, eating noodles, and everybody was talking about trading cryptocurrency. >> but does that mean it has inherent value? >> no. trading does not mean inherent value, but what it does mean is it has a massive tension, and it is tension economies that turned into actual development and add support and liquidity to the market, developing into meaningful and lasting

applications. at the end of the day, that is what this is about. blockchain technology is about software being built, and cryptocurrency is just so we see on the surface. detailsn,? right this company in hong kong, even that is more interesting. their lawyer is a guy in chicago. his business partner is a guy in las vegas. when i called their new york headquarters, it rang on someone's cell phone. their main phone disconnected. things are mature interesting here than they seem, and i think that is probably true. the difference between bitcoin and ripple are substantial. it is worth finding out, to really understand what lies beneath these things to try to determine what intrinsic value and not just guess. >> meantime, cryptocurrency is running into headwinds, not just in the u.s. but in china. this talk about the chinese

government cutting off the power supply to bitcoin miners. how serious do you think that is? >> i think this is the final strike of the chinese government's desire to reset the entire story of blockchain. i think what they want to do is clear the decks, and they have done it with exchanges, ipos, and now with mining. i think they understand the value and potential of utility for society, for the economy, for industry to build anew, and i don't think it's the end of exchanges. this is merely the chinese government resetting and taking control of what they actually believe will be a truly transformational technology. emily: other cryptocurrencies getting dragged down today. cory, you spoke with the ceo of ripple. take a listen to what he had to say. >> there is no doubt, 2017 has been, amongst other things, the year of crypto. it was in the year of crypto that xrp outperformed every other digital asset.

your today, we are -- year to date, we are up about 20,000%. emily: that is from december 27, but ripple going down with some of the others today. what do you make of it? --i see some volatility obviously, it has been volatile, with these currencies and trades. but i think our traditional ems, to say it is down a lot -- i looked at my bloomberg terminal. look at what happened to ripple trading over the last day. sure enough, it is down 11%. but if i look down the last 14 up 100%,s up a lot, hundred 38% in the last 14 days -- 138% in the last 14 days. one of the things is the

volatility we have seen tends to take the headline, but the long-term rise we have seen really tells more of the story. more to the point, when you look at the details, we see great differences between ripple and bitcoin, between xrp and the like-minded blockchain technology with the different ways they work and trade and the problems they are trying to solve. you find a much more interesting story, and again, that long-term we are usedthe lens to applying the comes to moving equities, but maybe the appropriate one to apply, even though the futures contracts have not reduced the volatility in the trade of bitcoin. honshu,hat was joe kinetic happening managing partner, and cory johnson. and that does it for this edition of "the best of bloomberg technology." to do this wednesday when facebook, youtube, and twitter

head back to washington to testify on terrorism and social media. we will bring you all the headlines. and remember, all episodes of "bloomberg technology" are live streaming on twitter. that's all for now. this is bloomberg. ♪

♪ nejra: mifid begins, new regulations start without major glitches, but what can be coming down the road? we will put that question -- mifid around the world, investors as far as japan say it could stunt double run. what would be the global implications of the eu's new rules? come to "bloomberg markets: rules & returns." i am nejra cehic.