are the same and we can measure success emma but then off the court, off the field, he goes from objective to subjective? all of the sudden, your talent does not define whether or not you will become an all-star. what somebody else is thinking defines that. thehen i am looking at folks who are ceo's -- not just, my goodness, we have several african ceo's, but i am looking at how many black board members they have or hispanic board members they have wearied what we are still seeing in this in termss an inequity of folks at the top and the bottom. still not an african-american who is a prime time host of a cable news network with a black man in the white house, and that is a problem for me. what happens is we praise sports because our sports figures worked on their game and

achieved success because they faster, thrown longer, if you can shoot better and rebound better, it means you are going to succeed. we should have the exact same attitude in the rest of our society. and when that happens can we make it the point that we breach -- preach all the time, we will see the inequality gap closing. , andook at average incomes you will must see these sub crime -- subprime loans. you will not see what you have seen and the home for closure crisis. it will take two generations to get just that money back. when we have that attitude about life, as we do about sports, then we're going to see it. i would be remiss to his a we the exact same attitude when it comes to our sports teams for mayors out there building new arenas for owners and you want them to win championships.

would you should be saying when it comes to the education of our is food, whether it choice or education reform mo cowan want to make sure we had the same kind of access us. if you want to win a championship in football, you sure as hell better win championships in educating our children. [applause] >> part of it is leading the way to it we have five owners in sports. and seven of five of the top companies do not have any african-americans on board -- on their board. less than 2%. google does not facebook does not. maiden them,ng to but he did. >> i name everybody to >> in sports, we have such a major amount of guys on the field. that is why we get a chance to talk about these things and hopefully change all the things we need to change. that these discussions are

important. go, it isi let them an honor to give the president's andd to kareem abdul-jabbar his foundation for all of the outstanding work he is doing around the country. [applause] a round of applause for all of our panelists. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] ♪ on this fourth of july, arizona senator john mccain is visiting u.s. troops in

afghanistan here he tweeted this thissaying honor to spend fourth of july with arizona national guard serving in afghanistan. thank you for your service per you will find more at twitter. look for the members of congress list. in washington, president obama today hosted a naturalization ceremony at the white house for 15 active-duty military service numbers and their spouses. the president used in the event to recognize the conjugations made by foreign-born members of the u.s. armed services. they have earned their american citizenship by serving the country. he advocated for immigration legislation. the president made these remarks following the oath. [applause] thank you so much. thank you, everybody. good morning, and welcome to the white house. and happy fourth of july. the deputy secretary, thank you

for taking care of the important part of this morning, which is administering the oath. that is the thing we want to make sure we got right. directorting to be the and two family, friends, distinguished guests, thank you all for being here. finally, to these money five men and women, service members and spouses, it is an honor to join everyone here for the first time in calling you our fellow americans. this is one of my favorite events to do. and not just because we get to have our and watch fireworks later. it is because each of you has traveled a long journey to this moment, journeys a began in places like jamaica boko germany , yet,an china, guatemala

somehow, either because your parents brought you here as children or because you made the choice yourselves as adults, you ended up here in america. many of you did something extraordinary -- you signed up to serve in the united states military. you answered the call to fight and potentially to give your life for a country that you did not fully belong to yet. you understood what makes us justcan -- not circumstances of birth or the names in our family tree. it is that timeless belief that many, we arehough one weird we are about together with a set of beliefs. and an innate -- and unalienable rights. we have certain obligations to each other, to look after each other and to serve one another. over the years, that is exactly what you have done roderigo came to the united

states from the philippines and saidd the navy because he he wanted to be part of something big and important. today, the petty officer second class is still part of that great cause, and today he is also an american citizen. canadaie moved here from with her mom when she was 18 years old, and today she is 26 and a sergeant in the army. she joined the military to give her children someone to look up to and someone they could be proud of. stephanie, i know you have made your children and all of us very proud. oscar was born in guatemala and became a marine last year. becoming a citizen, he says, means becoming a part of a society that strives and stands world.d all around the just being a part of that makes me complete. oscar, welcoming you as an

american citizen makes our country a little more complete, so thank you. then there are those of you who married an american service member, and as a military spouse, you have been serving our country, as well. dina is originally from jamaica. she met her husband in germany. today she is a nurse, and she and her husband have four beautiful children. a club of thening best of the best, becoming a united states citizen. i agree. congratulations on joining the club. america is and always has been a nation of immigrants. historyut our immigrants have come to our shores in wave after wave. from every corner of the globe. everyone of us, unless we are native america, have an ancestor who was born somewhere else.

always the we do not same or have not spoken the same language, we have done big things together. we have won this country's freedom together, we have built our greatest cities together, we have defended our way of life together. we continue to perfect our union together. that is what makes america special, that is what makes us strong. basic idea of welcoming immigrants to our shores is central to our way of life. it is in our dna. our diversity, our differences, when joined together by a common set of ideals makes a stronger. makes us more creative, access usferent -- makes different, we make something new from all of these different strands. and that is why we want to keep attracting the best and brightest from beyond our shores we will have to fix our immigration system which is broken. we will have to pass common sense immigration reform. we should not be making it harder for the best and the

brightest to compare. our economy,grow we should be making it easier. that is why i'm going to keep doing -- [applause] i will keep doing everything i can do to make our immigration system more efficient, so hard-working men and women like all of you have the opportunity to join the american family and to serve our great nation so we can be stronger and more posthumous -- prosperous together. i will close with a >quick story. emigrant from armenia who became a famous chef. "you whoquote -- have been born in america, i wish i could begin understand what it is like not to be an american.

not to have been an american all your life, and then suddenly to be one for that moment and then forever after." today on this fourth of july, from thomas jefferson's monticello to the alamodome in texas, emigrants from around the world are taking the oath of citizenship, and many of them have worked and sacrificed four years to get to this moment. have done something we should never take for granted, the right to be called american from this moment and forever after. that should give us hope and give us confidence about the printer of our country. -- future of our country. like all of human of women who have given so much to call , andelves americans muslims would keep the door open to those who are willing to earn their citizenship, we will keep

growing our economy, we will continue to journey forward, and we will remind the world why the united states of america is and always will be the greatest nation on earth. we are very proud of you. congratulations. god bless you, god bless the united states of america. [applause] >> the ceremony earlier today at the white house on this july 4. we have been asking our facebook page what does it mean to be an american? dodd,eans american means faith, family, liberty, and decency to all human beings. we're one nation under god. in god we trust. god bless the united states of america. an opportunity to a better life for me, my children, no producers due to my race, religion, political opinions. they do america.

-- thank you america. event to memorialize the is happening.led here is some of what they had to say. have seen it, they feel bad for a little bit, but they are soon active posting selfies. what would you rather do here at the museum? or get practical newscast, more journalist sues names you cannot pronounce and laces you cannot see on a map? war memorials make people uncomfortable. let's look at why these journalists died. the depictions that someone did not like.

they shot video that someone did not like. they ask questions that somebody decided was out of line. they wrote things that someone thought to not be written. they expressed ideas that somebody disagreed with. you take a look at that smartphone would to your hand -- lued to your hand. how many times do you put something out there, honey photos to share, how many snotty remarks and critiques? rhat would you say if you unflattering photo of a lawmaker got your business license revoked. what if you made a >> video of a street protest and suddenly men in uniform smash your phone and hold you to jail? could not happen. it happens every day, hundreds

of times. when might it happen to you? honoring journalists who died in 2013, tonight at 8:00 p.m. eastern on c-span. i,i tell the story about how whose every aspect of identity is a threat to israel, my gender ethnicity is purging among the cultures middle eastern, my citizenship is american, everything about me is a warning signal for israel. the experience of an iran ian-american single man trying to get through the airport in the 21st century is to spite globalization has brought us closer and has

diminished boundaries that , despite all of that, all you have to do is spend a few minutes trying to get through the airport to remember that those divisions and things that separate us are still very much alive. aslan will take your phone calls and tweets on islamic fundamentalism, war on terror, and the tension in the middle east were three hours on sunday as part of the three-day holiday weekend of nonfiction books and authors. now a series of discussions featuring entrepreneurs and innovators. they talk about building businesses from the ground up,

and we will also hear from millennial's who work on the leading edge of the tech revolution. >> hamdi ulukaya came as a guest of a guest at dinner at my house and lo and behold i had chobani yogurt in my refrigerator. he is the most interesting person, who has revitalized a whole section of new york with his wonderful product. he will be interviewed by steve clemons, who one of these days you're going to open your closet and there's going to be steve clemons, the ubiquitous steve clemons. >> thank you very much. don't be shy for those of you standing in the back. don't worry about the cameras. aggressively ram yourself through those aisles and get a seat because it's worth it for the lineup we have today. hamdi, thank you so much for joining us. you're a young man growing up in

turkey. you came over here to study business and you said, aha, feta cheese. [laughter] and we're not even at the yogurt story. but you were going to make your fortune in feta cheese. i need to know why feta? >> well, two things. one is, i came to learn english. i didn't know a word of english. >> and feta was a great english word. >> actually, we don't call it feta, we call it white cheese. [laughter] the reason i came up with that idea is my father came to visit, and the cheese, the white cheese, is very big in our breakfast dishes. when i brought the cheese i could find in the supermarkets my father said, is this it? i said yes. he said why don't you make some. i grew up in turkey, in cheesemaking, yogurtmaking. so basically my father not liking the cheese that i brought for him for breakfast made me go

into the cheese business. >> now we need to jump to the real story here. how many of you have lots of yoplait yogurt in your refrigerator? how many of you are dannon consumers? how many of you are chobani consumers? this was not set up. i had no idea. i thought it could go really badly for you. [laughter] i just didn't know. but you moved into yogurt. and the story is fascinating. i'd love to tell you -- tell us the story real quickly, not about why yogurt, but tell us the story about why "entrepreneurship" and how you saved the town, how you saved the factory. >> well, i was, to make the story short, i started this cheese business. it was very small, you know, struggling with language, with running the plant, trying to sell, all the small -- all the big issues that small businesses

go through every day that i did. and i was going through my junk mails one night in my office and i saw this ad and it said fully equipped yogurt plant for sale and there was a picture of it on the front side of it. i continued to throw it into the garbage can, still smoking my cigarettes and making garbage. about a half an hour later i went back to that paper and took it. now it's dirty and -- >> and it was a kraft yogurt. i didn't even know that kraft made yogurt. >> it was a brand called breyers. didn't even know it then. but when i went to visit, this was about a 90-year-old plant. they were making yogurt and cheese. actually, they said it was the original plant that they invented philadelphia cream cheese. >> wow. everybody knows that. >> i know. so i couldn't believe the price that they were asking for it. i thought they were missing one zero. it was like $700,000 or $7 million.

i was afraid to ask one more time. didn't want to look so surprised, so cheap. >> maybe you should have asked if you knocked off another zero. >> on my way back i called my attorney. i said, i just saw a plant that i want to buy. he thought i was the craziest guy ever. and he told me a million things why i shouldn't get it. one, it was the largest food company, that it was getting out of the category. this was a plant this they were selling as is. that means all the mistakes and crimes and everything that's been done in this plant, it was on this turkish guy's shoulders. and then he said -- i'll tell you one more thing, the biggest problem, you have no money. [laughter] you haven't paid me for the last six months. >> ah. >> it was true. i hadn't been paying him. so that was the thing. and i figured it out with a small bank. >> did you finally pay him? because this is on the record that it could be used against you, a confession. >> yes. he later said, i wish i was a

partner with you then. so the first day i bought the plant with an s.b.a. loan, small business administration, was august 15, 2005. and i hired five people that kraft let go. and there was a bar across the street and people who were coming to that bar were bikers. i had only seen them on movies, and they're scary. [laughter] and when i saw them -- >> they said, hamdi, come on over. >> if i had seen them before, i probably wouldn't buy it. but that was the first day. and those five people and me and, you know, i could not describe how scary it was and how lost i was, and everything that the attorney said, it was true at that moment. i did something really, really crazy and i didn't know what i was going to do next.

so my first board meeting with those five people, mike, rich, maria, myself, mustafa and frank. they said, what are we going to do next? and the first thing that i recognized from the picture and when i went there the first time is the wall outside. it was white, maybe 15 years ago. no longer. it was horrible. and i said let's go to the ace store and let's grab some white paint and let's paint these walls. and mike said he was retired, and then came back to the plant. he's been in that plant for almost 25 years. he said tell me you have more ideas than this. [laughter] >> well, you know, i just want to -- i mean, we just had brian greene up here. he's one of the most cosmic conceptualizers and thinkers. did you think the universe of

yogurt was just a universe of -- i mean, at the time -- i mean, again, you're clearly successful. but one of the questions is, i remember the yogurt. i liked yogurt then. i remember greek yogurt coming online and taking on more and more. it is interesting that a turkish guy is making greek yogurt. >> only in america. [laughter] >> yeah, only in america. you go back to istanbul and -- does that play well in turkey? >> no, no. the turks are angry, the greeks are angry, the turkish are angry -- >> we were going to come out here and take a selfie with all of you and then tweet everyone. but in any case, it is a big thing. but i mean, when i began thinking about talking to you today, i didn't know, where did you steal the market from? when you look at the absolute dollars out there for this sort of product, there's some finite

number. i didn't know whether you were displacing velveeta cheese or displacing yoplait or whether the universe was getting bigger, or have you made the universe bigger? >> you summarize the the whole thing. actually, all of it. >> it was an accident, if i did that. >> all of it. we created a market. some of them came from the other categories and some of the people started eating more. but when we started, there was greek yogurt by a company who brought from greece 10 years before me, 10 years. i mean, you're talking 11 years actually. so they created this buzz of greek yogurt in the specialty stores and some fancy places, but not in the mass market. but someone who grew up with yogurt, yogurt was the simplest thing that you had. it doesn't matter if you're rich or poor, lived in the city or not, it's the simplest, purest food and you should have access to this. i couldn't understand why you have to go to new york city, a specialty store, and pay $3 to get a good cup of yogurt. so i worked two years to make

that, and when i made it, i said i'm going to go to the mass market first. so my first store was shop-rite. my buyer went there and said, well, we have five chobani's we want to put on your shelf. it's $30,000 to $50,000 to put on the shelf. he said we need that money to be paid. we didn't have that kind of money. we said, what if we paid with the yogurt? so then you sell, you can take some of it and for the weeks, we can pay it off. and then the guy asked a very nice question. he said, what if it doesn't sell? and we said we'll give you the plant. we literally said, we'll give you the factory. but that guy -- >> did they want the factory? >> no, he sold it. he sold a lot. actually, he called me two weeks later, he said i don't know what kind of stuff you're putting into this cup.

i don't want to know. but i cannot keep it on the shelf. from that moment on, i knew this wasn't going to be about selling, it was going to be about, can i make it enough? i'm this tiny little guy in upstate new york who worked two years to make this cup. now it's selling and i'm going to make the big guys wake up at one point. so this is the destiny of every small food setup. you have a dream, you work hard, you don't sleep, you have neck pain, back pain, all kinds of pain, right? [laughter] you don't go to bahamas, you don't do anything. [laughter] >> yeah. he was in the bahamas last weekend, so don't feel sorry for him. >> i was there for two days. >> i was trying to track him down and he was telling me about the roosters on pink beaches. so he was doing fine. you then moved -- you've got another plant in twin falls, idaho. are there similarities between this edmeston, new york, which is -- chuck schumer loves you for saving this town and these people.

tell me about twin falls. we have a lot of cover. i've got to get to vladimir putin and whether he either -- eats chobani. >> what happened is from those five people i launched the brand in 2007. this is something that people need to know what happened. the magic really happens in the small towns, like upstate new york. with those five people we created a brand that became number one in five years. and from that five, we have right now 3,000 people. in 2012 -- from 2007 to 2012, within five years, we went from zero to $1 billion in sales. [applause] and this is -- some people said, and i haven't seen anything otherwise. some people said this is the fastest growing start-up ever, including all the technologies. but one of the most amazing things is until 2012 -- 2013,

actually, we all did it independently. so we stayed independent. and we invested in that factory that i bought from $700,000, almost $250 million. and then we built a factory in twin falls for $450 million. and we built it in one year. i and all the people working the company had never had this kind of business experience before. we were never marketers, finance people, operators or anything like that. so we figured it out along the way. and you know what the secret is? not a big deal. [laughter] it's not a big deal as much as people try to make it a big deal. what they do, when you talk about these things, it sounds like, oh, you have to go through some kind of schools or you have to get in with the big corporations, you have to have this kind of disciplines, you have to know all the textbooks and everything. b.s. you need to really be there and along the way, you figure it

out. >> what was the biggest mistake you made at the beginning? [applause] what was the thing -- obviously you got beyond your biggest mistake. or maybe you're perfect and you've never made a mistake. but what was the biggest mistake you made from what you thought you would need to do and you changed course? >> the biggest mistake i made is a human mistake. it's towards -- as the business kept growing, you know, 500, 600 million, two brands and the plant in australia, the people that you start with is your friends. you share the dream together. and as business grew so fast -- >> those dreams become complex. >> and the capability of being able to handle that kind of business is a different one. so you need to change the skin and you need to bring more people, different people. and, you know, i struggled with it. i should have done it maybe a year or two years earlier,

including myself, you know. i could have brought some different people in. these are the entrepreneurs and people like us struggle a lot, and i think all the issues are human issues, mistakes that are human mistakes. but i think i've done or we have done together, we've done more good moves and redistricted what what was going to happen in two years or three years. so these are way overshadowing the mistakes that we've done. and i kind of try to keep it simple. but it became really big that it wasn't as simple. so we're trying to put a structure on it and make sure chobani goes on for a long, long time. >> before you answer this question, i was in a green room last week with a young man, he's an entrepreneur out of washington. i don't know if many of you are familiar with sort of the 15th and u street area in d.c.

there's a place called cake love. and this guy created something. he brought in people from the neighborhood and he's just created a big thing and he was out there talking about his new product, which is cake in a can, which he's supplying to some various large chains now. it was interesting. i was thinking about the fact that i was going to be seeing you here. and he's really moving forward. he's struggling. he's not a billion dollar company but he's worked hard in the community. i was going to ask on his behalf, what is the biggest thing he can do to get on a road to more dramatic success? other than appearing on msnbc? i'm not sure that helped him. could hurt him with a lot of consumers out there. >> you really have to have a great product. i mean, i worked two years to -- people said, this is good. i said not enough. then they said, this is -- >> did it used to be crappy? >> it was good. then we made it the first month, it was still better than what it was in the marketplace. but my expectations are really,

really high. and the cup, i mean, there's no yogurt cup left in the world that i haven't seen. when we launched chobani there was five bags of cups from china to colombia that they took off from my office. so you really have to -- once the product is perfect, then the rest is really your capability. i mean, there's a lot of stuff that you can do right. >> get it out there marketing. >> yeah. >> did vladimir putin not letting the official yogurt sponsor of the u.s. olympic team getting in, did that help? because we're all talking about it. it turns out that most of those people in sochi are sanctioned now in the united states and europe. >> we were really heart broken. the olympians were eating chobani when they were training in this country. it was in their kitchens, it was in their smoothies. they came to the plant. it was like a festival day. all the community farmers, the kids, everybody in the factory, we all made this palate

together. we did this in 2012 after london and we were hoping this was going to go and, you know, it hit the wall. >> there was a lot of speculation that the change of the uniform from the under armour uniforms affected the performance of some of the athletes, but it was really the absence of chobani yogurt. >> that's right. we believe in that and we were sad. but the next olympics we believe we will do it. but, you know, it is food -- people forget a simple cup of yogurt or a simple loaf of bread or whatever you get from the store, it's available when you're in turkey, greece, italy and in your city. but you've got the supermarkets in twin falls and in new york, it's a shame what is in the supermarkets. and the manufacturers, they could definitely do better. they can do better. they can take the preservatives out, they can take the colors out. >> talk about that.

we've got a minute and 22 seconds. i went on -- if any of you haven't done it, i'm not advertising for him, but you have a really great web page. i went on my iphone. you have this thing called "how matters." tell us about how matters. and about the issue of ingredients. can we really walk away from all the preservatives and everything out there? because i think it's interesting, because when you go through the stores, there aren't that many foods, i think, that i'm eating that are probably along the lines of the ingredients that you have. i'm pretty much of a bad eater. but you're telling me i can get on without all of that. >> yeah. and it's your choice. maybe you live in washington, d.c. you could, if you wanted to --

>> i need stuff that will survive a month in my refrigerator, maybe two. >> availability to good food is a human right, it's a basic right. who's going to make this? everybody wants better food, but it is too expensive, and it's not there. so guys like us, the big guys, they have to put the human in the center, meaning somebody is going to eat this, somebody's baby is going to eat it, somebody's friend is going to eat it. that's what how matters, how you make your food matters. and it goes beyond that, that when i started with those five people in that community, the culture of chobani became that everybody came to work and go back to their home and said they've done something amazing today. and then the promise that a

certain portion of the profits go back to the community, first in our own community and then expand. so i believe business is the best vehicle to solve issues in the community and society, and it's the vehicle that is sustainable because it's a business. but the business has the right mindset that not only the founder or the c.e.o., but everybody in there, that when they walk into the plant or the offices, that they're going to do something right. and the return that comes in, it will go back and do something more right. and it will be the effect of going on and on and on. i'm proud that chobani, every act that everybody does every day -- they're not perfect, but we have the right mindset. we're not perfect, we're trying. >> well, before we thank you, we're right at the end. you just got a $750 million loan to expand. which food company out there should really fear you? >> big guys. i love fighting with the big guys, you know. i think one thing that -- message to people in the food

world is when they tell you, oh, these are people, they have a lot of marketing money, they have a lot of plants, they have a lot of people, you will find out that the big size that they have is actually becoming an advantage for you to be fast and smart, and it's really fun to play with them. [laughter] >> ladies and gentlemen, hamdi ulukaya. everybody wave. we're going to do our selfie. everybody waving? yeah? say hi. hold on. i'm going to send this to turkey and -- [laughter] here we go. >> send it to greece, steve. >> there we go, there we go. >> thank you. >> thank you very much. [applause] >> only in america. my favorite line. and you can walk into my house one night and i can serve chobani. it was great. thank you. next, we have david kestenbaum of npr. he's going to tell us what's happening to our money, where it's going, how we're going to spend it, how we're going to pay for things. with jeffrey alberts, phillip

bruno, and nicholas carrow, c.e.o. of blockchain. welcome. [applause] >> i'd like to tell you a quick story. a few years ago, a colleague of mine started hearing about bitcoin and i said let's go eat lunch with it. people are saying, this is going to be the future of money. we thought, great, we'll go buy lunch in new york with it. it turned out to be incredibly difficult. it took two weeks. you exchange dollars with bitcoin, got hacked and had to shut down. they doubled from $12 -- >> the ultimate high was about $1,000. >> it was a long time ago. we had to find a guy who had bit coins, hand him dollars cash. he gave us bitcoins, and there was only one place in manhattan that took bitcoins and it shut down. so the question is, where are we now and whether it was legal as currency, or what it was. so could you just sort of quickly -- maybe each of you

could bring us up to date on one little part of that and tell us how far we are now. >> sure, i can speak just on the extent of the law that relates to bitcoin. and the short answer is, it is legal. but regulators are all still trying to figure out exactly what it is and how it can be used. you can use it legally and illegally. >> buying drugs is still illegal if you use it with bitcoin. >> afraid so. so you've had some regulators come out and make statements about certain legal compliance. the i.r.s. has had certain rulings. >> and bernanke said the word. it's all significant. it is legal, but i think it's going to be a couple of years until people kind of figure out how all the pre-existing regulatory mechanisms are going to apply to it because it's constantly changing.

>> nick, can i buy lunch in new york? >> a lot has changed since you went and tried that. i live my life 100% on bitcoin. my company pays all of its employees in bitcoin and we're a bankless institution. we have employees on four continents and there's an unbelievable amount of human and financial capital pouring into bitcoin projects. from the last year, just in our company alone, we've seen growth from 100,000 users to over 1.5 million. i think it's really important to remember that outside the confines of even this room, bitcoin is an absolutely global phenomenon. for example, in argentina, there

are probably 400 or 500 times more restaurants, bars and services accepting bitcoin than here in new york. that's because there are real fundamental reasons there for why it's more interesting and an approachable financial solution for the people than maybe in the united states. >> is there a restaurant in new york that takes them? >> there are several. there's a bar not too far away from here called ever. there is one in brooklyn and several others. >> i think what's interesting here is bitcoin is a currency or a store of value, so we're seeing some interest in that regard. >> explain what those two are. >> so a store of value is, do you want to hold your life savings or some portion of it in bitcoin as a means of keeping your money? the other is as a medium of exchange. so that's for like buying lunch and doing other things there.

i think what we really find special, though, is thinking about it as a network, as a way to transact and to send money point to point without involving a financial institution or an intermediary. because most things up until now have been set up as these hub and spoke networks, where there's somebody in the middle and all the transaction goss through that. but this new phenomenon is a way to transact that doesn't involve those intermediaries and doesn't involve any of the fees associated with it. so it's incredibly low cost. >> in other words, these are kind of two visions of the bitcoin future. one is that it's a real currency. everyone talks about how much they have and they use it to buy lunch. and the other people hold on to the bitcoin. the other is that it's a way to send money from one place to another in a cheaper way than the credit card system or the banking system, right? and you're saying the second one seems like more of a go than maybe the currency.

is that right? >> i don't know how to handicap these, but i would put more currency on the second one, which is the ability to have it as a low-cost exchange vehicle. and as a network. and, you know, it's interesting. i interviewed 20 years ago one of the founders of visa. this is when i got into the payments industry. and he said, look, the internet is going to revolutionize payments and we're going to be able to do point to point transactions. we're coming into that right now. >> one of the criticisms of bitcoin is that it's basically digital version of gold. and economists left, right and center will tell you that the gold center was a bad, stupid system to have, mainly because you can't adjust the amount of money. there's no central bank that can say we can extend the supply. there's no way for the cash in the system to increase with population. so you get what's called deflation, which means that every day that goes by, what you're holding is worth more. that may seem great but it's also a disincentive to spend. if you say, well, why buy the car today? it's going to be cheaper tomorrow or the next day. in fact, bitcoin has gone up in value. if you were stupid enough to buy

a pair of alpaca socks, which were some of the first things that were for sale, you basically spent millions of dollars for what's now a pair of socks. so why hold on to it? how big of a problem does that seem to you, that it's finite, it's sort of digital gold? >> look, i'm not an economist, but there's a couple of responses to that. one is that, i think i have the same general instinct that phil does, that a primary value of bitcoin is as a means of payment. so the criticism that you have is more focused on its value as a potential currency. the second is that i think we are so far away from the notion that bitcoin would actually be like a foundational currency for a country or a large percentage of people, that the deflationary aspect of it is not likely to be terribly relevant. it would have to be a high percentage of the economy before the deflationary aspect -- you would see negative effects. >> one is that you can't have a central bank for money supply and the second one is built-in deflation because you can't create more, right? that would still be a problem. you've seen the value of it shoot up just for different reasons, right? >> i would actually challenge this, because some of the research has been conducted on the block chain itself. so we can actually study transaction velocity in a way that's impossible --

>> a block chain is whenever you do a transaction, this is what records it. >> a professor at stanford has looked into this very carefully. interestingly, about 50 years of this kind of thought of deflationary currency would cause people not to spend it as quickly is possibly inaccurate in the context of digital currency. i believe that is from the reduction in friction and the payments themselves. what we've witnessed is that the transaction volume and the speed at which the money is moving in the bitcoin economy is at parity with the u.s. dollar. if this holds true, the research will most likely be incredibly informative as more currency innovation comes forward. >> you know, i think the other thing here is we need stability in the value. right now there's been some estimates that 80% of the transactions are actually more speculative in nature. and i think this has to get to a period where we don't have 10% swings in the value a day or even more over the period of a week, that people are going to trust it as a store of value. and to get from there to something that is less speculative and much more for

currency and commerce is going to be a messy process to get there. but that's the bet that you would make if we were to see it to be a store value in the future. >> bitcoin can be used as an investment or currency. what we're witnessing right now, if you believe that payment network is valuable because it allows you to transact anywhere in the world instantly basically for free, in order to ride those rails you have to have possession of the currency, the bit coins themselves. so you basically need to buy some of those credits in order to play in the game and it's a little bit like -- imagine if we were having this conversation in 1970 and a bunch of people were sitting around the room and saying, man, i have this idea. we're going to revolutionize the postal system. we're going to let people send messages to and from each other instantly for free. people said it's crazy, but we did it, and everybody uses email every day and they don't understand how it works under the covers. but it lets us correspond with our families and lets us send

messages for free. that's the concept of the bitcoin. imagine in 1970 if you had the opportunity to invest in the credit system that lets you use email every single day. that's kind of what's at take -- stake with bitcoin. that's why there's a lot of speculation in it right now. it's totally young experiment right now. i wouldn't advise anyone throw their life savings in it, but go study it. to be ignorant would be like putting your hand in the sands of the financial future. >> there are plenty of counterarguments that turned out to be stupid. but we'll move on. can i ask a question? it's hard to see with the lights. how many of you have actually used bitcoins to buy something? just raise a hand. >> for me, my credit card works really well. my credit card works fine.

i don't notice it as a consumer. what is going to push me to deal with the hassle of bitcoin? >> i think you're bringing up a great question. the target example, there's protections. no one lost any money. except for some of the financial institutions that issued it. so it's great. bitcoin is irrevocable, the money is gone. that's great for certain transactions. you know, what you look for is around use cases. why is it good for you? and personally, i used it when i needed to move money to rent -- to rent a vacation house and i needed to transfer the money to sterling, it's great because there's less friction and it's cheaper. >> tell me what you did again. >> just to rent a house. so renting a house, they needed the money. i moved it to the real estate agent who was in the u.k..

>> who accepted bitcoin? >> yeah. >> there's a phrase i like, which is the best time to plant a tree is 20 years ago and the second best time is today. i think you just need to recognize that there's a lot more at stake here than revolutionizing shopping in new york city. when you think about the 2.5 billion people on planet earth that don't have access to a financial system that's completely ignored them, then today there's an opportunity for them with, a smartphone, to put a bank in their pocket, a bank that lets them interface and interact with each other and around the world instantly for free, basically. that's a really powerful thing, if you think about it. let's put aside the shopping portion of this as well, because there's a lot more that we can revolutionize around the world with this type of technology. and people have been ignored in a lot of ways. so that's something else to consider.

>> so one of the concerns voiced early on was that most of the people wanted to be anonymous, because they thought they were doing something illegal. and in fact, they shut down silk road, a big online drug site. do we have any information about that, about what fraction was through silk road? it's hard to tell from the data who's buying what. we shut down one big company, but can we tell how many people were buying drugs from silk road? >> i actually don't know the percentage. but it was a very large amount of money. >> so silk road was in a marketplace where people could exchange and buy things from socks to narcotics. it was shut down by the u.s. government. but the interesting thing is that it was shut down by the u.s. government and immediately

afterwards everyone called for the demise of the bitcoin and journalists said it would never survive and it was only used for bad things. two weeks later it started its fastest run-up in value in its entire history. it's been called a bubble and it's been called dead before, and that's just, i think, the challenge that we all face in the industry is to continue to communicate the value that it serves and we're still here. we're building and innovating and there's more money moving into bitcoin-related projects. >> what can we tell about what people are using bitcoin for? you can see there are jumps in traffic, say in china, which you assume is people trying to get around currency controls. or they can change it for bitcoins and switch them out and put it into dollars. for those people, that's serving a real need. they're not using it to buy lunch, but it's serving some need. how much do we know about what people are using bitcoins for? >> i'll try and talk about it just a little bit. so people with tag addresses in the bitcoin network.

it's a way to verify that transactions are going where you'd like. if you're into doing donations for a charity, you can made immediate international transactions happen without having to take fees for a cause, for example. if you are doing payments for vacation homes and things like that, that's a huge case, gaming is a big one for sure. and i think remittances will be a big story later this year. more systems come online to replace the networks that are being run by companies like western union. >> i assume banks and regulators. i understand you can't name names, what is the feeling there? there is a great deal of

interest in this. i would say financial institutions are in the mode of just studying it right now. this is not just something in passing. they are very serious about it. i've talked to some regulators around the world and central banks that are really looking at this. there is looking less from a currency standpoint as from an innovation of how to pay. it is a little too early to go off and adopt this and design a payment system to run a nation on. >> it is not just a better way to send money from one bank to another, but a way for anybody to send money to anybody. >> they're looking for not just a way to design a payment system, but also how do they reach other areas, what is the social impact that you have from

getting into the banking system. how do you think about making that more advantageous? just as an example, when we see paper payment, cash and check, go electronic in the traditional sense, we have seen countries add to their the growth each year. there is impact we see there and can we make it even more efficient through something like this, and would there be even more impact on gdp growth globally. >> in terms of an everyday transaction, like if i were to do this instead of a credit card

fee, how much cheaper would this be? >> it depends on what the merchant fees are. right now they are quite high for except the record, but there are certain use cases. >> a typical credit card fee is between 1.5-2 percent for the physical world. the institution has to stand in and make the payment. >> if i buy a cup of coffee and it is two dollars, they pay for sense. how much cheaper would be with bitcoin? >> the fee is less than 1/10 of a penny. the payment was in silly to the merchant. instantly togh the merchant. they can spend that money right away if they choose to. ok cupid, overstock.com, that will be a story that continues all year long. you will see a lot more online

merchants accept bitcoin. they can do it without taking any of those fees. overstock.com has not had a single fraud case related to bitcoin. >> they probably spent years in rooms trying to figure out how to save a few percent. if they're going to hold on to bitcoin, the coin are very volatile in value, much more than the dollar. yes, the transaction costs are lower but they are taking on this other risk. >> that can convert the transaction or they can choose to keep it. what i've witnessed, is the store is different outside of the u.s. than it is internationally. i met a woman who is in shanghai who accepted bitcoins and does not accept credit cards because it is too slow.

there are lots of examples like this where they are keeping it. it is a different way and they believe in it. >> could the government still shut it down if it turns out that most of the traffic is not -- >> i don't think it would be possible for the u.s. government to shut down -- from a practical or legal perspective? >> i don't think they have the practical ability to do it. so much of it functions outside of the united states. they could criminalize use of it, but they could not stop the network due to its decentralized nature. >> by the way, if you are using bitcoins, here's how you should treat them when you file your taxes. you must to that now, right? >> they acknowledge that it exists. >> you are obviously responsible

for your taxes wherever you live. i pay my taxes. you have to do it based on property rights. every time i buy a copy -- a cup of coffee, i have to talk to take stock on my capital gains. bitcoin is tricky. sometimes it looks like a new digital commodity and sometimes it operates a lot like a digital currency. just like light it is sometimes a particle and sometimes a wave. but they are at knowledge and the working. i expect more thought as it goes

forward. >> we want to build a safe home for people to explore that. that is what we are looking for in the industry. >> there is a certain extent to which it is a vote of confidence, simply to issue regulation. they may be good and bad, but they decreased the risk for major financial players when they're thinking about moving in to the space. there is no regulation, they have no idea which way it will go. there's a certain value to that. one of the related developments we have seen over the last year is major financial players have started to move into this. they bring their background at knowledge of people from the banking industry who know about customer regulations and anti-money laundering regulation. they bring that knowledge to companies that have incredible coders that think creatively about compliance. if you bring these more sophisticated players in, you will see a lot of development

that will rapidly expand the industry. >> how would you feel if the system decided to offer bitcoin banking services? >> i would be thrilled. i think that would mean they have discovered a reason to be innovative again. i think the challenge is on everyone to build better systems. i hope they get involved, because they're been working in finance for 50 years and we don't know everything. >> do you see any interest in anyone doing that? >> no comment. they're all looking at this and trying to figure out what to do. it think there are any commitments at this point on

what to do with it. there is old technology in cards. that technology does nothing for an online transaction. this is also a solution for the online space. >> when i think about the disruptions over the last 10-15 years in technology and the digitization of things, we used to send mail and now we send e-mail. we are to buy records and now we download songs. to not expect the digitization of money would be a little naïve. >> some small part of the money exists in forms of paper and coins. >> i think one of those questions you asked earlier is that we get to watch this money supply grow constantly. sure, there's an argument that maybe that helps control the

deflationary cycle, but the money supply grows every single year and we get to spend less of that income. bitcoin can be spent different ways. i don't think that is a big problem. i think people have to vote with their confidence. >> recently, we moderated a bet between two people on bitcoin. one was a columnist for reuters who was betting that bitcoin was going to die and no one would remember it in five years and the other is a venture capitalist who is very bullish. they bet that in five years time, one in 10 people polled would say they bought something with bitcoin. i want to ask all of you which side of that that you would

take. do you think that five years from now if we did a poll of americans, one in 10 would've bought something knowingly with bitcoin. >> i think your caveat is important, because one in 10 will have spent some form of virtual currency. it might not be bitcoin. it might be bitcoin and they don't know it because they deal with an app with which they buy things online. i think speculating about whether they know how the guts of the transaction is going to work is hard. >> he meant literally like them thinking of it as a currency. >> i think it will. just because of how widely known bitcoin is now. >> yes, within the previous month. >> the other part of that, the common part is really important. paypal, which is come up in a serious way to transact, it has about 80 million accounts now in

the u.s. how many people really use it, it is really important and 15% plus of e-commerce transactions. that is only a small part of everyone's life. >> five years? would you take the bet? >> that is a little tight. >> if you look at the speed at which the growth is happening, it is absolutely hockey puck and it is growing faster. hockey stick, sorry. >> thank you very much, this has been fun. [applause] >> thank you, guys. i am holding on to my wallet. thank you for coming.

next up, we have the founder and ceo of kickstarter. i could make a lot of jokes about what we are going to kick start, but i think you have already heard all of them. he is going to be interviewed by andrew sorkin of the new york times. i will give this to him when he completes the interview. these are your cronuts. >> hi yancy, how are you? >> i will go quick because i have a lot of questions. i want to try to understand what this whole kickstarter thing is really all about. what was the inflection point?

what was the thought that got this to happen? what was the story behind kickstarter? >> kickstarter the website is five years old as of a week from yesterday, thank you. it was launched in april 2009. the original idea was eight years before that by my partner perry chen. he wanted to propose a concert to people. it was a way to test an idea publicly and allow things to only go forward if there were people who would support them. he had that concept and didn't know what to do with it. he was working as a recording engineer and a preschool teacher and a waiter. he moved back to new york in 2005.

i was a rock critic at the time and he was a waiter at a restaurant in brooklyn. we met there and became friends. he brought in a friend who is a designer and tried and failed to make this website for four years because we were a waiter and a rock critic any designer. [laughter] then we finally managed to get a group of technical people to work with us and then in 2009 the site was finally launched. it was a long journey and just a lot of guesses and mistakes, but somehow it managed to come out. >> who is it for, though? there are probably people who get e-mails from friends and others to try to get them to give them money. who is supposed to be using it on one side and what sort of base case is there for me to actually hand over the dough?