so so everyone says they're o.-g. . gangster but twenty ten for me is really when years begin the game theory has worked and people are entering users and speculators and market makers markets are entering quaint space and this is exactly what the protocol was designed to do was pull these people in is an interesting phenomenon because the technology is very attractive but there's something else a cult people and i call the big. and that there is for the first time this mechanism that guarantees freedom and for the human soul it resonates and it draws you in and a lot of those folks in that period you could tell just by looking at them their eyes are like pinwheels and they embraced this what's happening and they were

transformed individually before we saw the transformation roll out more on a society wide level. only about five people in two thousand and nine i say anyway he says they were in two thousand and nine they're either how funny is that so she or adam back maybe peter todd wasn't he like some free fourteen year olds yeah. what was two thousand and ten like what were you people thinking right because it wasn't when lamb it wasn't when tropical here you are in a tropical like what where you think you kept you going back it was introduced as this. better kind of people thing that you could use the nerd money talking to. what was i thinking of the beginning was the nerd money. and that's literally and even at the beginning after a kind of got into a twenty twentieth's well i don't even know if you. legal because the constitution

states you can't make your own money so for a long time i didn't tell anybody my parents didn't even know my wife was doing some weird stuff with computers outside of the normal words. so for a long time until the first supreme court hearing the first time and only time i've ever watch c.-span. it was super low key i don't know what we're doing this isn't drugs but it also might not be so two thousand and ten is the year that because one is able to actually have users march seventeenth two thousand and ten the first big coin exchange opens it's called big clean market dot com oh yeah well this is now all the machinations of markets and finance creeping into the bitcoin space markets have been around for a while now we had a big coin market so people are familiar with the attributes of markets and economy and they just brought them into the big point space and by being there in the big

points space they could then adopt greater users and we see this pattern repeating over and over again anything that's ever been tried in economic and finance would be brought into the big going to space remember we discussed in two thousand and ten was the first big queen transaction between soto she nakamoto and how thingy that happened on january twelfth two thousand and nine may twenty second two thousand and ten ten thousand b t c spent on pizza the first real world transaction using big points takes place when a jacksonville florida programmer laszlo. offers to pay ten thousand big points for pizza on the bitcoin forum at the time the exchange rate put the purchase price for the pizza at around twenty five dollars right well again to use an analogy from war you know this is the shot heard around the world now this is now bitcoin answering into commerce it's now at the cash register it's now people buying stuff it's now got a real word application july eleventh two thousand and ten slash dot. wrote about

the upgrade to version three of the bitcoin client this was one of the early internet outlets for the sort of hacker community beyond four chan four chan is more the troll hacker side of the internet slashdot is the code writers the programmers the tech nerds the geeks that went there to find information so here is slashdot focuses on the upgrade to the client version three of the bitcoin protocol all these hackers all these coders all these programmers all these geek see it and say what is big quine go over to bitcoin and the price just by them looking at it it goes up nine hundred percent from eight tenths of a penny to eight cents at that time and bitcoins history it was still considered a novelty and people looked suspiciously at it and they were afraid to use it because they didn't want the label of being a freak and a geek slashed out of course already well into their freak to engage them were happy to give it a seal of approval and cover it and this was the beginning kind of internet phase

whatever number you want to put on it but another kind of explosion technology driven that was giving birth thanks to the hackers and cypherpunks and quasi alchemy that had done so much so far to change the world as we know it a friend sent the article on slashdot in twenty ten for me to read i read called you know this is because no way this thing's ever going to work and then you went to look at the cold be that you just knew there is no way you took me at least a year to sort of go back and forth and appreciate and see that actually worked i mean you know the news reader with bugs like anything that's new software was right it's a very hard problem it was so hard to deport a nation problem there was a very clever little trick i can remember who made it but we use the i or c. channel four nodes to find. selves there was no there wasn't enough nodes in

a network no people were mining on their laptops and then people were my new video cards i remember this. guy who you know almost burned his house down because his laptop was running overnight and it was it was different i mean. i think we were a lot more focus on. trying to really understand what a big question was because he made no sense you know honestly i mean i'm not a friend in show god i know. i couldn't really grosse what was happening there until you know for me clicked you know where you know this is a new asset class this is a whole complete new fing that's based in nothing else is not a derivative of anything else. i don't think we're tempted anything like this before it's it was a fascinating experiment so more users are being drawn into bitcoin but was

perfect was the code perfect now there were many many flaws in the code of bitcoin august fifteenth two thousand and ten exploit generates one hundred eighty four billion bitcoins so this is known as the value overflow incident that was block number seven four six three eight and it came contained a transaction that created one hundred eighty four billion vic lines a new version of the client was published within five hours of this is that contained a soft forking changing to the consensus rules that rejected output value overflow transactions greater than twenty one million. three inch four were making an iteration to be more secure so from a security perspective i'm ok with more interation is being made we're going to continue to find more bugs i think the guy was obviously very intelligent very

small but he wasn't. skilled programmer so the the code the hero was for a kludge was very messy but. by was functioning and he made some good decisions about high works but then some of the things were is a bit. the strange and next one of late things we have to live with inside of coin right it's a misnomer to think that because it was birthed perfect in a perfect state of being it's being actively developed from day one as we see right here in this active development of this particular exploit and this has been going on sence day one the fundamental foundation of it the balancing of incentives and the architecture has maintained all assaults on it and it is a foundation upon which you can build on top of it but it does require constant development and feed in care of the protocol there were mistakes at least in the

code and some of the will design the thing that's the toshiba right was the monetary policy because it is fixed and it is permanent and it is not going to be changed anytime soon without the consent of everyone on the network so that's the thing she got right september twenty ninth two thousand and ten another exploit discovered so it genuinely appears that suppose she was not perfect that his creation was not divine and immaculate there were many flaws in it the community of code writers the community of bitcoin core contributors fixed it in this case it was discovered by a guy going by the name of kermit and it resulted in a new version of the big queen client which then fix this micro transaction problem right so at this time because it is still very much software experiment and the price is immaterial it's a novelty the idea of it price going as we know into the tens of thousands of

dollars was not in anyone's thought process at the time and they still you know wanted to fix the architecture in a way that would be sustainable you know during the renaissance in europe you know the idea of. the. self-sustaining dome that we saw built in that period was an architectural triumph and after many failed attempts there was finally the ability to do so and that then became the standard by which modern architecture referenced so here you have this ability again scarce digital value to double spend problem solved and so we knew they knew that it was possible and now it's just a matter of starting to make it more reliable so the reliability factor had to be addressed so it was may twenty second two thousand and ten that you were able to trade ten thousand bitcoin for

a pizza that in the game theory attracted the attention of people who trade o.t.c. who do short sales who create futures contracts market participants they then had an exchange value they could start thinking about derivatives about short sales about all sorts of market concepts and of course by october twenty eighth two thousand and ten just a few short months after ten thousand bitcoin was tradable against one pizza the first ever short sale facilitated by. o.t.c. and i.r.c. channels the first recorded short sale of big queens is initiated in the form of one hundred big queen loan from nanotube to kiba. well market makers and finance areas will always welcome any opportunity to engage in a market on both the long side am a short side so when you start posting prices of something a commodity in this case a digital commodity

a rare scarce digital commodity infinite really scalable but finite in derivation they're going to try to make a short sale and see where that goes so this is attracting the financier class on top of the technology class on top of the monetary theory class all these people exist together in this protocol. facebook and google started with a great idea and great ideals unfortunately it was also a very dark so. they are constructing a profile of you and that profile is real it's detailed and it never goes away turns out that google is manipulating your opinions from the very first character that you type into the search bar it will always be one dog food over another one

comparative shopping service over another and one candidate over another they can suppress certain types of results deiced on what they think you should be seen if they have this kind of power then democracy is an illusion the free and fair election doesn't exist the more we give them the sooner we all. put themselves on the line they did accept the reject. so when you want to be president. actually going to be first which is what before three in the morning can't be good. i'm interested in the waters in the house. this should.

be neat politically falls needs to come. from. but ideally. into pos the house. giving political guidance to the process so basically what i'm waiting for he's an author politically impulse ideally stemming from the moment he feels. so so we're talking about the oh gee years and two thousand and ten not only did we have the first short sell but we also had big queen's very first obituary fifteenth of december twenty ten y. because one can't be a currency the underground economist wrote and it was that twenty three cents then

sure every every major piece of technology that comes around the changes everything is this there to be unworkable and go to die soon i mean we've seen this time and time again it's not surprising that the press would look at it and say this can't possibly work and this is to be expected and they of course were wrong it becomes anti-fragile how do we all agree on one specific version of this history of transactions and also how do we all agree on a certain style of rules about how we're going to govern our money and it's difficult to get people to agree on that because everybody wants a screech other over right nobody is honest we always have to assume that every participant is going to find a way to attack us or to get some advantage over us and normally to solve this problem what we did is we build governments and we build centralized authorities to solve this coronation problem so the game theory is kind of like the rule sets and

just the incentive structure that gets everybody to agree because if someone tries to cheat the system he will be penalized in a way so. it's kind of like the driving force that keeps the everybody in check and we arrive at an equilibrium where everybody is kind of happy with the rules of everybody's happy that that transaction history set is this and it can be modified and that happens organically spontaneously and it doesn't come from anybody it's not a top down. and game theory is kind of like the natural selection you know next or selection is is a phenomenon which brings to an equilibrium and the game theory of decline is what kind of keeps us all in check and get this consensus rolling so let's look at the environment in which big queen is evolving just a few weeks after ending q e one just six hundred billion dollars printed for them

the world economic forum davus happens in january two thousand and eleven and here is the headline max world needs one hundred trillion dollars more credit says world economic forum on kaiser report we covered that on kaiser report we were also contacted that same month by john meton us who was a very early adopter of bitcoin and he said to me stacy i would like to come on in europe and i would like to come into your studio in paris and discuss this thing called big coin. course this is paris max and it is here where our personal big queen journey began that's right a little bit of big oil history max to stacy first learn about bitcoin right behind this store on the sixth floor well max you can't really go to the moon without lift off and lift off for us happened right here in this studio where you interviewed

for the may thirty first two thousand and eleven episode number one five one there who like to see you know state you interviewed john meton s. about bitcoin yeah i love this episode it really see us in a raw beginnings of the show and the story of bitcoin and john were telling us i thought it was brilliant and explain to us what it was all about. welcome back to that kaiser report time now to turn to economist john mcdonogh so what is bitcoin the very basic level big coin is a peer. peer distributed electronic currency when you lose bitcoins they're destroyed you can't get them back and just like when you burn a dollar bill that hundred dollar bill is gone from the system so that's what makes these so unique and different is that it's not just a counterparty trade like with pay pal it's a digital better token that you can actually send to someone over the internet and we haven't had that before on the internet which is a lot of what a lot of people miss them this again a clearly this is

a challenge to the status quo so but you're taking on the establishment in this way so clearly they're going to feel threatened at some point or do they feel threatened or is there going to be a confrontation of some sort or a how do you approach that i don't think that bitcoin is large enough right now to be on the radar of many governments the entire economy is approximately fifty million dollars if you take the total number of bitcoins outstanding multiplied by the exchange rate it's fifty million dollars and it used to just be five million small time ago i can see it growing exponentially and it definitely challenges the status quo. this is just after hearing this super elite only invited people who go down. all the central bankers treasury secretaries c.e.o. is the largest banks in the world who had destroyed the global economy and the global financial system meet up and down an order to conspire together as

a group that we will issue one hundred trillion dollars more credit the last destroying your own individual economic sovereignty because they themselves are the divine right of makers who is becoming it's all about us because it's all about you that's who to stay used to stick in honesty and because it's all about us because because it's governed by the nature of the thoughts and if you look around nature how the nature to work even though it's in business. all and we cannot perhaps see it every day but has it always a poor of twenty four seventh's. seventy four hours seven days a week in never stops to work and then they choose it all a pick up all to everyone on this planet no one is able to go about the law of gravity for instance and nobody can ever have heard this nature as it oh they try but they will never be able to make it possible for santa never writes in the

morning we see examine in the morning right thing and then we see sunset in determining and because it's basically the embodiment of this nature is that all for the first time in human history we now have this nature nature is that all being manifested in the world that actually get on peace our leave at the end of the awful lot of people and that is a prequel to everyone who choose to use it i'm a big believer in free market capitalism i'm a big believer in adam smith's theory of the ability for a person to pursue his or her happiness and individual passions and i think bitcoin at its core. was the first time that i read that technological ability for us to mass spread the philosophy that i want worldwide that each individual should be able to pursue his or her freedoms to the fullest and the biggest freedom. that big brings to light that we need to have more of is

economic and economics of energy and to be our own banks being your own bank is much more of a powerful phrase when you don't have a back pocket with a wallet with four credit cards and three debit cards and you're an american citizen it's a lot different if you're in the sub continent of africa or south america or most of asia where a lot of people don't have a bank account and they don't have economic freedom they don't. of serenity and. those of the emotional and philosophical things that got us into becoming the goddess to dedicate day in day out to declining to try to bring community together just having more i look at it more attention given to bitcoin is like feeding it nourishing it watering at it's starting to flourish every single time it was

slashed in two thousand and ten that looked upon bitcoin and their audience therefore did and it blossomed nine hundred percent in one day here we had the same thing four hundred percent increase when we looked at it then it went up to seventeen dollars and then it crashed so another bit coin obituary to more sell and forbes says so that's the end of bitcoin then part of the d.n.a. of the coin protocol is the standard chip resistant aspect to it and as journalists at that time as a way to restore sovereignty individual sovereignty to individuals by being hard money on your on your own account but that you could have that while simultaneously having a store of value that was on confiscated ball and that is becoming increasingly more important as the story goes forward so all that was kind of baked into the cake at the time the power of big queen was demonstrated in the comments on the you tube upload of our first episode talking about bitcoin people were so against it

like so aggressively against it it really drew my attention more to researching between to find out what this was and one of the other. of bitcoin is a meritocracy who then we interviewed next about bitcoin and that was in july of two thousand and eleven and here was a guy who wasn't very very early code contributor to bitcoin he was also the inventor of the first big queen improvement. postal bit one so here is a guy who was the go to he was also the only go to person for a b.b.c. or any news organization that did cover because at that time basically you had to talk to a mirror talking. here welcome to the kaiser report very good to be on the show mike's and i must say that you'll show it was when the fuss to start reporting on. you know she had

a very very informative coverage of events in the sensationalist news off to walk us through it what is bitcoin why does it ignite such passion they should the is the first decentralized currency online that is. the thing is because nobody owns the network there is no concept of control nobody can tell people how big is used big coin if you think about it is actually you are a willing participant in this network with the current financial system if i don't want to use the monks or i don't want to use my money in to feel money i have no choice if if i want to do business in the world something like big coin the whole concept is and now i have my money on my computer and i can choose who i want to trust exactly and he personifies because he's a spare typically and he also i think is someone who were part of that early

generation who have what i call the pinwheels in the eyes where they're so blown away by what this technology can offer humans and the experience of being human that it is like it goes back to permeate the s. and the passing of fire you know it's just totally changes the relationship between power and those who have to deal with power and are the beneficiaries or the. organizing subjects' of power so it changes. playing feel completely you know it's like walking into a billiard parlor and just it's getting on to the table and all the balls are now flowing in your direction and the other side can't do anything about it so this is the end of episode two because we are now entering the next phase of quantitative easing we're already seeing the banks wanting a hundred trillion dollars more in credit we see the global financial situation and which bitcoin is emerging we have those. and then from august of two thousand and

eleven begins the conferences more and more people ordinary people not just the hackers not just the geeks not just the code writers not just the programmers not just those people are involved in big going now as ordinary people whether they're builders or dentists or doctors or lawyers or housewives there's a conference to go to to attend to hear speakers to listen to what bitcoin is about and this is where we turn to in the next episode. we get on if you don't want the rule book. to sit for the fall to do. so because you didn't. have to queue to fold falls. or

you measure your purpose in life of playing if they don't thrill. the among the group was. to build them over to you before you exit your then so who calls herself like me in the course of the security just hold it where you will pick up. the. well. crucial we're going to produce. this.

now doing those manufacturing jobs in a bit because that's where the innovation happens on the factory floor. been moved to china as you point out china and we moved all our jobs manufacturing over china . and china so we don't it's not it's not created in california built in china is going to be created in china built in china. by the way over.

in the stories that showed that we've just gone the first of a summit between putin and north korea's kim jong boosted by relations and look to remove nuclear capabilities from the korean peninsula. russian national grid jailed in the u.s. the failing to register as a foreign agent but a lawyer says he's a victim of the current political climate in motion. none of maria maria's activities in the us were illegal. in and of themselves but she got caught up in this and she rushes hysteria and saudi arabia comes under fire from the un and human rights organizations for a mass execution with concerns that the child.