so so everyone says they're o.-g. . gangster but twenty ten for me is really when. begin the game theory has worked and people are entering users and speculators and market makers markets are entering it 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 appalled people and i call the big point derangement syndrome in 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 by five people in two thousand and nine i say the way he says they are in two thousand and nine they're either how funny is that so she or adam back and maybe peter todd was in here 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. i hear you are on the chopping it's like what were you thinking you kept you going back it was introduced as this. better kind of people thing that you could use these nerd money to. what was i thinking of the beginning was the nerd money at our show and that's literally and even at the beginning after a kind of got into a twenty twentieth's well i didn't even know if it was legal because the constitution states you can't make your own money so for a long time i didn't kill anybody. appears to me even though my wife is doing some

weird stuff with computers outside of the normal words though. so for a long time until the first supreme court hear you first time and only time i've ever watched you spin. 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 be queen is able to actually have users march seventeenth two thousand and ten the first bit coin exchange opens it's called big queen 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 points space and by being there in the big points base they could then adopt greater users and we see this pattern repeating over and over again anything that's ever been tried in economics 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 suppose 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 can you offers to pay ten thousand big points for a 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 news of them elegy from war you know this is the shot heard around the world now this is now big coin 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. it's 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 deeks 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 that's time when 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 of course already well into their freak them and get them were happy to get a sale 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 it and 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't remember who made it but we used the i or c. channel four nodes to find themselves there was no there wasn't enough nodes in a network in zero four my. any on their laptops and then people in my new video

cards i remember this. 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 initial god i even 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 victorians 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 and four were making an iteration to be more secure so from a security perspective i'm ok with more iterations 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 for a messy. but. by was functioning and he made some good decisions about how it works but then some of the things were is a bit is very strange and the kind of life things we have to live with inside of bitcoin right it's a misnomer to think that because most 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 does require constant development and feed in care of the protocol there were mistakes at least in the code and some of the show design the thing that i suppose she got 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 suppose 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 bitcoin 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 too. 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 that 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 keep. market makers and financier is will always welcome any opportunity to engage in a market on both the long side and the short side so when you start posting prices of something a commodity in this case a digital commodity 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 a. tracting the financier class on top of the technology class on top of the monetary theory class all these people exist together in this protocol. american all of it's own. and the notion that somebody playing games at the mall or. even influence. is frankly. russia was the stage to notice stage has been. in influencing the domestic politics of other

countries. than russia. even. as i live the good feel confident. we need to. be young. and we have many things and. this is you know. why some peoples also take our things all the power just for damn self.

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 at twenty three cents them 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's 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 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 in to 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 the stacy first learned 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 that point yeah i love this episode it really see us in

a raw beginnings of the show and the story of bitcoin and john the tonus i thought was brilliant and explain to us what it was all about. welcome back to the 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 counterpart to trade like with pay pal it's a digital bearer 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 clearly this is a challenge to the status quo so what 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 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 to 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 than destroying

your own individual economic sovereignty because they themselves are the divine right of makers who is becoming is all about 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 can all perhaps see it every day but has it only way to pork 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 in the morning right thing and we see it 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 and nature has it all been 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 the 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. serenity and. those of the emotional and philosophical things that got us into becoming the goddess to dedicate day in day out to be coined 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 big coin then part of the beauty of the coin protocol is the standard shippers assistant aspect to it and as journalists at the time we were drawn to it not only because we were covering gold at the 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 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 improvement. postal 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 a big question 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 mikes and i must say that your show is one the first to start reporting on coins and you should get in very very informative coverage of it compared to the later sensationalist news off to walk us through it what is bitcoin why does it

ignite such passion they claim actually is the first decentralized currency online that is. the thing is because nobody owns a network there is no concept of control nobody can tell people how big is used because if you think about it is actually you are a willing participant in this network the current financial system is i don't want to use the monks or i don't want to use my money into field money i have no choice 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 to trust exactly and he personifies but going is the spirit of it going 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 the playing field 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 big queen 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 now it's ordinary people whether they're builders. or dentists or doctors or lawyers or housewives there is 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. join me every thursday on the alex salmond and i'll be speaking to guest of the world of politics sports business i'm showbusiness. 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 based on what they think you should be see 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 are all. the people that are now doing those manufacturing jobs also start the end of it because that's where the innovation happens on the factory floor so the fact that

floors been moved to china point out. that we've moved all our jobs manufacturing over china now all the innovations in china so. it's not it's not created in california built in china is going to be created in china built in china. when lawmakers manufacture them sentenced to the public will. when the ruling class isn't protect themselves. with the crime and merry go round to listen to the one percent so. we can all middle of the room see. the real news room.

in the stories that shape the week the first of a summit between vladimir putin and north korea's kim jong un boost bilateral relations with focus also on breaking the nuclear on the korean peninsula. russian national nooria is jailed in the u.s. for failing to register as a foreign agent but on the way in says she's a victim of washington's current political climate it's. not over. his 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 groups for a mass execution.