Banking on Bitcoin Page #2

was digicash from David chaum.

Privacy of payments

is actually essential

for democracy.

The reason is not

because you need to be able

to make private payments

in order to express yourself,

but rather that in order

to inform yourself,

you may need

to purchase information

and that's the thing that allows you

to have opinions worth expressing.

Although I wouldn't say

David chaum was a cypherpunk,

he definitely inspired

the cypherpunk movement.

It's as if the cypherpunks

kind of came upon

David chaum's tools,

like the technology

of some alien species,

and they only took the weapons.

They were most interested

in the ones that could be used

to disempower the government

and empower individuals.

The break between him

and the cypherpunks came

when he realized he would need

existing institutions

to help him with it,

so he started

talking to governments,

he started talking to banks.

He was very close to having

this thing happen

in the late '90s,

and nobody was really

prepared for this

outside of

the cypherpunk movement.

People it seemed like

had almost sort of

given up on the project.

Other than a few

experiments here and there,

by hal Finney, Nick szabo,

the conversation around this

really died down.

And then all of a sudden

it came back to life

after the financial crisis,

and you had people going back to

those experiments in the 1990s

and looking at new ways of

putting those ideas together.

Nick szabo, in 2006,

had just finished up

a mid-life stint

at law school,

and if you look Nick's writing

around the financial crisis

that is really revived

his interest

in these ideas that, you know,

he had been working on

in the 1990s

with privacy and contracts

and the problems

of governments and other

trusted third parties.

And he brought bit gold

back into the conversation.

So hal Finney

came up with his own system.

Adam back has hashcash,

wei dai has b money,

szabo has bit gold.

So what satoshi did in 2008,

was satoshi took a lot of these

ideas and made them work.

He created an

encryption-based protocol...

It's not really

a currency...

Utilizing a ledger

called the blockchain,

allowing for many kinds

of transactions to occur.

Contracts, all kinds of things

can be built

into the blockchain.

And it does this through a

system of consensus building

where multiple computers

all participate

in the management

of the blockchain ledger,

a kind of digital document,

if you will,

that keeps track

of all the payments.

I understand it's something that

is instantaneous online

and it can go from one

country to the other

and you know,

they can have their money.

Well, I never heard of it

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