While in San Francisco last week, Glenn met with Naval Ravikant, co-founder AngelList, a platform for start-ups to connect with potential investors and recruit talent. Naval's at the heart of Silicon Valley, and has invested in Uber, Twitter, Postmates, and more. Glenn wants to bring the stories of future technology being developed in Silicon Valley to people all over the country, so he made sure to talk to Naval about one of the biggest tech inventions people need to know: Bitcoin and Blockchain.
Glenn: Talk to me a little bit about Blockchain. We’ve had a conversation in the past about how right now if you go across the border, are you carrying $10,000 in cash?
Naval: You can carry it in your head. So, what Bitcoin does is Bitcoin essentially says that money and speech are the same thing. Let me give you an example. A Swiss bank account, if I know the number and I know the password to that, that is money. That is as good as money, and I can cross borders with it. So, they obviously can’t stop you from crossing the border with money if you have a bank account somewhere remotely.
Think of Bitcoin as a bank account in the cloud, and it’s completely decentralized, not the Swiss government, not the American government. It’s all the participants in the network enforcing. So, the ledger, the distributed database, it’s called a Blockchain, is held in the cloud by all the parties involved. It can be broken by any of them. It’s cryptographically too strong. You would have to compromise the entire network to take over Bitcoin. Not even the NSA can do it, and the value of the Bitcoin is a bounty on the Bitcoin.
So, if the value of all the Bitcoin in the world today is $5 billion, that’s a $5 billion bounty. Any hacker who can go break that, can collect a lot of that money, but they can’t, so it shows you how strong it is. Even the NSA couldn’t break the Blockchain today…I don’t think so. But because of that, that means that Bitcoin is protected. The value is protected. The money is protected. But notice what I said at the beginning, money is speech. That means that speech is protected. That means I can publish things into Bitcoin that no one can take away. I can publish WikiLeaks, for example, tracks of information into there that are irrevocable.
Explain that. Slow down. Explain that.
Blockchain is a giant database. That database has a $5 billion bounty on it which is the value of all the Bitcoin.
So, that’s basically a $5 billion reward. Hack me, and you’ve got $5 billion.
Correct, or something close to it. You may not get it all out, but an approximation, that’s a reasonable assumption.
I’ll take half a billion.
Sure. So, that’s the bounty that protects the Blockchain, and the Blockchain is a distributed database and with an infinitesimal amount of Bitcoin, I can write anything into that database. I think long-term, Bitcoin is a currency of the Internet. So, even if humans don’t use it, routers will use it. Web browsers will use it. Web servers will use it.
So, let me bring this to the real world.
Machines will use it.
Sony would use this for all of the contracts to be able to stop what happened to them.
Sony would use Bitcoin grade encryption, so Bitcoin advances encryption. You and I may use Bitcoin for a transaction to lock our contract or our money into the cloud. Someone in China may use it for speech. They might use it to get a message out to the rest of the world anonymously in a way that it cannot be pulled back. So, China may censor YouTube. China may censor Twitter. They won’t be able to censor Bitcoin. There’s no central authority. There’s no one you can go to and say we’re going to turn Bitcoin off. Turning Bitcoin off is the same as turning the Internet off, so the moment the Internet became truly pervasive, it was inevitable that speech would become pervasive.
Why are there such, I mean, other than the obvious—
The great firewall of China will fall.
In our lifetimes.
Why is there such pushback on Bitcoin, other than it disrupts everything?
It disrupts everything. If it works, it will be the greatest transfer of wealth in human history. Even if it doesn’t work as advertised, it may still enable free speech and anonymous speech to a level that large states, totalitarian states, would be uncomfortable with.
So, in other words, with the Blockchain, somebody in North Korea can tell us what’s happening in the prison camps, and they can show us the videos and the pictures, and it can’t be traced back.
Well, they’d have to be careful about it, but if they’re careful about it, it can’t be traced. It can’t be pulled back. It can’t be stopped. You can’t turn off Bitcoin without turning off the Internet. That’s how it’s designed. People forget what the Internet did was it connected every human to every human, and so because of that, it reduced the power of the elites. It reduced the power of mass media. It reduced the power of controlled media. No one can control the message anymore.