Bloomberg anchor displays bitcoin on TV, immediately gets robbed by viewer
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You sent us emails — many, many emails — over the last several months, maybe over the last couple years, with questions like these:. All right, so what is Bitcoin? It strikes me that the world is currently divided into two groups of people: Now, the second group is large — but the first group is noisy. I have nothing to do with Bitcoin…Umm, I was just an engineer doing something else. A Chinese government crackdown on domestic trading of the virtual currency Bitcoin is starting to have an effect.
The prosecution claims Charlie Shrem was involved in a drug money laundering scheme via the Silk Road website. It was only virtual money, but it is gone… The largest Bitcoin exchange declared bankruptcy in Japan today. Gox online exchange, based in Japan, was hacked out ofcoins of the virtual currency earlier this week, valued at near half a billion dollars. This incident produced headlines declaring that the Bitcoin revolution is over.
One way to look at it is basically Mt. Gox bloomberg anchor bitcoin robbery gone to fail for Bitcoin to be able to go mainstream, because Mt. Gox was never set up to be able to take Bitcoin mainstream, which is basically happening now. So is Bitcoin headed for the mainstream, or oblivion? What problem does it solve — or is it a solution in search of a problem? And, perhaps most important, should you care?
Twitter, Pinterest, you know, a very large number of the mobile apps people use all the time. E-commerce we do a lot, and lots of other categories of technology. Okay, and before that, and before that, and before that, you were doing things like helping build the first browser that a lot of us who got on the Internet when bloomberg anchor bitcoin robbery gone was new started to use, Netscape Navigator.
Before that Mosaic, yes? So Marc Andreessen has, quite literally, a vested interest in Bitcoin. And there bloomberg anchor bitcoin robbery gone these encampments that these generals have all around the city. But they have a coordination problem, which is they have to be able to communicate with each other to develop the battle plan and to decide when to launch the attack. The twist to it is some of the generals are traitors.
But none of the other generals know which ones are traitors. You know, one of the huge problems of the Internet over 20 years is who do you trust, which websites do you trust, which people do bloomberg anchor bitcoin robbery gone trust when you do a transaction, who do you trust? And so this idea of the Byzantine Generals Problem turns bloomberg anchor bitcoin robbery gone to apply directly to the Internet as a whole.
And so, the ability to very easily pay somebody online, the ability to very easily charge for a piece of content, the ability to very easily exchange a digital title, or a digital key, or a digital contract has just been missing because you have no mechanism for establishing trust. And so Bitcoin basically bloomberg anchor bitcoin robbery gone out the promise of being the first solution to establishing trust over an untrusted network.
Now, you may be thinking, wait a minute! I think of Bitcoin as really a revolutionary new technology that is in some ways way past due. Now you each have a digital copy. You are not supposed to be able to spend your money and keep it too. What they do is essentially transfer IOUs back and forth to make sure that digital money is not spent twice. And that public bloomberg anchor bitcoin robbery gone is maintained by a set of computers all talking to each other using a protocol.
Without us knowing each other ahead of time, I can send you a unique piece of digital property that bloomberg anchor bitcoin robbery gone be digital cash, or a digital key, or a digital contract. And basically everyone can inspect this blockchain any time they want, and they can basically prove through the math of Bitcoin that that transaction actually took place. The blockchain that Andreessen just mentioned is what Susan Athey was describing earlier as a public ledger.
It is a log of all transactions in bloomberg anchor bitcoin robbery gone Bitcoin ecosystem. Now, banks and other financial institutions already have ledgers of their own, which let them transfer funds internally or with other trusted parties.
Okay, what sort bloomberg anchor bitcoin robbery gone economic bloomberg anchor bitcoin robbery gone does that open up? Those industries have made fortunes by taking a cut of every transaction, which a virtual, and virtually frictionless currency like Bitcoin, could perform for much, much less. What kind of markets might benefit?
One is the remittance market. So you know, we have poor people from developing bloomberg anchor bitcoin robbery gone go abroad…and then they remit their money back home to their home country to feed their children or their parents and their families…And the fees can be around 10 percent. Some of that business will be transactions, some of that business will be digital contracts, some of that business will be digital keys, digital signatures, and then the system will start to work itself into…things like antifraud, or things like public payments, or things like micropayments.
Wait a minute, anti-fraud? Well credit card fraud, we actually know basically what credit card fraud costs the economy which is basically most of the credit card fees. And so economy wide across all credit card transactions, credit card fees range basically between two and three percent.
The majority of that is paying for fraud. And so one way to think about credit card fraud, is credit card fraud is a two-to-three percent drag on the entire economy. Credit cards never anticipated online transactions. Credit cards, by the way, the credit card system, never anticipated malware running inside a cash register at Target.
In the s that was an inconceivable idea, which is when credit cards were dreamed up. That said, the volatility of the currency scares people, and including scaring off some of the people that Bitcoin supporters like yourself would probably like to not be so scared off. Or is that not the way this problem could have been solved?
First of all, Bitcoin can be used as a transaction system without being used as a currency. It can be used that way. And so literally the way that could happen is when you go to buy something on the Internet you basically do a conversion of dollars to Bitcoin, send the money across the wire, and then the merchant on the other end immediately converts Bitcoin right back to dollars….
The main fee that you would pay for the transaction use case today is the fee to exchange Bitcoin and dollars back and forth. And you might spend the Bitcoin by buying something from one of your suppliers, or you might spend the Bitcoin by you know, having a refund program, a rebate program, a loyalty program back to your customers or whatever it is.
And so that will be part of the kind of economics that will determine, you know, who chooses to hold Bitcoin versus who chooses to convert it back to regular currency. Similarly, very shortly there will be derivatives, there will be Bitcoin derivatives, and there will be Bitcoin insurance.
So what are the advantages of a currency and or transaction platform that is not affiliated in any way with a government? You know bloomberg anchor bitcoin robbery gone complain about our government all the time, but like it works pretty well… I think the benefit bloomberg anchor bitcoin robbery gone Bitcoin not being connected to a government is much greater in poorly run countries.
And, you know, you go all over the planet once you get outside of the U. And so typically they have corrupt governments… And then you also have a lot of countries that have very badly run banking systems and very badly run central banks…And so I think in a lot of the rest bloomberg anchor bitcoin robbery gone the world, outside the U. So you bloomberg anchor bitcoin robbery gone see why Marc Andreessen is such an evangelist for Bitcoin — aside from the fact that his firm has Bitcoin investments.
But what about the Mt. Gox exchange getting hacked to death to the tune of several hundred million dollars? What about the potential criminal uses of a virtual currency? But it bloomberg anchor bitcoin robbery gone very easy to do that now digitally using Bitcoin. Now, you also asked about Bitcoin when we were running our public-radio pledge drive, asking you go to Freakonomics.
A comic-book bloomberg anchor bitcoin robbery gone in Bozeman, Montana is doing it. I think it would take a turnkey provider that we could go to that would essentially say yes you can just bloomberg anchor bitcoin robbery gone this little widget on your site, you can set your prices in dollars, we will do all the translation on the backend, we will take all of that headache off of your shoulders.
So they would handle all of that and just say we will make it so you can do this and overall the net transaction fee is still going to be lower than every other credit card processor. I know of a few startups that are exploring this, again serving that kind of middleman, risk mitigation function.
So we will guarantee you a rate for the next 24 hours. And we will handle all the processing. I have no idea what the capitalization is of any of those firms. In the early days of the Internet, almost all the big telecom CEOs said this thing will never work, almost all, by the way, the big technology CEOs said this thing will never work, the media CEOs all said this will… Let me tell you a quick story: Like, and advertisers are never going to advertise on this thing.
And like consumers are never going to use this… The early days of the web were not primarily people talking about how great it was going to be, the early days of the web were primarily people talking about all the bad uses. Although I will tell you this: It was Milton Friedman — also a Nobel laureate — injust a year after Paul Krugman told us the Internet was only a fad:.
I think that the Internet is going to be one of the major forces for reducing the role of government. And you may get that without knowing who I am. That kind of thing will develop on the Internet and bloomberg anchor bitcoin robbery gone will make it bloomberg anchor bitcoin robbery gone easier for people to use the Internet.
Of course, it has its bloomberg anchor bitcoin robbery gone side. It means that the gangsters, the people who are engaged in illegal transactions, will also have an easier way to carry on their business. It always comes back to the gangsters — even though gangsters have always done pretty well with cash, as have tax evaders.
And in that role, I run the Department of Financial Services, which oversees all banks, insurance companies, and everything in between in the state of New York…. First of all, is the number right, 6. Not that I expect you to have the… okay…. Bitcoin therefore, as of today at least, would represent a tiny, tiny, tiny drop in the biggest, biggest, biggest bucket.
Why are you worried about Bitcoin? Or why are you concerned enough to think you might should be worried? Bloomberg anchor bitcoin robbery gone think it has potentially a bright future to it, and it could really, potentially, at least the technology could, revolutionize, or at least improve upon our existing payment systems. Lawsky recently organized a two-day fact-finding mission to help his office write some of the first Bitcoin regulation in the United States.
