Bitcoin Big Bang - The Unbelievable Story of Mark Karpeles

Police in Japan have arrested Mark Karpeles,

the CEO of a failed bitcoin company.

Mt. Gox was one of the world's largest

bitcoin exchanges until last year.

It lost millions worth of bitcoins,

leaving angry investors without their money.

I had no idea who he was, Mark Karpeles,

some guy who has the first bitcoin exchange

and he's sitting on top of, you know,

almost a billion dollars worth of money.

And where did it go?

This whole burgeoning ecosystem and technology

was essentially entirely dependent on this 20-something

French guy sitting there in Tokyo with his cat.

All of a sudden, this website just crashes

and burns, seemingly out of nowhere.

They were up to one million accounts,

so it's a hell of a lot of people out there

who've got reason to be angry.

This is almost more like a Wild West robbery.

Just imagine, image a bank you can trust,

a bank that knows-- (shouting)

Imagine, above all, a world without banks or bankers,

a world in which the governments no longer

control their currencies or its value.

This new world is a currency.

Digital, free, universal, as easy to use

as a credit card but as discrete as cash.

And it's name is bitcoin.

Are you ready to bypass the system?

In 2008 ...

this was a period of financial crisis.

The system almost failed again.

But the central banks came to the rescue,

printed trillions of dollars to bail out

the banking systems and all the large mortgage holders.

There were bailout all over the world.

It created this whole new desire

to have a financial system that existed

outside the bounds of Wall Street,

outside the bounds of central banks.

There was this desire to kind of

return money back to the people.

At the time, there was as a small group of people

that were working on the idea of a new digital money

that would be entirely private, be not connected

with a government, be global and purely digital.

The immediate reaction to thinking about electronic cash

is that it can't be possible, 'cause if it's digital,

you could make a copy of it.

If I make a copy of it, then aren't there two of them now?

It just naturally wants to fit in your brain.

And it was 2008, when Satoshi Nakamoto,

which is a pseudonym for somebody else

or maybe several people, we still don't know,

but came up with this idea of a ledger,

a ledger that would belong to everybody,

that everybody could see.

And there would be a protocol to enter and exit the ledger.

And there would be a very carefully scripted algorithm,

that how many of this new unit called bitcoin

could be created.

When you start reading about the Blockchain

and distributed ledgers, it just clicks,

like, oh, wow, there really is this way to do this

decentralized authentication of transactions

where you really could have a digital cash system.

And then it sort of turns on another part of your mind

to this whole world of possibilities

that weren't possible before.

It was very apparent to me early on

that it was gonna be a big deal.

It's alive, it's alive!

The very first product that I bought was a pair of pliers.

I didn't need pliers, but that was the first thing,

and I was in a hurry.

So I click that, and they said, "Okay, now scan this code,

this QR code," so I scanned it and sent it some money.

So I sent it, and they said, "Your transaction is done."

And really, I had a sense like a breathless sense.

They didn't know my name.

They didn't have to know my identity.

It was based on a trust relationship.

They didn't have to access my credit history.

Nothing matters except that I owned something.

So you have to understand, it was like a cash transaction,

except the person I'm transacting with

is not in front of me.

The person is somewhere else,

could be anywhere in the world.

Nothing like that has every been possible

in the history of the world.

And when I realized this, I thought, "I can't believe this.

"I can't believe this just happened."

So I got up, and I remember just dancing

around my dining room table, just kind of

doing a little dance, going, "That's the future.

"I just saw the future."

And I realized at that moment, if this works,

the relationship between the individual and the state

and our whole public lives are going to change forever.

When?

I don't know, but it's going to happen.

Bitcoin was really fed by some of the same

philosophical impulses as the internet and also some of

the same technological concepts as the internet.

Both are really, on a technological level,

about taking power away from the center.

At the core, the internet and bitcoin

are really about decentralizing power.

If you study economics, you realize

the more economic freedom people have,

the higher their standard of living.

If you or I print a bunch of money in our basement

and go around town spending it,

we would go to jail for counterfeiting,

because it's economically destructive

and is stealing from everybody else.

When governments do the exact same thing,

when they print a bunch of money,

it doesn't change what it is:

it's stealing, and it's wrong for the exact same reason.

And as a Voluntarist and a Libertarian,

I have a huge, huge problem with that.

So the invention of bitcoin strips that power

away from every single government

in the entire planet to do that.

Bitcoin could mean different things to different people.

One of bitcoin's strengths is that

it had all these different elements to it.

And somebody could be into it because of

the political aspect, and somebody could be into it

because of the technological advances that it made.

And everybody could kind of have their own connection.

Certainly in the first few years,

the typical bitcoiner was a guy

who spent most of his life in front of his computer

and not a whole lot of time with other humans.

But these were people who kind of lived,

in one degree or another, sort of in their own world

and could inhabit this abstraction,

which was this new money.

There was no reason to think it would work,

and so you had to be a little weird

to devote any time to this.

I got into economics because I realized

the quality of money has a lot to do

with the quality of our lives.

You get the money wrong, you get everything wrong.

With bitcoin we have a chance to get the money right.

And it can liberate the world.

At least a third of humanity is unbanked today.

This provides them financial power, access,

a chance for a better life for everybody,

equally, democratically, all over the world,

regardless of race, sex, religion, nationality.

That's awesome.

That's beautiful.

That's utopia to me.

Goddammit, that shit itches.

Us Libertarians, we don't like uniforms too much.

Of course, when Mark bout Mt. Gox,

he didn't expect to end up, four years later,

handcuffed in the back of a cop car.

Did you, Mark?

Huh?

Eh, whatever.

Beginning in 2011, Mt. Gox became the first

credible internet site to exchange dollars into bitcoins.

The thing is, at the time, well, a bitcoin wasn't worth

a buck, so, let's be honest, nobody really gave a fuck.

But just a few short months later,

the media dragged bitcoin out of the shadows,

and Mt. Gox went from 3,000 to 60,000 clients

in just a matter of weeks.

And that, that was the beginning of the glory days.

, Mark?

Isn't that right?

Mark!

Mt. Gox was the first place where you could

turn your fiat currency into bitcoin.

It was the exchange.

There wasn't really an alternative.

This was, Mt. Gox was the bank of bitcoin, essentially.

He had like 98% of the world's market share.

If you think of bitcoin as being an island,

at that time Mr. Gox was the only bridge

to the rest of the economic world.

The growth of Mt. Gox was very quick,

as we saw a very large increase in users.

The first few months after I joined,

we started changing and we were getting