Transcriber: Midori T Reviewer: Emma Gon
Six years ago, I became obsessed with money,
(Laughter)
not having it but understanding it.
Money is one of the most central elements in all of our lives,
and yet, most of us know little about how it works.
It seemed to me
you could trace almost every problem in society back to money
or the lack of it.
The aha moment happened for me
on a typical sunny day in Palo Alto where I grew up.
I was an Internet entrepreneur - which is also typical there,
and like most days, our engineering team was fiercely debating a new technology.
On this day, they were talking about money,
and not regular money but Internet money.
They had discovered something called "bitcoin,"
and they claimed it would change the world.
The promise of bitcoin and the technology behind it
called "blockcain" was to allow us
to safely send digital money over the public Internet
directly between us without any intermediary like a bank.
You might think like I did
that services like PayPal and online banking
already let us send money online,
and like I was, you'd be wrong,
because money doesn't actually move directly between us on the Internet;
it actually sits in closed, private networks owned by banks and governments,
and every single time you send money,
you are asking them permission plus paying fees
to move money around in their systems.
There used be a good reason for this
because the value stored in money is very different
than the kinds of information we're used to sharing online.
You see, information like text, video, images
can exist in many places at once.
When you send it to someone, you and they now have it.
With value, it can exist in only one place at one time.
When you give money to someone, you no longer have it.
With money, it's essential to know that you're not getting a copy.
And no one had yet figured out how to secure an open network
like the Internet in such a way that would guarantee
that our money could not be changed, copied, or duplicated
until now.
For someone who grew up in the Silicon Valley,
watching the Internet change our world,
this was a really big deal, and here's why:
think about how information moved before the Internet.
You needed to ask permission of a newspaper or a cable station
in order to broadcast your opinion.
The Internet let anyone share any idea instantly and cheaply
directly between us.
And the information revolution completely changed our society.
Now anyone with a laptop
could topple a government or sway an election,
and that was just through sharing the ideas stored in information.
What would it mean for the value stored in money?
This new technology, blockchain, was creating an Internet of money
that would allow us to transact freely, directly between us
without asking permission or paying gatekeepers.
The implications for society of having an open, global network
for the free exchange of money between people
are as big as the Internet.
So what is blockchain?
Well, it's pretty technical and challenging to describe,
so I'll give you an image that worked well for me.
Imagine a magical book.
Anyone who wants can get a copy of this book for free.
And what's magic about it
is that anyone can add lines of text to the book
and those lines will automatically appear in everyone's copy.
Now imagine that those lines aren't just text but transaction records,
so the book is like a database or an Excel spreadsheet,
and it's a long and growing record of all the transaction info ever added.
The book is so magical
that any transaction that cannot actually take place -
let's say due to insufficient funds or an incorrect password -
will be automatically rejected by the book.
But once a line is entered, it can never be changed or deleted.
Every few seconds, the pages of all the books check in with each other
to make sure they're in sync,
and once a page is verified, it is sealed forever.
The only way to destroy this book
is to destroy every single copy of it out there.
So even if the original author destroys the original copy,
the book will live on.
This is similar to how blockchain works,
and its power is in allowing a network to operate reliably
without the need for a central point of control.
It does this by stringing computers into a network,
so that together they're in charge of running and securing the system.
And it allows users to place their trust not in magic
but in a transparent algorithm
that reliably logs and transfers value from one place to another
with no central control.
It's kind of like a Google Doc with no Google.
No one can shut it down or change the terms of service;
it's completely decentralized.
And the magic is math.
Bitcoin was the first decentralized currency built on blockchain technology.
It was the revolutionary spark
that inspired thousands of entrepreneurs like me
to think about a world without a monopoly on the transfer of value between people.
Today, there're 15 billion dollars stored in bitcoin,
and some think it will grow a hundredfold in the coming decade.
That's a lot of value stored in money that's not issued or controlled by anyone.
This is the first ever people's money online, and it's just the beginning.
Today, there're over 700 crypto currencies already on the market and counting.
And a new generation of blockchain technology
lets us customize money in even more sophisticated ways.
Imagine a currency that pays its own taxes,
so you don't have to file at the end of the year;
imagine a currency that automatically gives discounts to certain citizens
at the moment of purchase,
so veterans or seniors wouldn't have to chase down their benefits.
What if Tel Aviv could issue its own currency
to people who are helping make the city better in creative ways?
And you could use that money anywhere.
Few years ago, my team and I tested this concept
by creating our own local currencies.
One of our most successful projects was called Lev Market,
and it let mothers here in Israel use a currency called hearts
to purchase goods and services from each other in a trusted marketplace.
Within a year,
we saw over 10 million dollars worth of commerce in this community.
Moms were selling recycled toys and offering lessons,
baking beautiful handmade birthday cakes,
all in hearts.
These moms had a ton of potential to share with each other,
and yet, before they had hearts,
few of them had any shekels spare to cooperate.
In Lev Market, they could earn hearts
for positive actions that made sense for their community
like volunteering in schools.
It was like a pinpoint expansion of their money supply,
and it created real abundance for these families.
Blockchain will let local currencies like hearts flourish all over the world.
We can create a much smarter money supply,
money that's custom-made to meet our changing and diverse needs;
money that catches up to the complexity of our modern economy
and that reflects our modern values.
And blockchain goes further than money.
Remember how we said
that its power is in allowing a network to operate reliably
without a central point of control?
Think about the other services in our lives beyond money,
that are also controlled centrally.
What would a social network look like without a company in the center
keeping all the profit that's generated from our content and comments?
What would a news network look like without a media company in the center
beholden to shareholders and politicians?
What would a digital cloud look like without servers in the center
but only all of our computers strung together?
These projects and so many more are already underway on the blockchain,
and they fundamentally change how we pool and share our resources.
Blockchain decentralizes control,
which helps us shift society
from a pyramid with limited room at the top
to a web with more access to opportunity
and more consensus on what is valuable.
Economic freedom is the next great challenge of our time,
and we'll call it the value revolution.
Thank you.
(Applause)