[AUDIENCE] How do you see unbanked people [acquiring] cryptocurrencies when...
they don't have access to classical financial instruments?
[ANDREAS] Well, they get to cryptocurrencies not by buying it, but by earning it. That is the fundamental...
shift in your mentality that you need to make, [away from] the idea that this is an investment.
In order for it to operate as a currency, you must use it as a currency. And don't get me wrong...
Right now, you can't. At the base layer, Bitcoin has not scaled enough to be useful as a retail currency.
It is very useful for cross-border transactions, for import-export businesses, for outsourcing.
It is useful for store-of-value. It is not useful for buying a cup of coffee.
As Giacomo said, blockchains will never scale in the base layer [alone],
but Bitcoin can with a combination of second- and third-layer scaling, as well as base layer scaling.
We already increased the block size [with SegWit]; we will do it again, if necessary.
Not to support bigger transactions, but to support more second-layer scaling when necessary.
I don't think anyone is really opposed to that, except for very few outliers.
How [will] the poor [adopt] this? We [first need to] make it better, bigger, and faster.
We make it more secure and easier to use. We move complexity from the frontend to the backend.
We create complex systems that are easy to use.
There is a fallacy in engineering, that the way to build easy-to-use systems is to make those systems simple,
and [only offer] simple choices.
But most technology and engineering is a series of unbelievably complex things,
each of which took decades to build, was unimaginable at first, and required people to overcome [layers of]...
complexity to build entirely new sciences, professions, and disciplines.
If you were to approach someone in the early 19th century and say, "We will electrify the world."
"Even poor people will have a better time!"
That person will just do "the quick math" in their head and write a PhD about why there is not enough copper...
in the world, why it is not possible to create enough electrical energy, or distribute it, to do what you want.
[They will tell you] the infrastructure upgrades [would be] unthinkable.
If you introduced them to the concept of an automobile and say, "In order to make this happen, we just need to...
re-design every city in the world and repave all seven billion miles of road, but don't worry --
We will do that in forty years!"
[They would have said, "That will not happen. That is ridiculous! Imagine the money it would take."
"And with this internal combustion engine, there are all these bits moving up and down."
"It is electrical and chemical at the same time? Look, horses are simple. Eat hay, poop." [Laughter]
"I don't know why you want to do heavy engineering to bring this complex technology [to life]."
Complex technology can create simple solutions. In the background, it will be unimaginably complex,
and most people won't understand how it works.
That is okay, that is what specialization is all about. I was at an internet conference in Stockholm last week.
It was an audience of about eight thousand people, most of them internet specialists and engineers.
I asked the question, "How many of you understand how BGP works?" I will ask this audience as well.
How many of you understand how BGP works? I will put my hand up, because I do.
Great, maybe twenty hands went up in this audience of a hundred and fifty people.
Now, how many of you use the internet? Never mind. [Laughter] You do not need to understand BGP...
to use the internet; BGP is unimaginably complex, and itself rides on top of complex routing infrastructure.
There are lots of people who love that, who works on it day-in and day-out.
There is someone out there tweaking BGP routing tables every hour of every day of their life, and they just love it.
And I'm thankful they are doing it, so I don't need to.
The bottom line is, we will scale and it will be unimaginably complex.
If you try to read the papers for the Lightning Network, sidechains, drive chains, or MimbleWimble,
you can read it three times and understand 10% of it.
That is, if you have a master's degree in computer science and ask the [author] to explain it to you...
so you can [include] it in your book.
Okay, that may be a rather narrow example, but that is what happened to me.
I don't need to understand it in order for it to work.
The way we [include] poor people is through a relentless process of optimization and scaling that takes decades.
The marginal cost of a transaction will gradually [fall] to zero; the network capacity will grow to billions...
of real peer-to-peer, trustless, private, confidential transactions per second.
If they are not private and confidential, I don't want them. That is how we will do this. It is just as possible...
as bringing Skype over 3G to a village in the Amazonian Basin on a $20 Android phone,
which is happening right now.
In 1993, if you had told me that would happen, I wouldn't have believed you, even though I was building part of it.
The reason you can do video conferencing to the furthest reaches of the world had nothing to do...
with bigger pipes, but it had everything to do with two inventions from a German research [organization]...
called the Fraunhofer Institute of Technology,
which invented .mp3 and perceptual lossy compression in the mid 1990s.
We didn't make the pipes bigger. We made the videos much smaller.
That [should] give you an idea of where I stand on the scaling debate. Yes, we can make the pipes a bit bigger.
But we need to make the data a hell of a lot smaller. There are a lot of smart people working on that.
We haven't even scratched the surface yet. I am not ready to give up [on this experiment].