Today humanity stands at a crossroads The path chosen by humankind may have a greater impact on our freedom and prosperity From any event in history in 2008 a new Technology was introduced. This is very important to strike the fate and destiny of humanity Inextricably linked to the force so that if captured and controlled It can enslave all mankind, but if it is allowed to remain free and flourish it can be strengthened Unimaginable levels of peace and prosperity It has the ability to replace all financial systems Globally to replace Wall Street by 90% and to provide some government jobs, have no agenda It is always fair, honest and cannot be manipulated Corrupt spoil or cheated It changes the power structure and puts control over one’s destiny in the individual’s hand The future is when we look at the 2.6 million years old human chronology Development and the main turning points that led to modern civilization Cultivation of domesticated animals created a wheel, harnessing electricity and splitting an atom 60 years of computers on the Internet and this new technology It will be seen as one event A turning point that will change the course of human history It’s called full consensus for distributed ledger technology Until now it was the primary use of cryptocurrencies like Bitcoin But its potential goes much further Hey, I’m here in Washington, DC Across the street from the Federal Reserve because I’m really excited about something We can be on the brink of turning in the form The currency and trade that could put places like this the Federal Reserve and other central banks out of business in We have the fourth episode of Hidden Money Secrets and we invite viewers Join a discussion to develop a new global monetary system and people who offer the most sensible and compelling way Arguments where cryptocurrency and Bitcoin people? So here I am at a huge Bitcoin conference attracting experts from all over the world And I will be with them to ask many questions Develop my own opinion.
I’d like you to develop for you because this might be something that changes the world The most common question that occurs recently is when are you going to make an episode of hidden money secrets around cryptocurrencies The reason for that took so long is that I was not happy with the launch of this video until I was comfortable explaining it How it works and now I can finally As I said in the introduction, we will start this journey at the first bitcoin conference ever This was the first time I had dived deep into the search for bitcoin and after it had ended I kept on learning and Learn some more and it has actually become difficult to finish this episode because of the speed with which this space develops But only a few weeks ago I learned about something new that could change everything and I knew we had to get this video out quickly This is really big We will know more about this Later breakthrough in the video because in order to explain it we need to go back to the beginning and find out how Bitcoin works Like most people at first, I found the whole thing very unfair and complicated But now I’ve found a way to break it down so you don’t have to be a rocket scientist to get it I will explain it using an old issue Bitcoin claims it has solved.
It is called Byzantine generals The problem so far has been unsolvable The problem is like this How can you completely confirm that there are multiple entities separated by an R space at all? Full agreement Before taking action in other words How can individual parties find a way to ensure full compatibility? Here is the example Imagine that you are a general in the Byzantine army and that you are planning to attack an enemy city You have a city, surrounded by several battalions Each of them camped several miles from the other and all of them.
Led by another general A coordinated attack on the city from all sides at the same time will be successful But the uncoordinated attack is likely to end in defeat You decided to attack at dawn, but you do not have radios or cell phones Signs from flags, or smoke can be seen by the enemy How do you make sure that all the other generals are arriving? Consensus and all attack together at dawn You can send a message on horseback, but what if someone is caught or killed before delivering the message You will need to receive a response from all of your generals who confirm that they have received your message This means that they will have to send reporters to you on horseback, but what if they get caught or killed? What if a messenger was captured by the enemy and Marsa the Antichrist with a fake response sent to you and How do other generals know that the messages they receive from you are authentic and not? Intercepted and changed by the enemy Worse yet, what if some other generals were traitors They send messages to you confirming that they will attack Fajr When is their real intention to back down? How can you be so certain that all your battalions will reach unanimity and attack simultaneously As I said, this problem has remained unresolved for thousands of years, in its essence It is all about individual parties that can trust each other directly.
No strings attached Bitcoin claims to have conquered this, and its brothers Now imagine that the Phalanges are actually computers on a network and The generals are copies of a computer program running a ledger The ledger is that across some math is very complex Record transactions and events in the correct order in which they occurred The key here is that all of these accounts are exactly the same for each one Soon, a change will also be made to one copy of the ledger if it is proven correct by all mathematics Other copies of the ledger are updated to match What we have here is a distributed ledger that is always in consensus This is one of the first things to understand about bitcoin This is the first full consensus distributed by the “Dansger” magazine that humanity has ever seen This network can be expanded across the entire planet This means that the individual parties are on The opposite sides of the world can reach consensus on an event without the need for any third party Trust broker Whether it is an order from a general to his forces, or he asks you for a pizza The mathematics distributed ledger confirms whether the event is correct and permanently recorded Bitcoin the first full consensus of distributed notebook is trust device But is it 100 percent reliable This is a question for later in the episode, but for now it’s where Bitcoin came from and who invented it Well Bitcoin was originally developed by a semi-pseudo developer, Satoshi, Nakamoto There is a lot of speculation about who he is and frankly the second works directly with him, but I have no idea But this was not really worried to me because it is Bitcoin itself is open source, hence any engineer who can evaluate Bitcoin source code Evaluate Bitcoin encryption, understand the software, and trust it So you do not have to trust someone who wrote it, you trust the program itself, and then it was one of the biggest programs Reasons for choosing Satoshi Bitcoin’s open source is that you can trust the system.
You don’t have to trust who he is I don’t know who Satoshi Nakamoto is? Also, I don’t know who was Euclid Some dude may be in Sicily A few years, BC But we don’t really know that we have some historical records that tell us that Euclid is the one who invented the engineering in The old world however Did not matter Euclidean geometry works if I know who you chlid is or not whether Euclid is a nice guy or An evil person Euclidean geometry It simply works. It is completely independent of its originator, and if we don’t know who it is Invented the electric motor, radio or any of these fundamental technological developments? Electricity So what do you do? You do not have to submit any appeal to the authority You do not have to worry about drivers now in a centralized system.
It is controlled by someone The things behind the curtains are really important Who is in control of it important? Who invented it because it stays in control or they may have a secret way to control its bitcoin wide open No, one is in control and everyone can see exactly how it works So how does it work and what is the goal? Crypto currencies like Bitcoin Allow people to interact with one another using the Internet anywhere on earth Instead of having an account number like a checking account or credit card Cryptocurrencies are safer because they have a public key and a private key It’s like having to count one number for deposits and another for withdrawals You will often see them displayed as a string of characters, or an erasable symbol This level of security means you can put your public key on the bulletin board if you like it and your money It’s still safe, the only thing others can do with your public key is send money to you It is your private key that gives you access to your money as long as you control your private key Your money is completely safe and theft and fraud is almost impossible But just like cash in your wallet You must keep her safe to prevent it being stolen, for her security is entirely your responsibility Cryptocurrencies can give you privacy like cash You do not have to disclose any personal information when spending it in contrast to a credit card bearing your name This account number and expiration date serve as a public key But the equivalent of your private key is your signature and security code in full view This is just plain stupid.
I toured five national money museums while I was in one of them I saw a group of young students on a school picnic I can only imagine that one day in the future a group of children would stand around the credit card screen Pointing and laughing at the amazing stupidity of the system we used once and that is the goal Cryptocurrencies are light lights before the current technology as Bitcoin was the first cryptocurrency I will use it as an example, and I will expand on the previous description of a distribution notebook But first where does Bitcoin get its value from Bitcoin is the brand new to humanity in both currency and payment network At the same time, this is where Bitcoin gets its value through a massive network of computers all over the world running Bitcoin Distribute the professor each On the second day of each day, these computers keep the ledger updated with unanimity across the system It motivates them to process and confirm transactions that the Bitcoin system called a blockchain Think of it as a fresh copy of the old ledger in your notebooks But instead of a list of entries and handwritten accounts, the blockchain is a digital list of entries Accounts are simply block a set of transactions Think of a block as a whole page of the transaction in the old ledger Blockchain is just a chain of blocks It’s the same whole series of pages in an old ledger is easy, huh? Here is how blockcin Bitcoin block works It is already present in every one of millions of computers on the network as accurate copies of each other But in this example we can even zoom in and you can really see how the blockchain works I will see it as one huge block in the middle of a small network of computers Let’s follow a Pizza transaction with Bitcoin when the transaction occurs, it appears for the first time on the network in a group of Unconfirmed transactions with thousands of others from all over the world Millions of different computers from the network Then collect some of these transactions and put them in their own blocks, and all computers create blocks Constantly, hoping that the arrivals will have an addition to the official series, a new block will be added to the series Every ten minutes or more when a computer wins the right to a ban? Recognized as the next in the series and rewarded with an award from the newly created bitcoins The way the computer wins the prize is to try to guess the answer to a very difficult math problem in The truth of the problem is very difficult even with millions of computers guessing Billions or even trillions of times per second, it takes just 10 minutes to find the answer Once one of the computers guess the correct answer and wins all the millions of computers on the network that have not won I was directed to throw away from work.
They have completed the order Update Ledger with a block from the winning computer and Start again with a new math problem in doing this, as computers use tremendous amount of energy and cost literal wealth to run. So why do they do it because it can be very profitable This is where bitcoin mining comes from gold rather than hitting through mining precious metals in the wild These computers hope to hit Bitcoin by extracting valuable numbers on the chan But when these millions of computers choose transactions to enter their blocks They are not all choosing the same transactions and not all blocks are of the same size Some contain more transactions, some contain less, when clusters are thrown away from the transactions that contain them back to the pool Uncertain Transactions This means that the likelihood of confirming the deal and staying in the order confirmed in is not Absolute however, it becomes more than certain every 10 minutes as new blocks are actually added quite large Transactions It is suggested that you wait six blocks or more for 60 minutes to completely ensure that the payment is permanent Why is it so slow? Why is your pizza cool before you own it so interesting? The system is constantly slowed down And here is why? With the mad difficulty of guessing answering a math problem you would think the odds of two or more computers Win at the same time Very unlikely, but it happens quite often This is called a soft fork and when all the computers in the network happen Receive each of the winning blocks and be instructed to create a new template that grades to the block they first received But because of the different internet connection speeds Computers receive different winning blocks at different times the draw is cut After about ten minutes, when a computer solves a new math problem A block is added to the ledger and the longest winning streak But what happens to all the blocks on the other side of the fork is discarded along with each The parameters it contains that belong to this soft, unconfirmed transaction pool Forking is the main cause of slowing the system on purpose With a math problem if the system is immediate, it will be everywhere all the time and there will be no consensus Nobody has any idea The ledger was correct one and each computer would be busy building a different block to create another fork Slow down and a massive amount of computing power are required to keep the Bitcoin ledger in full alignment So with more and more computing power added to the system grid automatically Adjust to make it more difficult to solve math problem Which then requires more strength? If Bitcoin were to be used extensively, it would use an enormous amount of the world’s energy There are other systems for reaching consensus, but we’ll look at them later in the episode Currently Bitcoin works as intended and allows people to interact with one another using the internet anywhere on earth Bitcoin is the first complete consensus of distributed resolution data that humanity has ever seen but it is not the last Here I am at a conference with Eric grill from a coin outlet I am going to buy some very first bitcoin at the moment So Eric will show me how to do this.
It will tell me this is a paper wallet That’s right, so I can put I can download this paper currency. This inside this little ziplock here With bitcoins, so I’ll take it 100 dollars for the bill and Wait a second, what should I do now? You’re going to clear your public address inside there. Yes, well, pull it when it makes a good sound? Well, I got a good, good, well monitored view And Aha, so I’ve got 0.16 0 7 3 2 9 4 Bitcoin, and I just finished this session, and now I send it and it’s over So basically In the blockchain hundreds of dollars just put in He gave me that 0.16 something The bitcoins in the blockchain are assigned to my account code and And behind me here, I can peel off this door, and there’s an icon that’s my key Purchasing power is now protected in the blockchain This is mirrored around the world millions of times, so thank you very much Eric Great.
This is a great meeting for you, yes Great machine, great progress forward, and when it comes to comfort, yes people have built it up. They will begin to understand Cryptocurrencies more when you get exposure which is very similar to an ATM This is what we are married. Yes really. OK. thanks. thank you So I spent a day in the conference now And I wanted to come in and kind of detail about some of the things I overwhelmed as I came to Washington Circle in Washington, D.C. Behind me as a statue of George Washington Many people don’t know this But you know that the revolutionary war was a war liberated in order to free itself from it Regulation of government interference from their lives from a lot of taxes and The founding fathers were fighting for freedom and freedom and at the end of the war George Washington was controlling the armies of this continent and could crown the emperor himself Instead, he chose to resign from his commission and retire in private life It gives us this gift from a free republic One of the things I face from this conference is that many of them are concerned about the organization and therefore it is the same A revolution fought again They are concerned about the organization they cannot do Transactions with crypto currencies But you can come and try and punish us after that and make it less likely to use it This is a tool that can free humanity It is an astonishing leap in technology and an astonishing leap in the potential development of the human race Thus, if this battle is lost and governments succeed in trying to organize Cryptocurrencies will be the loss of a revolutionary war This stands for all that the founding fathers stood for the belief in freedom and freedom Individual choice and responsibility for your actions in the next day Listen to more experts and the more you learn, the more you need to know Even just knowing all the technical details about Bitcoin.
There is still a lot to learn about keeping money safe in the real world One of the most interesting things I discovered was in the early days of the Internet They were actually paving the way for something like Bitcoin even before they knew what it would be So when the first web browser was built 404 error page not found and there is also 402 error The payment method was not specified again when the web browser was originally created They were thinking about time When they were finally Discover the technology that creates technology to transfer value over the Internet and did not have the technology at the time But they still have the insight that we will finally reach Well now here we are Bitcoin is the solution to that Guys, it’s hard to isolate it.
What’s special in Bitcoin is quite amazing, but I had to mention one thing I have to say it was a distributed network This is amazing because it is basically empty that can exist In trillions of copies worldwide, what this basically means is that it cannot be destroyed I mean, you can apply every regulator, every bureaucrat, every politician Central banker in the world backs it to destroy the blockchain They can spend 24/7 making this shattered copy after copying after copying Destroy trillions of copies, but as long as there is one left somewhere and there will always be it can reproduce itself immediately Billions and trillions come from again Practically right away what this means is that the blockchain itself is stronger than every government in the world The combination of several times more than this is huge.
We have never had this tool Strong to overcome the despot of Throughout most of the agreement I haven’t found anyone sharing some of the concerns I have about Bitcoin like Deflationary currency that was until I met Chris Ellis Chris Tell me about your concerns Bitcoin is now still an experience like most cryptocurrencies and the price is mostly supported by Feeling of speculation, this is because markets are pricing mechanisms forward. People look at information And they buy based on what they think others will do in the future with that information And I think a lot of people talked to a lot of merchants as well Lamentations tell me that people don’t spend bitcoin, so I’m worried. I think the economy A side of Bitcoin is probably Weaker, that’s why we need a lot of these Alternative cryptocurrencies to play with some of the parameters, but we should consider this experience now mm-hmm One of my interests is that In contraction Speed is slowing because your currency will be more tomorrow than it is today So people have a tendency to hoard currency in deflation like the Great Economic Crisis, for example Bitcoin you will have Lots of coins per month, then this level drops every year or four Until you reach the level that reaches 21 million coins and stars When it stops I have two concerns One of the Bitcoin mining that people do is what encourages They have to leave computers running around the planet, and that’s what makes Bitcoin work now I know that there are small transaction fees, and if the speed of the number of transactions pick up enough Then the transaction fee is the reason for leaving your computer But you have a deflationary currency that encourages hoarding and is not spent on transactions So when it reaches 21 million What is the bonus of leaving computers running at a speed state? Slow down and people tend to store it and there are no new coins for me Energy cost will likely increase and increase in the future.
Yes. Do you have any other concerns? Yes, one of my concerns in this space is that most people are here Communications and marketing are in the business to persuade people and I think we need more developers We need to inspire younger people Maybe fewer than a thousand people on the planet already know this Write a cryptocurrency, which is a huge form of centralization that becomes like Congress And then we have to go to them as normal people who don’t know how to stand out and demand change or otherwise We end up putting the blade into the blade and producing our own blade, so I still think there’s a lot to do in terms of Outreach Get current programmers in Bitcoin space on github Warehouse so they can start making their own changes and start experimenting and learning as well So what have you learned in the past few days about bitcoin and other cryptocurrencies? I learned that they are a simple, fair, honest and neutral mathematical formula I learned that this is more than just a digital coin I thought this was only for sending value from one person to another This is a revolution that will change the world and demise the borders It will connect the world, and it is as important as the Internet But because it connects people because it frees people will come today When there’s an invitation to organize it – stop it – maybe close it? People who claim these things should have their motives in question Because what they are trying to prevent is freedom.
Simply One of the things cryptocurrency does is it provides freedom and people who will call for it? Regulation or abandonment will be the financial sector in the central bank? The government to It provides a lot of things that the government is doing very badly, and it will do very well The performance of the financial system at the moment is very poor, it will do well It is an honest, honest moment and cannot be subverted The only caveat is that Bitcoin has the first drive feature It is the largest, but it may not work It is an experiment at this point But the important thing is that the genie is out of freedom and the bottle is on our way to us right now We can all support her or we can let her tremble I think this can’t be stopped, so I’m going to sell my mind and my silver and transform it into Bitcoin of course not Bitcoin as I said is an experiment There is a possibility that these things can go to zero before they are fully developed There is a possibility of some kind of catastrophic failure Now it has proven to be extremely strong and unpalatable You never know what will happen in the future, so we must bear in mind one thing The Germans came to the enigma machine in World War II, and it was supposed to be unbreakable Then we broke the code Then they added another tweak to it to make it even more complicated It was supposed to be unbreakable and we broke the code So Bitcoin has not been fully proven It has got five years of existence now and durability This may be the solution to all human problems when it comes to a simple method of exchange But more than that you can make these smart contracts settle down With a set of rules So someone doesn’t get paid until all the rules you’ve set are fulfilled You can create a credit account with yourself as there is a third party that has to sign that the transaction has been completed Before the payment is made, they work on things that you can hand over to something Constantly and pay for it when you use it It would be like paying for the Internet every second you use only or paying for gas It is delivered to your home instead of monthly You are billed per unit thermal and without any friction costs, which increases efficiency So humankind remains with more prosperity if there is no third party between the bleeding Economic energy ends up with more prosperity This is a good thing for all of us and because it is very fair and honest There is less need for the court system.
There is less need for Government, rules and regulation and People to force all these things in the future there will be less need for Wall Street that Wall Street Not realizing it yet? But they are ancient Dinosaurs from the past are close to extinction. You can attach stocks and bonds and things like that Can cryptocurrencies and companies now do I POS only on the Internet do they need Wall Street anymore? They do not need a third party such as Sachs Goldman Sachs or some of the other major brokerage firms that have been broken up You don’t need to worry about corruption because the code cannot be destroyed I know I will put some of my capital Committing the act from now on, supporting this movement and helping to advance human freedom Forward, here’s another thing why people buy bitcoin is the same reason people buy gold and silver It is an alternative to all others Banknotes that are being forgotten are being printed on this planet right now, and they are wiping out You need third-party trust You don’t have to trust another person to use your bitcoins You just have to trust yourself.
You do not have to trust another person with your gold and space. You must trust yourself So the reasons are the same, so I would like Encourage each precious metal investor to investigate bitcoin and other cryptocurrencies I would encourage both bitcoin and cryptocurrency The user and the investor to check the precious metals, I’m going to hold both I look at cryptocurrencies as very speculative Capricious and Risky game Possible look at gold and silver Just like saving.
I see them as something unprecedented 5000 years of proven and less than real value Compared to the banknote swamp on this planet at this point So when I came here I expected to find nothing but a digital payment system and what I found was technology that could revolutionize The planet if the founding fathers of America were standing by my side They will fight for this revolution Hey, this is a work alert on July 11, 2014 I promised all the insiders to share with them what I am doing Financially and Lately, I have done something unusual yet Precious metals gold and silver material But Bitcoin has been investigating very little I was in Washington DC Recently at the Bitcoin conference, I learned a lot about it. I became convinced that this has huge potential on the upside The probability of a fall will be short-lived And there is a downside risk that could fail completely So I’m not going to put a lot of my work into it but one day It is likely that about 10% of my Bitcoin wallet is true or not Another thing that I do is I buy a bunch of Pegasus 1 ounce It’s almost a deal, and I recently made a video on how? One of the things I didn’t touch upon during the conference was talking to retailers about their experience accepting Bitcoin as a method of payment I will be interested in accepting Bitcoin into my own business But I still have some questions so I made a trip to Salt Lake City to see Patrick Byrne now.
This is a man He has already earned respect because he understands critical history The economy and frictional nature of our current Wall Street monetary system So I know you are in a very low profit margin business being an online retailer of discounted goods Me too, I’m in a very low profit margin The business that you take Bitcoin You are one of the first big companies to adopt Bitcoin the first excellent big business What is your recommendation to me? OK we’ve got Publicly, and you can look at our public files, our gross margins are very high teenage For retailer and our operating margin is Just over 1% 1.2%, of course to take people’s credit cards Costs about 2 or 3 or 4% for most businesses if you start doing sales in Bitcoin And it saves you say 3% on your expense those those sales instead of being 1% that margin go to 4% net margin so it’s really especially if you’re a tight margin business it makes a lot of sense to accept Bitcoin and Avoid those credit card processing fees those credit card companies and that part of the financial industry really has an amazing ability to sit on your The exchanges you’re making with the public and extract they’re basically extracting the entire profit margin for themselves and Bitcoin ends that Cryptocurrency ends that so so it’s a frictionless system frictionless system, but you can you know the empire is gonna strike back? No matter what they’re saying.
I think the financial industry is quite. Sorry They didn’t do more to put a stop to Bitcoin kill it in its cradle now that it’s getting some momentum. They’re not able to You know that’s their entire business model is to extract is to be in that position where they can extract the rents through their monopoly or oligopoly and Bitcoin ends that so it’s really an arrow right at the heart of their business model if you don’t trust the financial system anymore There’s basically two ways of checking out you can buy gold physical gold and silver and get it somewhere safe where it can’t be taken from you and the other solution is to Get get into the crypto revolution Since starting this episode we’ve seen a blockchain boom the IPO as I mentioned are happening now but they’re actually called ICO initial coin offerings and The early nonchalance of the financial industry has been replaced by a race to develop their own blockchain payment systems Because of its rate of growth Bitcoin has been stressed to the limits where it was once fast and cheap it is now Slow and expensive in fact the issues Bitcoin has suffered from have led to political infighting Bitcoin forking into multiple versions and alternative cryptocurrencies gaining market share every day Distributed ledger technology has caught fire And there’s a speculative mania occurring while the speculation can’t go on forever one thing is for sure Blockchain is here to stay or is it? Last week I was in New York City For a meeting that we had scheduled that I thought was going to take a couple of days And it ended up only taking a couple of hours so with all the leftover time I decided to go visit an old friend Demetri Covina’s he used to have a one of the best financial shows on television called capital account you might remember him from Episode two of hidden secrets of money where he talked about Greece and the hubris of leaders and empires and how history repeats Anyway, he has a new podcast called hidden forces and when we visited him He was all fired up about this new technology and this podcast you know when I listened to it I got all fired up and he invited us to attend an event so we went home to Los Angeles There for two days and right back to New York again and to the event that he hosted about Hash Graff technology created by Leland Baird that is Probably going to end up replacing blockchain technology I mean This is big.
We went to the event we listened to some of the people that are involved with this And we were just absolutely blown away So I’m going back To visit with Demetri now and get his take on how the event went last night and where the future of this thing is going Since the advent of Bitcoin there have been many thousands of blockchain based crypto currencies created And now there are more of them being created every single day So what’s different about hash graph well it isn’t blockchain. It’s totally different in fact the way It works is a real Mind-bender and not very easy for me to explain that I’m gonna give it a try instead of a block in a blockchain Hash graph calls their packages of information Events your computer takes a transaction like a payment or anything else for that matter Such as an action in a videogame an offer to sell merchandise or even sell stocks or bonds a bid on that item a contract or even a law pretty much any Information or transaction you want to record and it puts it in the event for transmitting information quickly hash graph uses a Technology that has been the gold standard in computer science for decades it’s super fast and it’s called gossip protocol Your computer randomly tells another computer in the network About the event you’ve created and that Computer responds by telling your computer about any events it heard about then that computer tells another Computer about your event and the other events it heard about and the computer It’s talking to responds by telling all the events it knows about it’s absolutely the best most efficient way to spread Information, and it’s exponentially fast But here’s the twist Each time a computer tells another computer about an event it also includes the information of the time it heard it And who had heard it from and the time they heard it And who they heard it from and so on and so on it’s called gossip about gossip And it lets everyone know what everyone else knows and exactly when they knew it in just fractions of a second The other major component is an even older technology And it’s the most robust secure and certain way of coming to absolute consensus It’s called voting protocol, but until now It was so slow that nobody ever used it and the twist that hash graph has given.
It is that there’s no voting Instead because everyone already knows what everyone else knows you can mathematically Calculate with 100% certainty how they would vote it’s virtual voting and it allows hash graph to come to consensus almost instantly So instead of recording things on a block and then adding it to the blockchain once every 10 minutes Hash graph events are added to the system instantly the moment they’re created so they don’t have ten minutes worth of Information in them this means that they’re small and they contain far less data so they use very little bandwidth and are much easier to transmit and because it’s not trying to guess the answer to an incredibly complex math problem trillions of times per second hash graph uses just a Miniscule amount of power from what I’ve seen so far Compared to blockchain hash graph is lightning-fast more secure and provably fair all events are time-stamped the moment They’re woven into the system so the record of whose event came first in who’s came second is instant and there’s no such thing as soft forking or Unconfirmed events it can also replace huge portions of the internet that are currently run by Centralized servers by replacing them with the shared computing power of all of our own computers iPads and cell phones It looks like hash graph might just have the potential of fulfilling all the original hopes and dreams I had for blockchain technology the power to decentralize and remove the middlemen from commerce banking stock markets and much of the legal system and government with the speed at which this Technology is evolving the future is looking bright and hash graph is the perfect example of just how fast things are moving in this field Well I think the really amazing innovation that Leemon has made is in the way in which he has made adjustments to the gossip protocol And to the voting system in order to make them compatible at scale right because a voting algorithm can work And you can reach consensus in the in the exact same way but in order to Deploy that in the real world the bandwidth constraints on it would be such that you’d never actually be able to practically use it But by incorporating the gossip protocol and creating the hash graph And then being able to use that in conjunction with the local data that you have in memory and running a voting algorithm locally on the computer without having to cast any votes or send any votes over the You’re actually able to get all those strong guarantees that you get with a voting algorithm But you’re able to do it at scale and that’s what’s so remarkable and to be quite honest.
It’s it’s hard to imagine How no one thought of it it’s one of those brilliant ideas that you could have only Looked in retrospect and said how did no one think of this but at the time No one did so one of the challenges I think with any new technology like this is how do you really explain to people? How do you make a compelling case for what makes a technology so compelling right and? One of the things that’s so compelling about this technology is the throughput it’s the speed And it’s it’s you know you can tell people that they’ve tested over 300,000 minimum tested Transactions per second versus bitcoins three to seven max, but like how do you kind of get that in your head? And I sort of did a back-of-the-envelope calculation and that’s roughly twice the speed of sound relative to a snail’s pace Bitcoin being a snail’s pace and This network literally being like a supersonic jet traveling at twice the speed of sound Which is I mean just wrap your head around that for a second? It’s it’s remarkable It’s not even like within so you can see the difference It’s tremendous and understanding of course that the speed of the network The reason why bitcoin is so slow is because they have to make it slow because if it’s not slow it would fall apart it Would branch off everywhere you would never have consensus now remember the explanation of the Byzantine generals problem from earlier And how blockchain was built to solve it? Here’s something not many people know blockchain systems aren’t Technically Byzantine fault tolerant they came close, but no cigar So I like many people assume that block chain was Byzantine fault tolerant and in fact I did not fully appreciate what that even meant I sort of just assumed it and because I saw it as a sort of part of the larger picture of Blockchain being very secure and not having been hacked but in fact it isn’t Byzantine fault tolerant and the reason why it’s not Byzantine is Because in order to be Byzantine you have there has to become a point in time when you’ve reached consensus You know you’ve reached consensus, and you know you’ll never be wrong and you’re never going to change your mind And that doesn’t happen with blockchain because the nature of the network the the geometrical qualities of the blockchain network require you to always sort of Recognize that you’re never entirely sure your probabilistically more confident that you’re arriving at consensus But that’s also why on the blockchain network.
You need to keep a entire history of the ledger because you sort of have to have the capacity to do a Forensic analysis in the event that you are mistaken in the event that the network has fork Then you don’t know it And so that’s something that you don’t have to do with hash graph because with hash graph Your your comb coming to consensus every few seconds And you can dump the entire history of the network’s data and just keep rolling forward because you’re absolutely sure that you reached Consensus and that’s the difference. I think the major problem the sort of the big deal in the blockchain community for years ever since The community figured out that they could take this protocol that bitcoin was built on and sort of extrapolate it and use it to build these distributed Systems this distributed architecture around storage and computation etc and building applications on top of it is that there’s there was a recognition that it was that it had limitations it had limitations at scale and the community’s been trying to figure out how to address that while at the same time building apps on top of it and Something that LeMans said which really has stuck with me is that while everyone was really busy Building apps they forgot about what the core of distributed technology is all about which is reaching consensus And what hash graph has done is it has revolutionized that process we can agree about the things that were communicating about at Scale and that’s a revolution.
It’s the biggest revolution since the web Right and you were just following your heart to do it. Oh, thanks the thing it was not right So we’ve been looking at this amazing new technology for about a week now and what I find so Incredibly amazing is that it holds the promise to solve all of the problems that the other distributed ledger distributed network ledger systems have Bitcoin once it started to scale up it turned out that it used an immense amount of energy to run the system and Also as it scaled up it became slower and slower and slower to where it was no longer at currency It was basically a speculative Vehicle you people could make some gains in purchasing power on it but it wasn’t something that you could stand in line at a Starbucks and pay for a cup of coffee for a Friend of mine just did a transaction that took four hours for confirmation and so This is incredibly fast pretty much Instantaneous the number of transactions that it can process per second is mind-boggling compared to Bitcoin And it uses almost no power, so it solves all of the issues that I had with Bitcoin There is a lot of different crypto currencies now and many of them are engineered to either be faster or to be more sound and Robust, but everything has a set of trade-off And so whatever feature that they want to offer they have to give up something else so the really fast ones if they Want them to still be fast once they’re scaled up? they More vulnerable to some sort of attack or hacking The ones that are less vulnerable to attack and hacking have the problem of scaling they’re going to be slow So you know speed fairness where the transactions are recorded in the absolute order that they came in some cryptocurrencies offer you the ability to pay extra to have your transaction mine first and that really isn’t fair a Distributed ledger should be recording everything at the absolute time of event and then full consensus is reached and there’s no argument No going back This is set in stone for ever So now we’re actually on our way to talk to some of the team at hash graf and learn more about this When I first arrived I was chatting with some of the hash graph team about how much energy the Bitcoin system uses these days it has literally gone through the roof if Bitcoin were to replace the entire world monetary system and financial markets it would use more power than the entire world produces it’s completely unsustainable This is one of the reasons.
I’m interested in hash graph It’s amazing efficiency the other reason these guys already have commercial customers using their technology at an industrial scale How it’s being used today is in private enterprises? It’s been deployed by the Credit union Association where Cu ledger is a group of 6,000 credit unions and a consortium that had to make a decision what distributed ledger Technology were they’re going to use it and we beat IBM hyper ledger, and we’re super proud of that It’s we’re a small company no more than six people today and The fact that we could go up against IBM. It’s a true David and Goliath story, and we’re really proud of that It’s also being used in aetherium based projects where a lot of these ico coin offerings are starting to realize the limitations of the etherium protocol in that today It’s five to seven transactions per second Hash graph is again that hundreds of thousands of transactions per second Which opens up a whole new genre of applications that could never run on aetherium our technology speaks for itself It’s night and day in true comparison to everything else in the market and everything falls short Especially when it comes to security we’re asynchronous Byzantine fault tolerant.
We’re the strongest form of security you can get in a distributed architecture You don’t have to take our word for that. There’s 30 years of academic literature on in the space of voting based systems Ours is a voting based system without the voting we do virtual voting which sounds weird, but it works. It’s peer-reviewed Mathematically proven, that’s what got the credit unions the fact that We have absolutes certainty that when we achieve consensus. This is consensus It’s not it’s not blockchain in that with every additional confirmation We become a little more certain, but we’re never truly certain and that’s the case certainly of blockchain with hash graph you never have that what if You’re a hundred percent certain that this is the way things are this isn’t theoretical We’re not talking about a white paper or some voodoo idea that is Is not practical because the fact of the matter is this is a tech stack that you can go download today It’s been out for a while now We took it to TechCrunch Disrupt to have developers and the hackathon out there build on it We gave a $ 5,000 prize to a team that built up the hash graph fair auction ledger and what that is is distributed auction for the first time ever in the history of mankind where there is no centralized infrastructure, but Distributed parties could submit a bid and we can still decide who won that auction think Sotheby’s or eBay But without a leader without any vulnerability and with complete fairness, that’s never existed before Well for me the most exciting Applications or potential applications for hash graph are in in terms of Internet of Things in terms of identity and In allowing us to be able to control our own identity instead of it being in the hands of corporations or other organizations from our currency or economic standpoint It opens up possibilities in in developing countries You know there’s so many possibilities that before hash graph got invented.
You know all these possibilities did not exist, but now they do It really does seem like hash graph has cracked the problem of consensus at scale once again You can see the speed of evolution in this space right in front of your eyes and like I said in Washington DC It may not be Bitcoin that dominates this space it may not be aetherium it may not be hash graph But you need to understand how quickly this thing is moving.
It’s a very exciting time The more I found out about this technology the more, I needed to know about it So I headed straight to Texas to meet with lemon Baird hash graft CEO mance Harmon We we both lived in the same town It was actually a suburb of Austin, Texas, Cedar Park, Texas And there is a Starbucks on the corner we would meet there after Kids have gone to bed and would sit at the Starbucks until they would close and very often Until late in the evening after they’ve closed we would often watch the people at Starbucks Bag up all the trash and throw it over into the dumpster and leave it And I would be sitting there talking about The latest thought and in the latest evolution of the hash graph that you know what’s the latest rabbit hole that? Leeman was going down in terms of exploration of how to solve this problem And so there are great many memories of this process in that particular location It’s clearly the case that we’re wanting to change the face of the internet We’re wanting to make the internet what it should have been from the beginning But nobody stopped to figure out What’s the right way to do this and the internet grew up in such a way that there are serious? Architectural flaws and security flaws and and there’s a lack of trust at a very real sense And we see the opportunity to fix that problem And there’s a general understanding across the community that what we’re doing today in the world of distributed consensus is sort of equivalent in many ways to what happened in the mid-90s with the introduction of the World Wide Web and how that changed Society and fundamental And and so we’re not alone in this it’s obvious to the community We just happen to have the best technology in the market at the right moment in time And so we’ve been given this privilege of being able to be on the leading edge and and perhaps uh sure in this new trust layer on top of the existing Internet and There’s a certain camaraderie that comes along with wanting to Do so your to do something as as bold as say we’re going to change the internet So it’s funny the ledger field is very broad and people come to it from different directions some people thirty years ago We’re coming to it from making computers not have faults but they’re also concerned about how to Create cryptocurrencies or how to create smart contracts or how to create? Short stared in short information or how to do databases the database world has been doing this for decades my My interest was slightly different What I wanted to do was to enable collaboration My goal is that we should have anyone on earth at any moment can just wave their hand and carve out a chunk of cyberspace Carve out a world of their own without having to pay anything for free create a court world of their own and invite some friends And now we have a shared world Anybody should be able to create this shared world and in this shared world you and I should be able to create Documents and create movies and create 3d objects and we should be able to collaborate with each other and talk to each other We should be able to interact in ways where I’m not the dictator of the whole world.
I can’t delete everything arbitrarily We should have rules enforced So maybe it’s a fair world where I can’t delete things you create or maybe it’s a fair world where we vote on things Or maybe it’s a world in which We have a stock market And you can make sure that the first bid gets matched up with the first acts not the later ones We won’t have a world that you and I can trust and that our friends that we have invited and maybe the strangers we have Invited can trust is going to work the way we want And we can trust that if my computer dies and is erased I can get all the data back the data will never disappear But to do it totally for free No server involved just the computer the people involved with complete trust without having to trust any one person in any way and Be able to have this shared world that has the fairness and then the speed I mean I wanna be able to play gains in this world So I want a ledger where I’m recording every single time a person moves or shoots or pick something up you want to be able to do a game and We’re talking hundreds of thousands of transactions per second, maybe we want huge speed and we want complete security We want privacy we want no one is spying on us this isn’t funded by advertisements you want to spy on me So I have better advertisements we want it just to be something that appears out of nothing That’s just living on our computers And then when we’re able to have a shared world we want to have multiple shared worlds that connect to each other So maybe you and I and a few friends set up a little stock market just for ourselves to send things back and forth The banks do this they’re called dark pools.
It’s like a little tiny stock market just for a few players that Trust each other sort of but not entirely. I don’t entirely trust you and have even the problems with dark pools where maybe Banks are taking advantage of some of the information involved, maybe one banks hosting the server But they can manipulate the timing a little bit, and we have to worry about this I don’t want that I want a completely trustworthy stock market that maybe you and I in a few banks set up But then I want to have a different sort stored world that maybe keeps track of a cryptocurrency And I want them to be able to link so that that cryptocurrency is used to buy and sell our stocks. I Want to be able to have a game world that links to a Wikipedia? World where it appears that pieces of Wikipedia are actually part of our world and as they change in the Wikipedia world they change in Our world you want to have shared worlds that are internet interlocking with each other that allow shared trust even across these things This is the vision for what we want The internet to be it will change the way we even look at what? Cyberspace is what the Internet is what our networks.
Even what our computers? This is what’s going to happen and 20 years from now when The children who are born, then are growing up. They’re not even going to think about websites and Emails as a separate thing and Internet and many of the hacking attack that we have today They’re just gonna take it as a matter of course that any time. I won’t talk and wave my hands I get a shared world. It’s free It’s easy it’s trustworthy and reliable I can invite two friends or a million friends and it all just works And it will change the way we think of what the Internet is That is what I? started being interested in building and This is the direction that we’re going this is what distributed Ledger’s do is They will ultimately allow us to do that and there’s a lot of rough edges is we have growing pains and distributed ledger technology today but we’ll get over the growing pains we will get to a world that really is fast and secure and fair and We will enable to then have this vision of shared worlds big public ones little private ones everything connected That was the idea that was five years ago so I like playing with math so I kept playing around with how would you do it, and I convinced myself? Yeah, it’s impossible.
You can’t do that. There’s no way that you can have really high throughput because and And also have all these security and fairness properties You just can’t do it because ultimately you end up having to tell everybody what you think and then telling people what other people thought And they you can have millions or billions of extra votes and receipts on votes floating around and just doesn’t work so I was able to convince myself. It’s not possible And I set it aside And it would come back and haunt me, and it would keep nagging at me, and so I would pick it up again And I would spend a couple of days going through it and going through the math and realizing No, I was right.
It really is impossible You can’t do that and set it aside again, and this kept going for years I have lots of math problems some I’ve been working on for decades they just for whatever reason I don’t know why they just latch on to me, and I can’t get away from them and eventually I said Wait a second if we’re all just talking to each other and you include a tiny bit of extra information We could each end up with a complete history of exactly how we talked to each other in what order? But if I had that I would know exactly how information flowed through our community I would know what you know I would know when you learned it I would know what you know about what Alice knows and what you know about what Alice knows about what Bob knows and about when? They learned it.
I would know so much that I could take one of those huge impractical impossible to slow voting algorithms and do it with no votes at all I Could just sit here and say oh, I know how you would vote so don’t bother voting don’t tell me your vote I know it. I’ll just pretend that you voted and I’ll just pretend and I’ll just get to the conclusion and So all we do is we just talk to e we talk anyway to send out our transactions We had a tiny bit of information and it gives us this entire history the history is called a hash graph You just get this entire hash graph that lets you see such incredible amounts of information about who knows what when That then you get consensus for free But that’s where we’re going and where we’re at the very early stages I mean the planet is at the early stages of what Ledger’s can do and I think whatever you think that Ledger’s might be able to do they can do that But they can also do more and we are just as as a as a species beginning to learn what the final limits are and we’re pushing as fast as we can along that path and so this is the Gateway to the next net this is it this is the next note Technically the geeks will always know well.
There are multiple layers, and the Internet’s still down there at the bottom Just like it always has been but for the users What they think of when they think in their mind of what the net is is changing and that’s what’s going to be different and a low energy cost ah Let’s talk about energy cost you can run this on your cell phone Am I correct the processor and a cell phone apps is enough to actually run absolutely hash graph absolutely so There are systems that would require you to buy a supercomputer. It’s called a mining rig It’s a big box full of specially built chips that don’t do anything useful humanity They just mind which means they solve math problems that have no inherent use The purpose of them is to slow down the network This isn’t this isn’t sound good Just on the face of it.
I’m going to spend a lot of money on a supercomputer and then I’m going to Use a lot of electricity to run my supercomputer and the whole point of the supercomputer is to slow down the network But that’s what it is and so proof of work systems work that way Proof of work is really exciting because it was the first to show us all the possibilities of Ledger’s But it’s the first generation. We’re clearly need to move beyond that and we will I think over time So with hash breath yeah, you could run a full note on your cell phone You’ve accomplished something a tool that is extremely powerful.
What are your hopes and dreams? My hope and dream is that this pushes us forward along this path to an Internet of shared worlds like we’ve been talking about Where anybody can collaborate with anybody and? The data is stored You don’t have to pay for a server to hold it it is secure. It is private where you have the rules enforced We could set up an organization and trust that elections aren’t being rigged Because the rules are enforced you don’t have to trust any one Person we could have money and trust that no one’s going to inflate the money supply because the rules are enforced and it is Guaranteed we could store The deed to your house and at any given moment I could know that we’re all seeing the same answer as to who owns it So that you can’t sell it to one person and also sell it to someone else at the same time You’ll get caught because it’s a publicly visible thing that everyone knows that everyone else is seeing the same thing I I vision a world where the whole internet works this way or we all know that we can all see the same thing and that rules are enforced that we have collaboration and To do that we need speed we need security we need fairness And I my goal is that what we’re doing? Pushes us along that path because that’s the goal that we need to get to where the nature of the internet itself is Different because it has a trust layer So this has been my three-year journey of discovery from Bitcoin to hash graph and all the promise that they contain Now when we make a documentary like this You shoot hours and hours and hours of film and you have to decide what to put in and what to leave out? many of these guests we interviewed for somewhere between a half an hour to more than two hours and they said amazing things and stuff that you really do want to learn and So we’re going to make all of this available as bonus footage on hidden secrets of money Dot-com and so go there if you’re interested in any of this, but especially hash graph You know we wanted to take you on this journey of discovery to show you these stepping stones along the way and My hopes and dreams when I first started on this journey Was that Bitcoin was going to be the technology that was going to help free the world to make a fairer more prosperous freer planet for all of us by helping to change the monetary system and it has Bitcoin is Extremely important, it’s like the very first automobile It’s like the discovery of Electricity it’s like figuring out how to harness fire It’s it’s a very very important technology, but no man can Design something that is supposed to be a free-market interaction and predict all of the unintended consequences, and what satoshi nakamoto has done here is beautiful except when he did it figuring out how to Incentivize people he over Incentivized the mining area and what has happened to Bitcoin is it has become this behemoth That is no longer the promise of a currency It’s not going to replace the world monetary system or the financial markets nobody is actually using it for transactions they’re using it as a speculation now and So it isn’t living up to the original promise of what bitcoin was supposed to be Hash graph might we have yet to see right now none of the blockchain technologies that I know of can run markets where it’s got to be absolutely instant and Absolutely fair hashgraph can provide these things you know The people on Wall Street were sort of like dinosaurs looking up at an asteroid and not realizing What was coming suddenly? everybody in the financial sector is scrambling to try and figure out how they can get a cut of this and One of the things a lot of the Wall Street people don’t realize yet, is that a lot of them are already obsolete now hash graph Because it’s plant patented.
There’s there’s no token that you can buy right now there It’s a platform. It’s just like the blockchain. It’s it’s something that underlies Applications that will be built on top of it so but this The part that underlies those applications. This is a Revolutionary trust layer that speeds everything up Conserves energy and turns the Internet into something completely different because it’s completely decentralized As far as government in the financial system We have seen a tremendous change since the founding of the United States of America It was founded on freedom and what we’ve seen is more and more controlled by government and the financial system inserting themselves more and more and more between Individuals that want to transact with one another now the powers that be are not going to want to go down without a fight and This does have a potential to supplant most of what they do to take away much of the power and That’s really what I would like to see and so this is my great Hope and dream, but we’re not out of the woods yet, we have to keep pushing this forward and Please support it.
This is something that Everybody should get involved with and everybody should spread the news on it if you want it to succeed just like the beginning of this episode These technologies really do have the power to enslave or free mankind It’s going to be one or the other there is no middle ground here and right now We have the opportunity to choose. This is a decisive moment in history the future of mankind Depends on what you do so learn as much as you can about this space.
Thank you for reading and don’t forget to share with us in the comments below what do you think about a future where all our transactions are recorded in the hashgraph.
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