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Money Is Broken; Its Future Is Not

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The presentation 'Money Is Broken; Its Future Is Not' was given by Tyler and Cameron Winklevoss at the Money20/20 conference in Las Vegas, NV on November 3, 2014.

Published in: Economy & Finance
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  • DOWNLOAD FULL BOOKS INTO AVAILABLE FORMAT ......................................................................................................................... ......................................................................................................................... 1.DOWNLOAD FULL PDF EBOOK here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL EPUB Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL doc Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL PDF EBOOK here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL EPUB Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... 1.DOWNLOAD FULL doc Ebook here { https://tinyurl.com/y8nn3gmc } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
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  • Part I and II, articulate and succinct tutorial. Part III, wow, very forward thinking.
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Money Is Broken; Its Future Is Not

  1. 1. MONEY IS BROKEN; ITS FUTURE IS NOT CAMERON WINKLEVOSS @winklevoss TYLER WINKLEVOSS @tylerwinklevoss
  2. 2. PART I UNDERSTANDING MONEY
  3. 3. Money is the most widely used yet misunderstood technology in the world. “One reason why money is a mystery to so many is the role of myth or fiction or convention...the money around us, the money that we grow up with, appears the only “real” money to us.” -Milton Friedman, Money Mischief
  4. 4. The Context: Before money, all trade relied on barter, a system of trade, whereby one individual exchanged his or her goods and services for the goods and services of another (i.e., in-kind transfer or swap). ORIGIN Why do we have money anyway? Example: I’ll trade you my two bushels of corn for your wheel of cheese. The Problem: What happens if I want what you have, but you don’t want what I have? The answer is, nothing.
  5. 5. Trade Problem Why do we have money anyway? This trade deadlock is known as the Coincidence of Wants Dilemma, whereby two people must want what each other have, otherwise a trade will not occur. Other limitations of barter are portability (difficult to transport 10 oxen to the marketplace); divisibility (cannot trade half of a horse); measure of value (no common way to measure the value of goods against each other); and storage (perishables like fruit do not last long). The Solution: Invent a common “medium of exchange”, or what we colloquially refer to as money. The Answer: We have money because money solves a trade problem.
  6. 6. 1 Scarce 2 3 4 5 6 Durable Verifiable Portable Divisible Fungible Storable Difficult to Counterfeit 7 8 9 Widely Acceptable MINIMUM VIABLE PRODUCT What does money need to be?
  7. 7. WHAT COULD WE USE FOR MONEY IN A PRE-INDUSTRIAL WORLD?
  8. 8. FAILING FAST • Money cannot be a gas, otherwise, it would leak out of your piggybank. •Disqualifies 11 elements including the noble gases.
  9. 9. FAILING FAST • Money cannot be reactive or corrosive, otherwise, it would spontaneously explode in your hand (ouch!), or rust. • Disqualifies 38 elements such as pure lithium, which ignites when exposed to air or water, and iron, which rusts.
  10. 10. FAILING FAST • Money cannot be radioactive, otherwise, it would radiate away or eventually kill you (yikes!). • Disqualifies 38 elements such as promethium and einsteinium (i.e., lanthanides and actinides).
  11. 11. FAILING FAST • Money must be rare, but not too rare. • Disqualifies 26 elements such as copper, which is too abundant and osmium, which only comes to earth via meteorites (i.e., too rare).
  12. 12. FAILING FAST • We are left with rhodium, palladium, platinum, silver and gold (5 of 8 noble metals).
  13. 13. FAILING FAST • Rhodium and palladium weren’t discovered until the 1880’s.
  14. 14. FAILING FAST • Platinum’s melting point (3,000 degrees Fahrenheit) would have been too high for pre-industrial furnaces.
  15. 15. FAILING FAST • Silver and gold both seem like strong contenders, but...
  16. 16. FAILING FAST Text • Silver and gold both seem like strong contenders, but...silver tarnishes easily. •Silver also has too much industrial application (i.e., usefulness outside of being a currency is a bug not a feature), whereas, gold does not; it’s just useless enough.
  17. 17. FAILING FAST • This leaves us with gold as our best bet for money in pre-industrial times and silver as our only runner-up. •Both metals have enjoyed an ~8,000 year first-mover advantage . •Insight: If we were to replay history over and over again, gold would always emerge as beta money, version 1.0.
  18. 18. OPTIMIZATION We’ve built better money. Why don’t we use gold for money today? Portability: Divisibility: Storability: Fungibility: Difficulty to Counterfeit: Good Better Best Good Better Best Good Better Best Good Better Best Good Better Best Physical Less Physical Digital As we’ve made money less physical or “real”, we’ve optimized its parameters.
  19. 19. MONEY MATRIX Originally hardware-only, today, money is primarily software and starting to become “smart” or programmable.
  20. 20. 1 2 3 4 5 6 Money is a 10,000 year-old technology. Government-backed paper money (i.e., fiat money) is a 40 year-old iteration on this technology. Your money is primarily digital, and has been for over 50 years. Money made of precious metal is no more “real” than money made of paper or computer bits. Crypto-currencies like bitcoin have unique technological intrinsic value when compared to all previous money technologies. These unique qualities give crypto-currencies unprecedented money potential. TAKEAWAYS SO FAR 7 8 Bitcoin is the world’s first-ever programmable money or smart money. The idea of money being something physical is almost entirely a fiction.
  21. 21. PART II THE PROBLEM WITH MONEY TODAY
  22. 22. THESIS Money is, and always has been, a technology that facilitates trade. It does so by helping people exchange value more easily (i.e., reduces friction). But today... Money is no longer facilitating trade; it’s holding it back!
  23. 23. INTERNET These protocols work in tandem and can be thought of as the first, middle and last miles of data transfer. This network, which today we call the Internet, transfers packets of data back and forth using specific communication protocols developed over time. Since the early 1960’s, technologists have been building the largest data exchange network in the world.
  24. 24. PROTOCOLS The Internet protocol suite (TCP/IP) is typically divided into four layers: 1. Link Layer Puts packets on the network (e.g., Ethernet, DSL, ISDN) 2. Internet Layer Routes packets over the network (e.g., IPv4, IPv6, IPSec) 3. Transport Layer Establishes routes on the network (e.g., TCP, UDP) 4. Application Layer Delivers packets as web pages, email, files, voice, etc. (e.g., HTTP, SMTP, FTP, RTP)
  25. 25. DILEMMA This network has become very good at exchanging data, but has no way of exchanging value. As a result, all components of trade have become truly global, except for money. The Solution Create better money. The Problem
  26. 26. Good news: The Internet already has a value transfer protocol, it’s called “Bitcoin” with a capital “B”. It also already has a digital asset that can be transferred over this protocol, it’s called “bitcoin” with a lowercase “b”. MONEY OVER IP The Internet needs a value transfer protocol (VTP) that can transfer digital value between users. In other words, the Internet needs Internet money!
  27. 27. Better news: A new proposal called pegged sidechains could allow for other value transfer protocols to emerge and run parallel to the Bitcoin protocol, harnessing its security and growing infrastructure. Entirely new application-specific coins or AppCoins would traverse these parallel protocols called sidechains, “backed” or secured by the Bitcoin protocol. Bitcoins would become the global reserve crypto-currency, from which users could jump into and out of these distinct AppCoins and their protocols depending on their value transfer needs. APPCOINS
  28. 28. PART III THE FUTURE OF MONEY
  29. 29. FUTURE OF TRADE Soon, money will no longer hold trade back; it will begin to propel it forward! By allowing cryptographically-proven nano transactions, AppCoins will open new vistas of trade, previously unimaginable. Not only will they facilitate trade between humans, they will enable it between machines.
  30. 30. SMART INTERNET Computers will interact intelligently to reduce network congestion and allocate scarce resources accordingly. A router being flooded by traffic might require DDosCoin in an effort to shut down a denial-of-service attack. A server might require a sender to include EmailCoin in an effort to weed out spam. OpenCoin would be rewarded to developers based on their contributions to open-source projects. StorageCoin would be rewarded to computers based on how much storage capacity they dedicated to the network. This new ability to transfer value will fundamentally change the neurological pathways of the Internet forever!
  31. 31. AUTONOMOUS AGENTS In the future, AppCoins will enable the first forms of artificial life and usher in a ‘Second Machine Age’. Computers, machines and things (e.g., refrigerator), which today cannot open a bank account, will be able to plug into these protocols and behave like rational economic actors. A new Trade Network will emerge, on which these computers or “autonomous agents” will bid for work and be hired.
  32. 32. AUTONOMOUS AGENTS Agents will be anything from a self-driving car that picks you up and takes you to the office, to a drone that delivers you a tube of sunscreen on the beach, which it just purchased from an autonomous kiosk. On your trip, your self-driving taxi will negotiate with roads for road-space using RoadCoin and pay other self-driving taxis with SpeedCoin to get out of the way. Agents who are profitable will be able to purchase more software and hardware in order to spawn children. Soon, a fleet of agents would arise to form an autonomous corporation led by the parent agent. Agents and autonomous corporations will be subject to supply and demand and market competition. Ones that provided poor services would become unprofitable and shut down, or be reformatted and sold-off in a bankruptcy proceeding to other agent bidders.
  33. 33. TRADE SINGULARITY A Trade Singularity will be occur, whereby trade between computers, machines and things, will exceed trade between humans. Uncreative tasks, both blue-collar and white-collar, will become primarily automated. Goods and services will become much cheaper and living standards will be much higher. Long-Term Trend: Humans who are creative will win the day.
  34. 34. SMART CONTRACTS Agents can be viewed as public goods because no one will profit directly from them, but everyone will profit indirectly (e.g., lighthouse, highway). As a result, there will be a funding dilemma or free-rider problem. So, how will we fund these public goods? Taxation is too inefficient, but lightweight digital assurance contracts are not. People will send PledgeCoin to a pre-defined digital escrow address that will only use the funds when a certain target is met, otherwise, it will return the PledgeCoins to their senders. In the future, entire sectors of public goods will be built out by these digital assurance contracts, which will come to replace a lot of taxation. Want a better taxi? Create a smart contract!
  35. 35. IF WE FIX MONEY, THE COMPUTER BITS ARE THE LIMIT THANK YOU
  36. 36. REFERENCES IMAGES Slide 1: FamZoo | Flickr Slide 2: Nicki Mannix | Flickr Slide 3: Omer Wazer | Flickr Slide 21: Tax Credits | Flickr Slide 22: Joanna De Silva | Flickr Slide 27: Dustin Gaffke | Flickr Slide 34: Museum of Photographic Arts | Flickr Vectors: The Noun Project & FlatIcon NPR | A Chemist Explains Why Gold Beat Out Lithium, Osmium, Einsteinium… Mike Hearn | The Future of Money European Central Bank | Virtual Currency Schemes

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