Skip to main content

tv   Inside Story 2017 Ep 351  Al Jazeera  December 19, 2017 10:32am-11:01am +03

10:32 am
is an insult an embarrassment to you and us ambassador nikki haley's said america would not be told by anyone where it can put its embassy and u.s. vice president mike pence has postponed a trip to the middle east the white house says he needs to stay in washington for a vote on the tax reform bill palestinian authority president mahmoud abbas and also one of egypt's top religious leaders have refused to meet him following the uproar over the u.s. decision on jerusalem at least three people have been killed after a u.s. passenger train derailed onto a highway it happened in washington state during rush hour thirteen of the trains fourteen carriages fell off the tracks amtrak train was carrying it seventy seven passengers and seven crew at least seventy people were injured. and the philippines at least thirty one people have been killed in landslides caused by tropical storm kai tak rescuers are trying to find a forty others who are still missing a state of emergency has been declared puerto rico's governor has ordered
10:33 am
a review into how many people died when hurricane maria hit the island in september . made the announcement following claims that they already gave a much lower number of fatalities the current official number of dead stands at sixty four those are the headlines news continues keep it here on al-jazeera inside story is next. news has never been. but the message is simplistic and misinformation is rife listening post provides a critical counterpoint challenging mainstream media narrative at this time on al-jazeera. a virtual coin worth nearly twenty thousand dollars that is still hard to understand but that coin is pushing its way into the mainstream with its recent surge in value of what's driving it and can it be sustained in an regulated environment this is inside story.
10:34 am
hello i'm kemal santa maria so we're going to talk about bitcoin today because while a lot of people are talking about it right now the digital currency is moved from the fringes to more of the mainstream particularly in the past few weeks because its value has risen at such an extraordinary rate we're talking around the twenty thousand dollar mark at the moment and just like a surging stock it's left a lot of people wishing that either got in earlier or wondering how they can jump on board now as ever though there are questions some of which we have to answer in this program questions about how safe it is how to regulate something which by its very nature is decentralized and if it's just another bubble waiting to burst we appreciate the not everyone is up to speed with exactly what this phenomenon is all about so here is a quick explainer bitcoin is a virtual currency which means it's created by computer code there are no middlemen
10:35 am
so there are no transaction fees you don't need to give your real name and there's no government control this is what we mean when we say decentralized and that makes bitcoin perfect for illicit sales but recently more efficiently businesses are starting to accept them simply because they are becoming increasingly popular and therefore more. manual when it started back in two thousand and one bitcoin was worth less than one cent as of monday one costs about nineteen thousand dollars according to coin base which is a digital currency exchange based in san francisco now to go back to one of those points cohen appealing to many because of its lack of regulation but governments are starting to take notice for example the french finance minister bruno the mouth said on sunday that he is going to propose to the next g. twenty president argentina at the g twenty summit in april we have a discussion all together on the question of bitcoin there is evidently a risk of speculation we need to consider and examine this and see how we can
10:36 am
regulate big coin so here is the panel for today starting in cambridge with derek holman who is an economic historian at the university of cambridge in the london school of economics on skype from sydney david vaile co convener of the cyberspace law and policy center at the university of new south wales and in berlin your plants are who is among other things the owner of room seventy seven a restaurant and a bar that first accepted bitcoin way back in two thousand and eleven gentlemen welcome nice to have you with us in the interests of transparency i need to start with this we can see you all in vision at the moment hands up if you own bitcoin just in the interest of transparency. so we've got berlin in cambridge with bitcoin and sydney doesn't i just do that and for the record i don't either just in the interests of transparency we think it's important that we do with this for the discussion so derek let's start with you first of all the price i want to deal with
10:37 am
the news headlines at the moment this price is what is driving it the fact that as i said over a good number of years it's gone up from almost nothing to nineteen thousand but the fact that november twenty ninth it was about ten thousand and today it's nineteen thousand that seems to me to be quite extraordinary. it is extraordinary but it's not unprecedented in big points case we've seen massive price run ups in two thousand and eleven and also at the end of two thousand and thirteen. you know at the end of two thousand and thirteen that was the first time big question really came on to the mainstream media's radar screen and i think your viewers should be advised that both after the two thousand and eleven two thousand and thirteen run ups price lost nearly ninety percent of its value so what can go up quickly can certainly go down quickly as well yes something i do want to deal with later on i'll just stay with you a moment what is driving i mean we can see what's driving the price but where is the interest coming from right now why is such
10:38 am
a surge in interest right so there's a number of things that have been propelling big price higher most recently is the adoption of an introduction of futures markets by wall street firms like c m e e c b o e and nasdaq next year i think this is seen as a major development for big oil and a legitimizing development. in crypto currency as a new at asset class many people think these future markets are going to pave the way for exchange traded funds e.t.s. to come next year as well and we're seeing also survey data indicating that millennial zz a third a millennialism here in the u.k. according to a recent survey are looking to invest in crypto currency so there's a number of things but i think wall street's embrace is clearly the biggest factor right now david violence in the us probably the more cautious about three guests and it become to you to ask you this do you feel that the general public really does understand this or that i mean hopefully watching
10:39 am
a program like this they will learn more but maybe they're just more interested in the fact that the returns are so good at the moment. well the returns are obviously what is driving everybody nuts it's the fear and greed working together the fear of missing out and the idea that maybe you can get on the bandwagon i think everybody should take a deep breath and just step back for a moment but don't listen to me i hadn't thought missed out on that capital gain but the problem is complexity and this this shia strangeness and we had an assist of the underlying technology and therefore the great difficulty of seeing stories in the economist of people starting to say an exchange traded fund a future is derivative of this sounds very much like a great thing that would call everybody in but how could you possibly value it what's what's behind it why is the. i suppose the backing in terms of any assets
10:40 am
but also with the protection in case some exchange operator just decides to take your money and go and so from a consumer protection perspective or even an investor protection if we treat this as a speculative assett rather than a currency the question is how can you tell how can you make a rational and well informed sort of estimate of the sort of risk that you're looking at. really i think it's almost impossible for even the experts was gobsmacked by a computer science seminar i went through with a professor of computer languages that you want to study last year and even the experts the cryptographers the math ph d.'s were had them out saying i've been trying to digest the the deep of the underlying technology and so you know i still feel that i only just scratching the surface of my own ignorance of all of the different sorts of factors that could come in here so i really have
10:41 am
a worry for the taxi driver or the hairdresser who's heard about it last week and suddenly wants to jump in i like the points that you raise and i think your. lane is the perfect person to put them to your david talks about complexity and the weirdness. just give me your response to someone who has used for a long time and used it in a commercial sense as well tell me your thoughts. so everything we hear about the complexity and reorganise of bitcoin right now we have heard before about twenty five thirty years ago and then people were talking about this weird thing called the internet big cornice hard to explain it is a very complex technology and it takes about as much time to understand it as it took back then to understand what is an e-mail and how is a web server functioning and things like that but they usability of bitcoin increases in it with an incredible speed and we start seeing people using bitcoin
10:42 am
even without knowing that they use bitcoin like people today use facebook without actually understanding that they're using the internet so i think we're pretty much on the right path here maybe you should explain to us then in your own experience how it works if you're saying it's actually simpler than it is if i well if i owned it cohen and i came to your restaurant in berlin and i wanted to pay with it how easy or difficult is that and yeah go ahead explain it. well you're talking about the usability as exact of bitcoin which is very very easy you you come to our restaurant you ask for your bill our stuff will present you a q. our code that you scan with your mobile phone that gives you our payment address and the amount to be paid your jacket your click on send and then we have the money
10:43 am
irreversibly nobody like with credit cards there cannot be any charge backs or anything like that so the actual use of bitcoin is totally easy but that doesn't explain you how it actually works it's like you can you can use your email client very easy nowadays without understanding how the internet works so i wouldn't think that in the future everybody will know every technical detail of how the bitcoin network works just like today nobody really knows what to t.c.p. ip and all these technologies underlying the internet function very common actually improves scales is totally easy it's easier than sorry to interrupt your guy just wanted to put some of that garrett hohmann joining us in cambridge basically what you'll seems to be saying is the usability is there and people should use it without fully well that it's not so important to fully understand the technology behind it what do you reckon. well i think you know
10:44 am
people are a little more trusting of the underlying technology of e-mail because it's just e-mail but when it comes to money and wealth i think people are a bit more conservative in do want to know a little bit more about how something like that quaint works before they put more say resources into it or use it so i don't know that the analogy is a perfect one but i take the point is it doesn't necessarily need to be where everyone understands how block chains work and so on i also think that many people find still difficult to use if you go into a pub here in cambridge like i have and try to pay with their coin and you don't have an internet connection it's very difficult to actually complete that payment. q.r. codes are something that more and more people are getting used to using you know apple pay and other digital payment systems are becoming more popular but still paying with your smartphone is is not something that you know majority of people
10:45 am
are doing so there is a usability challenge as well people need to learn how to use this new technology before it becomes adopted beyond the tens of millions of people who are using it right now david vaile in sydney how are you going with your complexity and we had this now your understanding a bit more. look i don't want to be the devil's advocate but being typecast as that so i have to sort of respond. i think the comparison with a male is very interesting like i've been trying to help people understand things and trying to simplify and provide usable sorts of technologies for a long time now and you know the great thing about email is that it does have a real world analogy. even the system and the e-mail system a similar enough so that people can you know make their own conclusions like that you've got a message you posit that sort of thing the problem for me with big corn is that it's its fundamental nature is not even clear so it's sometimes called
10:46 am
a crypto currency but in many ways it doesn't behave like a currency it doesn't have some of the fundamental things you can't pay taxes with it and you can't. have any reader it's not like it exists in. anything other than as a chunk of data i suppose it is when i should if you lose that bit of data you've lost the whole thing it's not like there's a bank account and i'm not a fan of banks you know i sued banks up almost driven banks to bankruptcy but you know they're by no means you know ideal but if you lose your you know your bank card or something like that you can go to them saying you've still got my money and you can get it back on not suddenly at risk so that that risk the physical risk of actually losing access to the single bit of data is something i think it's unusual for people there's another question of the exchange right like if the exchange rates relatively stable is behaving like
10:47 am
a currency and it might go up and down one percent sort of every so often that's one thing but if you're in a situation where it might go from ten thousand dollars to twenty thousand dollars in a week and maybe in a jump of a thousand dollars in an hour if you have gone in to buy a cup of coffee what's the exchange right at the the at. and there's also different exchanges and so which one who's actually exchange right do you use i suppose that the the the final thing is that because it's not clear that it is actually a currency and many of the features actually behave more like an assett and so that the whole question about speculation about bubbles about sort of sudden disappearance of trust in the market all of those sorts of things unlikely to affect an e-mail or to affect an ordinary sort of currency if you're trying to use that analogy ok you're in berlin i'd seen you shaking your head i've seen you nodding your head just a quick response from you before we move on. you can
10:48 am
there is nothing on the planet that you can hold so security as a bit coin the point here is you need a backup of your private keys. so it's of people will learn to take computer security much more serious than they did so far but bottom line you cannot lose your bitcoin if you have a proper back up and nobody can confiscate your bitcoin nobody can inflate your bitcoin nobody can stop your bitcoin payment with capital controls and so on and so on so bitcoin in fact is the safest s. at the safest digital bear as it that the planet has ever seen i would like to also make a remark about the valuation and the question is it a currency is it a commodity is it maybe a stock it's neither of these bitcoin is a network and because people are trying to apply the valuation mechanisms that they
10:49 am
apply to stocks or currencies or anything like that they cannot understand this immense this immense growth that we're seeing bitcoin is a network we need to talk about network valuation not market capitalization and network valuation follows metcalf's law which means the value of a network increases exponentially with the amount of people using it if you look at that bitcoin from at coffs point of fuel from a cough log point of view you're not surprised by its growth that's to be expected gentleman we need to talk about the r. word and that is regulation because governments are starting to talk about and really i mean i guess this is what appeals about bitcoin that it is decentralized it's not regulated. garrick what and i start with you there in cambridge. how would you even let's deal with the morals and the idea of regulation in
10:50 am
a moment but if it were to be regulated how do you even start with something that is global something that is virtual something that is borderless. well so in big case it's been regulated at least as far back as two thousand and thirteen in the united states when finn sen issued their initial guidance and actually that regulation led to an increase in price as regulation regulatory announcements often have and the reason is again once a regulator comes out and issue some guidance or incorporates. in some way into an existing regulatory framework it further legitimizes it not all regulatory announcements have been positive for the price when china this year announced that it was shutting down exchanges that caused the price drop. but japan you know has already passed laws formally recognized as currency and you're seen businesses now
10:51 am
more and more business is actually accepting coin in japan and japan is the number one country today for the trade in a big coin so it's a bit of a i think a. myth that because it is not regulated so also a myth that it's a great mode of payment for the online dark web there's been a number of successful prosecutions of criminals using that quine online in the country of bulgaria actually which rounded up a criminal network has over three billion u.s. dollars or about six percent of g.d.p. i believe of bitcoin now in its possession so it was able to seize this illicitly used you know because and that's been a huge windfall for bulgaria so it's something that can be regulated and typically it's been regulated at the point where it's converted into national currencies but derek you're talking about and this might be my stupid question of the day so do forgive me but you're talking about individual countries there with their
10:52 am
individual rules when we have gone a currency that is being traded all over the wool them through the internet so i don't know how the two come together. right well i mean if a country wants to ban big coin for example it might be difficult to completely stamp it out of existence prevent all citizens in a particular country from using it but a country can for example ban the listing of bitcoin wallet apps in the app store and android store it can you know outlaw the existence of regulated exchanges to make sure banks aren't allowed to transfer funds into those exchanges at least banks that are within that country's jurisdiction i mean there are various points of control that regulators can exercise to limit you know the use of mean big point maybe decentralized but people are still centralized and you know if you know who's running an exchange or developing software you know you can arrest that person if they're breaking the laws and that's what we see happening in countries that have
10:53 am
chosen to crack down heavily on david does that put in of your or elaine if you will feel as i mean why guard describe that there is regulation up there and the japanese are even setting the trend was turning into a car. well if i can continue my theme of complexity i've just started a survey where we think we might limit ourselves to the top thirty or forty countries but to try to understand their responses to both bitcoin and also to the. financial transaction use of block technology so for instance you know that the australian share market has just decided to use the underlying technology block shine for the settlement and so one of the first preliminary sort of survey it looks like an extreme variety of responses some countries are ignoring it some countries just exploring one use but deprecating the others some embracing
10:54 am
it and actually legalizing it and moving towards making it a an. actual currency others outright banning it or banning the things around the edges the exchanges and the conversions and so at the moment it's a bit of a miss i'm not sure that that's a bad thing as i suppose a should actually start off by saying there's a huge amount of etiology in the bitcoin and in the block china will there's a whole lot of inbuilt assumptions a lot of it is on one side is very much a libertarian idea that sort of government is bad you know unregulated markets are good and that to me is going into the future but going back to the nineteenth century one of the great inventions of the twentieth century was antitrust law competition law consumer protection law you know banking controls and things that actually stopped the crazy and sort of out of control exploitation that you get in
10:55 am
some sorts of free markets i'm neither a fan of a total free market nor of a top of an ivy regulated market what's interesting is some of the conversations i've had in. with bankers and other sorts of people in relation to all sorts of information controls and i often cite look what we want is sensible regulation it actually as we had before in this case improves the value of bitcoin when you get this stepping in it's and that is because the the i suppose the etiological purist position that you know regulation is bad doesn't actually match up with consumer reality where you're completely for instance out classed in terms of knowledge and sophistication but you're also outclassed in negotiating and lobbying power compared to big businesses and also to those who run the bitcoin scheme you might actually like to have you know someone on your side or to have some of the
10:56 am
prudential regulations or the restraints on straight out rip offs that have actually been developed in the last hundred years rather than going back to the wild west of the nineteenth century with all things are run down the clock so i'll come back to you maybe maybe if i get away from the odd would regulation and use the pay word which david said and that was protections and he mentions before the fact that it's not backed by assets oh ok go ahead you've raised your thinking. i don't. think interrupt you but yeah regulation as a matter of fact the big bitcoin protocol he's not regulated and can by definition by definition not be regulated that is a feature of bitcoin that it is that is its whole purpose and that's what gives it value and that's the way or is they must sorry to interrupt you where is it over to you actually related many pure lated where is the protection for the person who owns it. you see the person who
10:57 am
believes in bitcoin fuz the absence of regulation as the protection the absence of regulation protects people from negative interest rates from monetary inflation from capital controls from bank bail in. so i belong to all these people who would like to be protected from these things and the tool to protect yourself is bitcoin. if you're talking about consummate protection meaning like i should get my money back if the online shop didn't sent me the parcel or something like that these are things that can easily build on top of the bitcoin network but the bitcoin protocol the bitcoin network itself can never be regulated it would stop being bitcoin if that regulation attempts were successful fests and i think discussion gentlemen i thank you very much for your time very
10:58 am
common in cambridge david vaile in sydney and your plants in berlin and as ever thank you for joining us you can see this program again any time by visiting our website at al-jazeera dot com you can head to our facebook page for further discussion as well that is facebook dot com forward slash a.j. inside story hop on twitter as well i handle is at a.j. inside story i'm at come out for me come all santa maria and the whole team here thanks for joining us and we'll see you again soon my . abandoned by the state social collectives are occupying space is among the people a military architects working on the edge of. in the first episode. some. of self building in st.
10:59 am
kitts a. graduate from iraq is also a part time going to museum which includes a reconstruction of the famous. most of the people he's showing around came to germany as refugees this is just one of several museums taking part in the project called meeting point and as well as bringing people together one of its aims is to emphasize the contribution of migrants right up to the present day to western culture. because i've been here for some time i can help them with lots of things forward to me the great thing is it's not just about museums about forming a new life is a part of life it's culture. realities it's a piece of machinery it goes wrong it's their arch the true which we can bring a legal system to bear getting to the heart of the matter we need of the.
11:00 am
hear their story on talk to al-jazeera at this time. and they're all the countries of managed to solve this problem but you worry that this conflict could erupt into a right. that's. the price clearly there writeup been prejudiced setting the stage for a serious debate up front at this time on al-jazeera. will take all necessary steps to achieve a denuclearization and ensure.


info Stream Only

Uploaded by TV Archive on