When Bitcoin Hit $100: CNBC's 2013 Coverage
Summary
TLDRThe script discusses the emergence of Bitcoin as a response to currency crises and debt concerns. Created three years prior, Bitcoin is a digital currency that operates without regulation and has seen significant value growth, despite its novelty and association with niche markets like gaming and adult entertainment. While some see it as a revolutionary financial tool, others criticize its lack of tangibility and potential for hacking. The debate highlights the growing unease with traditional fiat money and the quest for an alternative, although the script suggests skepticism about Bitcoin's long-term viability and widespread acceptance.
Takeaways
- 😕 The script discusses the creation of Bitcoin as a response to concerns over government-controlled fiat money and currency crises.
- 💡 Bitcoin was created around three years prior to the script's date and was initially under the radar but started to gain traction.
- 💸 Bitcoin operates as an electronic online digital currency that can be exchanged for dollars or euros on specific networks.
- 📈 The value of Bitcoin has been increasing rapidly, with significant growth over the past year and months mentioned in the script.
- 🌐 There are a limited number of places that accept Bitcoin, including novelty clothing stores, gaming sites, and adult entertainment platforms.
- 🚫 Concerns are raised about the lack of regulation and control over Bitcoin, which could lead to misuse such as by drug dealers.
- 🤔 The speaker expresses skepticism about Bitcoin's value and long-term viability, comparing it unfavorably to gold.
- 💬 A debate is presented in the script about the scarcity and indestructibility of Bitcoin, with differing opinions on its security and value.
- 🛡️ The script suggests that if Bitcoin became widely accepted, it might face regulatory challenges or even be shut down by governments.
- 💼 The speaker argues that Bitcoin fails the test of being a perfect form of money, as it does not meet the criteria of rarity and indestructibility.
- 🔐 The creation of new Bitcoins is described as a difficult process requiring significant computational power, which adds to its perceived security.
Q & A
What is the context in which Bitcoin is mentioned in the transcript?
-Bitcoin is discussed as a response to concerns about currency crises and debt crises, as well as a reaction to government actions such as confiscating funds from private bank accounts and printing large amounts of money.
How old was Bitcoin when the conversation took place?
-Bitcoin was about three years old at the time of the conversation.
What is the general sentiment towards Bitcoin expressed in the script?
-The sentiment is mixed, with some acknowledging Bitcoin's growing traction and others expressing skepticism about its value, security, and future acceptance.
What are some of the places that are beginning to accept Bitcoin as a form of payment?
-Bitcoin is being accepted in some novelty clothing stores, gaming sites, and adult entertainment sites, although it's not widely recognized or accepted in mainstream commerce.
What are the four elements that the speaker believes money should have?
-According to the speaker, money should be very rare, indestructible, divisible without losing its purchasing power, and not be increased by fiat.
Why does the speaker believe Bitcoin fails as a form of money?
-The speaker argues that Bitcoin fails because it is not rare and is destructible, contradicting the four elements they believe money should have.
What is the speaker's opinion on the value and future of Bitcoin?
-The speaker is skeptical about Bitcoin's value and future, suggesting that it is a novelty and that if it becomes widely accepted, the US government would likely shut it down.
What is the current size of the Bitcoin market compared to traditional currency trading?
-The Bitcoin market is about a billion dollars, which is significantly smaller than the four trillion dollars in currency trading that occurs every day.
How has the value of Bitcoin changed recently according to the transcript?
-Bitcoin has quintupled in value over the last year and has seen significant increases in value over the last couple of months, with over a 20 percent increase in just a month.
What concerns does the speaker have about the use of Bitcoin?
-The speaker is concerned about the lack of regulation and control, the potential for misuse in illegal activities such as drug dealing, and the possibility of the market being shut down by the government.
What is the speaker's view on the security and counterfeiting of Bitcoin?
-While acknowledging that hacking could be a problem, the speaker suggests that the chances of creating a counterfeit Bitcoin that end users would accept are astronomically low due to the design and creation process of Bitcoin.
Outlines
💰 Rising Concerns Lead to Bitcoin's Popularity
The opening paragraph discusses how confiscation of bank accounts and printing of trillions of dollars have caused people to worry, leading to the rise of Bitcoin. Bitcoin is described as an electronic online digital currency created about three years ago, now gaining traction. People can exchange their traditional currencies for Bitcoin, which has seen a significant increase in value and acceptance, albeit primarily in niche markets like novelty clothing, gaming, and adult sites.
📉 Bitcoin's Drawbacks and the Gold Standard
This paragraph highlights the drawbacks of Bitcoin, such as its lack of rarity and indestructibility, comparing it to gold, which is considered a perfect form of money. Gold's attributes, including rarity, indestructibility, divisibility, and stability against inflation, are contrasted with Bitcoin, which fails to meet these standards. The speaker credits Bitcoin creators for their distrust of fiat money but criticizes Bitcoin as an attempt to reinvent the wheel, resulting in what they see as a 'flat tire.'
🔒 Bitcoin's Security and Scarcity Debate
In this section, the discussion revolves around the security and rarity of Bitcoin. The speaker argues that while gold is physically scarce, Bitcoin's scarcity comes from the computational effort required to create it. The destructibility of Bitcoin is also debated, with the conclusion that it is exceedingly difficult to counterfeit due to the complex and resource-intensive process of generating new Bitcoins. The improbability of successful counterfeit Bitcoin creation is emphasized.
📉 Concerns Over Regulation and Illicit Use
The paragraph discusses concerns regarding Bitcoin's use in illegal activities and its lack of regulation. The speaker mentions stories of drug dealers using Bitcoin and notes that the total Bitcoin market is still relatively small compared to traditional currency markets. There is skepticism about Bitcoin becoming mainstream, as the US government could potentially shut it down if it became widely used. Despite its growing value and visibility, Bitcoin is still seen as a novelty.
📊 Potential Role of Bitcoin in Diversified Portfolios
Here, the potential for Bitcoin to play a role in diversified investment portfolios is considered. Despite its growing acceptance and value, there is concern about the increased risk of hacking as Bitcoin becomes more popular. The speaker argues that the possibility of rapid loss of purchasing power makes Bitcoin a risky investment. There is a debate on whether Bitcoin's vulnerabilities are merely theoretical or likely to occur, with some experts believing in its potential despite the risks.
Mindmap
Keywords
💡Confiscated
💡Trillion dollars
💡Bitcoin
💡Currency crisis
💡Debt crises
💡Digital currency
💡Fiat money
💡Gold
💡Destructible
💡Regulation
💡Hacking
Highlights
Confiscation of billions of dollars from private bank accounts and printing of trillions has led to public worry.
Bitcoin, an electronic online digital currency, was created three years ago and is gaining traction.
Bitcoin operates as an unregulated currency, accepted in some online networks.
The value of Bitcoin has recently increased significantly.
Bitcoin is accepted in novelty clothing, gaming sites, and adult entertainment.
There are concerns about the security and regulation of Bitcoin.
Bitcoin creators are credited for not trusting fiat money controlled by governments.
Bitcoin is criticized for failing to meet the four elements of a perfect form of money.
Bitcoin's scarcity is based on the scarcity of CPU time, unlike physical scarcity of gold.
The creation of a Bitcoin requires vast amounts of CPU power, making it difficult to counterfeit.
Concerns about the potential misuse of Bitcoin for illegal activities.
The Bitcoin market is currently valued at about a billion dollars, a small fraction of daily currency trading.
Bitcoin's value has quintupled in the last year, with significant increases in recent months.
There are dozens of online places where Bitcoin is accepted, though not widely recognized.
Debate over the potential role of Bitcoin in diversified portfolios and its security.
The possibility of increased hacking attempts as Bitcoin becomes more widely known.
Opinions vary on the long-term viability and acceptance of Bitcoin.
Transcripts
you know you confiscated a few billion
dollars out of private bank accounts and
you print a couple trillion dollars and
all of a sudden you know what happens
people start to worry so out of this
worry we have something called the
Bitcoin
bitcoin is an electronic online digital
currency was created about three years
ago kind of flew under the radar now
it's starting to actually gain some
traction you exchanged your dollars to
exchange your euros whatever you go on
to these networks and they it's an
accepted currency and it's zooming and
value lately just unbelievable at how
much this has taken off and and there
are places that are beginning to
actually accept this sort of universal
digital currency kind of operates in the
shadows not regulated but it's an it's a
total outgrowth of people getting start
starting to get worried about these
currency crisis debt crises where are
these things accepted still not a lot of
places I checked out online not a lot of
websites that you would recognize but
the places are kind of novelty clothing
gaming sites yeah wait for it porn some
of those places but you know there are a
lot of drawbacks are a lot of fears that
I'm sure that our guests are going to
talk about but this tells you how really
insecure people are in this age of debt
and currency crises and all the other
things that we have going on in the
world first I have to give Bitcoin
creators credit at least they they know
enough not to trust fiat money that's
controlled by our government but we
they're trying to reinvent the wheel and
they've come up with a flat tire we
already have a perfect real form of
money and it's called gold money has to
have four elements it has to be very
rare indestructible divisible without
losing its purchasing power and cannot
be increased by Fiat and and bitcoins
fail on the first two they are not rare
and they are very much destructible had
paypal invented Bitcoin we don't be
heralding it as the most important
financial revolution since the internet
isn't the credit card perhaps and I
guess I would say as for those first two
points as to it being destructible and
rare I guess I don't know if I agree
with that I mean gold is only rare
because it's physically scarce but
Bitcoin is rare because it counts on the
scarcity of CPU time and so I think it
like why is that so destructibility I
think that's also sort of in question
what are the chances of someone coming
up with a counterfeit Bitcoin and they
present that to an end user and they're
accepting this this phony Bitcoin
I guess the chances would be
astronomically low and that's the whole
design I mean the way that you the way
that you create a Bitcoin is that you
basically have to find a larger rare
number bigger than any of the other
Bitcoin out there and so every Bitcoin
the next Bitcoin is even harder to
create and so I'd say right now it
requires vast amounts of CPU is
generally through Amazon Cloud and
things like this to create the next
Bitcoin so be exceedingly impossible or
exceedingly difficult to create so hack
so hacking Bitcoin could be a problem
but what about someone coming up with a
counterfeit that end users don't
recognize as being counterfeit and then
of loading the purchasing power of all
just yeah you guys I guess one of my
concerns here is - is that you know
there's a lot of stories about drug
dealers using these kind of things and I
think it's just a matter of it's not
regulated it's not controlled the whole
the whole Bitcoin market is about a
billion dollars it's a novelty for the
Geek Squad I can assure you if these
became well promulgated then the US
government would shut it down and just
just to give alright just to give our
viewers some perspective there's about
four trillion dollars in currency
trading every day and as Michael said
it's about a billion dollars worth of
bitcoins it has quintupled in value over
the last year just just since the the
Cyprus thing came up it's up over 20
percent or over the last month or about
a couple months it's up over 40 percent
so it's actually getting some visibility
out there again you can go online and go
to places where bitcoins are accepted
and there are dozens of places no
websites that you would actually do that
you know if I said them oh yeah I know
that but it's just gonna be very
interesting to see just how much this
catches on it just sounds so silly but
maybe it's not David how much of your
wealth will you place in bitcoins what
percentage would you believe that a for
any sort of a highly diversified
portfolio something like Bitcoin is
going to play an increasing role if it
is widely promulgated and the
exponential increase of someone trying
to hack it because it'd be many more
people trying to hack it goes up well I
guess you're assuming that merely that
because you can theorize the possibility
that's going to happen I would say your
purchasing power can be wiped out in a
nanosecond and that's why it would never
be widely accepted in this I hear you
say that but that doesn't make it true
and I think that there are people who
spend a lot of time on this that might
know this topic maybe a bit more
and who believe
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