Inside The Cryptocurrency Revolution | VICE on HBO

So, we're in a helicopter in Iceland over some fjords and lava flows on the way to the Genesis Ethereum mine. Marco Strang has made millions in cryptocurrencies. He began mining bitcoins in his dorm room nearly a decade later, when the 28-year-old dropped out of college. he turned a single struggling computer into a lucrative crypto mining empire. What you are seeing here is the Enigma facility which is the largest Ethereum mining facility in the world and it was an exciting time years ago when we came here and built this and now We are expanding and expanding more and more because the demand is growing and everyone is increasing capacity.

If you have the money, you can always buy

cryptocurrency

last year. Bitcoin peaked at almost twenty thousand dollars or you can earn it by running a

cryptocurrency

mine. network of computers that serve as the backbone of the cryptoeconomy, what are these machines doing? Those computers are miners, they are mining cryptocurrencies and they are validating transactions on the blockchains and they get a reward for them, so if I pay someone for something. Yes, in a cryptocurrency it is potentially being validated by one of these computers. Yes, that is true and when someone makes that transaction, you validate it here in Iceland and you make money.

Yeah, how much does it cost to create one of these if I'm going to create one? of these at home one of these units and how many are here in this warehouse here tens of thousands of mining operations like frames were made possible by the pseudonymous programmer satoshi nakamoto who in 2009 created bitcoin, a decentralized digital currency managed by no entity and beyond the control of any government except Nakamoto, whose true identity remains a well-kept secret, faced an obvious problem if a physical currency does not exist, who tracks the ownership of a digital currency, to solve this he created blockchain software that records and stores information like who owns it. a bitcoin on a decentralized ledger shared among millions of computers, cannot be changed and is almost impossible to hack.

The important thing about mining in general is that there is not a single central entity that validates all the transactions made by miners around the world. validate them so that this server farm in this kind of moonscape of Iceland this could replace a central bank, it's not just replacing, it's actually making a central entity obsolete, it's a scam, it's a bubble that's going to explode, everyone is going to lose all their money for some time. cryptocurrencies, most likely true, but I see real value in, for example, bitcoin or ethereum, the underlying technology is phenomenal. People have told me that this is the most

revolution

ary technology we have seen since the wide-scale adoption of the Internet. comparable to the beginning of the Internet, at the beginning it was just a very abstract protocol, but now I mean we are doing almost everything on the Internet blockchain, which some compare to the early days of the Internet.

It sounds confusing, but listen, present. So many opportunities, so many unique business models, people say blockchain could kill businesses as we know them for regulators, it's certainly a concern, there are things like the second one, you have fincen, you have the irs, but while the world Business is rushing to exploit it and governments are rushing. to regulate it countries like russia see a very different opportunity my sense of cryptocurrencies largely driven to evade US sanctions and undermine sovereign currencies both are challenging the national interests of the United States these are the people who will build our new future and lives there, one of those unconventional solutions is the ethereum blockchain created by a man named vitalik buterin, yes, raised in canada and from russian parents, vitalik is the biggest celebrity of the blockchain movement if blockchains are and so As transformative as you know the proponents say they are, then that would imply that we will eventually see hundreds of millions of people using it in one way or another.

Vitalik created the ethereum blockchain when he was only 21 years old and his cryptocurrency, ether, ranks second after bitcoin, its market capitalization increased by more than ten thousand. percent in 2017, Vitalik is on a global campaign to raise awareness about its creation and its potential applications for business finance and government. Where do we go now? We are going to Kazan, which as I understand it is the capital of the Republic of Tatarstan in Russia, as I do. I have met people from the government of Canada, the United States, the United Kingdom, Russia, China, Taiwan, Singapore, Thailand. Usually central banks want to chat and ask me why not, but you're 23 years old and you say things like, usually central banks want to talk to me.

That's not it, it's very strange, I'd probably say I'm older than you guys and no one wants to talk to me. Am I traveling with you? We can not? I think they are traveling clearly in this car. So we are behind a very nice Mercedes that we can't be in because it is a metal VIP car that is treated like some kind of rock star. Here the Kremlin rolled out the red carpet for Vitalik in the hope that his prodigal son would return home. Now we go to the unified presentation center of the Republic of Tatarstan.

Oh, this is sure to be the place where we do the surprise effect, so the Kazan government is doing everything it can for Vitalik. We are in what seems to be the third hour of a never. -end of the city tour and, uh, what does this have to do with blockchain, as it's anyone's guess that the Russian government's hope is that vitalik's technology can be as transformative for its own finances as it has been for the yours, so I first heard about bitcoin in maybe February 2011. I finally found a guy who was willing to pay me five bitcoins per article to write articles for his bitcoin blog and how much was bitcoin worth at the time, each bitcoin It was zero point eight dollars zero point eight dollars to make five per item. and now that would be five thousand dollars an article, pretty much okay, no, you know, being a high school kid without much money, I thought that $1.5 an hour was a pretty reasonable wage, so yeah, it was a good business for you. hour, yes, fight for 1.5, explain to me why this technology is so transformative that people think it will change the world because they represent sort of epochal changes in the options we have to interact with each other with a bitcoin.

I don't need banks to send money anymore, it's just something that happens directly between peers and Ethereum extends that to make digitally enforceable agreements that change entire industries, right? And he hasn't done it yet, but we'll see what it is. Vitalik, why are you so interested in blockchain? Because Tata Stand is considered to be the innovative republic. You want to be Russia's Silicon Valley guy. That's exactly what we're trying to do and Vitalik seems like a guy who can help you achieve it. true, he is considered as an IT hero, let's say for young people, is that something the kremlin in moscow is happy about yes, he is, i think so, the kremlin arranged for vitalik to meet with one of the powerful surrogates of putin, tatar, waiting for Upon his arrival, the president organized a hackathon for Vitalik in the hope that he could inspire a new generation of Russian technology leaders, so we are at a government-sponsored blockchain hackathon where Vitalik is the star guest and one of the judges.

This is a high-tech park. which aims to support the IT industry and startups, the goal is to create an ecosystem that produces people who will then produce companies which will then produce technologies. The United States has approximately 2.5 million. The people who work in the IT industry are very active and Russia has only 400,000 and many of their very intelligent Russians also come to work in the United States, a lot, the league, as we call it, the league of brains, but this is something Russia can lead in, we can get in early with blockchain, we hope it will be kind. of the idea, isn't it?

In 2016, the Kremlin came close to banning cryptocurrency transactions, but that hostility turned into opportunity. Putin, along with the rogue regimes of Iran and Venezuela, realized that a virtually untraceable anonymous currency could provide an opportunity to evade the shutdown. international sanctions when you were at the st petersburg economic forum president putin pulled you aside what was that? what did you want to talk about? um I introduced him to you know what ethereum was and what he was doing and it seemed like he was willing and supportive of anything we could do to improve the Russian economy while American lawmakers are working on how to regulate cryptocurrencies.

Russia is taking significant steps to integrate it not only in an effort to avoid US sanctions but also to undermine them. The Power of the Dollar in International Trade Sergey Gorkhoff was trained by the FSB as a Putin confidant and currently serves as head of Russia's largest state investment bank, which was sanctioned by the Obama administration in 2014. He recently signed an agreement with vitalik in support of a new blockchain research institute tell me why the bank is so particularly interested in blockchain banking soon what would you say to a country that has not yet adopted blockchain technology?