The future of money | Neha Narula

I want to tell you
about the future of money. Let’s start with a story
about this culture that lived in Micronesia
in the early 1900s, called the Yap. Now, I want to tell you about the Yap because their form of money
is really interesting. They use these limestone discs
called Rai stones. Now, the Yap don’t actually
move these Rai stones around or exchange them the way
we do with our coins, because Rai stones can get
to be pretty massive. The largest is about four tons
and 12 feet across. So the Yap just keep track
of who owns part of what stone. There’s a story about these sailors that were transporting a stone
across the ocean when they ran into some trouble
and the stone actually fell in. The sailors got back to the main island and they told everyone what had happened. And everyone decided that, actually, yes, the sailors had the stone
and — why not? — it still counted. Even though it was
at the bottom of the ocean, it was still part of the Yap economy. You might think that this
was just a small culture a hundred years ago. But things like this happen
in the Western world as well, and the Yap actually still use
a form of these stones. In 1932, the Bank of France
asked the United States to convert their holdings
from dollars into gold. But it was too inconvenient
to think about actually shipping all of that gold over to Europe. So instead, someone went to where
that gold was being stored and they just labeled it
as belonging to France now. And everyone agreed
that France owned the gold. It’s just like those Rai stones. The point I want to make
with these two examples is that there’s nothing
inherently valuable about a dollar or a stone or a coin. The only reason these things
have any value is because we’ve all decided they should. And because we’ve decided that, they do. Money is about the exchanges
and the transactions that we have with each other. Money isn’t anything objective. It’s about a collective story
that we tell each other about value. A collective fiction. And that’s a really powerful concept. In the past two decades, we’ve begun to use digital money. So I get paid via direct deposit, I pay my rent via bank transfer, I pay my taxes online. And every month, a small amount of money
is deducted from my paycheck and invested in mutual funds
in my retirement account. All of these interactions are literally just changing
1’s and 0’s on computers. There’s not even anything physical,
like a stone or a coin. Digital money makes it
so that I can pay someone around the world in seconds. Now when this works, it’s because there are large institutions
underwriting every 1 or 0 that changes on a computer. And when it doesn’t, it’s often the fault
of those large institutions. Or at least, it’s up to them
to fix the problem. And a lot of times, they don’t. There’s a lot of friction in the system. How long did it take
the US credit card companies to implement chip and pin? Half my credit cards
still don’t work in Europe. That’s friction. Transferring money across borders
and across currencies is really expensive: friction. An entrepreneur in India
can set up an online business in minutes, but it’s hard for her
to get loans and to get paid: friction. Our access to digital money
and our ability to freely transact is being held captive
by these gatekeepers. And there’s a lot of impediments
in the system slowing things down. That’s because digital money
isn’t really mine, it’s entries in databases
that belong to my bank, my credit card company
or my investment firm. And these companies
have the right to say “no.” If I’m a PayPal merchant and PayPal wrongly flags me for fraud, that’s it. My account gets frozen,
and I can’t get paid. These institutions are standing
in the way of innovation. How many of you use
Facebook photos, Google Photos, Instagram? My photos are everywhere. They are on my phone,
they’re on my laptop, they’re on my old phone,
they’re in Dropbox. They’re on all these different
websites and services. And most of these services
don’t work together. They don’t inter-operate. And as a result, my photo library is a mess. The same thing happens when institutions control
the money supply. A lot of these services
don’t inter-operate, and as a result, this blocks
what we can do with payment. And it makes transaction costs go up. So far, we’ve been through
two phases of money. In an analog world, we had
to deal with these physical objects, and money moved at a certain speed —
the speed of humans. In a digital world, money can reach
much farther and is much faster, but we’re at the mercy
of these gatekeeper institutions. Money only moves at the speed of banks. We’re about to enter a new phase of money. The future of money is programmable. When we combine software and currency, money becomes more
than just a static unit of value, and we don’t have to rely
on institutions for security. In a programmable world, we remove humans
and institutions from the loop. And when this happens, we won’t even feel like
we’re transacting anymore. Money will be directed by software, and it will just safely and securely flow. Cryptocurrencies are the first step
of this evolution. Cryptocurrencies are digital money that isn’t run by any government or bank. It’s money designed to work
in a world without intermediaries. Bitcoin is the most ubiquitous
cryptocurrency, but there are hundreds of them. There’s Ethereum, Litecoin,
Stellar, Dogecoin, and those are just a few
of the more popular ones. And these things are real money. The sushi restaurant down my street takes Bitcoin. I have an app on my phone
that I can use to buy sashimi. But it’s not just for small transactions. In March, there was a transaction
that moved around 100,000 bitcoins. That’s the equivalent
of 40 million US dollars. Cryptocurrencies are based on
a special field of mathematics called cryptography. Cryptography is the study
of how to secure communication, and it’s about two
really important things: masking information so it can
be hidden in plain sight, and verifying a piece
of information’s source. Cryptography underpins
so many of the systems around us. And it’s so powerful that at times the US government has actually
classified it as a weapon. During World War II,
breaking cryptosystems like Enigma was critical to decoding
enemy transmissions and turning the tide of the war. Today, anyone with a modern
web browser is running a pretty sophisticated cryptosystem. It’s what we use to secure
our interactions on the Internet. It’s what makes it safe for us
to type our passwords in and to send financial
information to websites. So what the banks used to give us — trustworthy digital money transfer — we can now get with a clever
application of cryptography. And this means that we don’t
have to rely on the banks anymore to secure our transactions. We can do it ourselves. Bitcoin is based on the very same
idea that the Yap used, this collective global
knowledge of transfers. In Bitcoin, I spend
by transferring Bitcoin, and I get paid when someone
transfers Bitcoin to me. Imagine that we had this magic paper. So the way that this paper works
is I can give you a sheet of it and if you write something on it, it will magically appear
on my piece as well. Let’s say we just give everyone this paper and everyone writes down
the transfers that they’re doing in the Bitcoin system. All of these transfers get copied
around to everyone else’s pieces of paper. And I can look at mine and I’ll have a list of all
of the transfers that are happening in the entire Bitcoin economy. This is actually what’s happening
with the Bitcoin blockchain, which is a list of all
of the transactions in Bitcoin. Except, it’s not done through paper. It’s done through computer code, running on thousands
of networked computers around the world. All of these computers
are collectively confirming who owns what Bitcoin. So the Bitcoin blockchain
is core to how Bitcoin works. But where do bitcoins actually come from? Well, the code is designed
to create new Bitcoin according to a schedule. And the way that it works
is that to get those Bitcoin, I have to solve a puzzle —
a random cryptographic puzzle. Imagine that we had 15 dice, and we were throwing these dice
over and over again. Whenever the dice come up all sixes, we say that we win. This is very close to what these computers
are all actually doing. They’re trying over and over again
to land on the right number. And when they do, we say that they’ve solved the puzzle. The computer that solves the puzzle publishes its solution
to the rest of the network and collects its reward: new bitcoins. And in the act of solving this puzzle, these computers are actually
helping to secure the Bitcoin blockchain and add to the list of transactions. There are actually people
all over the world running this software, and we call them Bitcoin miners. Anyone can become a Bitcoin miner. You can go download the software right now and run it in your computer
and try to collect some bitcoins. I can’t say that I would recommend it, because right now, the puzzle is so hard
and the network is so powerful, that if I tried to mine
Bitcoin on my laptop, I probably wouldn’t see any
for about two million years. The miners, professional miners,
use this special hardware that’s designed to solve
the puzzle really fast. Now, the Bitcoin network
and all of this special hardware, there are estimates
that the amount of energy it uses is equivalent to that of a small country. So, the first set of cryptocurrencies are a little bit slow
and a little bit cumbersome. But the next generation is going
to be so much better and so much faster. Cryptocurrencies are the first step to a world with a global
programmable money. And in a world with programmable money, I can pay anyone else securely without having to sign up
or ask permission, or do a conversion or worry
about my money getting stuck. And I can send money around the world. This is a really amazing thing. It’s the idea of permission-less innovation. The Internet caused
an explosion of innovation, because it was built upon
an open architecture. And just like the Internet
changed the way we communicate, programmable money is going
to change the way we pay, allocate and decide on value. So what kind of world
does programmable money create? Imagine a world where I can
rent out my healthcare data to a pharmaceutical company. They can run large-scale data analysis and provide me with a cryptographic proof that shows they’re only using my data
in a way that we agreed. And they can pay me
for what they find out. Instead of signing up
for streaming services and getting a cable bill, what if my television analyzed
my watching habits and recommended well-priced content
that fit within my budget that I would enjoy? Imagine an Internet without ads, because instead of paying
with our attention when we view content, we just pay. Interestingly, things like micro-payments are actually going to change
the way security works in our world, because once we’re better able
to allocate value, people will use their money
and their energies for more constructive things. If it cost a fraction of a cent
to send an email, would we still have spam? We’re not at this world yet, but it’s coming. Right now, it’s like we’re in a world
that is seeing the first automobile. The first cryptocurrency,
like the first car, is slow and hard to understand
and hard to use. Digital money,
like the horse and carriage, works pretty well, and the whole world economy
is built on it. If you were the first person on your block to get a car with an internal
combustion engine, your neighbors would probably
think you were crazy: “Why would you want
this large, clunky machine that breaks down all the time,
that lights on fire, and is still slower than a horse?” But we all know how that story turns out. We’re entering a new era
of programmable money. And it’s very exciting,
but it’s also a little bit scary. Cryptocurrencies can be used
for illegal transactions, just like cash is used for crime
in the world today. When all of our transactions are online, what does that mean for surveillance —
who can see what we do? Who’s advantaged
in this new world and who isn’t? Will I have to start to pay for things
that I didn’t have to pay for before? Will we all become slaves
to algorithms and utility functions? All new technology comes with trade-offs. The Internet brought us
a lot of ways to waste time. But it also greatly
increased productivity. Mobile phones are annoying because they make me feel
like I have to stay connected to work all the time. But they also help me stay connected
to friends and family. The new sharing economy
is going to eliminate some jobs. But it’s also going to create
new, flexible forms of employment. With programmable money, we decouple the need
for large, trusted institutions from the architecture of the network. And this pushes innovation in money
out to the edges, where it belongs. Programmable money democratizes money. And because of this,
things are going to change and unfold in ways that we can’t even predict. Thank you. (Applause)

100 thoughts on “The future of money | Neha Narula

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  2. I sometimes wonder how much cryptocurrency is contributing to global warming with its energy intensive mining process.

  3. Next time dress more professionally before presenting in front of an audience. You looked tacky and it brought the message down.

  4. At what point does the blockchain become so big it is untransferable? Is this another race betweem hardware and software?

  5. It is about tracking and controlling people even more. The future is not a pretty place, only useful idiots, brainwashed Marxists think so and can't imagine the negative consequences.

  6. Where are all these haters from last year comments? =)
    Buying BTC now for the current price of 13/14k$ or waiting for a bubble? lol

  7. how old is this?? re: the exact year/date?? vs. the upload date??..because: a lot of good info..except her information re: mining on home computers, it's quite outdated..i mean, she did mention the more updated mining systems..but why mention the old way at all?? because, is anyone still doing it that way?? 🤔🤔🤔🤔

    so, kudos to her for explaining Bitcoin/crypto-currencies in-a-nutshell-style..she even gave me some nice ways to share the info with those who have questions (otherwise, i don't try to convince people)..but really, the first 85% or so of her talk was pretty good..but that last 10% to 15% made it seem like she was conflicted re: explaining mining and also the crypto part of crypto-currencies re: the point & original philosophy behind Bitcoin [& other true cryptos]. 😮

  8. Well there are many cryptos now , just like dollars and yen and always one form of crypto will more valuable than others , and sooner crypto banks will emerge .. history repeats..

  9. This is so worth the watch. Awesome for introduction to those who do not know what crypto or blockchain is! AWESOME

  10. First of all, the place is called "Yap", not "the Yap". The culture and people are correctly referred to as "Yapese" and they didn't live in Micronesia in the early 1900s but have lived there for centuries beyond that and continue to do so today. Now that I've got that off my chest, I can continue watching.

  11. The future of money | Neha Narula – blockchain – block chain – TED TALK – TED talks – The extrinsic (perceived) value of a specific stone is based not only on its size and craftsmanship, but also on its history. *( a great tie in to digital money and block chain….

  12. The future of money | Neha Narula – blockchain – block chain – TED TALK – TED talks – Rai, or stone money (Yapese: raay[2]), are large, circular stone disks carved out of limestone formed from aragonite and calcite crystals.[3] Rai stones were quarried on several of the Micronesian islands, mainly Palau

  13. So, the big problem with crypto currencies is that in most serious countries, the governments are actively attacking them. They’ll be banned in the US soon, then it’s game over for them.

  14. As someone who makes a living with cryptocurrency, whose had like 100 transactions fail or stall, I can't take her claim of "not having to worry about your money getting stuck" seriously.

  15. If money is going to "evolve" this way it is only going to become more complicated. People who are having hard time understanding economy already will get even more confused and tricked. That would encrise gap between rich and poor.

  16. problem with existing Fiat money is that we did not decide that its valuable,
    Bitcoin CASH system is the best form of money now, decentralised and money created and owned by the people, not the fucking banks or corrupt governments. Start switching to Bitcoin Cash (BCH)… we need to get rid of the bankers… for good.

  17. It's really a shame for TED to host speakers like Neha Narula. For those who are not familiar with the crypto scene, she heads the DCI department within MIT. Along with her associates, she has led a dirty campaign against IOTA, IMO the only currency that is the true disruptor in crypto. If there were any justice in the world, people like her, who lie and cheat for personal gain with obvious conflict of interest, should be shunned from the community. Instead, she is giving TED talks.

  18. Is this crazy week over yet? Video: Crytopcurrenices are the Future: Discover the Life-impacting Secrets to Buying them with Ease on Coin Falcon 🖖

  19. it represents sweat equity; don't forget about the sweat in money. friction is competition. …oy gevalt, her photo library is a mess?! while the world is plugged in to an outline, it'll work. good talk, but narrowed focused.

  20. I hate it , What if the Power goes out , you can't Put it in a Trust , Your Household Income can't be correctly judged if your on SSI and Food Stamps ' EBT , , What if you only use Burner Phones where there's no Apps or Texting , And The Feds Just Will not let it continue , They spent 300 years putting their system in place , The Fed Will Shut it Down .. Buy Silver and Gold and Invest in a good stock , Crypto is funny Money The Government has to know your Value , If they knew you were Hiding it in Crypto you would loose ant Benefits or Eligibility for them . 🙁 QC

  21. Not to mention if you use your computer to solve these cryptography (algorithms, very advanced algorithms), it will kill your computer faster than anything.

  22. This is the perfect video to get the drunk. Every time she says imagine you drink. Or programmable money…

  23. This is a 2016 year video — Bitcoin was going to be THE digital RETAIL currency but it is NOT scalable – meaning: the more people who use it – the slower it becomes! Right now – Bitcoin can only do 7 transactions per second. Visa does 80,000 TPS. CLOUDCOIN solves all of these issues – and MORE! Cloudcoin does 180,000 TPS/ Cloudcoin is not Mined – Bitcoin is and takes the Energy of a Small Country to run! As soon as Cloudcoin is released (or spent into the economy) it is decentralised. With CC (cloudcoin) there is no Blockchain Ledger, instead there is a Cloud of computers called the RAIDA (Redundant Array of Independent Detection Agents) and it confirms during a transaction that the coins are authentic and not counterfeit. This is done in a millisecond, unlike with Bitcoin – which can take – in some cases 40 hours but fluctuates in time. Cloudcoin's can be recovered if lost, Bitcoins – if lost are gone! Cloudcoin is the ideal RETAIL CURRENCY! Quantum Computers are becoming a real threat to any Blockchain currency — in theory any cryptocurrency can be hacked by a Quantum computer in under 2 minutes. Cloudcoin is NOT a cryptocurrency and is Quantum computer SAFE! Look at the FACTS! Cloudcoin will be on Bitshares Exchange (decentralised exchange). Cloudcoin is where Bitcoin was in the year 2009! It's still only $ 0.06 to $0.10 cents per Cloudcoin when I wrote this 9/1/2018 www. cloudcoin. global . Just search (how to buy cloudcoin). You will want to go get a Bitshares account. Do Not Wait —- if you missed Bitcoin early prices — now is your chance!!!!!!!

  24. Thank you for your video!! Oober Wallet presents the fastest way to exchange currency & cryptocurrency. Find more on It can be interesting for you. Ask any questions in comments.

  25. For cryptocurrencies to actually evolve into money (they are pretty clearly not yet money) the topic needs to be addressed much more nuanced. –

  26. Bitcoin is the future. Governments can try to stop it but they can't shut it down as its decentralised. There are a number of issues that need to be solved though such as privacy, although monero and z cash have privacy features, and scalability and usability, lightning network layer 2 will help to solve the scalability issue. These issues will be solved very quickly and mass adoption will be in the next 5 years.

  27. There is no such type of "DIGITAL MONEY" Now a days which are offered by banks that's it's only a fiction to manipulate,..BUT the truth it's simple only a "DIGITAL SERVICES"..🙄🙄

  28. I’m so thankful to be an early adopter thank you blockchain for jumping into my life!!!!!! Exploded right in my head one day random !! No one even told me about it

  29. any idiot can look at the blockchain and EASILY see that 97% of BTC is owned by 2% of BTC adDresses…. BTC controls the whole crypto market hence those 2% OWN ALL OF CRYPTO!!!!!!!!!!!!

  30. Thanks for sharing. If you are planning to invest in cryptocurrency check for cryptocurrency trading, exchange and wallet.

  31. She starts off great, but then loses herself too much in the weeds of cryptocurrency talk. She should have focused on the big picture. Can we design a world where money/currency becomes obsolete, or will we always need it to "govern" us, because ultimately money decides who eats and who doesn't. We currently "need it" because the amount of resources such as food and water are limited.

  32. Sounds like Ripple and Xrp. She blatantly skipped it to talk about Bitcoin and Ethereum which forks so much and is slow in transactional speed. This is equivalent to a reverse stock split which dilutes a stocks value. Mining is too Energy intensive just like printing paper fiat currency. XRP is premined and cannot be made any more of. Bitcoin was the test trial. Xrp is the standard.

  33. OK, the government can just type in enough digital money to pay everyone $50-100 thousand a year and we can all live in bliss.  Nothing has any real value.

  34. Bitcoin and Cryptocurrency doesn't change anything. The expectation of credit and debt doesn't change the world system, just the medium of exchange.

  35. Bitcoin is the future of money. It is why we started accepting BTC for payments 2 years ago. Lovely talk Neha!

  36. So basically you solve a problem to earn bit coins? The system caves in on itself when the value of the bitcoin mined equals to or is less than the cost of the energy that is used to mine it in the first place. The system is flawed

  37. The truth from my personal experience is that trading daily is far safer and more profitable than HODling with so much uncertainty in the market. I have lost over 8 BTC value HODling for one year and have gained over 13 BTC in less than two months, something I am sure is a daydream for most hodlers. You have to be careful though and be exceptionally good in your T.As, reading the news and understanding the trend correctly. I would also like to stress is that if you aren't 100% sound in these, you should make contact with someone with good experience and trade history to help you through. Someone I would highly recommend is Gojko Novak **([email protected]) His analysis is sound, and his trade signals and strategies are some of the best out there to follow. He helped me recover my losses and make gains I find hard to believe

  38. Youtube comments are full of amusements sometimes….

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    To understand MONEY and the Federal Reserve System watch –
    Mike Maloney's – "Hidden Secrets of Money" series –
    see – Ron Paul Money Lecture Series
    Pt. 1 – "What is Money?" – Joseph T. Salerno –
    Pt. 2 – "What is Constitutional Money?" – Edwin Vieira –
    Pt. 3 – "What About Money Causes Economic Crises?" – Peter Schiff –

  41. Pretty good speech. But she's implying that Bitcoin will be replaced by something better. This is highly unlikely. Much more likely is bitcoin will continue to be improved and be built upon with layered protocols (like the lightning network) that will facilitate some of the things she is talking about.

  42. It's a terrible idea. States need to have different currencies and to control theirs. And transactions need to be monitored by the state. Otherwise everyone will be unemployed because some guy in Libya with literal slaves chained in his basement is doing the work and getting paid. The world is extremely effed up, and to simplify things saying we all use one currency and no hassle and it will be great is a foolish thing to say.

  43. “ Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center."
    — Vitalik Buterin

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