Blockchain will Disrupt Everything | Tim Draper

So I kept looking for that company that would provide the virtual currency to this virtual world. And then, out of nowhere, Satoshi Nakamoto created Bitcoin. Bitcoin was just what I was looking for. All right. It was the Wild West for a while, but it was amazing. It was frictionless, it was secure, and of course the banks are being hacked regularly. And the Bitcoin blockchain has never been hacked. So if you think that you're secure with your money in the banks, they're playing whack-a-mole to try to make sure that you feel secure. When I dug in, I realized that there were many potential uses for the currency beyond what you use fiat currencies for. People were using it to send money to their families overseas. People were using it to pay for houses and pizzas. Did you hear about the guy who— where the guys who were creating Bitcoin didn't have any money, but they ordered a pizza? And so then they used Bitcoin to pay for the pizza. It's like a $10 million pizza. It could easily manage micropayments like the ones that Hollywood has to make each of the people who contributed to a movie or show— so all those Star Wars credits. Each of those people gets like 25 cents every time, you know, the movie plays for a month. And it's very expensive and complicated to send, but this would be a very simple way to do it. And most importantly, it was banking the unbanked. Originally, banks were set up to be that trusted third party, but regulations got so heavy for banks that they couldn't handle the small accounts profitably. So they kind of pushed people away. They drove all the small accounts away because it— they can't take your $25 deposit because it costs them $200 just to comply with all the regulations that the country has put on them. So the unbanked were victims of this excess regulation, and they could use Bitcoin. And the blockchain technology that Bitcoin was created on was a perfect ledger. I saw that you, you, you won the nice person award even though you were teaching accounting. I thought that was really impressive. But we may not need accounting. It is now possible that all accounting will be done automatically on the blockchain. I've played around with the idea of investing in Bitcoin, having the companies pay their employees and suppliers suppliers in Bitcoin and then having them all use Bitcoin to spend. And if that's the case, it's all on the blockchain and the accounting can all be completely automatic. And the ledger kept perfect data, so people could keep so-called smart contracts on the blockchain. So lawyers and how we use them might also have to be reinvented. So this technology that was set up to be virtual is ripe to reinvent the professions of bankers, accountants, and lawyers. It has infinite possibilities. Imagine healthcare with perfect data. People can coordinate their own data about health. They can keep perfect healthcare records and hold it themselves. Your genetic history can go in there, your ancestry, your blood test results. And then you can combine that with your Fitbit results and what you had for breakfast and where you've lived and where you've traveled to and who you've met. All this data can be stored in the cloud, and artificial intelligence can be— can determine your best course of action as a patient. So what a doctor is today might also be reinvented. Initial coin offerings, or ICOs, are using Bitcoin's blockchain technology and already are inventing My profession, venture capital. Where a company is built for the good of the shareholders and a nonprofit is for the good of society as a whole, an ICO is something different. It's something new. It's like a Kickstarter for societal transformation. Dramatic pause. It requires public support for a mission, but it directly connects the buyer of tokens with the entrepreneur. It's a mission. It's a mission. It spreads with a mission, and the net— the bigger the network, the more valuable the coin. One of the most exciting uses of Bitcoin's blockchain technology is that the government can also be reinvented. At least at the virtual level. It turns out Bitcoin can be combined with blockchain and a smart contract, and you have the perfect bureaucrat— honest, fair, consistent, and incorruptible. So now governments have a new tool to improve the way they govern, to attract you, the businesses, the citizens, the money, the entrepreneurs of the world. Since much of government can be better done virtually. Governments, what do they do? They keep a census, they keep tabs on you, they provide a safety net, Social Security or pension, welfare, they provide unemployment insurance and healthcare insurance. All of those services can be done virtually with Bitcoin and the blockchain. Now, government can operate much more efficiently and effectively Providing better service at a lower cost. So your taxes go down and the water works, or, you know, you get a great education in California again, or whatever. Little plug for 3 Californias there. And since we can travel both virtually and physically, governments are going to have to change their tune. Where they used to control and regulate everything that moved, now they must be cognizant of the fact that people can potentially go to another government. I started this school, Draper University of Heroes. It targets people who are about 2 years out of college, so, you know, think about it, who realize that there was— that they want to do something extraordinary with their lives. We train them to become entrepreneurs. It's a very unusual school. It's all team-based training, so you're stuck with a team the whole time. We celebrate your failures. We're not after perfection there. We're actually after mistakes. Now why? Because, well, what do electricity, penicillin, Velcro, Reese's Peanut Butter Cups and America have in common? All mistakes. It turns out there's— there are a lot of great discoveries and they all happen by mistake. We take students through something I call embarrassment training so they're comfortable doing silly things in front of the class, survival training with Navy SEALs and Special Forces, And we toughen them against emotional turmoil because it's very difficult to go start a business. You feel very lonely at times. The system seems to be working. Our students have started 350 companies and on average have created 3 new jobs for people. 3 new jobs. You guys are thinking, can I get 1 job? They are creating 3 jobs per person. One of our students built a device that detects cancer in the fallopian tube without damaging it. Angelina Jolie wouldn't have had to have the whole thing ripped out. And she just sold her company for $275 million. She created the whole business at Draper University. Another created Qtum, a token that reached $5 billion in value. Now it's down, it's like $1.7. Still huge, huge value creation. We've had some amazing speakers there. One day the Prime Minister of Estonia came to speak to our students. He said, just by instituting digital signatures, we saved 2% of our GDP. With digital voting, all our young people started to vote. Apparently they don't like those creepy booths. They'd rather use their iPhone. With digital identity, we reduced our crime rate and increased the business climate. And then he handed me a card and made me a virtual resident of Estonia. A virtual resident. So I was the 3rd virtual resident. There are now 20,000 virtual residents of Estonia. They are not living in Estonia. They don't even have to set foot in Estonia. set foot in Estonia. We can set up bank accounts and buy real estate anywhere in the EU. But there's something going on here. The virtual part of government can now cross borders. Imagine getting your Social Security from Chile, your medical insurance from Canada, and your pension from a country that doesn't even have a landmass associated with it. Thank you.