I delivered this at TEDx Adelaide late last year, you can find the video online https://www.youtube.com/watch?v=HrCKFd5vTpM

I work on the infrastructure; the low-level computer code that other code uses to do useful things. I give away all of the code that I write, and I’ve been paid to do that for almost 20 years now.

It started back at University; a friend and I downloaded this new Operating System called Linux onto a pile of floppy disks. Sorry, I see someone, young person in the audience, confused [laughter]. A floppy disk is like a … imagine a crappy USB key, put into a case that’s shaped like a 3-d printed save icon [laughter].

Now Linux was Open Source, a community-produced program that was supposed to be like the program that ran the big computers at University, only this ran on a home PC, and was free.

…clearly, amateurs can’t compete with multi-billion-dollar companies. The real world doesn’t work that way, does it?

On my PC at least, it sucked; it was very slow and buggy. So clearly, clearly, a community of volunteers — amateurs — can’t be expected to produce something to compete with well-paid professionals at multi-billion-dollar companies. And even if they did produce something interesting, without the sales and marketing budget: the real world doesn’t work that way, does it?

So five years later 1997, I ran Linux on my laptop, sure, but none of my clients ran Linux. And I go to this international computing conference. And at that conference were all the key Linux developers, and I heard them talk about their community tackling some really really difficult technical challenges and that’s what I wanted to do. And as a group they were, and still are, the brightest bunch of programmers I have ever met.

So when I got home, I started working on a new part of Linux in my spare time. That same year, it got accepted into Linux, and I kept updating it, collaborating with a growing community of programmers from around the world. The next year, I found a company to sponsor me, so that I could write the next version full time: paid to release all my code for free.

[SLIDE: graph of NASDAQ rising] Now, this was the height of the dot com boom. If you could write a web page, you could get venture capital funding. If you could put an “e” at the front and a “.com” at the end, you could get twice that! [laughter] A lot of these companies used Linux, so Linux was hot. I joined a Linux startup. My friends at another Linux startup had their initial public offering in 1999 with the stock ticker LNUX. And they offered stock at the initial price of $30 to members of the community, and I was one.

On the very first day their stock jumped from $30 to $320: the largest first-day increase in the history of the NASDAQ. But don’t worry, I am not going to let my spectacular new wealth change me! [SLIDE: NASDAQ dropping] [laughter]

If you look up “dot com boom” on Wikipedia, it redirects you to “dot com bubble”. And pop it did. Those Linux companies evaporated. My company laid everyone off. That stock was worth less than I paid for it. And the newspaper articles changed from “Linux is the future” to basically, “Linux is dead”.

See, in 1998, people started asking: “when is Linux going to compete with Microsoft Windows?” “Will 1999 be the Year of the Linux Desktop?” 2000? 2001? … 2016?

Anyway, in 2001 I got another job working on Linux, there was still so much technical challenge, so much to do. But the spotlight had moved on: the rock star days were over.

In 2001 the Linux rock star days were over.

I’m going to pause my Linux story at this point, 15 years in the past, to talk about a second technology.

In 1977, the invention of the digital signature. Now, what this is, is you make a 40-digit, secret number, and you take this number, and a document, and MATH MATH produce another huge number that no one else could have made. And I can take that huge number you’ve produced, and the document, and MATH MATH prove that the only person that could have made that [huge number] is someone holding your secret, ie. you. That huge unforgeable number a called digital signature.

Now first thing to do when you invent something like a digital signature is try to make money. No, no I mean literally, try to make electronic cash. Right so the bank has a secret number and it signs this document to say “this is worth 10 bucks” and I can take the bank’s signature and the document and email it to you and you can check that “yep, it’s worth 10 bucks, the bank said so”. Of course, I can also email it to you [points to another person]. And this is called the double-spend problem. It’s also the triple, or the million-spend problem. See, signed documents are great, but I can just copy the whole thing including the signature.

The double-spend problem: signed documents are great, but I can just copy the whole thing including the signature.

Now we can fix this: if every time you send me money, I ask the bank “has she sent this to anyone else?” and it signs to say that “no, it’s now transferred it’s now yours”. But that’s not really digital cash, that’s a digital bank account.

In the nineties, a company came along with something of an innovation. Their “digital bank” would yes, check and sign that no, this had not been spent twice, but, using MATH MATH MATH MATH, the bank didn’t know exactly which note it was signing. This gave you back your privacy, this blinded signature. People started to get excited about the possibility of electronic cash.

In 1998 that company folded. Without their server to check whether something had been spent twice, the money was useless.

It was a full ten years before somebody calling themselves “Satoshi Nakamoto” published a nine page paper which described a computer network which could check for double spends without a central authority. As long as at least half the network was honest, nobody could spend twice.

When Digicash folded, their money was useless. “Satoshi Nakamoto” described a computer network *without a central authority*.

Of course the question remained: would anyone trust currency backed by nothing more than math and a network of computers? By the end of 2013 the answer was a definitive YES, with the world’s largest bitcoin exchange, the Japanese Mt. Gox, valuing each bitcoin at over 1100 US dollars, up from $30 two years before. [SLIDE: bitcoin price rising] But don’t worry, I’m not going to let my sudden and superb wealth change me! [SLIDE: bitcoin price dropping] [laughter]

In February, 2014, Mt Gox suspended bitcoin withdrawals. Then they suspended trading. Then they filed for backruptcy. Incompetence, theft, hacks, fraud, insider trading, or all of the above. The bitcoin price plummeted. Bitcoin was dead.

Clearly, clearly, no bunch of volunteers can produce something which can compete with professionals at multi-billion companies, and even if they did produce something, without a marketing and sales budget, well the real…

Let me pause that there. And go back to my Linux story. Because an interesting thing has happened in the last 15 years. When you take out your phone and pull up a web page, the machine that sent you that web page is probably running Linux. Of the 500 fastest supercomputers in the world, 497 of them Linux. And Linux is in over one billion phones at the heart of Android. Instead of winning the desktop, we won everywhere else.

…but in the last 15 years Linux, instead of winning the desktop, we won *everywhere else*. And that’s why I started working on Bitcoin.

And that’s why last year I left my comfortable big company job working on Linux where I’d been for 12 years, and I started working full-time in the Bitcoin community.

And so people ask me “So Rusty, is bitcoin going to replace Visa and Mastercard?” “Is it going to replace the US dollar as the world’s reserve currency?” Well, I can stand here with twenty years of experience in disruptive communities and I can give you an iron-clad guarantee that I do not know [laughter]. But yesterday I took my phone, with Linux at its heart, software that I have written over the last twenty years, and I walked into a newsagency here in Adelaide, and in a couple of minutes I bought some bitcoin with it. So I think I can promise you that the next two decades are going to be at least as much of an exciting adventure as the last two.

Thank you.