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HOLD THIS UP IN JUST A SECOND. THAT IS A HISTORY OF IT COIN. HELP US OUT HERE. IN THE LONG-TERM HISTORY OF WHAT WILL HAPPEN IN THE FUTURE OF BITCOIN, THAT IS A RIDICULOUS QUESTION. WHERE ARE WE? >> I THINK YOU ARE RIGHT THAT A LOT OF PEOPLE MAYBE A YEAR AGO THOUGHT WE WERE A YEAR FROM FACEBOOK AND NETFLIX, AND PEOPLE WERE EXPECTING THIS TO BE SOMETHING THAT WAS GOING TO BE USED FOR ONLINE PURCHASES, AND WE ARE NOT THERE YET. THIS IS A VERY IMMATURE SYSTEM. THE MARKET CAP OF THE WHOLE SYSTEM IS LIKE $2 BILLION, THREE BILLION DOLLARS. WE ARE STILL MUCH FURTHER THAN MANY BITCOIN AFICIONADOS WANT US TO BE. BRENDAN: IS THIS THE BITCOIN OF THE 1980'S? IN 1989, IT WAS EASIER FOR SOMEONE TO USE THE INTERNET. IS THIS THAT SAME MOMENT? NATHANIEL: WE ARE WAITING FOR SOMEONE TO FIND A WAY TO EASILY USE IT, AND THAT HAS NOT HAPPENED YET. THERE ARE A COUPLE OF EARLY COMPANIES, BUT YOU ARE EXACTLY RIGHT THAT THIS MIGHT BE MORE LIKE DARPA NET THAN THE INTERNET. CHRIS: WHY DOES THE VALUE OF THE COIN -- OF BITCOIN FLUCTUATE ? IS IT PURELY SPECULATIVE? NATHANIEL: RIGHT NOW IT IS PURELY SPECULATIVE. THE TERM VIRTUAL CURRENCY IS NOT A GREAT ONE. RIGHT NOW IT IS A COMMODITY. MY BOOK IS TITLED "DIGITAL GOLD" BECAUSE I THINK AT ITS CORE THIS DIGITAL TOKEN IS A SCARCE DIGITAL ASSET. THAT IS WHERE YOU START BY THINKING ABOUT IT. THERE ARE A LOT OF THINGS UNDERNEATH THAT. TOM: I GIVE YOU THE HIGHEST CREDIBILITY FOR TALKING ABOUT THAT. I SPENT A SERIOUS AMOUNT OF TIME WITH AN ECONOMIST A NUMBER OF MONTHS AGO. HOW CAN YOU HAVE INNOVATION IF YOU GO FROM 800 TO 239? DO YOU JUST ASSUME WE WILL ENJOY BITCOIN AS $10 A COIN? I DO NOT HOW -- I DO NOT UNDERSTAND HOW YOU CAN INSTRUCT A SYSTEM ON A DEPRECIATING ASSET LIKE THAT. NATHANIEL: RIGHT NOW YOU NEED A BOOST WRAP -- A BOOST -- A BOOTSTRAP. A LOT OF TIMES PEOPLE DID EXPECT IT TO GO BACK DOWN TO $10. I THINK AS A CURRENCY, AS A COMMODITY, AS YOU POINTED OUT, IT IS STILL ALMOST ENTIRELY SPECULATIVE. THE QUESTION IS, THE QUESTION THAT SUSAN AC AND OTHERS TALKED ABOUT, IS WHETHER THAT TOKEN, THAT ASSET, THE NETWORK THAT IT SITS WITH -- WHETHER THAT CAN BE HARNESSED. FRANKLY, THE METAPHOR I SOMETIMES THINK ABOUT FOR THE FUTURE OF IT IS THAT THESE TOKENS ARE MORE LIKE BANDWIDTHS, SORT OF RADIO BANDWIDTH, WHERE YOU WANT TO OWN THEM BECAUSE YOU WANT TO USE THEM FOR A SHORT AMOUNT OF TIME. TOM: CAN YOU DO THAT WITH A DEPRECIATING, VOLATILE ASSET? NATHANIEL: AS LONG AS PEOPLE ARE WILLING TO CONTINUE BUYING AND HOLDING IT, WHICH THEY HAVE SO FAR BEEN WILLING TO DO -- TOM: THE STOCK IS JUST -- BRENDAN: I WOULD ARGUE THAT YOU ARE LOOKING AT THE WRONG MEASURE. I'M LOOKING RIGHT NOW AT TRANSACTION VOLUME. INSTEAD OF LOOKING AT THE VALUE OF IT AS A STORE OF VALUE, LOOK AT WHETHER OR NOT PEOPLE ARE USING IT. THAT IS NOT DROPPING, BUT IT IS ALSO NOT RISING. THAT SAYS THAT NATHANIEL IS RIGHT. TOM: YOU ARE CORRECT UNLESS YOU ARE TAKING A LOSS FROM 236 DOWN TO -- BRENDAN: IF THIS WILL MAKE TRANSACTIONS CHEAPER, IT HAS TO FIGURE OUT A WAY TO HEDGE THE CURRENCY RISK, AND THAT COSTS MONEY. YOU HAD A NICE MOMENT IN YOUR BOOK WHERE BILL GATES IS CONVINCED OF THE VALUE OF BITCOIN. I HEAR FROM IT COIN ENTHUSIASTS THAT THIS IS REALLY GOING TO CHANGE DEVELOPMENT ECONOMICS. WHEN YOU TALK ABOUT DEVELOPMENT ECONOMISTS, THEY SAY THE PACE OF DIGITAL SERVICES IN KENYA IS FINE. THEY ARE NOT WAITING FOR BITCOIN. WHERE DO YOU FALL ON THAT? NATHANIEL: THERE ARE 10% TRANSACTION COSTS -- 10% TRANSACTION CHARGES. BILL GATES WENT WHEN HE WAS SORT OF ARGUED INTO THIS FROM WHERE HE WAS BEFORE. PART OF IT WAS RECOGNIZING HOW EXPENSIVE THE SYSTEM IS. IT IS A LOT BETTER THAN WHAT YOU HAD PREVIOUSLY. TOM: I LOVE WHAT ADAM DAVIDSON SAYS. "DIGITAL GOLD" ON THIS IMMENSE