I would like to ask you how the old fashioned financial system will adapt to the changes caused by the development of cryptocurrencies?

[AUDIENCE] Hi, I would like to ask you how the old fashioned financial system will adapt to the changes... caused by the development of cryptocurrencies? [ANDREAS] Poorly. [Laughter] I think the traditional financial system will "adapt" in the same way that... traditional telecommunication [companies] adapted to the internet, the way the horse and carriage industry adapted to the automobile. How many people in this room own a horse? No? Not yet? Maybe as a hobby. But you certainly won't use it to go to work every day. The idea of having a fixed relationship with a centralized institution that holds your money for you... will [eventually] be one of those obscure, weird, elitist things that old rich people do. They will have a personal relationship with their banker; they are the only people to have a personal relationship.. with their banker to start with, but in the end they will be the only people left who have that. The rest of us will be debanked. I don't think the financial industry will adapt very well. It is not because bad people work for banks. Some great people work for the banks. The greatest of those great people who work for banks will quit and do a start-up in the cryptocurrency space. They will spend the first couple of years trying to persuade everyone around them... that they have seen the future and it is not this system we've put together from '70s technology... with COBOL to a mainframe that is slow, inefficient, and insecure. "This is the past. I have seen the future." They will try to persuade, but large centralized institutions like financial services have this inertia. They are organizationally sclerotic. As a result, they can't change, even if a lot of people inside want them to, even if they know that not changing means the end. Instead, they will simply try to delay the inevitable because they are unable to change. This is the nature of large organizations.. After creative and interesting people inside these corporations [explain] that they have seen the future, eventually they become tired, leave, and join a start-up. [They] will actually pursue the dream because [they] understand that this is the future. "Since nobody here understands me, I will take it elsewhere." The best part is, they will do it January. They will fund their startup with the bonus... from December, turn around, and compete with the company that gave them the bonus in the first place. We will welcome them! Thank you.

As enterprise use cases grow and ETFs loom large on the horizon, is there anything we could or should be doing to ensure that Bitcoin remains the open, decentralized, censorship-resistant system that we love? For instance, is running a full node helpful? If so, what tools make this feasible for a non coder?

"Keeping Bitcoin awesome. As enterprise use cases grow and ETFs loom large on the horizon, is there anything we could or should be doing to ensure that Bitcoin remains... the open, decentralized, censorship- resistant system that we love?" "For instance, is running a full node helpful? If so, what tools make this feasible for a non coder?" Great question. I would say that running a full node is helpful if you know how to do it [or want to learn], but it is not the most helpful thing you can do. The most helpful thing you can do is use and hold cryptocurrencies in the most decentralized, peer-to-peer manner available to you, so that your use expresses the principles you want to see in the network. 'Be the peer-to-peer network you want to see in the world.' That means, don't keep your coins on... centralized custodial wallets. Don't keep them in places where other people have the keys, and therefore can control, censor, seize, lose, or steal your money. They will also [have the power to] express your preferences in the adoption of changes [in consensus]. Keep your own keys. Take the decentralized power into your own hands. Hold the keys for all of your crypto. Use wallets that are strong in privacy and decentralization. Try to avoid using centralized services as much as possible. It is not [yet] possible to do that 100% of the time. We still live in an environment where things we want... require fiat [currency]. I use exchanges too, but when I do use exchanges -- which is not often -- I use them for a very short period. I will move money into the exchange, exchange it, and move the result out. I will not give any control [to the exchange] for more than a fifteen minute window of exposure. Even then, I do it reluctantly and I like to find other ways to do it with decentralized exchanges and... person-to-person trading. That is not always possible, but take control. Be decentralized. The other [important] thing is... Running a full node is something that is more for techies. I absolutely encourage it... as a fantastic learning experience, but it won't have as much of an impact [on the network] as you might think. Do you know what has an even better, bigger impact? Choose to make your labor part of the new economy. Withdraw your productive potential, creative capacity, work ethic, and labor from the old economy. Firmly position it in the new economy. Accept cryptocurrency for your products and services. Be part of the new economy. Hire people who accept cryptocurrency over people who don't. Whatever business you are in, accept cryptocurrency for what you do. If you are paying other people, such as web designers, taxi drivers, hairdressers, system administrators, accountants, lawyers, or whoever it might be... Find people who accept cryptocurrency. If you move your labor into the crypto-economy, not only are you creating more [opportunity] for people to not [need] exchanges, or move back into fiat, creating internal circulation velocity and economic activity, you are also opting out. You are depriving the traditional economy of your maximum creativity and productive potential. You are still in that economy in some ways, but you have taken out the most important thing. That is what you can do to keep [Bitcoin] awesome. Engage with that economy as much as you can.

If Bitcoin succeeds, we replace money. With Ethereum, maybe we are replacing cloud computing and centralized social networks. But in my head, even if you sum up all of those industries, they are still less influential or important than money. What are your thoughts, in terms of what is at stake? What are both of these projects trying to accomplish?

[AUDIENCE] Hi, my name is Jed. I work for a cryptocurrency exchange in the Middle East. First of all, I want to thank you. I am only here because of your Patreon channel. [ANDREAS] Oh, wow. Thank you! [AUDIENCE] I got one of the tickets you gave away. You all should follow Andreas on Patreon. [ANDREAS] Thank you. [AUDIENCE] My question is... A conversation that I catch myself having with people very often... With 'Mastering Ethereum' just on the brink of being released, [I am] thinking about what is at stake here. If Bitcoin succeeds, we replace money. That is what is at stake, in my mind, with Bitcoin. With Ethereum, maybe we are replacing cloud computing and centralized social networks. [We could create] all of these different decentralized applications. But in my head, even if you sum up... all of those industries, they are still less [influential or important] than money. What are your thoughts, in terms of what is at stake? What are both of these projects trying to accomplish? [ANDREAS] That is a great question and also a very controversial topic. This is not something you can design. You can design what you think it will do, and then the market decides whether to adopt that application [for that purpose]. You can't force the market to adopt it for an application that it is not suitable form. The fundamental problem is, we don't know what these [systems] will [become]. The most interesting applications they [could] have, are ones that don't exist today. That is the [aspect] people fail to notice. If you try to measure what these technologies could do in the future in terms of the applications we have now, you are missing the point. I remember the conversations in the early '90s. People would say, "Let's say this internet thing succeeds." "How many phone calls and fax messages can it support? For all of the investment in infrastructure, is it really worth it to replace the fax machines and phone calls, when we have a system that works?" "Arguably, the system you're describing is slow, inefficient, and has this weird decentralized [feature]." "That doesn't really work for our profit margins." After one of my first presentations about the internet in the '90s, the CEO said, "This sounds really interesting." "How do we buy it?" [Laughter] Missing the point... The question isn't 'how many faxes or phone calls can you send over the Internet?' First, it was none. Then, it was very few. Eventually, it was at parity. Six months after parity, we could do high-definition calling for the entire planet on a single fiber optic cable. Exponential technology meets linear technology. The value of the internet has nothing to do with that. It swallowed and destroyed the phone industry. That value evaporated. Why? Because I don't have to pay a euro or dollar per minute to call my parents. I did [need] to pay that. I remember sitting in a phone booth in London, feeding pound coins into a phone... so I could speak to my family for a minute and a half. We would pre-arrange a time. The entire family would line up in front of the phone, with one of those big curly cords, and then I would call. They [would step up] and quickly say, "Hi Andreas! This is your cousin." "Hi Andreas, this is your aunt." "Hi Andreas, this is your uncle." "Love you." "Love you." "Love you." "Love you." [click] "Bye?" Because I could only afford a minute and a half. [Laughter] Everybody must get in there quickly! That industry was generating billions of dollars. Now they can't, and it is gone. It was not "replaced.." by the internet, because it was not about [phone calls]. The interesting industries that came out of [their collapse] did not exist before. So replacing money isn't about taking the banking industry as it exists today, and creating a blockchain-based banking industry, then saying, "We're done, that's it!" "It is worth the same amount and we are running the same applications." No. It is about fundamentally changing what money is and how money works. From batched money to streaming money; from money that works on time periods of weeks and months... to transactions that can happen in milliseconds, globally, for values as low as a thousandth of a penny. [Maybe] I am not making those transactions, but some kind of autonomous agent is. Maybe they are changing between cryptocurrencies in real-time while they're [sending that transaction]. None of these applications exist [yet]. It is not about replacing money with one global currency. First of all, that is a broken model. We will not have one currency, any more than we will have one language. Quite the opposite. We will have fragmentation and choices between hundreds of different currencies, for different purposes, that will be fungible and exchangeable by an algorithm in your wallet... that decides how to arbitrage between two opportunities. You will not just have a bank in your wallet, but a full-blown foreign exchange brokerage house. A system for exchanging every loyalty reward token as fast as you need it, none of which [needs] to be visible. Just as, with a browser on your phone, you essentially have an entire phone company.. doing things like least-cost routing and optimization in real-time. You don't need to know about that. We are not replacing all money with one money. We are replacing the concept of money with a new plurality of systems that... don't need to be geographically defined monopolies with rigid rules, high barriers for adoption and trade. That all goes away. It will become as fluid as sending a packet across the internet. Then the interesting applications start [to be built]. A lot of people ask me, "What are the interesting applications in Ethereum?" To me, the killer app is simple: governance. Ethereum is about re-inventing the modern corporation. It is about reinventing human organization. Not commerce, not trade, and not money. It is about taking the geographically rigid concept of a corporation with shareholders, these fifteenth century concepts, and replacing it with a model of governance where decision-making... can happen in ad-hoc collaborations between people, that can emerge and dissolve very rapidly [if necessary]. You can have fair, transparent, open governance. What [will] these projects [be]? I don't know. Funding projects, collaborative projects, development projects. Who knows? Re-inventing the corporation. That is the killer app. Will it happen now? No. It might take decades, but I think that is where we are going.