ARI SHAPIRO, HOST:
The technology behind digital currency is beginning to influence the global economy. We're going to take a look at bitcoin and its underlying platform blockchain on today's All Tech Considered.
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SHAPIRO: Bitcoin gets a lot of attention because drug dealers sometimes use it to buy and sell drugs, but that's not all it is. Turns out bitcoin is also the great new hope on Wall Street, a tool so powerful it might even be able to keep traders honest. NPR's Aarti Shahani reports on how one bitcoin evangelist makes the case.
AARTI SHAHANI, BYLINE: It's a counterintuitive idea, but to Austin Hill, it's obvious. Whether you're talking bitcoin or gold, tulips or euros, he says, currency is not good or evil. It's how you use it.
AUSTIN HILL: And in fact, probably the most-used currency and the most-used instrument for illegal activities on the planet is the U.S. dollar.
SHAHANI: And we certainly haven't thrown that out. Hill is sitting in my car. I just picked him up from San Francisco International. He's really late for our day together because he was stuck in New York looking for Wall Street types who can help him build his startup. It's called Blockstream.
HILL: Ideally you want someone who's been on the inside and has seen where the system has broken down.
SHAHANI: Turns out bankers have already bought into the idea that bitcoin and the platform it's built on called blockchain is hot. Just about every big bank on Earth has a research team working on it. Hill went on Wall Street in search of true believers. He mostly found opportunists who see a shiny, new tech toy and think...
HILL: Like, I've got to do this. I can make so much money with my comp tax, with my Rolodex.
SHAHANI: He's poking fun, but he's by no means being dismissive. Cryptographers are flocking into the blockchain and bitcoin movement, but they can't do it alone. It'll take all kinds of people who believe now is finally the time for e-money, a digital system for financial transactions that is faster and cheaper than anything the world has ever seen. And that system, if it's built right, can protect the world from failures we have seen.
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UNIDENTIFIED MAN: When the real estate market was booming, millions of homeowners finally were house rich.
SHAHANI: Let's take an example that hits home.
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UNIDENTIFIED MAN: But now lenders are cutting off access to that credit.
SHAHANI: Recall back in 2008 the housing market collapsed. Wall Street bundled all kinds of mortgages - good ones and really, really bad ones into securities. Ratings agencies like Moody's gave them AAA ratings without having a clue about what was really inside. And Hill recalls investors traded them.
HILL: We built this kind of house of cards where at the base, no one was sure who owned what.
SHAHANI: Bitcoin, a favorite among criminals, could have prevented the bubble, Hill says, because of its accounting structure, specifically the blockchain. It's a public ledger, a record of every transaction in chronological order, not a cooked book in one company's filing cabinet. The blockchain can be programmed to be smart, to give every single mortgage a real-time risk rating based on reality - who's paying, who's defaulting - to enforce risk ratios. And its digital, shared by every computer on the network.
HILL: For one version of the truth - and if you design them properly, they cannot tell a lie.
SHAHANI: Unlike the credit rating agencies and auditors who somehow missed the truth.
HILL: And this is just a totally different way of thinking of, how does trust work?
SHAHANI: This bold idea is not a new idea. Austin Hill tried to build this kind of company back in the 1990s. He'd raised about 60 million dollars in venture funding, but it was too early. The tech bubble burst, and he had to fire more than 200 people. Today the Canadian native is darting around the world and living out of hotels. When we pull up to the Grand Hyatt, his home this week, I ask him to spot my some cash to tip the valet.
HILL: I just to pick which currency - yen, euros.
SHAHANI: He pulls a big, messy fistful of bills out of his gray backpack and says digital money would have been easier. Aarti Shahani, NPR News, San Francisco.
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