Worst day for casualties since launching the operation two weeks ago to push the white p. G. Out of the area its inside story now stay with us. Bitcoin in freefall the crypto currency hits a record high towards the end of twenty seventeen but in the last month its lost almost half its value whats behind that and can virtual coins ever be trusted this is inside story. And im jane dutton this is inside story from ahead courses and theyve made some people millionaires others have lost a fortune cryptocurrency zavala tile theres no doubt about that and for those who invest it can be a roller coaster of a ride from all time high to a new low in less than two months come to currencies took the World Economy by surprise the first bitcoin launched in two thousand and nine now there are more than Thirteen Hundred and regulators are taking them more seriously china india and south korea have introduced tougher regulations to combat fraud and tax evasion j. P. Morgan and bank of america say theyll hold sing the purchase of currencies on their credit cards and facebook has banned advertising for the virtual coin. A sustainable markets or a bubble about to burst well talk to our guests in a moment but first lets have a look at the crypto currency market bitcoin the largest of the Virtual Currencies has fallen dramatically in value from its high of twenty thousand us dollars to below eight thousand on friday if area and ripple also saw drops of about twenty percent the markets been under pressure to sell this past week with more than one hundred billion dollars wiped off in twenty four hours that still leaves the Global Market value at about four hundred billion according to industry track a coin market cap dot com last week five hundred thirty Million Dollars was hacked from an exchange in japan renewing concerns about security. Lets bring in our panel joining us from new york Nissen Eappen chief Information Officer at Arcadia Crypto Ventures and someone who has been a Bitcoin Trader from london martin back Access Financial analyst and London Bureau chief for the street and from sydney david vaile executive director of the cyber law and policy community at the university of New South Wales a very warm welcome to all three of you gentlemen listen even as a trader what is it that we saw what is it that we are seeing at the moment this is nothing you see its just fallen twenty percent this week maybe in the two months its fallen fifty percent i used to remember times when this was one dollar today morning it goes to ten dollars and it comes back to three dollars so compared to that this is nothing now for all the newbies are there you know my god this is like theyre going to get crushed but this is not Classical Music or jest this is punk rock and you have to be ready for that if youre expecting Classical Music something thats very very calm well you are in for a surprise so you say this is like comedy in a horse like clear cryptocurrency if you want to play the game you better get used to this kind of stress yes you better get us because this is a very nice and field even know what percentage of people are in crypto and this is changing the world because its like you know this is like one thousand nine hundred four in the internet you know its Something Like you know business comes out and say yes people are going to buy books on the internet nobody believed them by one thousand nine hundred eight most of the analysts out there were saying that around. By not two thousand and two internet is not going to be there theres not going to be any internet and all of this hype is going to be so inbetween that prices went up prices go down but the whole space is expanding the same thing is going to happen to the tokenization all the utility talk and market all the security talk in market everything that we see around us are is going to get talk and im not going to say its going to happen to morrow but its and its going to happen in the next ten to twenty years and you can be you can decide to be early on it are you can come later it doesnt matter because you can be part of this revolution it can be ahead of the curve or you can come in later but this is happening its happening in front of us martin back at what he said he has happened on this ng if any less so who is scary for you i think is significantly more scary i think it makes a good point that the volatility has been around for quite some time but theres a great difference between trading at one and three dollars then there is trading at nine thousand and nineteen thousand dollars which is what were seeing right now the potential for pain is a lot more significant and the stakes are significantly higher the one point i would make is that i do agree in one thousand nine hundred four we were all questioning the validity of the internet as a commercial vehicle but there was only one internet weve got Thirteen Hundred crypto currencies right now whether or not you believe that this is going to be the transaction messes of the future is really irrelevant is what is going to be the single token that we use or are we going to use multiple tokens if we use it and what is there going to actual vehicle him down there worth shows because the jumping in are there all good commercial vehicles old no not some that are better than others. This is just it at the present none of them really do anything that we cant already do Payment Systems are already in place theyre much faster theyre much more efficient they cost less they take up less energy and in fact theyre safer so what the moment nobody has explained to me exactly why these crypto currencies are more valid the Payment Systems that already exist and i should put it more importantly Payment Systems which are excepted by the commercial universe and regulators and central bankers i would have a lot more faith in investing in those Payment Systems than i would in speculating which of these thirteen krypto Thirteen Hundred cryptocurrency s. Are going to ultimately win the race to be digital tokens of the future david vaile what is your take on what weve seen the dramatic rise and now the recent plummet in tech ounces particularly the the the big three big ones whats going on here well look i suppose it just emphasizes the same questions that people have been asking. More so very recently which is what ease this thing what what what these technologies are they currencies of late assets they gambling tokens theres no doubt that the Underlying Technology the Block Chain Technology has a lot of attention uses whether any of those are currencies do i think. Not really proven yet if the currency jumps by ten percent a day then you know no one can really discern know whether the what trust theyre paying for anything and so theres always been that problem and theres always been a problem with it as a currency that you cant pay taxes you know which is one of the key features of the currency and as for an s. It the other question is whats it backed by and increasingly. Its obvious that it relies on confidence but in terms of anything else behind it its a matter. Of consensus and so when the Conveyor Belt of the rocket is going up the consensus suddenly gives you a ten thousand dollar increase in the value in a very short term but when it disappears then youre left with nothing so i suppose that the real problem is its about risk its about understanding whats behind this and its also about the sophistication of the uses now rather than ninety ninety four i wonder whether the analogy is really two thousand and seven two thousand and eight when the Global Financial crisis was about to unravel all of the finnish sophisticated Financial Derivatives that it sort of been building and building and building for so ten or twenty years and it turned out when the music stopped then that even apparently quite sophisticated. Players like Municipal Bodies or what they were investing discovered that nobody knew where the risk really went nobody knew what happened when the music stopped and so very quickly you had a crisis of confidence. There i suppose two or three days ago you would have said were on the way off the edge of the cliff id say its jumped by ten percent today so. Who knows where its going but who knows at a big place i mean let me bring martin in have that several important points raised by david there what sort of invest is this market attracts and how do we look at it i mean is it a council is it an asset i should imagine that thats very important to the tenant fifty from a legal point of view and how we deal with that Going Forward no question i think david raises an important point to talk when he talks about the ability to transact if you dont know what the value is going to be in twenty four hours time because the transaction process is quite slow in a bit coin universe so i might pay for a car with a bit coin south after noon and i dont know whether ive gotten a good deal when the transaction closes a few hours later or indeed tomorrow when i take delivery of the car that doesnt make it an efficient way for us to trade goods and serve. But i think ultimately what were looking at now is whether or not we are talking about bitcoins and block chain as a platform or whether were talking about them as an asset i believe in the concept of the platform im less excited about block chain its been around for about ten years it didnt have a great deal of utility three years ago were talking about it now only because bitcoins traded at twenty thousand dollars apiece the block chain itself isnt revelation very revolutionary i should say and it isnt actually revelator e either but it is interesting and it does have some validity in the commercial purpose we what we need to descend or dissect the difference between the block chain and the big points the big coins are speculation theyre not a currency theyre not even an asset as far as im concerned theyre a gamble they could be worth billions they could be worth zero the platform itself thats where youve got a story and for me thats incredibly compelling because its themselves theyre entertaining i wouldnt say theyve got a whole lot of value in this and what do you say in response to that is it important to separate. From the platforms or is that the way to go forward considering the volatility surrounding the crypts occurrences no is this important is that it. See block see im a quarter im a technologist i started this from technology this whole block chain people are telling its a great platform its just a database why dont you say you like oracle better its just a database with all the consensus mechanism and the incentive corbett coined this platform or this database is absolutely useless ok if you look into the technology piece of it you can use it as an asset you can use it as a gambling platform you can use it as anything because thats up to you it depends on what you want to do now telling that it is not stable or its increasing in value can you that its like saying you know were in the buggy era and a car has come out and all the bugs you want us are saying or discard is a useless thing its clunky it falls down is does not have a wiper thats of Technology Problem somebody will fix it there is an einstein or somebody like that will come and fix it but there is going to be a point where if youre still thinking that the buggy is going to be the future in two thousand when youre sitting in one thousand nine hundred twelve thats not going to be the case because it is or the block chain and bitcoin are different kinds of coins are going to take over now regarding multiple crypto currency so you can have multiple currencies you have the euro you have the u. S. Dollar you have indian rupee you have the chinese yuan and you using all that say made they could end up being thirteen thousand currencies it depends on what you want to use and it is such a friend as a research it is not about valerie bitcoin for example martin. I dont think that you are correct in comparing the multiple currencies the multiple because in the multiple coins that are out there in the marketplace simply because when we talk about the euro the yen the rupee and the dollar theyre all backed by the four faith and credit of enormously strong economies theyre big theyre backed by taxpayers backed by the central bank we understand out underneath allows them to create a particular value i have no idea who backs bitcoin i dont even know the name of the guy who created it i dont know if you really are but it just such a dangerous in the world i dont know where theyre located those are two significant risks and im not willing now to say its also a kind of crazy doesnt it if you dont know whos behind it what the true value of bitcoin and it is quite we dont i dont we dont know the people who are sitting on this committee who are verifying the block team were david is that one of the problems we dont really know where the starts where this ends what sort of checks and balances there are in block chains one of the things is that. Theres many things that were talking about that bitcoin is a particular implementation of the Block Chain Technology its a particular crypto currency but theres Thirteen Hundred other currencies kind of currencies and theres many other different ways to use a block chain Type Technology its also many different sort of political or governance models beyond is so now because in itself is a sensual crypto and it just myth that for avoiding identification through avoiding Central Banks youre avoiding a lot of the problems that come with a dent of the Central Bank Currency but also a lot of the advantages for consumers like the fact that you can trust many of them and that when something goes wrong theres someone standing behind that at the other end block chain technologies being used as being experimented with by some their. Very mainstream. Financial into g. s and also. Governments and they have no intention of it being you know a crypto anarchist experiment they want to put in all of the know your customer and other sorts of identification functions that work in other areas of business and of the economy and so one of the problems i think is bundling everything together as if one crypto currency is like another and one use of block chain is like another part of the problem for ordinary people for ordinary Business People or for consumers ordinary citizens is that the level of knowledge and sophistication and sort of technical understanding and business understanding that you need to work out exactly what youre dealing with is pretty high its much higher than saying well should i travel with american dollars o. E. M. Or whatever because even the nature of an asset a currency or a gambling token it is unclear and to compare ability of the risks in different types of systems the speed that sort of thing its all very technical and very variable it manes that a lot of people in this market a lot of people in this using this for transit actions really you have to count as unsophisticated and probably at risk of doing things that happened at the stand to be exposed to risks that they dont understand i guess like many not. I mean it seems that people need to be better educated and surely regulations will have a place in the sense that they might bring back some sort of stability that they might draw more confidence when it comes to this market whatever it is if its a currency or not because it is thats what is needed here here and i also want to ask you Something Else when when this billion was wiped off this market where did it go. This is to me in london thats an excellent question. The money its a zero sum game in a certain sense because the money is simply going to transfer from one entity to the next and whether or not it exists inside the big point structure or whether it gets pulled out into real cash thats the difference as to where the money goes and actually that raises a really interesting point because the analogy that i like to draw is when you own a share in apple for instance it doesnt matter whether everybody else sells their shares in apple you still have a piece of paper that gives you a small portion of the profits Going Forward for the sale of i phones and i pads and Everything Else like that everybody could believe youd still have that piece of paper that would have the value of profits if everybody leaves big coin i dont have anything of you if youre buying something that has no value whatsoever thats not true because i know at this point only increase it no no no the value of big point only increases when more people participate and when fewer people participate the value decreases that for me is a very uncomfortable legal swaraj the value of the go read a great deal of risk for people who dont know what theyre in and then you have to tesla shares lets say lets say you have tesla shares theres no dividend its having a trading at three hundred fifty dollars what are you buying that for then or if youre buying gord what it is it is only having value because more people buy gold otherwise why should it be at sixteen hundred dollars i agree with you no metal its shining its only use for seventy percent right so it is trading at sixteen and that is called social consensus so lets say you go to sleep tonight i agree and your wife tells you you know what i want an ounce of gold and you few have six hundred you tell are ok ill buy you this piece of gold tomorrow morning you wake up in the morning and if its by the snap of a finger everybody out only is only being hundred dollars youre not going to pay six hundred you really behind it so to social conditions i want you to live with one difference that i have that i think your stuff is going to be right. Youre absolutely right the one caveat i would say though that Central Banks around the world and some hold tons of gold they dont own any bitcoin so there is a sense theres a floor to the price of gold they cannot because of they talk about senses we dont have that consensus yet and because ok how david im going to bring in you how do we get that sort of consensus and clearly regulation is going to become an issue as we go ahead look at whats happened in and south korea the sort of regulation that russia is looking at that if they should be some sort of unified regulation how is it going to be better placed where should it be placed to make this is more acceptable you know the fascinating thing about bitcoin is that its not built on the i suppose the assertion the command of any Central Government that the attraction first to some of the uses is that it is based on consensus as this or a consensus is that this one that any individual block is valid and thats what all of the Crypto Mining is about another one is the actual mechanism the technical frame that its working in and so this is where you see splits so of change and that sort of thing and the third thing the most interesting one is that its worth something and the miraculous sort of creation of a big point as a thing that actually worked needed all of those three things that history types of consensus among strangers to just bubble up together and said that was the improbable thing and that was the great achievement that you had an essential agreement among strangers on each of those three quite Different Levels and that came forward and the problem now is that youre finding that. The technical problems of getting consensus about each block big but equally with the big question model creates huge demand for electricity it becomes slow and theres this in problems the. The technical demands of that consensus about the framework or the protocols as saying the fragmentation and the creation of Thirteen Hundred different sort of currencies and so its very unclear now does that go on forever is next week is there hundred thousand currencies or we know whats the limit there and there what about a government sponsored county well in a sense that the government steps in and says well we dont care about consensus we are going to say its worth this or were going to set up a trading mechanism that lets you know ordinary. Markets decide the price of this but within sort of controls and we dont need consensus about Technical Framework we dont need consensus that its worth anything we just work on. Within very close downs within sort of highly governed infrastructure highly governed sort of social and business sort of frameworks because of the things that government provides and its not about consensus modern is doing it well at the moment what do you make of so south koreas moves and look whats happening in zimbabwe in venezuela at the moment how well kept i can see is all being used they can itll be melded together to provide the perfect platform. This is i think its fascinating because i do think it has some incredible utility for people who are participating in economies that dont really have significant backing of their currency or indeed Central Banks that are trusted and i can understand in places like zimbabwe and venezuela why you would want to go into a marketplace that you could at least have some confidence that the value that you have created is going to be stored now theres an incredible amount of volatility in bitcoin but theres even more in the venezuelan currencies and indeed in zimbabwe as well so you can understand why there would be attraction there but i guess i would say that in many respects all of us are using Digital Currencies as we speak its not like were Walking Around with enormous bags of cash in our pockets when we go out and buy our coffee i take my card i touch the thing i get my starbucks and im on my way thats a Digital Currency in many respects and what the banks and the Central Banks do is they trade Digital Currencies amongst themselves the amount of actual notes dollar notes that are in the marketplace and out in the real world are infant tests of inference compared to the value of goods and services are changed each day so were already in a world in some respects of Digital Currency so that platform that concept does exist thats why i have been skeptical of the idea of bitcoin coming in at a forty five degree angle and this and people assuming that its a brand new Futuristic Technology weve been doing this in fractional reserve banking for declan explained that this isnt new this could actually relatively all this then off you go i mean clearly i should imagine you going to say that when he said not enough any sort of bubble so im just wondering way too from now for crypto currencies and let me. And respond to ok two or three things i want to bring him to provide one you cannot regulate bitcoin because nobody owns it you cannot take the server down theres no one server to take down theres no one company to take down ok so if we are using it so its like this so lets say the government comes with a rule tomorrow saying that you know what you cannot trade coffee but only starbucks can trade coffee ok you can go to a starbucks and you can buy coffee and lets see the guy starbucks has put up censorship or not than thats me saying that you are not allowed to buy coffee from starbucks lets say for hypothetical cases and lets say david is drinking a coffee hes took hes taken a coffee i go to him and say david im going to give you my i formed you give me my can you give me your coffee theres no way hes going to refuse that offer even if there was a rule so thats one thing and the second pieces nobodys been banks so lets say i go to my bank and i do a Wire Transfer to david in australia so the wire goes from my bank to the Federal Reserve and from that it goes to the nostra account for their bank in australia it goes to davids account but realistically that clearing and settlement happens over a week when i send david or anybody in london a big calling or a light coin or it clearly im the assa goes to them within one minute or ten minutes the slower bitcoin it doesnt ten minutes maybe the confirmation times declaw get it out again it may be going to have to leave it and were going to have to move in there a minute gentlemen sorry to cut you off thank you for all your different opinions when it comes to this certainly a fascinating subject and one we all have to get our heads wrapped around the thin eappen martin bacharachs and david bell and thank you two for watching and see the program again any time by visiting a website aljazeera dot com for further discussion at our Facebook Page thats facebook dot com for slash a. 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