Paul Kemp-Robertson: Bitcoin. Sweat. Tide. Meet the future of branded currency.

107,312 views

2013-07-25 ・ TED


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Paul Kemp-Robertson: Bitcoin. Sweat. Tide. Meet the future of branded currency.

107,312 views ・ 2013-07-25

TED


Please double-click on the English subtitles below to play the video.

00:12
So if I was to ask you
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what the connection between
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a bottle of Tide detergent and sweat was,
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you'd probably think that's the easiest question
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that you're going to be asked in Edinburgh all week.
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But if I was to say that they're both examples
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of alternative or new forms of currency
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in a hyperconnected, data-driven global economy,
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you'd probably think I was a little bit bonkers.
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But trust me, I work in advertising.
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(Laughter)
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And I am going to tell you the answer,
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but obviously after this short break.
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So a more challenging question is one
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that I was asked, actually, by one of our writers
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a couple of weeks ago, and I didn't know the answer:
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What's the world's best performing currency?
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It's actually Bitcoin.
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Now, for those of you who may not be familiar,
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Bitcoin is a crypto-currency, a virtual currency, synthetic currency.
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It was founded in 2008 by this anonymous programmer
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using a pseudonym Satoshi Nakamoto.
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No one knows who or what he is.
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He's almost like the Banksy of the Internet.
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And I'm probably not going to do it proper service here,
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but my interpretation of how it works is that
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Bitcoins are released through this process of mining.
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So there's a network of computers that are challenged
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to solve a very complex mathematical problem
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and the person that manages to solve it first gets the Bitcoins.
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And the Bitcoins are released,
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they're put into a public ledger called the Blockchain,
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and then they float, so they become a currency,
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and completely decentralized, that's the sort of
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scary thing about this, which is why it's so popular.
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So it's not run by the authorities or the state.
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It's actually managed by the network.
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And the reason that it's proved very successful
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is it's private, it's anonymous, it's fast, and it's cheap.
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And you do get to the point where there's some wild fluctuations with Bitcoin.
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So in one level it went from something like 13 dollars
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to 266, literally in the space of four months,
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and then crashed and lost half of its value in six hours.
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And it's currently around that kind of
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110 dollar mark in value.
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But what it does show is that it's sort of gaining ground,
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it's gaining respectability.
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You get services, like Reddit and Wordpress
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are actually accepting Bitcoin as a payment currency now.
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And that's showing you that people
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are actually placing trust in technology,
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and it's started to trump and disrupt
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and interrogate traditional institutions
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and how we think about currencies and money.
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And that's not surprising, if you think about
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the basket case that is the E.U.
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I think there was a Gallup survey out recently
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that said something like, in America,
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trust in banks is at an all-time low, it's something like 21 percent.
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And you can see here some photographs from London
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where Barclays sponsored the city bike scheme,
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and some activists have done some nice piece
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of guerrilla marketing here and doctored the slogans.
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"Sub-prime pedaling." "Barclays takes you for a ride."
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These are the more polite ones I could share with you today.
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But you get the gist, so people have really started
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to sort of lose faith in institutions.
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There's a P.R. company called Edelman,
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they do this very interesting survey every year
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precisely around trust and what people are thinking.
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And this is a global survey, so these numbers are global.
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And what's interesting is that you can see that
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hierarchy is having a bit of a wobble,
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and it's all about heterarchical now,
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so people trust people like themselves more
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than they trust corporations and governments.
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And if you look at these figures for the more developed markets
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like U.K., Germany, and so on, they're actually much lower.
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And I find that sort of scary.
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People are actually trusting businesspeople
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more than they're trusting governments and leaders.
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So what's starting to happen, if you think about money,
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if you sort of boil money down to an essence,
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it is literally just an expression of value, an agreed value.
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So what's happening now, in the digital age,
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is that we can quantify value in lots of different ways
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and do it more easily,
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and sometimes the way that we quantify those values,
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it makes it much easier
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to create new forms and valid forms of currency.
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In that context, you can see that networks like Bitcoin
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suddenly start to make a bit more sense.
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So if you think we're starting to question
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and disrupt and interrogate what money means,
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what our relationship with it is, what defines money,
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then the ultimate extension of that is,
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is there a reason for the government to be in charge
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of money anymore?
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So obviously I'm looking at this through a marketing prism,
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so from a brand perspective,
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brands literally stand or fall on their reputations.
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And if you think about it, reputation has now become a currency.
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You know, reputations are built on trust,
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consistency, transparency.
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So if you've actually decided that you trust a brand,
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you want a relationship, you want to engage with the brand,
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you're already kind of participating in lots of new forms
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of currency.
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So you think about loyalty.
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Loyalty essentially is a micro-economy.
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You think about rewards schemes, air miles.
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The Economist said a few years ago that
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there are actually more unredeemed air miles in the world
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than there are dollar bills in circulation.
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You know, when you are standing in line in Starbucks,
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30 percent of transactions in Starbucks on any one day
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are actually being made with Starbucks Star points.
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So that's a sort of Starbucks currency
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staying within its ecosystem.
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And what I find interesting is that Amazon
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has recently launched Amazon coins.
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So admittedly it's a currency at the moment that's purely for the Kindle.
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So you can buy apps and make purchases within those apps,
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but you think about Amazon,
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you look at the trust barometer that I showed you
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where people are starting to trust businesses,
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especially businesses that they believe in and trust
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more than governments.
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So suddenly, you start thinking,
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well Amazon potentially could push this.
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It could become a natural extension,
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that as well as buying stuff --
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take it out of the Kindle -- you could buy books, music,
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real-life products, appliances and goods and so on.
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And suddenly you're getting Amazon, as a brand,
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is going head to head with the Federal Reserve
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in terms of how you want to spend your money,
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what money is, what constitutes money.
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And I'll get you back to Tide, the detergent now,
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as I promised.
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This is a fantastic article I came across in New York Magazine,
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where it was saying that drug users across America
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are actually purchasing drugs
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with bottles of Tide detergent.
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So they're going into convenience stores,
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stealing Tide,
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and a $20 bottle of Tide
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is equal to 10 dollars of crack cocaine or weed.
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And what they're saying, so some criminologists
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have looked at this and they're saying, well, okay,
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Tide as a product sells at a premium.
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It's 50 percent above the category average.
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It's infused with a very complex cocktail of chemicals,
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so it smells very luxurious and very distinctive,
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and, being a Procter and Gamble brand,
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it's been supported by a lot of mass media advertising.
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So what they're saying is that drug users are consumers too,
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so they have this in their neural pathways.
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When they spot Tide, there's a shortcut.
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They say, that is trust. I trust that. That's quality.
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So it becomes this unit of currency,
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which the New York Magazine described
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as a very oddly loyal crime wave, brand-loyal crime wave,
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and criminals are actually calling Tide "liquid gold."
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Now, what I thought was funny was the reaction
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from the P&G spokesperson.
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They said, obviously tried to dissociate themselves from drugs,
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but said, "It reminds me of one thing
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and that's the value of the brand has stayed consistent." (Laughter)
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Which backs up my point and shows he didn't even
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break a sweat when he said that.
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So that brings me back to the connection with sweat.
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In Mexico, Nike has run a campaign recently
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called, literally, Bid Your Sweat.
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So you think about,
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these Nike shoes have got sensors in them,
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or you're using a Nike FuelBand
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that basically tracks your movement, your energy,
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your calorie consumption.
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And what's happening here, this is where you've actually
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elected to join that Nike community. You've bought into it.
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They're not advertising loud messages at you,
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and that's where advertising has started to shift now
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is into things like services, tools and applications.
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So Nike is literally acting as a well-being partner,
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a health and fitness partner and service provider.
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So what happens with this is they're saying, "Right,
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you have a data dashboard. We know how far you've run,
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how far you've moved, what your calorie intake, all that sort of stuff.
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What you can do is, the more you run, the more points you get,
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and we have an auction where you can buy Nike stuff
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but only by proving that you've actually used the product to do stuff."
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And you can't come into this. This is purely
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for the community that are sweating
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using Nike products. You can't buy stuff with pesos.
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This is literally a closed environment, a closed auction space.
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In Africa, you know, airtime has become
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literally a currency in its own right.
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People are used to, because mobile is king,
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they're very, very used to transferring money,
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making payments via mobile.
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And one of my favorite examples from a brand perspective
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going on is Vodafone, where, in Egypt,
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lots of people make purchases in markets
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and very small independent stores.
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Loose change, small change is a real problem,
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and what tends to happen is you buy a bunch of stuff,
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you're due, say,
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10 cents, 20 cents in change.
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The shopkeepers tend to give you things like an onion
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or an aspirin, or a piece of gum,
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because they don't have small change.
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So when Vodafone came in and saw this problem,
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this consumer pain point, they created
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some small change which they call Fakka,
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which literally sits and is given
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by the shopkeepers to people,
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and it's credit that goes straight onto their mobile phone.
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So this currency becomes credit, which again,
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is really, really interesting.
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And we did a survey that backs up the fact that,
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you know, 45 percent of people
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in this very crucial demographic in the U.S.
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were saying that they're comfortable using
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an independent or branded currency.
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So that's getting really interesting here,
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a really interesting dynamic going on.
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And you think, corporations
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should start taking their assets and thinking of them
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in a different way and trading them.
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And you think, is it much of a leap?
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It seems farfetched, but when you think about it,
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in America in 1860,
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there were 1,600 corporations issuing banknotes.
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There were 8,000 kinds of notes in America.
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And the only thing that stopped that,
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the government controlled four percent of the supply,
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and the only thing that stopped it
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was the Civil War breaking out,
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and the government suddenly wanted to take control of the money.
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So government, money, war, nothing changes there, then.
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So what I'm going to ask is, basically,
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is history repeating itself?
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Is technology making paper money feel outmoded?
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Are we decoupling money from the government?
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You know, you think about, brands are starting to fill the gaps.
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Corporations are filling gaps that governments can't afford to fill.
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So I think, you know, will we be standing on stage
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buying a coffee -- organic, fair trade coffee -- next year
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using TED florins or TED shillings?
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Thank you very much.
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(Applause)
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Thank you. (Applause)
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