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GARY GENSLER: Welcome, welcome.

If you have a desire to learn a little bit about blockchain

and its intersection with the world of finance and money

and you're looking for 15.S12, you're in the right place.

If you're here to not do that and just

hang out and have a good time, I guess you still hopefully

are in the right place, because we're

going to have a good time this semester.

My name is Gary Gensler.

I'm a Senior Lecturer here at MIT Sloan.

I'm also an advisor over at the MIT Media Lab.

And I've spent a lifetime around the world of finance,

and money, and public policy.

And I've been at MIT this last eight months.

And we're going to learn a lot together

about blockchain and money.

We're going to have a little bit of fun

here and see what we're going to do.

So we're talking about blockchain and money.

That's where we are.

By the way, I do cold call.

I do call on you-- so if you want to leave now,

I understand--

because I want to have an interaction a little bit

about it.

So my first question for the class,

for everyone, whether registered or not, how many of you

have ever owned a cryptocurrency?

Wait, wait, let's see.

It seems like it's about 45% of you or so.

All right, so it gives me--

Alin you want to keep your hand up long?

And how many of you have ever worked

on any blockchain-related projects,

in an entrepreneurial setting, a corporate setting, anywhere?

All right, good, so about a third in the room.

All right, so you all know probably more than I do,

but I'm going to give it a shot.

I'm going to always start every week with what are the study

questions for the week.

How many of you actually got the syllabus?

This is not going to be graded assignment.

I just have to have a sense of who

actually got this syllabus-- so a good many of you.

And how many of you actually did the two readings?

It's not graded.

I've just got to gauge the class.

Oh, thank you, thank you.

Write those grades down, by the way--

[LAUGHTER]

--no, no.

All right, so the two main questions

for this week's lecture really is, what is blockchain?

And why might it be a catalyst?

And I emphasize the word "might" it be a catalyst for change

in the world of finance.

We could talk a lot about things outside

of the world of finance.

And blockchain may indeed have a lot of applications outside

of finance, but I've chosen to try

to just narrow the scope a bit.

So this semester is really about blockchain and money

or blockchain and finance.

And secondly, you will see index cards

on every one of these round tables.

One assignment, by the end of the class--

you could do it now or later--

I would like each of you to anonymously write

on the card what you want to achieve in this semester.

It could be anything from this class,

from learning about blockchain, from making money on Bitcoin,

from--

I don't care if you tell me it's meeting your future spouse.

Like, what do you want to achieve in this class?

I can't help you on the third, but I

will try to help you on the things I can help you on.

And Sabrina and Talida will collect them later.

And next Tuesday, we'll tell you the results.

What is it that you want to achieve in this class?

And then we'll see at the end of the semester

if we've done that.

So it's just a way to help guide me help you.

So that's what we're trying to do.

And so what were the two readings?

One was a little thing I did.

And one was a thing I did with some of my colleagues.

And Tom, since I know you, what did you

take out of the readings?

AUDIENCE: That blockchain is essential to improved

profitability [INAUDIBLE].

GARY GENSLER: Did you have a good summer?

AUDIENCE: Mhm.

GARY GENSLER: Did you raise your hand?

Did you own Bitcoin?

No.

Who in the class read the readings

and took something different than Tom?

He said there was potential.

And your first name?

AUDIENCE: Alin.

GARY GENSLER: Alin.

AUDIENCE: Well, I'm coming from the technical side.

So from the technical side, all I see is a bunch of hype.

And 10 years have passed since the launch of Bitcoin

with very little to show for it other than hype.

[INAUDIBLE]

GARY GENSLER: OK, how many agreed with Alin?

This isn't a vote.

No, just two or three.

How many agreed with Tom?

There is more.

And how many of you are too shy on the first day

to put your hands up?

Most.

So I'm going to start and go back-- the internet.

How do I sort of--

I've come about this and of thought about, well,

what is blockchain?

What is it really about?

Well, the internet started many decades ago, before most of you

were born, but 1974-ish.

I mean, there is some predecessors

even from the late '60s, the ethernet, which is really

how two computers communicate.

And then you had TCP/IP, which was really

the internet protocol of multiple computers compute--

talking to each other.

And then later on in 1990, how do we move forward?

Does anybody know what HTTP is?

We're at MIT.

Your first name would be helpful.

AUDIENCE: Eric.

GARY GENSLER: Eric.

AUDIENCE: It's a protocol for communicate web content.

GARY GENSLER: Web content.

AUDIENCE: It's Hypertext Transport Protocol.

GARY GENSLER: Right, do You know who is

associated with the invention?

AUDIENCE: I don't remember right now.

GARY GENSLER: Anybody else?

Anybody know who-- it's not in the readings, or anything,

Tim Berners-Lee?

Anybody know who is associated with TCP/IP?

AUDIENCE: Was the company initiated by MIT faculty,

I think, [INAUDIBLE] or something?

GARY GENSLER: I don't know if it was a company associated

with MIT, but Vint Cerf may have had some association with MIT.

So these are the first three layers.

And then there were companies, commercialization, 3Com

and Cisco.

And of course, Amazon is still around today.

But there was something else going on.

How do we commercialize the internet?

Does anybody know what this scene is from?

AUDIENCE: This is the first pizza sold by Bitcoin.

GARY GENSLER: Good thought, good thought,

first pizza sold by Bitcoin, but no.

AUDIENCE: Is it from that movie Hackers or something?

GARY GENSLER: All right, movie Hackers.

AUDIENCE: I think it's from Net.

GARY GENSLER: The Net?

Have you ever seen the movie?

It's not a good movie.

So this is the opening scene of The Net.

And yes, that's Sandra Bullock.

And the year is 1995.

It's a cyber thriller.