Bitcoin. Sweat. Tide. Meet the future of branded currency.
-
0:01 - 0:03So if I was to ask you
-
0:03 - 0:05what the connection between
-
0:05 - 0:08a bottle of Tide detergent and sweat was,
-
0:08 - 0:09you'd probably think
that's the easiest question -
0:10 - 0:12that you're going to be asked
in Edinburgh all week. -
0:12 - 0:15But if I was to say
that they're both examples -
0:15 - 0:18of alternative or new forms of currency
-
0:18 - 0:22in a hyperconnected,
data-driven global economy, -
0:22 - 0:25you'd probably think
I was a little bit bonkers. -
0:25 - 0:28But trust me, I work in advertising.
-
0:28 - 0:30(Laughter)
-
0:30 - 0:32And I am going to tell you the answer,
-
0:32 - 0:34but obviously after this short break.
-
0:35 - 0:36So a more challenging question is one
-
0:36 - 0:38that I was asked, actually,
by one of our writers -
0:38 - 0:41a couple of weeks ago,
and I didn't know the answer: -
0:41 - 0:43What's the world's best
performing currency? -
0:43 - 0:45It's actually Bitcoin.
-
0:45 - 0:47Now, for those of you
who may not be familiar, -
0:47 - 0:51Bitcoin is a crypto-currency, a virtual
currency, synthetic currency. -
0:51 - 0:54It was founded in 2008
by this anonymous programmer -
0:54 - 0:57using a pseudonym Satoshi Nakamoto.
-
0:57 - 1:00No one knows who or what he is.
-
1:00 - 1:02He's almost like the Banksy
of the Internet. -
1:02 - 1:05And I'm probably not going
to do it proper service here, -
1:05 - 1:07but my interpretation
of how it works is that -
1:07 - 1:10Bitcoins are released
through this process of mining. -
1:10 - 1:13So there's a network
of computers that are challenged -
1:13 - 1:15to solve a very complex
mathematical problem -
1:15 - 1:18and the person that manages to solve
it first gets the Bitcoins. -
1:18 - 1:19And the Bitcoins are released,
-
1:19 - 1:22they're put into a public
ledger called the Blockchain, -
1:22 - 1:24and then they float, so
they become a currency, -
1:24 - 1:27and completely decentralized,
that's the sort of -
1:27 - 1:30scary thing about this,
which is why it's so popular. -
1:30 - 1:32So it's not run
by the authorities or the state. -
1:32 - 1:34It's actually managed by the network.
-
1:34 - 1:37And the reason that it's proved
very successful -
1:37 - 1:40is it's private, it's anonymous,
it's fast, and it's cheap. -
1:40 - 1:44And you do get to the point where
there's some wild fluctuations with Bitcoin. -
1:44 - 1:47So in one level it went
from something like 13 dollars -
1:47 - 1:49to 266, literally
in the space of four months, -
1:49 - 1:52and then crashed and lost half
of its value in six hours. -
1:52 - 1:54And it's currently around that kind of
-
1:54 - 1:56110 dollar mark in value.
-
1:56 - 1:59But what it does show
is that it's sort of gaining ground, -
1:59 - 2:00it's gaining respectability.
-
2:00 - 2:02You get services,
like Reddit and Wordpress -
2:02 - 2:06are actually accepting Bitcoin
as a payment currency now. -
2:06 - 2:07And that's showing you that people
-
2:07 - 2:10are actually placing trust in technology,
-
2:10 - 2:13and it's started to trump and disrupt
-
2:13 - 2:15and interrogate traditional institutions
-
2:15 - 2:18and how we think
about currencies and money. -
2:18 - 2:19And that's not surprising,
if you think about -
2:19 - 2:21the basket case that is the E.U.
-
2:21 - 2:23I think there was a Gallup
survey out recently -
2:23 - 2:25that said something like, in America,
-
2:25 - 2:29trust in banks is at an all-time
low, it's something like 21 percent. -
2:29 - 2:31And you can see here
some photographs from London -
2:31 - 2:33where Barclays sponsored
the city bike scheme, -
2:33 - 2:35and some activists have
done some nice piece -
2:35 - 2:37of guerrilla marketing here
and doctored the slogans. -
2:37 - 2:41"Sub-prime pedaling." "Barclays
takes you for a ride." -
2:41 - 2:45These are the more polite ones
I could share with you today. -
2:45 - 2:47But you get the gist, so
people have really started -
2:47 - 2:50to sort of lose faith in institutions.
-
2:50 - 2:52There's a P.R. company called Edelman,
-
2:52 - 2:54they do this very interesting
survey every year -
2:54 - 2:57precisely around trust
and what people are thinking. -
2:57 - 3:00And this is a global survey,
so these numbers are global. -
3:00 - 3:02And what's interesting
is that you can see that -
3:02 - 3:05hierarchy is having a bit of a wobble,
-
3:05 - 3:07and it's all about heterarchical now,
-
3:07 - 3:09so people trust people
like themselves more -
3:09 - 3:12than they trust corporations
and governments. -
3:12 - 3:14And if you look at these figures
for the more developed markets -
3:14 - 3:17like U.K., Germany, and so on,
they're actually much lower. -
3:17 - 3:18And I find that sort of scary.
-
3:18 - 3:20People are actually
trusting businesspeople -
3:20 - 3:24more than they're trusting
governments and leaders. -
3:24 - 3:27So what's starting to happen,
if you think about money, -
3:27 - 3:29if you sort of boil money
down to an essence, -
3:29 - 3:33it is literally just an expression
of value, an agreed value. -
3:33 - 3:35So what's happening now,
in the digital age, -
3:35 - 3:38is that we can quantify value
in lots of different ways -
3:38 - 3:39and do it more easily,
-
3:40 - 3:42and sometimes the way
that we quantify those values, -
3:42 - 3:45it makes it much easier
-
3:45 - 3:48to create new forms and valid
forms of currency. -
3:48 - 3:52In that context, you can see
that networks like Bitcoin -
3:52 - 3:55suddenly start to make a bit more sense.
-
3:55 - 3:58So if you think we're starting to question
-
3:58 - 4:01and disrupt and interrogate
what money means, -
4:01 - 4:04what our relationship with it
is, what defines money, -
4:04 - 4:07then the ultimate extension of that is,
-
4:07 - 4:10is there a reason
for the government to be in charge -
4:10 - 4:11of money anymore?
-
4:11 - 4:14So obviously I'm looking at this
through a marketing prism, -
4:14 - 4:16so from a brand perspective,
-
4:16 - 4:19brands literally stand or fall
on their reputations. -
4:20 - 4:22And if you think about it, reputation
has now become a currency. -
4:22 - 4:24You know, reputations are built on trust,
-
4:24 - 4:26consistency, transparency.
-
4:26 - 4:29So if you've actually decided
that you trust a brand, -
4:29 - 4:32you want a relationship, you
want to engage with the brand, -
4:32 - 4:35you're already kind of participating
in lots of new forms -
4:35 - 4:36of currency.
-
4:36 - 4:38So you think about loyalty.
-
4:38 - 4:40Loyalty essentially is a micro-economy.
-
4:40 - 4:44You think about rewards
schemes, air miles. -
4:44 - 4:46The Economist said a few years ago that
-
4:46 - 4:50there are actually more
unredeemed air miles in the world -
4:50 - 4:53than there are dollar
bills in circulation. -
4:53 - 4:55You know, when you are standing
in line in Starbucks, -
4:55 - 4:5830 percent of transactions
in Starbucks on any one day -
4:58 - 5:01are actually being made
with Starbucks Star points. -
5:01 - 5:03So that's a sort of Starbucks currency
-
5:03 - 5:05staying within its ecosystem.
-
5:05 - 5:08And what I find interesting is that Amazon
-
5:08 - 5:11has recently launched Amazon coins.
-
5:11 - 5:14So admittedly it's a currency at the moment
that's purely for the Kindle. -
5:14 - 5:17So you can buy apps and make
purchases within those apps, -
5:17 - 5:18but you think about Amazon,
-
5:18 - 5:21you look at the trust
barometer that I showed you -
5:21 - 5:24where people are starting
to trust businesses, -
5:24 - 5:26especially businesses
that they believe in and trust -
5:26 - 5:27more than governments.
-
5:28 - 5:29So suddenly, you start thinking,
-
5:29 - 5:31well Amazon potentially could push this.
-
5:31 - 5:33It could become a natural extension,
-
5:33 - 5:34that as well as buying stuff --
-
5:34 - 5:37take it out of the Kindle --
you could buy books, music, -
5:37 - 5:41real-life products, appliances
and goods and so on. -
5:41 - 5:44And suddenly you're getting
Amazon, as a brand, -
5:44 - 5:45is going head to head
with the Federal Reserve -
5:45 - 5:47in terms of how you want
to spend your money, -
5:48 - 5:50what money is, what constitutes money.
-
5:50 - 5:53And I'll get you back
to Tide, the detergent now, -
5:53 - 5:55as I promised.
-
5:55 - 5:57This is a fantastic article I came
across in New York Magazine, -
5:57 - 6:00where it was saying that drug
users across America -
6:00 - 6:02are actually purchasing drugs
-
6:02 - 6:05with bottles of Tide detergent.
-
6:05 - 6:07So they're going into convenience stores,
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6:07 - 6:08stealing Tide,
-
6:08 - 6:10and a $20 bottle of Tide
-
6:10 - 6:15is equal to 10 dollars
of crack cocaine or weed. -
6:15 - 6:17And what they're saying,
so some criminologists -
6:17 - 6:20have looked at this and they're
saying, well, okay, -
6:20 - 6:22Tide as a product sells at a premium.
-
6:22 - 6:24It's 50 percent
above the category average. -
6:24 - 6:27It's infused with a very
complex cocktail of chemicals, -
6:27 - 6:29so it smells very luxurious
and very distinctive, -
6:29 - 6:31and, being a Procter and Gamble brand,
-
6:31 - 6:35it's been supported by a lot
of mass media advertising. -
6:35 - 6:38So what they're saying is that drug
users are consumers too, -
6:38 - 6:40so they have this
in their neural pathways. -
6:40 - 6:42When they spot Tide, there's a shortcut.
-
6:42 - 6:45They say, that is trust. I trust that.
That's quality. -
6:45 - 6:47So it becomes this unit of currency,
-
6:47 - 6:49which the New York Magazine described
-
6:49 - 6:53as a very oddly loyal crime
wave, brand-loyal crime wave, -
6:53 - 6:56and criminals are actually
calling Tide "liquid gold." -
6:56 - 6:58Now, what I thought
was funny was the reaction -
6:58 - 6:59from the P&G spokesperson.
-
6:59 - 7:02They said, obviously tried
to dissociate themselves from drugs, -
7:02 - 7:05but said, "It reminds me of one thing
-
7:05 - 7:09and that's the value of the brand
has stayed consistent." (Laughter) -
7:09 - 7:11Which backs up my point
and shows he didn't even -
7:11 - 7:13break a sweat when he said that.
-
7:13 - 7:15So that brings me back
to the connection with sweat. -
7:15 - 7:18In Mexico, Nike has run
a campaign recently -
7:18 - 7:19called, literally, Bid Your Sweat.
-
7:19 - 7:21So you think about,
-
7:21 - 7:23these Nike shoes have got sensors in them,
-
7:23 - 7:24or you're using a Nike FuelBand
-
7:24 - 7:27that basically tracks
your movement, your energy, -
7:27 - 7:29your calorie consumption.
-
7:29 - 7:30And what's happening here,
this is where you've actually -
7:30 - 7:33elected to join that Nike community.
You've bought into it. -
7:33 - 7:36They're not advertising
loud messages at you, -
7:36 - 7:38and that's where advertising
has started to shift now -
7:38 - 7:40is into things like services,
tools and applications. -
7:40 - 7:43So Nike is literally acting
as a well-being partner, -
7:43 - 7:46a health and fitness partner
and service provider. -
7:46 - 7:48So what happens with this
is they're saying, "Right, -
7:48 - 7:51you have a data dashboard.
We know how far you've run, -
7:51 - 7:54how far you've moved, what your calorie
intake, all that sort of stuff. -
7:54 - 7:57What you can do is, the more you
run, the more points you get, -
7:57 - 8:00and we have an auction where
you can buy Nike stuff -
8:00 - 8:03but only by proving that you've actually
used the product to do stuff." -
8:03 - 8:06And you can't come into this.
This is purely -
8:06 - 8:07for the community that are sweating
-
8:07 - 8:10using Nike products. You
can't buy stuff with pesos. -
8:10 - 8:15This is literally a closed
environment, a closed auction space. -
8:15 - 8:18In Africa, you know, airtime has become
-
8:18 - 8:20literally a currency in its own right.
-
8:20 - 8:22People are used to,
because mobile is king, -
8:22 - 8:25they're very, very used
to transferring money, -
8:25 - 8:27making payments via mobile.
-
8:27 - 8:30And one of my favorite examples
from a brand perspective -
8:30 - 8:32going on is Vodafone, where, in Egypt,
-
8:32 - 8:34lots of people make purchases in markets
-
8:34 - 8:36and very small independent stores.
-
8:36 - 8:39Loose change, small
change is a real problem, -
8:39 - 8:41and what tends to happen
is you buy a bunch of stuff, -
8:41 - 8:42you're due, say,
-
8:42 - 8:4410 cents, 20 cents in change.
-
8:44 - 8:47The shopkeepers tend to give
you things like an onion -
8:47 - 8:48or an aspirin, or a piece of gum,
-
8:48 - 8:50because they don't have small change.
-
8:50 - 8:52So when Vodafone came
in and saw this problem, -
8:52 - 8:54this consumer pain point, they created
-
8:54 - 8:56some small change which they call Fakka,
-
8:56 - 8:58which literally sits and is given
-
8:58 - 9:00by the shopkeepers to people,
-
9:00 - 9:03and it's credit that goes
straight onto their mobile phone. -
9:03 - 9:05So this currency becomes
credit, which again, -
9:05 - 9:06is really, really interesting.
-
9:06 - 9:09And we did a survey
that backs up the fact that, -
9:09 - 9:10you know, 45 percent of people
-
9:10 - 9:14in this very crucial
demographic in the U.S. -
9:14 - 9:16were saying that they're comfortable using
-
9:16 - 9:18an independent or branded currency.
-
9:18 - 9:20So that's getting really interesting here,
-
9:20 - 9:22a really interesting dynamic going on.
-
9:22 - 9:24And you think, corporations
-
9:24 - 9:26should start taking their assets
and thinking of them -
9:26 - 9:29in a different way and trading them.
-
9:29 - 9:31And you think, is it much of a leap?
-
9:31 - 9:34It seems farfetched,
but when you think about it, -
9:34 - 9:37in America in 1860,
-
9:37 - 9:41there were 1,600 corporations
issuing banknotes. -
9:41 - 9:45There were 8,000 kinds
of notes in America. -
9:45 - 9:46And the only thing that stopped that,
-
9:46 - 9:49the government controlled
four percent of the supply, -
9:49 - 9:50and the only thing that stopped it
-
9:50 - 9:52was the Civil War breaking out,
-
9:52 - 9:55and the government suddenly wanted
to take control of the money. -
9:55 - 9:59So government, money, war,
nothing changes there, then. -
9:59 - 10:01So what I'm going to ask is, basically,
-
10:01 - 10:04is history repeating itself?
-
10:04 - 10:08Is technology making paper
money feel outmoded? -
10:08 - 10:10Are we decoupling money
from the government? -
10:10 - 10:13You know, you think about, brands
are starting to fill the gaps. -
10:13 - 10:16Corporations are filling gaps
that governments can't afford to fill. -
10:16 - 10:19So I think, you know,
will we be standing on stage -
10:19 - 10:23buying a coffee -- organic,
fair trade coffee -- next year -
10:23 - 10:25using TED florins or TED shillings?
-
10:25 - 10:27Thank you very much.
-
10:27 - 10:29(Applause)
-
10:29 - 10:34Thank you. (Applause)
- Title:
- Bitcoin. Sweat. Tide. Meet the future of branded currency.
- Speaker:
- Paul Kemp-Robertson
- Description:
-
Currency -- the bills and coins you carry in your wallet and in your bank account -- is founded on marketing, on the belief that banks and governments are trustworthy. Now, Paul Kemp-Robertson walks us through a new generation of currency, supported by that same marketing … but on behalf of a private brand. From Nike Sweat Points to bottles of Tide (which are finding an unexpected use in illegal markets), meet the non-bank future of currencies.
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDTalks
- Duration:
- 10:51
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Morton Bast edited English subtitles for Bitcoin. Sweat. Tide. Meet the future of branded currency. |