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