Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host, Russ Roberts,

of Stanford University's Hoover Institution. Our website is econtalk.org where you can

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Today's April 25th, 2014, and my guest is Gavin Andrewsson, Chief Scientist of the Bitcoin

Foundation, Gavin, welcome back to Econ Talk. Thanks, it's great to talk to you again. We first

talked about Bitcoin. It was, seems like a very, very long time ago. It's been three years.

A lot has changed since then, so I wanted to catch up and let's start with a little review.

How does a person get Bitcoins and what can you do with them when you have them?

Sure. To get Bitcoins, you need first a, what's called a Bitcoin wallet, so you need a place to put

them. And what that is is just a piece of software that runs either on your computer, on your

cell phone, possibly on somebody else's computer or cell phone, that is a place where the Bitcoins

can go. So the Bitcoin wallet software connects to the internet and runs the Bitcoin protocol,

which talks to other people running Bitcoin wallets and the Bitcoin protocol. And then once you're

connected to that network, you can participate in it. You can receive Bitcoins from other people.

You can send Bitcoins once you have them. The way you get them typically is you trade things

for them. Either you trade a product or service and get payment in Bitcoin.

Maybe you go to a currency exchange where you trade some dollars or euros or yen that you

might happen to have. Or maybe like me, you trade your labor. So I am actually paid my salary in

Bitcoin and get paid to one of my Bitcoin wallets, my salary every month. So that's the typical way

people get Bitcoins. Bitcoin is different in that it's a decentralized system. So there is a second

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