Dont call it this, this is ab testing and they make hardware like we make software. And whats also fascinating about it is, theres like this 12 retail price with 5 megabytes of ram, mp3 player, blu tooth. Everything, the only way you could make that its made by someone who stands in front of a manufacturing blind all day long. Figuring out, how can i get this. The rest of academia is public or perish. We are demo or die. Your demo only has to work once. I changed it recently to deploy or die. You have to actually take the stuff and send it out into the real world. In the old days because the costs of doing in addition was so high. We would inspire these Large Companies to create like a mind storm or guitar hero or the kindle. We wouldnt actually manufacture the stuff ourselves. Now, i realize that we dont have to sit there with the prototype that we can only make one of. We request make 100,000 of them, and let people play with them and just go and do stuff. And its its already been true with websites. Its not true with hardware. Im trying to get some kids from sh shenzhen to come to the lab. I think apple has gone has cracked down on a lot of the pirates. And a lot of these kids end up in jail because their Side Business is making fake iphones or iphones that when you swipe, it turns into an android. But they dont realize that they are actually extremely far ahead of the rest of the world. I want to bring that in to get them working on it. Some of the things i mean, obviously, theres a bunch of stuff from the Hardware Software combination ive been looking at. Its been wear ans, which i thi think, one of the other things, weve only begun to see a fringe of it is special hardware designs. One of the things on the bit coin side. And this is public so i cant say any more information about it. As a hardware specific, in order to touch this, and i think were going to see a lot more of that in various ways. Its one of the reasons why the principles of open source applied the software now also becomes applied to hardware and how that innovation loop works. Once you can begin doing ab testing. You launch and try it and do it again. I think thats one of the things that i think when we get added in the valley. Im not positive, its very close to software, tendses to be where most of the gravity is. But hardware and biology touch that. You have a Software View of the world taking on hardware is going to be ultimately successful. I think software is still key. Thats more or less the way we look at this. We divide it into the practice of Consumer Enterprise software, and well do anything where software is the key part of it. As long as software is the key element of it, thats the moores law and the revolution cycle similar things in terms of biology. You tauched on something i think might be fun what is this will m. I. T. Bitcoin thing . The m. I. T. Bitcoin thing is a student. Some students made the bitcoin club, they went out and raised 500,000 the last time i checked from philanthropists and theyre going to give 100 to every student in the club to do whatever they want. The idea, though is to me, bitcoin is a hack on bookkeeping, really. Its taking a ledger based bookkeeping system and making it feasible for the first time in this current form. Its clever, but its basically converting a conveyor based cash into a leather system. The only reason im obsessed with this. You know my friend jay vetti. Hes an indian genius. He was the ceo of oceanside bank. He was able to cut the cost of the banks in 18 months by completely redoing all of the systems. The only reason he was able to do that is hes an accounting genius and Computer Science genius. He told my story, he was in school in india and he was a whiz, so he didnt study for his accounting class. It was the first class where he didnt he failed or didnt do well. And then he realized you cant underestimate accounting. Everybody thinks its boring, but its actually really hard. He obsessed about accounting. He would talk to me about bookkeeping. And the fact that no one else learns out that much in that space, its kept the Fine Services business so far behind. To me, bitcoin. No one hacks them that way. Bitcoin is interesting for a lot of reasons. From m. I. T. s perspective, its driving a lot of smart people to think about basic bookkeeping problems, which i think is going to be the fundamental change in atom ago units. Everyones like lets assume standard Accounting Practices what can we hack. They went into hacking a system on top of something that was already old. Lets assume most of the computer chip guys dont know the physics and the phenomenon behind the memories they work on any more. Very few companies can go in and open the black box. Some of them do, but there are very few accounting and book keeping is kind of like the material science of money that a lot of smart people hadnt been focused on. To me, having a lot of random mit undergrads messing around is going to generate its hard to think of a world built up of bits instead of atoms. Would this be an alternative way of stating what you just said . Essentially a bit coin is done to reinvent the platform leather and that leather can be innovated on, extended, apps can be built on it, et cetera. And that accessibility allows geeks, designers, engineers to begin hacking. And that opens up innovation or is there Something Else . Theres a couple different layers, theres bit coin itself. Internet did it in its own sort of way. Its also kind of focusing a lot of smart. Its like the brain, when we were growing up, no one studied the brain. It was one of the most underfunded things ever, considering how important it was. Considering how important it is for us, no one really spent money on funding it, now its the thing obamas talking about. When you have a lot of smart people geeking out on something, it creates a critical mass. Smart people want to hang out with smart people. Nothing against accountants but the image of an Accounting Firm is not the image where youre like the physics math person is going to want to go. At m. I. T. There are the people who do quantum accounting the fringe people who are really into advanced accounting. The general undergrad student im not sure i know what quantum accounting is, but okay. The general undergrad. Its not there until you measure it . I guess the thing is having a volume of also, a lot of innovation comes out of trying a lot of things, right . To me, that bit coin is bringing attention to an area thats sorely needed a lot of attention. I think a lot of the stuff thats screwed up, whether youre talking about Network Security or the systems. Im on the Audit Committee of the New York Times. Which is gives us a view into how viewable our Financial System is. When people start figures, why dont we just do this, do that . I woulded one thing that i think is important that add, which is, part of the notion, if you can create an effectively Network Distributed integral trust system, where the trust resides in the network, and all the networks not just one node, one node of authority, that allows all kinds of new innovations. Leather is absolutely one of the important things. Theres various things. Bit coin is making me think about how dns should work. Theres a bunch of potential unlockings by having the network be the authority. Yeah, and i think thats right, and i think a lot of us have thought about i was on the ikan board, we thought a lot about dns and security and trust. It lights a fire under, when theres more money involved. Bitcoin is fanning a lot of really important planes that need to be penned. Lets shift to in a few minutes, by the way, ill be asking questions in the audience as well. And the questions can be anything that the whole group would be interested in. The one of the things, the means that go around Silicon Valley frequently, we disrupt industries. One of the best disruptions i work with. You place 1. And it becomes a platform. Thats part of the reason why the disruptive cycle Creative Destruction and its important. Obviously people have been kicking around a lot of stuff. You have sarah here media. M. I. T. X. Theres been a lot of thinking about what the future of the university is going to be. What are your at least partial perspectives on that . The media lab and other so i theres a theres a future of education, which is a broader thing in which the future of the university is part of. And i think. It ties to your book as well. I dont think were preparing people to be fully functional. Just because and i think you can blame it all the way. You can blame it on carnegie, but blame it on the companies that are hiring people. They have degrees or grades. That drives a testing culture to make sure that people meet the requirements for the degree. The tests are usually about you as an individual. So its not that much about collaboration. Its literally tests of skills and knowledge. Which is great for factory. Or if youre stuck on top of a mountain with a number two pencil and a mobile phone. In most cases youre going to have a moesch ill phone, your value to society is going to be, how can you pull the people and the knowledge that you need when you need it. And then turn it into something valuable. Its this ability to produce, think, ask questions. And those are not easy to assess. But even in the media, where its almost the opposite of that, when i do a tenure case, or im hiring a faculty member. Its but this paper has multiple arthurs. How do we know it was this persons contribution . Is there a single paper that this person is excited . What did this person do by themselves . Its always by themselves, its not about networking. It obviously is sort of networking, but its networking in a one dimensional way. To me preparing people for assuming that theyre networked and assuming that skills and knowledge are less important than ability to gain those skills and the knowledge when you need them, rather than to me, university feels like, okay, have you to memorize the encyclopedia, before youre allowed to go out and do anything is the opposite. That shift away from packing knowledge in your brain into being creative, and i think it makes sense. Because in a society where machines were not machines and computers are not yet Strong Enough to do the representative testing you need to do, thats a revolution, you wanted reliable similar standardized human beings as units of work. Today, when robots and computers are doing everything that is repeat agent or they can do, you dont want computers that act like robots and human beings. Which is sort of what a lot of universities try to create. I think that theres theres a bunch of stuff on how do you have any suggestions on what the mods are . Most of the dialogue i see happen within the University System is kind of like moot sufficient. Of course theyre not sufficient, their one innovation along the path of how do we change the outcomes in cost and results . I think the i think mods are a better knowledge and skill delivery system. But knowledge and skill delivery is one thing i think we need to not do as much of. But they will argue that if you make that part more efficient, you have more time for the other stuff, so the word that is often used is called the flip classroom, instead of sitting with butts in your seat watching a lecture, you watch a lecture at home. That sort of makes sense, although i would kind of argue, having said that, youre putting all your money and energy in building the knowledge delivery system, we dont sit around talking about well, now that we have the time in the class, what do we do, and how do we make that more effective, we are doing more peer learning online, we did this thing called creative learning, were not going to teach you anything, youre going to teach yourselves. Well have a guided conversation. And i think 25,000 people showed up, 10,000 stayed in. We didnt give any degrees, any points, halfway through the community started making their own software, to me, thats much more interesting. When you look at open sourced software, its peer learning. People teach each other, and Everybody Knows you learn more when youre teaching. This idea of a Network System 7 billion teachers is a much more interesting goal than one person teaching 7 billion people. I think theres a role for them, i think that the social behavior of learning and teaching is really important, because i still think that especially in the developing world, Everyone Wants that degree to get that job. And it all goes back to jobs. And you will spend a lot of money when you get a degree. When youre degree driven, youre focusing all your time on getting out of school, thats the whole point to get out of here. What about the phc students which are the ones we get for four years. Always imagine i may take your degree away when youre leaving, and then i want you to be able to look back and say, it was still worth it and to think of the degree as a scaffolding for you having an amazing time and learning a lot of stuff. Otherwise, i dont want you here, i want people here who dont want to leave. So i think well shift to questions now, i still have a stack all im supposes to do is say next question, and then the folks here will tell me who the youre selecting or am i selecting. We have one over here. Thank you for that presentation on the startup of you. I had the pleasure of sitting with my niece whos in tenth grade, telling her all about it, and telling her how she should figure life out with those slides. We got up to slide 100 and something and she got bored. But it was worth it. We dont put bitcoin or trust. We have all these issues that are almost Trans National at this point, and as weve seen with google as well. The regulator environment in you came out of left field, we have no idea. How is an entrepreneur or a community of entrepreneurs going to fix these Trans National issues. They do have a cause for concern . Any thoughts on the bitcoin angle, from both of you . Happy to. One of the things thats wonderous and complicating and hopefully not terrible about being more and more on a network page. Which i refer to as the knelt work gets inertia and life of its own, innovations and changes and things can happen that arent under a classic nation state control, bitcoin is precisely one of those things, if you look at the vast majority of like one of the ways that countries have historically worked is the Banking System is tightly regulated by the country and theres specific cross border Regulatory Infrastructure that causes it very difficult to drive innovation, that goes all the way back to paypal and how joe and i met. So part of the question will be, for example, i think that its going to be very difficult for government folks to figure out how should modern treaties be expressed . Should they be expressed in code . What are the kind of principles in that is one of the reasons joe and i hes on the foundation board, im on the Corporation Board of mozilla. In terms of guidance for entrepreneurs, its a question to say, understand that part of this technology is changing the world, there will be friction points with regulation, with government, and you have to have that as part of your thinking about what your startup plan is going to be what youre going to be doing what i do personally there, i look at whether its bitcoin in Financial Services or bnb and zoning regulation. I go, okay, what should the mature design of the ecosystem be why is that better nor all the individuals and society . And then how do you step in the way to do that, and recognizing there will be a number ofreconc changing the system as that happens. Well, its better for a bunch of the individuals because people can then kind of sublet rooms or apartments in ways that offer unique experiences, create income for themselves. That kind of income creation for our region, for service, individuals, and then also for travelers, they get a unique kind of experience. Its valuable for both in terms of how it plays. And thats the kind of thing. Theres regulatory issues, and other countries that the Trans National this could be a subject of an entire hour of talking. Ill stop there. The only thing i would say is, im a little disappointed by the lack of creativity in institution hacking by people who should be more innovative, i think partially its because Silicon Valley exists in a slight bubble because they were able to ignore a lot of institutions by being out here. On the east coast you see a lot of interesting hackers who have hacked their way into a funny situation in government, in the military, in large institutions, and you see a lot of nonprofits who are very creative at figuring out whether its the overthrow of governments to doing something creative. You see google hiring the exact same lobbyists that at t highers. I realize they dont have time to be innovative in that space. I wish there was more energy. You dont make money being a regulatory hacker. You make a lot of money hacking companies. One of those things that maybe this is a regional collaboration that we do. But for a lot of kids at the media lab to spend their whole life to figure out disruptive ways to do regulatory changes. Google does talk to us about that stuff, but i think thats we should do more of that. Next question . Good evening. I was very exciting by the conversation about the university future, and how you need to bring the element of social element of cooperation into that and it reminded me of this conversation i had with one of the professors at stan form in the department of education that we were talking, what is really needs is teach people how to connect the dots and how to synthesize information coming at them and picking up the writing and connecting the dots. One thing that was very interesting was, i remembered the Leadership Class i took 30 years ago at hp, they gave us different information to five of us without us knowing it, and said come up with an answer, and we were fighting with an answer until one of us finally said, le