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It looks like he is erasing a picture to let the Matrix or YouTube picture show through. First layer on the timeline would be the urban setting with a brick wall.
Second layer up on the timeline would be the Matrix picture run through a Photoshop filter to give it a brick texture.
Third layer up on the timeline would be the brick wall cropped from the first layer picture. You are covering the Matrix picture with the brick wall.
Four layer up on the timeline is a green-screened image of someone pretending to spray paint a wall. As the spray can moves over the lower images, erase the third layer and let the second layer show through.