Interview 1199 – Ken Shishido on Fiat Money vs. Bitcoin

by | Aug 9, 2016 | Interviews | 14 comments

On a long enough timeline the value of all fiat drops to zero. Joining us today for a quick tour of the history of monetary devaluation and how it can be avoided is Ken Shishido of the Tokyo Bitcoin Meetup Group.

Tokyo Bitcoin Meetup Group

Japan Bitcoin YouTube channel

Ken Shishido on Twitter

Bitcoin open source implementation of P2P currency (Satoshi introduction)


  1. Hey everybody. I debated whether to release the audio version of this interview at all since the visual element is so important to the conversation, but decided to release it anyway. If you do listen to the mp3, make sure to watch the video, too, so you can see the coins and paper that Ken is talking about.

    • I wasn’t aware that a silver dollar ever had an ounce of silver in it. The closest reference that I can find says that some were minted with 27 grams of silver, far short of even a 30-gram ounce.

      Do you have a link regarding the one-ounce silver dollar that you talk about in your video?

  2. Bitcoin was an interesting experiment in digital currency, and there will be many more, with improvements. Definitely not a real currency though. The recent Bitfinex hack, wiping out 36% of account balances, on top of many previous hacks, show it’s less safe than even a fiat bank account.

    Ken Shishido’s recommendation to put into Bitcoin “what you can afford to lose” is a reminder that it’s a speculation, not money. Still, it’s definitely worth keeping an eye on developments with blockchain technology and new Bitcoin-like instruments that perhaps address the past issues with Bitcoin.

    • Bitcoin is one of the few innovations that has the potential to break central banking tyranny. To discourage others from finding out about it by making uneducated posts is not only embarrassing for you, but counter-productive for the cause of freedom for everyone else.

      The loss of Bitcoin in by Bitfinex was a loss of money by an uninsured ‘warehouse’. It could happen to any asset that is placed in safekeeping with another party. If, instead of giving Bitcoin to another to hold for you, you keep your private key to yourself, than no central bank can inflate away your holdings, nor can any local bank take it from you through ‘bail-ins’. That makes it far safer than any fiat bank account.

      I suggest you get a copy of Mastering Bitcoin by Andreas M. Antonopoulos and read it before you make a fool of yourself again. There are serious issues with Bitcoin, including ease of use and lack of scalability. But I doubt you even know what any of them are.

      • Sam, let’s keep this cordial, no need for personal insults.

        The distinction between Bitcoin itself and exchanges or warehousers is important, but the average person trying it out won’t necessarily understand this or its security implications. To them, the end-to-end process constitutes the solution, and most likely that will include an exchange.

        You can get Bitcoin either by mining or by buying them on an exchange. Since mining is now incredibly expensive and technically challenging, the vast majority will buy on exchanges, which is a security risk, even if you don’t warehouse your bitcoin. In addition, most retail merchants accepting Bitcoin immediately liquidate receipts into dollars, making much of the market value of Bitcoin dependent on exchanges.

        Even if you avoid exchanges altogether, you are still affected by these hacks. Since Bitcoin’s value depends so heavily on exchanges, a loss of confidence leads to a massive loss of value in the currency itself. This indeed happened after the Bitfinex hack.

        There are also issues with the security of storing Bitcoin yourself, of transmitting them, the questionable privacy of a public transaction ledger (blockchain), and many other issues that the average person frankly will not understand or have the time to study. For the average person, the most secure currency is paper dollars, or gold/silver as a small inflation hedge.

        Please don’t misrepresent my position as discouraging people from learning about Bitcoin. I said it’s an interesting technology and definitely worth keeping an eye on. I just want to make people aware of the problems with it and that at this point it is a speculative instrument, not a real currency.

        • I read your reply and found that, with the exception of the last two paragraphs, it would still be true if the word ‘gold’ were substituted for the word ‘Bitcoin’ because both are minor forms of money in a commercial network dominated by FRNs and government hostility. Would you, then, advocate that your readers not buy gold? I hope not. On the contrary, if you had their best interests at heart, you would suggest they start learning about that form of money by buying a little and using that small initial purchase to gain experience in its safe transport, storage, and use as money.

          Your recommendation for Bitcoin should be the same, especially since it is both the same as gold in that it is equity money and different from it in that is ethereal rather than corporeal. In fact, it is (at the moment, at least) the only form of equity money that can be used to complete remote transactions without having to trust a third party, a critical feature and the reason it has gained such popularity.

          The statement that I justifiably find so offensive is your contention that Bitcoin not as safe as putting your wealth in a bank. To make such a claim to anyone who is new to the field is, frankly, either inexcusably ignorant or criminal. Since you have proven in your last that you understand Bitcoin and exchanges and how you are misleading your readers, the latter would seem to apply to you.

          For anyone reading this post, Bitcoin is something new under the sun, a technique that will allow you to take your wealth out of a state gone bad or engage on commerce across its borders when currency controls are imposed. Neither can be accomplished with gold. For that reason alone, it behooves you to learn about Bitcoin by both reading up on it and by experiencing it personally through purchases of small quantities of it. Yes, you may lose some of those funds. But the same thing can be said for your initial novice gold purchases.

          Bitcoin is more than ‘an interesting speculation’. Like gold, is used to buy stuff with and, therefore, is money. Please don’t let any goldbug nazi convince you not to get experience with it and, once you understand the rules that you have to follow to keep it safe, storing value in it and using it. If you do so, you will only trap your wealth in the physical world and make it easier for the state to rob you of your assets and the rest of us of our freedom.

        • Cryptocurrencies have a lot of potential and it will be very interesting to see how they pan out. I agree with you on privacy. Bitcoin has issues with Fungibility but has the potential to fix these. There are other cryptocurrencies that have already solved that:

          Regarding ‘being your own bank’ and people not having the time to study how to do this…I disagree. I’m an average person and my motivation was unlinking myself from paper fiat currencies and therefore banks. Once people start to accept that bankers are criminals, they will have the motivation and time to learn alternatives and be their own banks.

          Also, paper currencies are the least secure. But if you save up enough paper/fiat, then one strange day, you will have enough to decorate the walls of your house 😉

          Exciting times!

          • There’s a lot of potential in cryptocurrency, both on the central bank side and the peer to peer side. I just don’t think Bitcoin is a particularly good solution, except maybe in certain use cases like international money transfers, that are plagued by high fees. But it’s a lot less than its hype, basically.

            As for paper currency not being secure, I disagree. Most modern currencies do not hyperinflate. Zimbabwe, Venezuela, the Weimar Republic, etc. are outliers due to unique political circumstances. Of course, that may change and eventually the US dollar will hyperinflate and collapse. But the key word is “eventually” – it may not happen for a very long time (or it may happen next year).

            There are three things working against a dollar collapse, no matter how much they try to destroy it: 1. the oil market is priced in dollars, 2. it is required to pay US gov’t, fed./state/local taxes, 3. it is legal tender for the private US economy. So we’re talking about a backstop of many trillions of (current) dollars in value, something no other currency or country can match. So it’s unlikely to “collapse” anytime soon.

            If we talk about collapse, Bitcoin lost 80% of its value in 2015, then recovered a bit, then recently lost 25% of its value. That’s a much bigger loss of value than is likely in the dollar, whose deprecitation is pretty stable over time. Bitcoin’s price may stabilize later on, but it’s not ready for prime time and definitely not a stable store of value.

            Anyway, let’s be real. For most people these currency hedges don’t matter, because they don’t have much money to begin with. Liquidity is more important, to pay the bills, so dollars (or your local currency) are best. If you do have a lot of money, then sure, have some small hedges with precious metals, a little with Bitcoin, maybe some art, etc. They all carry their own risks. There is no such thing as a risk-free store of value.

            • Well, we will have to agree to disagree on paper/fiat currencies being secure. Con-men are in control of them and that’s enough for me to not trust them.

              But anyway, these are all man-made systems of value. Value is directly proportional to trust/faith. Maybe the only true money is something that can’t be inflated away…knowledge. Well, I guess a lobotomy… 😉

  3. I believe the answer provided in this video is that money regardless if its paper or digital should be backed by Gold & Silver, at least that’s what I understood.

    Bretton Woods System anyone?

  4. I was smiling all the way through this interview!

    — Solutions —
    I love seeing these “Solutions” interviews. “Solutions” are ACTIVISTS in action. ACTIVISTS change the world.
    I beat the drum for ACTIVISTS.

    ACTIVIST Ken Shishido makes some good points. (e.g. politics is not a viable solution)
    Ken states “…Opportunities are always in front of us and it is up to you to take your ACTION….”

    “Meetup Group” is a nice, simple, visible method to connect with like-minded people.
    Our “North Texans for Truth” Meetup has been around for 10 years.
    We have participated in hundreds of actions, events, theatre showings, marches, sign waves, presentations, etc.
    We have given out more than 70,000 free DVDs and literally tons of literature. (Corbett’s five minute “9/11: A Conspiracy Theory” is part of one our DVD “9/11 mix” handouts )

    Hmmm…perhaps our Meetup Group should see about having burlesque dancers at our weekly Thursday night meetings. (grin)

  5. Fortunately, in some respect, anyone is free to devise a script or currency for exchange of goods and services.

    Coops often perform this action to varying degrees.
    In the Dallas area, a group of Libertarian minded businesses tried to develop a method of trade utilizing an internal standard.

    Coops of farmers and ranchers and business owners often “trade”.
    There is also CSA

    I think a bright idea of a coop is the alcohol fuel coop, because alcohol fuel can be made from garbage or cattails or old donuts or a variety of plants or seaweed.
    An internal script of exchange could be devised to represent gallons of fuel in a fuel coop. The script could be exchanged for labor or fuel sources. When a local coop owns its own above ground fuel depots, all members can share in the benefits, along with providing another shared benefit of script exchange.
    During the production of alcohol, there are byproducts. These byproducts can be used to accelerate plant growth, feed fish or crawfish, used as pesticide, used as fertilizer, …and the list goes on. There are many exchangeable products which are intertwined with alcohol production.

    Here are a few examples of fuel coops which grew.

    David Blume is probably the leading expert on alcohol fuel production and forming a local coop.
    He has been at it since the 70’s, despite being crushed by Big Oil on a few occasions.

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