Interview 1199 - Ken Shishido on Fiat Money vs. Bitcoin

08/09/201620 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)

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  1. Corbett says:

    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.

    • Sam says:

      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.

    • Sam says:

      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.

      • n4x5 says:

        Yes. It’s important to understand and distinguish between flaws in warehousing services / exchanges like Bitfinex and MTGOX versus flaws that are inherent to Bitcoin itself.

      • 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.

        • Sam says:

          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.

        • What_A_State says:

          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.

            • What_A_State says:

              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… 😉

    • Sam says:

      A link to Mastering Bitcoin is You can also download a free copy from Github.

  3. Mohawk Man says:

    “Do feel lucky, punk?” Might want to look into Blythe Masters background and JPM and GS et al and her current work with Central Banksters in developing a new platform or altering an existing platform. Best hope hacked Net-Web or power outages are not in your futures. Alt currencies are not hedges nor insurance against monetary policy by the narcissistic psychopathic megalomaniacs but rather as play to their current actions. As Jim Grant would day–“The case for gold is not as a hedge against monetary disorder, because we have monetary disorder, but rather an investment in monetary disorder,”.

    If you can’t hold it you don’t own it. An EMP would make certain of that as would Blythe Masters and the mafia she holds court with–for now. Do away with the Carpet Baggers who seized control, seize their assets, fractional reserve lending ended, make certain they are never in a position to do so ever again and return control to The People/The Market. The Natural Order will return. PM’s/physical assets are probably a better way but B-Coin does make an important point–thats about it.A B-Coin based on hard assets is a different story but you still have power–Net-Web issues of concern. The return of the value is in question when there is no physical collateral to fall back on. Digits are hard to use to buy soup/essentials of daily living when things go awry. Ask oneself. What is it’s value?

    Middlemen, brokers, agents, interceders are meddlers and serve no value. They are an extension of the system who’s corruption is terminally systemic in both finance and governments worldwide–one in the same on many levels. Parasites cannot develop a system which does not pay them first and most. A pulseless host is much more to their liking in the long run and that is clearly their goal. (look up in the sky if you have any doubt).

    103 years of implementation/plunder and hundreds of years prior of attempt’s show this his for all the marbles once and for all. Humanity is a stake. They play for keeps and thus we must with humanity in mind this time. The individual and their empowerment to decide and choose. The return of value to the individual. A wound requires air and sun to heal. Bring it on.

    The Mohawk

  4. peace.froggs says:

    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?

    • Mohawk Man says:

      Bingo! The Bitcoin Shishido advocates has no underlying asset behind it. Digital currency has the distinction of power outages, EMP’s and hacking, which has been accomplished. Bitcoin backed by a hard asset will retain value of some sort but it’s still a gamble given todays volatile political conditions and the increasing saber rattling especially by the U.S., China, North Korea and now Japan.

      Bretton Woods reference means you understand the value inherit in hard assets. Without that, it’s cotton/linen/ink coin. Hell, there’s value in dung which burns and peat moss bricks as fuel assets and base money on that. How is that different from the petro-dollar? Hell, they’d have a private mafia take that over and propose The Scatology Reserve System and plunder that too.They probably start a civil war with child soldiers in Ireland and take over the peat bogs. Understand the thought patterns of parasites/tyrants and you can design a system that excludes them. Understand with whom you are dealing with and you’re halfway there.

      On what Shishido said though, he still sees value in the digital based Bit-Coin which is a wonderful principle in that it takes it away from the banking cartel but they’ll take that over too and It’s Gone! He does understand it to a certain extent given his examples but his trust in the digital sans hard asset backing is disturbing. I also don’t like the company he keeps James and his hat withstanding. James, get yourself a nice Stetson and stand proud. I’d add some Lucchese boots and knock em dead in the streets but I may be pushing it.

      The Mohawk

  5. alan.k says:

    James Corbett’s interview 1199 with Ken Shishido is interesting.
    Early on, Ken said: “Money itself doesn’t have a value, but it’s like a blood. Today we have a cancer in our blood system, and this is destroying our economy and society.”
    Well said.
    Ken agrees with Aristotle that the value of money is “none by nature, but arbitrarily made so by compact; so that if those who use it should alter their sentiments, it would be worth nothing, as being of no service for any necessary purpose.”; and I agree with both Ken and Aristotle.
    I take issue with Ken’s assertion that gold and silver are “honest money”. Gold and silver are not – and never have been – money. They are commodities – things that have inherent value.
    It is true that many commodities have been used as if they were money, and that rulers of monetary domains have acted dishonestly with such money – e.g. by issuing coins with less than the claimed amount of silver or gold in them. So gold and silver coins can be DISHONEST money.
    The core characteristic of money is the “unit of account” function. That is supposed to be a standard of measurement. That standard needs to be as accurate and as reliable as possible in order to deserve trust and to be regarded as fair.
    Ken went on to quote Satoshi Nakamoto: “The Central Bank must be trusted not to debase the currency, but the history of fiat currency is full of breaches of that trust.”
    Trust is all important. Our civilization is a monetary civilization – everything has been made dependent on, and subservient to, money. The institution of money is absolutely untrustworthy – it is dishonest and fraudulent in its very core.
    The dismal “science” of Economics teaches us that money IS three incompatible things:
    1. a medium of exchange;
    2. a unit of account; and
    3. a store of value.
    The third function is FALSE and FRAUDULENT.
    Only things with inherent real value can store value. Standards of measurement cannot have inherent value because they are verbal/numerical abstractions which should merely describe the standard of measurement. The standard of measurement for length/distance, e.g., cannot itself have or store length/distance. Likewise for all bona fide standards of measurement. Such logic is untenable. Such untenable logic is the logic of the dismal “science” of economics. By insisting that the unit of account can store value, it magically transforms the unit of account into a commodity whose value can be manipulated.
    Do you understand that? The standard of measuring value can be manipulated by people with the wherewithal to buy and sell currencies, thereby raising or lowering the (FALSE) “value” of the unit of account which must have no value in order to function as an accurate and reliable standard of measurement of value.
    I would love to hear James using his undoubted reasoning power and communicative skills to wrestle with this crucial issue.

  6. HomeRemedySupply says:

    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)

  7. HomeRemedySupply says:

    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.

  8. alan.k says:

    Apollo Slater makes an important point: “Anyway, let’s be real. For most people these currency hedges don’t matter, because they don’t have much money to begin with.”
    Yes! The reality is that for ordinary people money is effectively no more than a ticket of entitlement to obtain the goods and services they need to carry on surviving.
    For the super rich-and-powerful, their excessive money allows them to acquire ever more of the real resources of the world, and thereby dominate all of the important human institutions.
    Think about that: there is something profoundly and absolutely wrong with money as we have known it.
    What_A_State also makes an important point: “Maybe the only true money is something that can’t be inflated away…knowledge.”
    Yes! Knowledge is not “true money”! Knowledge, however, is one of the major resources that any society has. So too are the material resources within a society’s domain. There is a third fundamental major resource for any society – a most unfashionable thing, but the most important of all. And that most important of all resources is: the HONESTY of its people.
    Definition of ‘honesty’: honesty = worthiness of trust.
    The horribly abused word “credit” originally also meant “worthiness of trust”.
    If ‘knowledge’ were applied to ‘material resources’ with ‘honesty’ … Well think about that.
    A vastly different way of life – wiser and sustainable – would be enabled.
    Anyway, who cares about our grandchildren and great grandchildren?!

  9. nosoapradio says:

    My impressions as an utterly ignorant person on this subject:

    Becoming familiar with the use of cryptocurrencies would seem essential to anyone planning to live and thrive in the new digital paradigm, 3-D printers notwithstanding.

    Bitcoin will probably go the way prototypical apps such as Uber and AirBNB went: as a way of bringing Joeschmoe into the digital paradigm (sometimes while relinquishing lots of personal info as well as that of contacts) before being sabotaged or usurped by centralized management with an interest in interest…

    and improved versions that are more difficult to manipulate will emerge as the population as a whole becomes more cybersavvy.

    When octopussy and other titans such as Microsoft and Dell seem to be attracting customers to Bitcoin along with some big French companies like Showroomprivé.com and Monoprix I start feeling we’re being lured into the monetary paradigm of the new, globalist, Songdo-style smart city system, let alone a little uneasy about this particular cryptocurrency’s vulnerability to value manipulation…

    However in the face of what seems to be the impending collapse of the usury-based fractional reserve digitized fiat system, gambling on a bit of bitcoin would appear to be, at the very least, instructive and at best, could conceivably prove to be a life-saver…

    …bearing in mind, of course, that the financial overlords of the last centuries, if they haven’t actually invented Bitcoin, have its mechanics and potential figured out.

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