For Bitcoin’s Biggest Believers, Digital Currency Is Better Than Gold

For Bitcoin’s Biggest Believers, Digital Currency Is Better Than Gold

Updated by Endah

For Bitcoin’s Biggest Believers, Digital Currency Is Better Than Gold

For Bitcoin’s Biggest Believers, Digital Currency Is Better Than Gold

Wired · by Cade Metz · October 26, 2013
Ken Shishido (center) talks bitcoin with other enthusiasts at The Pink Cow restaurant in Tokyo’s Roppongi neighborhood. Photo: Ariel Zambelich/WIRED
TOKYO, JAPAN — Ken Shishido is sitting at the far end of the table, giving the lecture he always gives.
As others listen on, he leans over two pieces of American money dating to the 19th century: a dollar coin made of silver and a paper dollar that, way back then, you could exchange for the same silver coin. More than a 100 years ago, he tells his audience of two, dollar bills were backed by silver — a precious metal that will always have value. But today, that’s no longer the case, he explains, as he pulls out a modern dollar bill backed by nothing but the U.S. government. The government can devalue the dollar at any time, he says, and one day, the dollar may disappear all together.

This is why Shishido doesn’t believe in dollars or yen or any other government currency. He believes in silver. He believes in gold. And he believes in bitcoin, the digital currency that exists only on the internet.
‘It is always the government paper fiat money that gets corrupted throughout history. Bitcoin is not just a new digital currency. It is actually about liberty.’
— Ken Shishido

At first blush, that sounds like a paradox. But for Shishido, bitcoin is every bit as attractive as gold and silver — and perhaps more so. It isn’t controlled by any single central authority, and supply of the digital currency is limited. Bitcoin is controlled by thousands of individual machines stretched across the globe, and the cleverly designed software that runs atop these machines, driving the digital currency, will one day stop making new bitcoins. Yes, this software can be changed, but not without approval from a majority of those using it. Ultimately, this means no one can artificially reduce the currency’s value. Bitcoins will always be worth what the people say they’re worth.

“It is always the government paper fiat money that gets corrupted throughout history,” Shishido will later tell us. “Bitcoin is not just a new digital currency. It is actually about liberty.”
Shishido gives his brief lecture at a long table just inside The Pink Cow, the first restaurant in Tokyo that lets you pay for dinner and drinks with bitcoins. He helps oversee the Tokyo Bitcoin Meetup Group, and this Thursday evening, the group is holding its weekly meeting at The Pink Cow, a California-Mexican joint, run by an American expatriate, that sits at the heart of Tokyo’s Roppongi neighborhood, an area famous for housing expats and money-minded business types.
In some ways, this feels like the heart of the bitcoin world. Bitcoin was created by an anonymous someone known as Satoshi Nakamoto — whom many assume is Japanese — and Tokyo is home to one of the world’s most popular online bitcoin exchanges, Mt. Gox, a place where you can trade bitcoins for other currencies. But as even the Tokyo Bitcoin Meetup Group shows — with its many expats — bitcoin is very much an international currency. Part of its appeal, as Shishido shows, is that it can so easily cross borders.

A Pink Cow customer pays for his meal in bitcoins. Photo: Ariel Zambelich/WIRED
Shishido typically gives his mini-lecture when bitcoin newbies join the meetup. It’s a way of showing them what bitcoin is — and, in the larger scheme of things, what money is. But his lecture doesn’t show them everything. It certainly explains why Shishido, and so many others like him, believe in bitcoin — and why he’s determined to make Tokyo “the largest bitcoin community in the world.” But part of the magic of bitcoin is that it can be so many different things to so many different people.

As Shishido points out, it may be even more attractive than silver and gold because, as a completely digital currency, it’s capable of things that currencies are not. The possibilities are almost endless. Even at this relatively small gathering in Tokyo — a meetup spanning about two dozen people — everyone seems to view bitcoin in their own light. Everyone here believes in bitcoin, but there are so many reasons for believing.
For Shishido, it’s about independence from federal currencies. But for others, it’s a way of avoiding the hefty fees laid down by banks and credit card companies. It’s also a way of understanding who’s spending money and why, thanks to the very public way the system records transactions. It’s a technological marvel that makes such clever use of digital cryptography. It’s a simple means of investment, a bet on the future of money. And, in some cases, it’s just a convenience, a way of spending money without paper bills or checks or even credit cards. At the Pink Cow, thanks to bitcoin, you can pay for dinner with your cell phone.
Traci Consoli, owner of The Pink Cow, which lets you pay for dinner in bitcoins. Photo: Ariel Zambelich/WIRED

Traci Consoli, the American expat who runs The Pink Cow, installed the restaurant’s bitcoin system at the suggestion of Fred Friis, a Pink Cow regular who’s also a big part of the Tokyo Bitcoin Meetup Group. Friis grew up in Sweden, but he moved to Japan because he didn’t like the Scandinavian climate — and he met a Japanese woman. Like Shishido, he’s wary of government influence on our financial markets, but that isn’t what initially attracted him to bitcoin. He likes the digital currency because it makes his life easier.
Friis, a Java programer by trade, still keeps a bank account in Sweden, and he has an ATM card. But the card uses the Mastercard network, and oddly enough, most ATMs in Tokyo don’t do Mastercard. After encouraging Consoli to let him install the bitcoin system at The Pink Cow, he knows that in Roppongi, his favorite neighborhood hangout, he can buy food and drink without cash or credit. He simply walks up to the iPad tablet attached to the counter, opens up the bitcoin wallet on his phone, and scans a QR code — a kind of barcode — that pops up on the tablet’s display.

Yes, there are other ways of making this sort of digital payment — Google Wallet software comes to mind — and Friis is the one who actually set up the bitcoin system at The Pink Cow, after telling Consoli it was a good thing to do. At this point, it may be the only restaurant in Tokyo that accepts bitcoin. But this is a very real convenience in the everyday life of Fred Friis, and such conveniences are slowly spreading across the world. Next week, the first bitcoin ATM is slated to go live in Canada.
But convenience is only part of the equation. At the meetup, in an effort to explain the versatility of bitcoin, Friis distills the digital currency down to the most basic of concepts. If you own some bitcoins, he says, what you really own is long sequence of numbers and letters. These numbers and letters are otherwise known as a private “cryptographic key,” something that gives you — and only you — the right to spend those bitcoins, to send them to someone else.

This key is much like the private keys used to encrypt email messages and other transmissions sent across the net. With it, you can pay for dinner at The Pink Cow or buy stuff on a website. You can transfer bitcoins to someone else. Or you can move your bitcoins into an online exchange like Mt. Gox, where you can trade them for dollars or yen or other common currencies.
It’s as simple as that. But the results of this setup are myriad. It means Ken Shishido can store and send money that’s outside government control. And it means people like Marco Crispini, a British expatriate living in Tokyo, can move money from the UK to Japan without paying massive bank fees. Many people at The Pink Cow meetup feel much the same way. Most are expats — from one place or another — who need a ways of readily moving money across borders.

Cripini is also attracted to the public nature of bitcoin. Across the bitcoin network, every machine keeps a public ledger of transactions, and though this can sometimes be difficult to parse, it provides a new way of understanding how money is used. Crispini and others are currently developing a tool that will allow others to track how money is spent on the network, providing protection for their funds and guarding against money laundering.

The irony is that Crispini doesn’t use bitcoins to buy his dinner. The digital currency — created just four years ago by that anonymous programmer (or group of programmers) — is still young, and its price is volatile. Bitcoin’s value has been on a steep rise for the past year, and just this week, the value of a single bitcoin topped $200. Crispini doesn’t want to spend his bitcoins because he believes their value will only increase.
Fred Friis (center) chats with (to his left) Tobias Hoenisch, James MacWhyte, and Aya Walraven. Photo: Ariel Zambelich/WIRED

Many at the meetup see bitcoin mainly as a smart investment. Aya Walraven, a Canadian expat, also declines to pay for her Cal-Mex dinner with bitcoins. Yes, the bottom could just as easily drop out of the bitcoin market, and because there’s no central authority, its volatility is unchecked. But for now, most are confident the digital currency is very much on the rise, and for people like Ken Shishido, the volatility is a good thing.
‘We are still on the ground floor, and this concept is very new and experimental. Bitcoin itself may or may not succeed, but the idea of decentralized crypto currency exists.’
— Ken Shishido

“We are still on the ground floor, and this concept is very new and experimental,” Shishido says, comparing the bitcoin to Google or Facebook stock after the websites first went public. “Bitcoin itself may or may not succeed, but the idea of decentralized crypto currency exists.”
It does indeed. Others at the meetup, like James MacWhyte and Tobias Hoenisch, were originally attracted to the bitcoin because of the crypo bit, the mere fact that the currency boils down to set of alphanumeric keys. “I’ve always been interested in computer science,” says MacWhyte, “and cryptography has always been something that is particularly fascinating.” Clearly, MacWhyte retains this fascination, but he has also become a bitcoin investor, and as he has started building various bitcoin tools, most related to “point-of-sale” systems that let you by stuff in shops and restaurants.

The point here is that although bitcoin began as a fascination among the computer geeks of the world, it has evolved into something more. You may not grasp all the technical nuances of the way the system works. Few do, and even those steeped in the bitcoin world will argue over the particulars, as you see — so often — at the Tokyo meetup. But in the end, bitcoin is attractive because it’s useful on a very personal level.
Shishido certainly realizes that not everyone believes in bitcoin — at the meetup, he dons a party hat wrapped in tinfoil — but he’s quite serious about the comfort the digital currency can bring. After showing that U.S silver dollar and that silver paper certificate, Shishido may also show you a war bond his grandparents bought during the Second World War. The bond included coupons that his grandmother could remove and exchange for interest payments each year, on August 1. She collected every year from 1942 to 1944, and again on August 1, 1945. But five days later, the bomb was dropped on Hiroshima, not far from where she lived, and ultimately, the bond defaulted. It was worth nothing.
One day, bitcoin may be worth nothing. But, then again, it survive war and fallen governments and so much more.

Shishido makes bitcoin-themed party favors for the evening’s meetup — including tin-foil hats. Photo: Ariel Zambelich/WIRED
Pages: 1 2 3 View All