Was Satoshi Nakamoto Japanese? The Off-Cycle Perspective of Crypto in Japan

Was Satoshi Nakamoto really Japanese? An in-depth look at why that might be the case.

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Transcript

SPEAKER_00: 0:00

Hello, everyone. This is Ryan from Tea Cafe. This is episode number five. I'm calling it episodes now because uh, you know, I just want to fit in with the crowd, the podcasting crowd. So here we go. Um the last one we talked about. It was kind of a long one, kind of talking about like what happens during uh bear markets, and um kind of gave me my perspective of like having been through several of them, like what it's like, what it feels, what's going on in general. A lot of stuff like people don't really want to hear, but uh it's important. So anyway, uh it was very long, but there was uh part of it where I started talking about Japan, and I think it was worth revisiting again because this is uh a lot of things like people don't really talk about in the media, or even all the influencers out there, they they're not really um honed in on some of these subjects. So I'm uh Japanese American, by the way. I haven't lived in Japan since I was a kid, but I do speak the language and I do keep up with things here and there. So thought maybe I could provide a perspective that might be interesting to people, right? So without further ado, here we go. And um, yeah, so there's an interesting thing that's been happening in the last couple weeks, other than the price crashing, as everyone knows. Uh I've seen some people post about how this is Japan's fault. And I thought it was kind of bizarre because it keeps kind of came out of nowhere. Like, what does Japan have to do with crypto prices? It if you look at the uh rankings, right, of the uh crypto adoption rates around the world, Japan tends to be rock bottom, it's underneath like even some of the developing countries because they really um kind of just are not interested in the whole thing, at least for now. Um, which is kind of ironic because of the whole Satoshi Satoshi Nakamoto thing, right? And while we really don't know who Satoshi is, and I don't know if we ever will, unless uh he like reveals himself like out of the blue someday. That's not impossible, but but for now we don't really know who this person is. And uh but are they really, really Japanese, right? And part of it is uh I would like to try to make the case that there is actually a good reason to think so, and it directly relates to what is why it was created, why Bitcoin itself was created, and what's happening now. So, like I said, they increased their interest rate uh for borrowing in the Bank of Japan to its 30-year high. And by 30-year high, I mean 0.5% to 0.75%. I guess it relative terms that's might be a huge jump, but we're not talking about like 10%, 20%. And part of the uh the reason why um they kept it so low was the I under the idea that they wanted to spur economic growth, right? And America did a similar thing in the last couple of decades. Uh interest rates are rising again, but for if you remember, for a long time it was basically sitting at zero, right? And uh so that zero interest rate loans fuels a lot of uh economic growth, I guess. I mean, that part is a little debatable whether cheap loans really create real value, but but anyway, it gives people more money to play around with, and that has kind of contributed to a lot of the things that has happened in the US, the US business market, for better or worse, because uh there are big downsides to it too, which I will get into. But uh anyway, like Bank of Japan, they kept the low rates really, really low, and uh that like the the Americans know that too, so they've been borrowing money from Japan in order to feel things like crypto. A lot of people don't know about this, but it has happened, right? When people are looking for money, they're looking for low interest rates, and Japan has been basically the destination for a lot of that. It's not just there. There's money for a long time, there's money sitting in the US as well, right? You could do something similar, but it is part of that whole thing. So when they announce that they're gonna be raising interest rates finally, a lot of people freaked out and basically said, Oh my god, Japan is tanking the US economy or something, something like it's kind of exaggerated, right? But but it is what it is, and um uh Americans are like addicted to cheap loans at this point, and uh it really is uh um sort of a statement of how things are today. So their decision to raise the rates uh is kind of a big deal because it hasn't happened in 30 years, and a lot of people are thinking that it might be a signal that Japan is ready to make a move, and this includes people like Warren Buffett, who has been uh hoarding cash, so to speak. He sold off a lot of his stock um portfolio to hoard cash because he sees a bumpy ride ahead, at least in Wall Street. But the interesting thing is that he's been diversifying some of that into yen because he sees something happening. And so I want to kind of like dig deeper into that and see where we can go with it. The interesting thing about Japan's economy is that you could say that both Japan and America have been uh relying on low interest loans, right, for the last um uh since 2008, I would say, right? Um but the way they adopted it is very different. And this is like why, like when a lot of people go to Japan, it feels like familiar, but also very alien at the same time, right? It's like being on another planet, right? If you've been to like Tokyo lately, and the cultural differences are very stark. And I would say that uh on a basic level, I do think the big difference between Americans and uh Japanese approaches to money, you could say kind of Asian in general, but when there's money coming in, the tendency is for uh Asian people to save rather than spend. And uh if you go to like US media and a lot of the things that people are taught to do in business environments, in the US, it's about spending and getting a return, right? Taking a bet, doing startups, um, investing in crypto, or you know, like, hey, let's let's uh grow this thing, let's uh turn a profit, let's let's make some money, right? Make money, make more money with money. Whereas in Japan, uh they tend to save their money and not buy stuff they don't need, right? And uh some people will say maybe that's a wiser thing, but uh you know, it wasn't always the case in in America as well. There was a time where people encouraged Americans to save money for various things, but that's not the environment we've been living in for the last couple of decades, and I do think uh we're hitting like an inflection point where the spending has been gotten too much. So that uh segues nicely into the next uh uh thing is that do you remember 2008, right? The uh financial crisis. Um if you haven't watched the big short, I would recommend watching it again. It's pretty entertaining, but also very uh informative at the same time. And uh that thing, that whole thing almost took down the entire financial system in America. And um yeah, and I do think the reason why Satoshi actually built Bitcoin, why he invented the whole thing, was a response to that crisis. And if you look on the timeline, um, the birth of Bitcoin and the 2008 financial crisis kind of aligns very, very nicely. We don't know the exact dates, but they were happening at the same time in parallel, and there's no way a smart guy like Satoshi could have not known what was going on, right? Because it was a big deal and it affects the Japanese economy as well. So I want to dig a little bit deeper into that because I think it's gonna matter more than people think, and because it's such a uh invisible topic right now, uh, I think it's gonna some of the things might take people by surprise. There might be some opportunities in there worth exploring. So this is part of the reason why I'm kind of uh talking about it right now. So, okay, going into the identity of Satoshi himself, um there's really no proof, either way, if Satoshi was Japanese or not. The name, right, implies he's Japanese. Um, but there's no proof either way. Was he there? There's no records, right? There's no um evidence. So that's still up in the air. Uh apparently there was a point where from Satoshi's account he claimed to be a 70 37-year-old man living in Japan. Uh birth date of April 5, 1975. That's very specific, huh? It's kind of interesting how the Western media just kind of I don't hear that too often. I found that on Wikipedia, but you don't see the people in crypto talking about Satoshi that he has made this claim, right? And I do think there's some uh it's part of like Western interest trying to claim it for themselves like they usually do, right? But um, but either way, it's still inconclusive. We don't know, even if he could have just been making that up. Um and well we'll never know unless we have evidence. Uh the other evidence uh is also circumstantial. If you look at his work and writing styles, how he interacted with people, uh the critics of like the idea of he's Japanese claim that the way he approaches software and the way he talks really shows that he has Western sensibilities, right? But these days, honestly, it's not that unusual. Lots of people from Japan or Asia as a whole, they go to the US or European or they go to the West to study and they come back and they end up speaking perfect English. And uh, I mean, look at me, right? Like I'm Japanese American, but uh can you tell my writing is if can you tell by my writing style that I am Japanese or not? I don't I don't think it really matters. Like it's just a skill that you pick up being in a certain place, and anyone can really learn it. So that's inconclusive as well. But the reason to think that he may be Japanese is not so much the guy himself, but how things unfolded in crypto, especially in the earlier days. So one of the biggest uh things that happened in the earlier days of crypto was Mont Gox, right? The first crypto exchange, so to speak. And uh I think the idea, the idea for the company started somewhere else, like France or um it wasn't started in Japan, but they eventually moved there to establish themselves because they thought it was the best place to do this sort of thing. And you gotta keep in mind, like back in 2014, 2014 or so, uh crypto was such uh obscure weird thing that nobody even really understood. Um that was kind of a big deal. It wasn't easy trying to set up a company over this thing that people had no idea what it even was, right? So, an interesting thing about Monk Ox is that uh the history of it, it was it kind of blew up in the mid-2010s, and then they got into big trouble with with like uh regulations and like people were accusing them of illegal activity, and there's all kinds of drama surrounding it, and eventually it shut down. Um interesting side note is that uh Charles Hoskinson from Cardano, uh, if you know about that guy, uh he had a so he used to be on the Ethereum Foundation in its earlier days, and he had a disagreement with uh Vitalik and the crew, and I don't know what happened exactly, but it ended up with him leaving the team and starting his own thing. But you could tell he was really mad about about it because basically uh he got lucky in some ways and he made a lot of money in Bitcoin in Japanese funds or Japanese firms, and he did an ICO of Cardano as we know it today, and 90 plus percent of the initial investors in Cardano was Japanese. So it kind of got diluted by other things at this point. I don't know what the breakdown is, but uh interesting, right? Like that that part of it. So I like to think of Japan's crypto industry as being sort of off-cycle because they were kind of way ahead of their time. They created the thing, assuming he's Japanese, maybe not, but it doesn't really matter. They have they were the first to adopt it, as shown in Monk Ox. Uh, they were first, they were the first to regulate it. By the time uh it was like 2017-2018. Uh I remember I took a trip to Tokyo and Bitcoin was already integrated in the equivalent of like Best Buy or one of those electronic stores. Like it was already there. And then uh they tested it out among the public. The public's response was not very positive or or it was more like, yeah, sure, but no one used it. Sure, you know, Bitcoin, why not? They weren't like totally against it, it's just like why not? Oh, but oh, it costs it costs like ten dollars to make one transaction. Uh no thanks. Yeah. So uh so it kind of tried it out and no one used it, and then it kind of faded away. It's still there, and uh in the background, they st they are still talking about crypto and NFTs, but it's just not a big hype thing like it is here. So yeah, so that's why their adoption rate is one of the lowest in the world right now, despite being ahead of the game. And I think there's a lot you could kind of read into that because it might give us like an idea of what's to come. Uh and what's like both good and bad, because I do think like the sort of like non-adoption of the Japanese markets is also like what's basically hap what basically happened here in the last couple of years, right? So they've already gone through that that trowel of disillusionment, whatever we call it, right? The the the valley of uh doom or and uh I think it's worth maybe like paying a little bit more attention on that side because they might be ready to make some moves and they might actually show like what crypto is moving towards in the near future. This is all just speculation, but but that's that's why I think that and because all these things in the earlier days, especially when I was less understood, were happening in Japan, there's a good chance that Nakamoto is actually Japanese. I don't even mean ethnically Japanese, it could just be someone living. In Japan, not necessarily Japanese Japanese, but they just happen to be there. Could be a white guy or a black guy, you know. Um, could be a woman, you know, you know, we don't know, right? Could be anything, like, but the idea of that and that person being in Japan is not that un unthinkable because a lot of the early things that happened in the industry did happen over there. We just don't hear about it here if you're kind of inside the US media, right? Okay, so now going to the mechanics or the um economic reasons why Bitcoin exists. So um given that Bitcoin was a reaction to the 2008 fiasco, I think it's good. I think it's a good uh there's a good chance that Satoshi probably did not like quantitative easing or a lot of those um mechanics that that governments and uh right the Federal Reserves play to try to like manipulate manipulate's not the right word, but like adjust the currencies, right? And uh so one thing it one very interesting thing about crypto compared to regular fiat money, right, is that you there is no way to be in debt. Like you have a wallet, right? The wallet has so much coins in it, but you cannot go negative, right? You cannot go negative like you can here. Because uh our economy is a debt-based economy, and there's really nothing more radical than the idea of hey, no one can get into debt. What you have is what you have, and that's it, right? So I don't know, maybe there are some projects out there that have negative balances, but I don't I don't even know how that would even work, right? So uh yeah, so I mean, okay, well, um, so we have this thing that is supposed to reset the financial system, and what better way than to eliminate all debt from the beginning, right? That that idea is more radical than a lot of people get it credit for. And I do think uh it's a big part of why a lot of people got excited about it, right? There was this new world that was being built that had nothing to do with the current system. So over time that got watered down, right? And I don't think Bitcoin is the same thing or even the same culture it was in the beginning, but that's where that's where you can see the vision of where crypto wanted to be, right? So it goes even deeper than that because um right now the the US dollar is inflating at an alarming rate. Yeah. Uh don't pay don't pay attention to the CPI thing. It is because CPI excludes a lot of um like major things in order to get that low number. That's another discussion, but uh yeah, don't I wouldn't trust the numbers that are coming out of the uh reports these days because it's very, very uh skewed. But most people understand like everything's getting more expensive. You can it's not subtle, you just go to the store, you just look go online, you look, you look at your rent, right? Like it's just everything's getting more expensive. And uh why all of a sudden, right? Like, I mean, it wasn't really all of a sudden. If you look at healthcare costs, housing, education, those things have like double, tripled. Like it's crazy, right? Like the the rate, like tuition, especially. If you look at the last 20 years, you'll be shocked to see how much people were paying in tuition back then compared to now. And it's not just uh regular inflation, it's it's inflating faster than the currency itself. So, but it wasn't as bad, right? Like it wasn't as bad before, and the way uh the Americans were able to get away with it has a lot to do with global trade. So global trade, uh, there's this idea that Americans using their dollar are allowed to, because they own the currency, they are allowed to, quote, allowed to export inflation. So how that works is that if you increase the money supply on the American end, on the US end, and let's use yen as an example, when you increase money supply, it leads to higher import prices for countries abroad, not just Japan, but everyone. And uh it's because when you when you uh oh this is complicated, but it's very unintuitive. That's the that's the problem. So when when the US dollar it has more of it relative to the price of the currency that the other country has, you're basically paying more on imports, if that makes sense. So American goods become more expensive the uh uh the higher the money supply is for the uh on on the dollar side. So I'm not gonna mangle it anymore. You can look it up if you wanna, but that that's basically the idea. And if you can imagine, uh most countries aren't really too happy with that. It's like slapping on a tax on everything you import, and every time the Americans print more money, it just gets more and more pricey. Now, they can't really do anything about it because the dollar is dominant in global trade. And so that's that's what puts them in a privileged position, so to speak, right? They have the the advantage there. So what's been happening though in recent years is that due to various reasons, it's a lot of things economics, the uh government shutting down every year, as if on cue uh thing, uh political instability and everything, right? Everything, the everything problem. Um, they've been kind of uh pulling out. So Japan in particular has been buying less American goods uh overall, and uh just because it's like, well, this is I was fine before, but now it's getting pretty expensive, and so they're just like not buying as much. And this is compounded by the problem that uh the the US has a manufacturing problem where we don't really make stuff anymore. We become a service-based industry, and uh we don't really export that much stuff anymore, and a lot of people argue that American goods are kind of inferior right now compared to other what other countries are doing, especially in like uh electric vehicles and I don't know, it's everything because we moved away from a manufacturing country, so there's less stuff for us to trade in general, and that makes it less competitive, and it's just like uh other part is uh uh the Japanese banks have been absorbing American debt for a long time because we love our spending here and we want it now. So, hey, uh hey, let us borrow five bucks and we'll we'll buy that crypto thing and crypto poop coin, and don't worry, I'll turn it back, you know. And uh I'm kind of getting to reason why this gotten out of control, right? Like people were just spending money on frivolous things all over here, and it's not it's not subtle, you know. It's it's really like you just look around, it's happening all the time, even now. So, but again, uh Americans will shield it, Americans were shielded from the after-effects from a lot of those things because for a long time we had a dominance on a global trade, and uh we did a lot of that inflation was being absorbed by countries abroad. Now, now that they pull it out, uh we're gonna start feeling it back at home, and yeah, and uh while we're at it, just why don't we just throw some tariffs on top of that and make it just accelerate the whole thing, right? So, yeah, so uh that the dollar is not in a very good position right now, and anyone who has done any research would know that. But for the most part, politicians and most people are just kind of pretending it's not really happening because it's kind of uncomfortable to think about. Because what will probably happen in the next decade or two is that the US dollar will gradually lose its dominance, it's probably not gonna ever go away completely, but it's gonna be part of a bigger system where the yuan, Chinese yuan, maybe the yen, even the won, right from Korea, Euro, uh BRICS and SWIFT. There's all these other options out there that people are seriously considering right now just because they're worried of um where the dollar will be in the near future. They already downgraded the US uh economy from like triple A plus to double A something, and they did this like a couple years ago. It's not news, but they already downgraded the outlook on um the US currencies right now, and now are finally starting to see it. So this puts uh I'm gonna tie it back to crypto because this is what the channel is about, but interestingly enough, Japan has the lowest crypto adoption rate in the developed worlds. And I I said this earlier, but if you look at their rankings, they're pretty much rock bottom, even though they were the first to adopt. They already went through kind of the oh, excuse me. Uh they already went through the the hype cycle, right? And I do think they're one, they're a little bit ahead of what everyone else has done. They already went up, they got hyped, and then it went down, and then they just kind of got bored of it, and has been sitting kind of quietly uh at the bottom for a very, very long time. But as they say, uh um well, not as they say, but what goes down must come up. Not always the some some things will go down and never come back up ever again. But uh, but they they haven't stopped doing the crypto stuff, it's just quiet. And the way uh Japan and Asia approaches tech is actually very different from how it's done in the West, at least from what I'm used to, uh working around Silicon Valley, is like uh their tech applications tend to be very practical rather than big, if that makes sense. Um like being a programmer in Japan is like almost like a working like an office job, um, or even a blue-collar job. It's just seen like, okay, you're a programmer, you make a decent living doing that, cool. It's not seen as a uh something to put on a pedestal or debonize like it is here, right? The people the way people talk about software here is very emotional. Over there, it's just like a job and no big deal, right? And uh and it's very geared towards practicality because if you look at Japanese websites, the UI is like freaking terrible, you know. It's it's car, you know, it just looks like it looks really bad. Um and not not to say, you know, I'm not trying to insult anyone. It's just like they just don't really care about the aesthetics of how a website looks. Yeah, for the most part, there are exceptions, but like we do here. So you go in there, it's just like it's basically everything looks like Craig's Craigslist, right? Whereas here we try to make the website look so nice, use those rounded corners, border radius. Oh man, I hate, I hate, I hate how everything is turning into a circle, you know. I just just give me my my square buttons back, please. I don't yeah, I I don't think anyone, you should not be rounding the corners more than just a tiny bit, uh if at all. So unnecessary. Oh, any anyway, uh unrelated rant. Uh, because I do design as well. But but anyway, um uh maybe a clear example is actually maybe we can look at China because they have similar sensibilities as well, right? The way China treats AI is they're geared towards like very specific applications and use cases, and it's usually coupled with the idea of like there needing to be human, uh you know, you need humans monitoring this stuff, right? You put in a prompt and it spits on a bunch of mistakes and garbage, you need someone proofreading that, or it's gonna be a disaster, right? Whereas in the US, we have this idea that we're gonna create artificial general intelligence AGI within the next couple years, and that's why you need to give uh OpenAI like one trillion dollars, or we're gonna be left behind. But that whole scenario is just made up. There is no no one's no one in Asia cares about building AGI because they know it's not gonna work, and then focused more on like I don't know, I saw something like landmine detection, right? From a picture or video. Making see those little pixels. Uh, I've been actually using um for this podcast itself, like removing, I say you know a lot, you know, hey, you know, you know, I'm I'm conscious about it now, so I'm not doing it as much, but um I had a recording that had just way too many you knows, and I used uh AI to like um scrub it up, and it wasn't perfect, but it was like not bad, you know. But that's a very, very niche use case, and AI can actually be tuned to do that kind of stuff, you know. So I said you I said it again, you know. So so anyway, uh they they do that, and um that's kind of their approach to tech in general in the eastern countries. In the West, we're hoping that AGI gets created and it'll solve all our problems, but I do think that's gonna lead into a disaster, but it's another uh topic altogether. So uh yeah, so the reason why kind of turning it back to crypto, and I do think crypto really was an attempt to kind of get away from all that stuff that's mixed into the dollar and uh debt and quantitative easing. And Satoshi created this thing that had nothing to do with that, and he wanted to make a peer-to-peer payments network where you didn't have to worry about debt or all this like complicated like trade agreements and inflation exportation, and um it was like a chance to sort of hit the reset button and start anew, right? And a lot of it has to do with the problems that Japan was facing at the time. And if you think about Bitcoin in that context, it's kind of makes sense why it was created. And again, this is all speculation, it's all circumstantial, but the the motive for this uh invention was there, now as far as we know. So, yeah, so like I said earlier, Warren Buffett has been moving his cash into yen. Right now, the yen is probably still above 150 in the heyday of uh when uh Japan was economically the strongest, it will it went as low, even below 100. And the the fact that the Bank of Japan is making these moves now, a lot of people are kind of looking at them like, huh, what's going on? Like, what and I think that that has uh triggered some interest in some people, including people like Warren Buffett. And not not just him, but so anyway, um that's basically it. And hopefully found it kind of interesting. Well, they're gonna see what happens to the crypto market coming next, because If Japan has been saving money rather than spending, they could be in a very good position right now to buy up all the cheap coins that are getting shaken out at bargain prices. And wouldn't it be crazy if Satoshi had this planned all along? You know, that's something. He goes into like conspiracy mindset, but I'm like, wouldn't it be crazy if he knew all of this was gonna happen? He's like so such a huge genius that he he read The Room of the World and figured out that okay, in about uh 15 years we can uh make Japan the dominant financial force in the world, yet again, Empire, the rising sun, you know. I don't know. Uh that's the kind of uh stuff people are like saying right now. Not a lot, but a few of our, you know, exaggerating what's gonna happen. But either way, it's gonna be an interesting time. We you know that. So if your wallet is hurting, mine is hurting a lot too. I know I'm not I don't like this, but I do think do see things changing, which is good because that's what the industry needs right now. We need something to change, and then it's coming. So hope people are ready. All right, so take care and see you in the next one.