Macro Background

Despite being the 3rd largest economy in the world, the Bitcoin only scene in Japan is pretty small. Even the wider “crypto” scene is small, with only around 4M Japanese having accounts on “crypto exchanges”, out of a population of 120M. The reasons often put forward are: 1) the language barrier makes it harder for Japanese plebs to get information. 2) Scandals such as Mt. Gox, which was based in Japan, gave Bitcoin a bad image, and 3) in general, people have higher trust in institutions and higher trust in the integrity of the Japanese yen compared to other advanced economies.
Regardless of the reasons, it’s pretty obvious Japan is in dire need of Bitcoin. The debt to GDP is the highest in the world at 263% and with an ongoing deficit of 1/3 of the annual government budget, as well as increasing pressure on the weakening JPY, the debt and currency situation is likely only going to get worse.
Years of Keynesian loose money policies have largely funneled printed money into cantilionare giants , which suck up and largely squander all of the productive assets of the country. Meanwhile the demographic trend will see 40% of the population being over 65 by 2050. Finally, the geopolitical risks of energy dependence on the middle east, and dependence on China as the largest trading partner, leave the wealth and prosperity of Japan is hanging by a thin thread.

Some history

The bitcoin heyday—2017 and the blocksize wars.

Japan has a strange connection to Bitcoin. Satoshi chose a Japanese name for his nym, many prominent Bitcoiners live or have lived out here, and the first exchange--Mt. Gox--was founded here. The meetup scene in Japan was also fairly active pre blocksize war. With the likes of Roger Ver based out here, quite a lot of effort was made to promote base layer bitcoin as a means of trade, and several businesses around Japan began accepting bitcoin as payments. The subsequent 2018/19 bear market led to the enthusiasm dwindling, merchants one-by-one gave up on bitcoin (or worst—persisted with bcash) and the Covid pandemic took its toll on what there was remaining of a meetup scene in Japan.

Recent Developments post covid

Thankfully there has been a resurgence of late, and the point of this post is to make people aware of the active groups in Japan, to encourage stackers who are either based in Japan, or who plan to visit Japan, to reach out and get involved. With Nostrasia coming up in November in Tokyo, it is hoped that we can make connections and grow the bitcoin only scene here around that event.
One great thing about this bear market is that there is non of the 2017 era speculative mania around the bitcoin. The suits, scammers, and the stupid have all migrated to Web 3.0. Meanwhile the Web 3.0 events have almost zero to say about Bitcoin. Meaning that we have an almost perfect split of Bitcoin vs "crypto" occurring in Japan. Meaning also that the bitcoin-only groups are very high-signal.

The Groups

Tokyo Citadel

This is the group I co-founded back in early 2022. It is primarily ex-pat and English language, and was born as a Telegram group after the founding members met at a Bitcoin pizza party in spring that year. The focus of the group is privacy, bitcoin, freedom tech, citadel building and circular economy. We have regular meetups, a Podcast, and we are launching a new format of event later this month called “Honeybadger Hiroba” where we will be renting a physical space and combing presentations along with a casual meetup format. The group is run by the plebs for the plebs, is very punk with zero corporate sponsorship. If you would like to get involved, please reach out to the group via the following channels:

Diamond Hands/ Bitcoiner Hanseikai

Diamond hands is primarily Japanese language and focused on the technical aspects of the Lightning Network, particularity routing nodes. They are also highly professional and technically competent and even have corporate sponsorship and a popular swap services available to the public, among other projects.
Co-founded by Koji Higashi, who also runs the Japanese language YouTube channel “Bitcoiner Hanseikai” (Bitcoin focussed, but does discuss the wider “crypto space”) and the Diamond Hands substack newsletter, which is Bitcoin focused, and has recently launched a paid subscription with the mission of furthering Bitcoin adoption in Japan, by raising the quality of the discussion of a Bitcoin focused mindset.

Lostinbitcoin.jp / Tokyo Bitcoin Hackers

Lostinbitcoin was founded by Teruko Neriki, who translated the Bitcoin Standard and the Bullish Case for Bitcoin into Japanese, and is a regular attendee of Bitcoin conferences all over the world. The site aims to provide high-signal Bitcoin content to a Japanese native audience. The website is high-signal and should probably be the first thing you share with any normie Japanese in your life who you think may benefit from learning more about Bitcoin.
Teruko is also very involved in the Meetup scene in Japan and she co-hosts events along with Mempool Wiz at the OG Meetup “Tokyo Bitcoin Hackers” which hosts high-signal events with many high quality bitcoin builders. The events tends to feature prominent speakers (who are often visiting Japan) but are relatively infrequent as a result. (maybe once every couple of months).

KYC free scene in Japan

KYC free is not great in Japan, in my experience. Activity on Bisq is low with non existent in-person or cash by mail. ATMs are here but completely KYC-cucked. Incidentally, Japan is the KYC Kingdom and it’s impossible to get a phone number here without KYC and you very often need KYC to stay at individual Airbnb locations. Mining is also expensive with some of the most expensive electricity in the world, and small houses/apartments making noise from miners a real problem. With that said, it is possible to get Azteco vouchers here if you know where to look. There is also some robosats use from what I hear and sometimes people visiting will be looking to sell some sats into the local JPY fiat so it is worth attending meetups regularly for that sort of chance to come up.

Summary:

The bitcoin only scene is small but high signal and growing. People are pulling their sleeves up and putting in the PoW to promote bitcoin adoption in Japan. We need more plebs to join the mission. If you are in Japan at any point, please join in as many of the groups listed above as possible. If you know people in Japan or have Japanese friends interested in Bitcoin, please send them our way. If you have any questions please post them below and I will do my best to answer within the Japanese time zone. Thank you!
Thanks for shedding light on the Bitcoin scene in Japan, it's fascinating to see the dynamics at play in such a technologically advanced and economically significant country like Japan. The challenges and opportunities you've outlined make for a compelling narrative, and it's heartening to hear about the resurgence of interest in Bitcoin, particularly in its purest form. The efforts of groups like Tokyo Citadel, Diamond Hands, and Lostinbitcoin.jp are crucial in spreading knowledge and fostering a Bitcoin-centric mindset. Keep up the excellent work, and I hope the Bitcoin community in Japan continues to grow and thrive!
Hey, but why did the Bitcoiner bring a translator to the Tokyo Bitcoin Hackers meetup? Because they wanted to ensure everyone understood the "hash"-tagged discussions! 😝🇯🇵🪙 #BitcoinInJapan
reply
Thank you
reply
This is a great post and your replies are also brilliant, so full of context and interesting tidbits. Please keep 'em coming!
reply
Thank you. I'm happy to answer whatever I am able to. We also discuss a lot of these topics on the Tokyo Citadel Builders Podcast so anyone interested in Bitcoin and freedom tech in Japan might be interested to give it a listen.
reply
Crypto tax fee is up to 45%, that is the problem
reply
It's not a problem if you never sell. But, yes, with no de minimus exemption, high tax (taxed as income rather than a capital gain) it certainly makes spending Bitcoin a challenge from a tax overhead perspective.
reply
Isn't TEPCO mining bitcoin?
I see some Japanese developers active on Nostr
reply
There does seem to be a number of Japanese devs working on Nostr, yes. It gives me hope. I did see that Tepco news too but not sure how real it is.
reply
Interesting. I've heard so little out of Japan regarding bitcoin over the years. Is there any criticism of bitcoin in Japan that differs from the West? Or is it that without much Japanese hashpower or savings adoption it's just not a subject that moves the needle?
reply
I don't think it's unique to Bitcoin. If you think about it, when was the last time you heard of anything new and interesting coming out of Japan? The golden age here was the 80s/90s and it's all been downhill since. Japan sort of missed the boat when it came to the Internet. Programming/ Software engineering /IT in general is not as respected here as it is in the west. The cantilionairs also suck up all the capital and talent and misallocate it meaning Japan majorly under-performs when it comes to creating unicorn businesses. There was a government minister of IT a while back who caused somewhat of a scandal when he admitted to have never used email before. Also, businesses all try to copy Toyota and apply hard engineering/production line principles to coding such that they don't do move-fast-and-break things well and have trouble shipping and iterating code. Hours / days / weeks will get wasted doing pointless meetings going over some RCA that has been demanded as a response to even a minor bug. Then "preventative measures" will be put in place such as burdensome manual testing of 1000s edge cases further and further delaying shipping new code. It makes sense with cars--lives are at stake and recalls are expensive. With mobile apps and websites not so much. Things are changing to the point where the Japanese have noticed they have fallen hopelessly behind. However, things move slowly here and with the average age of the population being high, and the average computer literacy being low, it's really hard to roll out new and smarter ways of doing things. As for bitcoin in particular and unique criticism, I don't think there's anything so unique. What worries me more is that Japan is pretty indifferent to bitcoin and also macro economics compared to the US. It's very much the frog slowly boiling out here.
reply
That's a great summary. What culturally about Japan are you attracted to most now that you've been out there?
reply
It's still a clean and orderly society. The people are great, for the most part. The food is great. The society is conservative in a good way. I guess the "being decades behind" works both ways. Not good for IT. But good for social cohesion and common sense. It's also a country with a lot of natural beauty and blessed with many natural resources such as rice, fruit, fish. The government is weaker than its G7 counterparts, again in a good way. There was no lockdown in Japan during covid--they couldn't legally do it. There was no vaccine or mask mandate. Now, as it happened, most people went along with both masks and vaccines, but the point was nobody was forced to. Cash is also still widely used here. You can withdraw 3000USD worth of JPY from the ATM and nobody bats an eyelid. You can pay in cash everywhere. There is no nonsense laws on maximum cash transactions like Europe. The trains, buses and planes all run on time. The police are reasonable, for the most part. Also there is always a feeling like Japan could be back any day now. Just waiting for a few things to click and who knows. Probably not going to happen, but at least there is the hope.
reply
I highly agree with many points you mentioned. Just food, I may be to picky compared to you, but the corona virus money led to a sudden highly felt shrinkflation (almonds imported from Vietnam, nattô with worst beans, no plastic bags given in conbinis, etc the list doesn't end). Yet, are may country where we have the best beaches in the world (Okinawa) and at good ski courses (Nagano and Hokkaido)?
I left Japan since April to travel in Asia, and in every country I go, there is always a moment when I feel like Bruce Lee ("it is better in Hong Kong") and am thinking this and that was better in Japan.
reply
I think you are right about shrinkflation, not just since covid but it's been going on for decades. Not only in goods but also in services. You can still pay for quality, though, although of course that price tends to track actual inflation. (by my reckoning goods have doubled in price in the last 10 years)
reply
Super informational. Great read. I hope everything will change in a few months. Japanese people have demonstrated that they strive to be one of the best economies in the world for a very long time. It would be very sorry to see they missed this boat... I think it's just a matter of time... thanks for such a great post! 🙌
reply
Thank you. I also hope to see things improve. I don't think it will be months, though, and will maybe depend on the direction the US goes, since Japan often looks to US for leadership on these kind of matters.
reply
I have a trip coming up, and my vacation fund is sitting in sats. What's the most straightforward way to convert from sats to JPY? I don't mind KYC if I must.
reply
If you are patient you can probably do a p2p deal here at a meetup. Depends on amount but you should be able to do 1-2 thousand US worth without much problem.
reply
Do people use hodlhodl.com and RoboSats in Japan?
reply
I have heard of robosats being used but never used it personally. I'm not sure about HodlHodl.
reply
GREAT POST!
I often listen the Tokyo Citadel podcast. I wonder why people in Japan do not start their own Bitcoin circular economy. Out of any other system. You talk about heavily KYC stuff, but why don't you create small communities, that treade each others directly in BTC. For example like https://farmfoodmap.org/ or https://btcmap.org
STEP OUT OF THE FIAT SYSTEM, don't try to trick it or evade it. Simply refuse to use fiat. I know is hard to believe it, but it require indeed a lot of convincing work with people.
We are WARRIORS (like old samourais)... we are NEVER SURRENDER
reply
Thanks Darth. We are trying with circular economy, and it's a big focus of the group. One of our members worked with BTCMAP to update a number of the locations. Unfortunately, as you can see, it's rather limited at the moment. One thing we started is tokyocafe21.com which is a bitcoin only web store using BTCPay server. We have a group member who roasts coffee beans and sells those through the site. It's a small start, but my dream is to expand into having a farmer sell through the site things like meat, honey, vegetables, fruits. You are right that we need to opt out of the fiat system. The true power of Bitcoin is that it allows plebs to transact with one another without rent seeking parasites extracting the lion's share of the productivity. If anyone is Japan based and is interested in selling goods or services through the site please reach out and let us know.
Nice writeup Dash.
reply
Thank you
reply
reply
Thanks for this. Extremely interesting. Best of luck with the Tokyo Citadel.
reply
Thank you
reply
Fantastic post - thanks - looking forward to visiting next year and hope to come along at some point somewhere!
reply
I'm a lone bitcoiner living in Kansai... not much going on down here that I'm aware of. Would love to get more involved in the space / have people to talk to, but everything seems to be in Tokyo.
reply