Simon Dixon joins The Rich Dad Radio Show, to talk with Robert and Kim Kiyosaki. Simon is the CEO and co-founder of BankToTheFuture.com, the largest online, global, investment platform, and is an author and Bitcoin expert.

Simon’s start goes back to his days in investment banking. When asked how he progressed from there to where he is today, he explains that someone gave him a copy of Rich Dad Poor Dad; Robert Kiyosaki’s book. He found inspiration in the book’s theme, primarily that which depicts the rat race that we often find ourselves in, and made the decision to quit his job and to return to his passion; economics. Simon tells us that at the time, he was £100,000 in debt, deep in the rat race and consuming rather than investing.

“The business I tried to create was actually a non fractional reserve bank…I was really studying the fraud of money and how it’s actually created.”

This led to authoring the book, “Bank to the Future: Protect Your Future Before Governments Go Bust. Simon found himself, shortly after, speaking at the very first Bitcoin conference in the world.

The Bitcoin community was trying to create the very infrastructure that Simon was writing about, and researching. He purchased his first Bitcoin for $3 and began investing in various companies. Bitcoin did well, and Simon took the initiative to re-invest some of his assets into companies such as Coinbase, Kraken, Bitstamp and Bitfinex. Many of those companies went on to become the exchanges that built the Bitcoin industry. Simon created and built BanktotheFuture.com as a platform to allow other people to co-invest in the stocks and shares of these early stage Bitcoin companies.

With a Master’s in Economics, Simon says he actually felt he had to re-learn these principles outside of the university. What he learned there was far detached from the reality he’d discovered.

“…Every time a bank issues a loan…they’re actually creating a digital currency…they INVENTED digital currency. And Bitcoin found a way of doing that and circumventing the banking system.”

Robert tells us that he stays out of stocks, primarily because he knows he has no control over them. Instead, he invests in gold, silver and Bitcoin. Because, he agrees with Simon, “the banking system is based upon a fractional reserve system.”

Fractional-Reserve Banking

The most common form of banking practiced by commercial banks worldwide. Banks accept deposits from customers, and make loans to borrowers while holding in RESERVE, an amount equal to only a FRACTION of the bank’s deposit liabilities.

Simon agrees with Robert, and adds that he’s learned Fractional Reserve Banking has no fraction and has no reserves.

“You’re pushed to stocks,” Simon says, “just to try to beat inflation.” Bank deposits are just as risky. You’re betting on the credit risk of the bank and they are taking excessive risks and only the Federal Reserve and the system as a whole keep it connected. You believe your deposits are insured. Only 1% of those are actually insured.

What do you see happening with banks and Bitcoin, in the near future?

According to Simon, there are two types of banks at the moment; standard banks which have sold off all of their toxic assets to your pension and the 401k is holding the toxic assets (or the Federal Reserve is holding all of those toxic assets).

And then there are the banks that have excessive risk. “I believe that’s where everything is moving right now”. We’ve entered into a two-tiered economy… “Super power China, which is looking more and more like America, and America, which is looking more and more like China every day.”

Simon believes we are entering into a new monetary phase; governments around the world must pay for the obligations they’ve made, and cannot meet. “We have to move to a completely new monetary renegotiation.” He believes this will be central bank digital currencies, where they (government) will be issuing currencies based upon allowing banks to go ‘boss’.

Rather than bailing out an insolvent bank, they’ll let them go ‘boss’, meaning any money that you held at a bank, you can download an app in the future, and you’ll have this new central bank digital currency.

The problem with this, Simon says, is that it is going to de-leverage the economy, and that money is going to be surveillance. “It’s going to be the removal of all your privacy, freedoms, when you take that money, the helicopter money that going to be issued and used to allow banks to go bust.”

But then you have Bitcoin….

Then you have Bitcoin, the exact opposite. The money that you hold at a bank is not your’s to own, and the bank is the legal owner. You can’t spend it because of the surveillance and anti-money laundering laws, and it’s being printed out of existence. Bitcoin is the other side that. You can own your money. You can spend your money. The money supply is completely fixed. Companies right now are trying to protect their balance sheets from the dollar and put a percentage of it into Bitcoin.

We are in the middle of one of the largest wealth divides with incredible wealth inequality, Simon says. This is causing people to push for socialist ideals because everybody is deep in debt. And they’ll push for the central bank digital currency, “which is going to be signing away your freedoms, your personal liberties, and privacy.”

What causing the fluctuation in Bitcoin’s trading prices, day to day?

Simon explains that gold is ‘a store of value’, meaning it’s not designed to increase your wealth, it’s designed to preserve it. For 5,000 years, it has preserved people’s wealth. The wealthy and the central banks use gold as a store of value.

Bitcoin, on the other hand, is a 10 year experiment. It’s a ‘speculative store of value’. Bitcoin has many of the properties of gold, but it’s digital so you can spend it, it can be used. It is speculative because it doesn’t have 5,000 years of history. So, people are speculating on whether Bitcoin can become a store of value. This causes the fluctuations in value, daily.

The difference in trading and investing in Bitcoin

Simon explains that he’s seen a lot of people spending their Bitcoin, using it as a currency to meet living expenses, instead of using it as a store of value. Also, he says Bitcoin can be over-traded. Every time you trade it, it creates a taxable event and you create the opportunity to be ‘wrecked’ by insiders, or lose all of your money.

The difference is an investor in Bitcoin looks forward to the Bull and Bear markets. For Simon, cracks in the market allow him to acquire more Bitcoin at a lower price. He’s not going to sell that Bitcoin; he has a long-term perspective of it. Like a store of value.

If you’re a trader, he says, most people lose money to the first 10% of insiders. They know the game better than most, and have access to better resources. So folks who trade in Bitcoin are thinking long term, and risking losing quite a bit to insiders, as well as creating a taxable event.

Robert and Kim share that they too, think long-term with their investments. They have no intention of selling it, and when the price goes down and people panic, they take advantage of the lower rate to accumulate more.

Currency Vs Money

Simon shares that Money stands the test of time and Currency is what governments create. It always dilutes and always goes down in value. Bitcoin is speculative money, but it’s based on monetary principles.

“When someone says to me, ‘are you selling Bitcoin?’ I hear, ‘I am buying currency.’” Why would I buy currency, unless it’s to meet short-term living expenses? “The stuff the government creates is very good for that.” But it’s useless for savings, he says. It’s all about the perspective of Bitcoin as a store of value and not short term currency.

The Downside to Bitcoin?

Like any store of value, or investment, you have to have the responsibility of owning your own money. Like gold, you store it somewhere else; Switzerland, or Singapore. You secure it outside of your home to ensure it’s safe. Bitcoin brings with it a new need for people to secure their money. The future is about cyber attacks, preventing people from stealing your data, emails, and hacking into your accounts. While entrepreneurs have created amazing tools to make this easier, it’s still a tool that everyone who gets into Bitcoin needs to learn.

What prevents people from starting their own Bitcoin?

“Well, 10,500 other people have tried to create their own Bitcoin and no one has quite ever replicated the network effect.” Bitcoin was created at a time when it was unknown, and no one was speculating on it. There was no connection to the central bank. “Bitcoin is now the world’s largest super computer that is secured by tens of thousands of computers all around the world with NO creator, which gives it commodity-like features that nothing else has ever been able to replicate.”

“Bitcoin is freedom. It’s the ability to own your own money, spend your money, and not be at the mercy of anyone else’s money supply.”- Simon Dixon

Visit BanktotheFuture.com for more information.