Is a car a good way to cross the Atlantic?  By plugging some holes and attaching some empty tanks at the bottom, a car may perhaps be made to float well enough to do it.  But it will never be as good for that task as a boat.  The reason is that, when the car was designed, every detail was chosen with one purpose in mind: travel on roads.  If the purpose had been to travel across the ocean, almost every detail would have been different -- as one can see by comparing the car to any boat.

The point is: to tell whether some artifact is a good choice for some purpose, it is worth checking what purpose it was designed for.  Sometimes a thing developed for one goal turns out to be very good, or even optimal, for some other goal; but those occasions are very rare.  Almost always, changing the purpose requires a complete redesign, starting from a blank page.

Bitcoin was not created to replace commercial banking or credit cards: it says that on the very first paragraph of the whitepaper.  It was not created to replace central banking either.  Nor to be a store of value, a high-value settlement system, a micropayment system, a lucrative investment, a tool for illegal trade, etc.. In fact, its goal was not even to create a new currency.  

As it says everywhere on the paper, starting with the title, Satoshi s goal was to create


The bitcoin protocol is the best solution that Satoshi found to accomplish that goal.  All its parts were chosen with that goal in mind.  If the goal had been something else, the design would have been different.  Or he may not have bothered to create it at all: since there were already pretty good solutions for those other goals, but not for that particular one.

The new currency was created only because Satoshi (and everybody else) did not know how to achieve that goal with existing currencies.  

Understanding the original goal helps one see that bitcoin is actually terribly inadequate for most of the other purposes.  In particular:  

Bitcoin is not a viable replacement for commercial banking, because it is too expensive, slow, unsafe, complicated -- and lacks many features that bank customers want, like ability to reverse payments, customer assistance, credit, deposit insurance, etc..

And its capacity is too limited: it is OK for the few legal payments where a trusted intermediary is not available or really undesirable -- which a normal person may need a couple times per year, maybe.  It is totally insufficient for millions of people using it for all their payments (or, worse, for micropayments).  Perhaps that much volume could be handled by off-chain solutions or some "overlay network" -- but then there is no reason to use bitcoin: banks and credit cards are already great "off-chain" solutions.

If Bitcoin cannot replace commercial banking, much less all payments with national currencies, then it cannot replace central banking either.

Bitcoin is not a viable a longterm store of value, because it has no mechanism to stabilize its value.  (Even if it were truly scarce -- which it isn't -- there are plenty of things that are just as scarce but totally worthless.)

For its stated goal, it did not need such mechanism. All it needed was that the value would remain almost stable over a few days, between earning some coins and spending them in another payment. And its very use as a currency would endow it with some value, that would vary only slowly because usage would vary only slowly.

(Satoshi at one point refers to an hypothetical increase in usage of 20% per year as "crazy".  If it had increased at that "crazy" rate, and bitcoin had not been turned into a pyramid investment schema, the price today should be less than 0.50 USD/BTC.)


The most hilarious thing in the "bitcoin space" may be the belief that Satoshi was a libertarian and wanted to destroy banks, based entirely on that single headline in the genesis block.  

But the headline had a specific technical purpose, namely to prove that he had not been doing any pre-mining.  That purpose required it to be a headline of a major paper published on that same day.  So, which is less likely: that he patiently delayed the launch of bitcoin until a vaguely relevant headline came up; or that he rushed to launch the system when he saw that vaguely relevant headline on his newspaper?  

Or perhaps he just picked up the newspaper that he had on his desk, and typed in its main headline?


Let me say only that I am neither Dorian Satoshi Nakamoto nor Craig Steven Wright.