There are seemingly only two valid reasons to hash the public key:
1) you think that the public key scheme is vulnerable in the long term
2) you want to separate long term and short term security.
1) you think that the public key scheme is vulnerable in the long term
2) you want to separate long term and short term security.
I already told you that if the public key were exposed for a longer (indefinite!) time, so you would need to increase the security of the public key. But to what level given quantum computing may be coming?
And 256-bit was about the upper limit of what was available and well accepted in 2008.
I remember seeing that 256-bit was only expected to be recommended security for ECC for only another decade or so.
https://www.keylength.com/en/3/
https://www.keylength.com/en/compare/
I will now show you why there's some craziness in this scheme:
Take Satoshi's system: L = 160 bits, S = 128 bits, which makes his B_hash(160,128) = 928.
Suppose that I would have taken L = 160 bits overall: B_nohash(160) = 960.
So I would only have used 32 bits on about 1 K more to have OVERALL SECURITY of 160 bits.
The hashing wins me 3% of room, to decrease the ECC security from 160 to 128 bits.
Take Satoshi's system: L = 160 bits, S = 128 bits, which makes his B_hash(160,128) = 928.
Suppose that I would have taken L = 160 bits overall: B_nohash(160) = 960.
So I would only have used 32 bits on about 1 K more to have OVERALL SECURITY of 160 bits.
The hashing wins me 3% of room, to decrease the ECC security from 160 to 128 bits.
You are not accurately accounting for the savings in portion of UTXO that must be stored in DRAM (for performance) versus what can be put on SSDs. Without that in DRAM, then the propagation time for blocks would be horrendous and the orphan rate would skyrocket (because nodes can't propagate block solutions until they re-validate all transactions due to the anonymity of who produced the PoW). 320-bit public keys (i.e. 160-bit security) in UTXO would require 100% more (double the) DRAM.
Satoshi just nailed you to the cross.
And if there is a suspicion on that fragility, it is very wasteful to take a useless 256 bit key which would in any case easily be cracked by assumption.
You are not assimilating all the information I already provided to you.
The public keys can be hacked off the users' wallets. So we need more than trivial security there for the ECC public key cryptography.
Another reason (in addition to the compression of UTXO) to hash the values on the block chain is because when the use of a quantum computer is detected, we have some protection against chaos and can map out a strategy for burning the values to a new design securely. Hashes are much more likely to be quantum computing resistant.
Satoshi's cryptography choices are so clever and obtuse that even a very smart person as yourself takes a long time to finally grasp his genius. That indicates how genius Satoshi is. When we find that PhDs (college professors?) are offended by the notion of Satoshi being a genius, and such PhDs are committing Dunning-Kruger blunders when analyzing Satoshi's work, then we have a very strong indication that Satoshi's IQ was in the 180+ range. For example, when listening to Freeman Dyson or John Nash (180+ IQ for both) speak initially the unsophisticated observer (not you @dinofelis) might conclude they are not super intelligent. But that is simply because the observer is incapable of perceiving the depth of complexity being communicated so concisely. I have had public+private discussions with college professor Jorge Stolfi on Reddit in 2016 and generally thought him to be intelligent and mathematical, but I was shocked to read his myopic presentation to the SEC recently concerning the decision on the approval of the ETF.
If we appreciate how rare 180 IQ is, then we understand that the set of people who could have been Satoshi is quite small.
P.S. readers I don't know who @dinofelis is. And I would guess he is probably more formally trained than I am in math and Physics and other STEM fields. I have some areas of programming level expertise that he may not have (not sure about that though). My main talent is I am highly creative non-conventional thinker, similar to John Nash but lacking the full breadth of Nash's mathematical genius. I was no where near a teenage math genius but this could be because I was so into athletics and also I wasn't even exposed to learning materials until about 8th grade (my parents had me in inner city public schools and changing schools every 6 months). I did ace Calculus at a college in night session while I was still in high school. My SAT was high in math but not a perfect score (although I had a hangover and still slightly drunk when I took it). I wasn't interested in studying for standardized tests and I never showed up for my math classes in high school, yet still aced the exams. In short, I excelled on the things I was motivated to excel on but more interested in my intellectual and athletic hobbies than in conforming with the structured curriculum. At the university, I hated to attend lectures and would learn independently and also doing my own research on things I was interested in the library. And spending the rest of my time partying and playing sports.