The question of Bitcoin’s primary function – as a payment system or a digital reserve asset – continues to spark discussion. With Bitcoin’s price holding strong above $100,000, the ongoing demand from Exchange Traded Fund (ETF) providers, and major corporate Bitcoin holders, the idea of using Bitcoin for everyday purchases appears increasingly uncommon.
But is Jack Dorsey correct in suggesting that Bitcoin’s value diminishes if it’s solely a store of value and not actively used for transactions?
Bitcoin: More Than Just a Store of Value?
Bitcoin’s initial purpose was to serve as a form of electronic money, facilitating direct, secure transactions between individuals. Its potential as a store of value emerged later as an additional benefit. According to BitVM creator Robin Linus:
“Bitcoin is designed for payments – its function as a store of value is a secondary advantage.”
The prevailing narrative surrounding Bitcoin has largely shifted towards viewing it as “digital gold” and a target for institutional investment. However, influential voices like Dorsey and Linus argue that this perspective overlooks the core principles and long-term relevance of Bitcoin. Linus reiterated this viewpoint, stating:
“The original vision of cypherpunks was clearly to develop electronic cash for secure, peer-to-peer transactions. The ‘digital asset’ perspective arose later. It’s surprising that this is even debated.”
Dorsey reinforced his position, adding:
“I believe it must be used for payments to remain relevant daily. Otherwise, it becomes something you acquire and forget, only using it in emergencies or when needing liquidity. If it fails to transition into a payment system and secure everyday use, it becomes increasingly irrelevant. To me, that signifies failure.”
Satoshi’s Vision: Payments as the Core Function
Satoshi Nakamoto’s original communications, including emails and the Bitcoin whitepaper, unequivocally highlight Bitcoin’s intended role as e-cash, currency, money, and a payment system. His vision for Bitcoin as a means of payment is crystal clear.
In early exchanges with Adam Back in 2008, Satoshi described Bitcoin as a revolutionary method for establishing a peer-to-peer electronic currency, referencing previous digital cash initiatives and emphasizing payment functionality.
He described proof-of-work as a mechanism to enable currency on a decentralized timestamp server, thereby emphasizing the clear focus on payments.
The Evolving Narrative: From Currency to Investment Asset
Over the years, the focus has changed. The entry of institutional investors through ETFs, the “Number Go Up” (NGU) marketing strategies, and the discussion of Bitcoin as a hedge within investment portfolios have all contributed to this shift.
While these changes have introduced greater liquidity and wider acceptance, they have arguably steered the ecosystem away from solutions that directly benefit everyday users and foster real-world payment adoption, diverging from Satoshi’s original objectives.
While Bitcoin has become well-known as a store of value, its fundamental origins in secure, peer-to-peer, digital payments have been overshadowed.
Key figures within the community, including Dorsey, Linus, Swan, and even Satoshi himself, remind us that true and widespread usefulness depends on embracing Bitcoin as an active currency, not simply a long-term holding.
Guy Swann, host of Bitcoin Audible, has called for open discussion, tagging notable individuals like Dorsey and Linus, as well as other influential voices in the Bitcoin community such as Michael Saylor, Saifedean Ammous, and Adam Back:
“I want to hear from the most knowledgeable individuals who can offer substantiated arguments. Not just slogans, moral grandstanding, and quotes from the whitepaper.”
Limiting Bitcoin’s role to only a store of value risks losing sight of its original purpose and the unique utility that once set it apart. The prospect of Bitcoin as a payment system hinges on the community’s willingness to challenge the prevailing trends and refocus on payments and broader real-world acceptance.