Settlement network VS means of preserving value: Which one is Satoshi Nakamoto's original intention in creating Bitcoin?

As Bitcoin celebrates its 8th birthday, multiple online Bitcoin communities and social media platforms have launched a fascinating debate to try to understand Satoshi Nakamoto’s vision for the Bitcoin network. Some experts believe that Satoshi Nakamoto’s original purpose in creating Bitcoin was to make it a settlement network, while others believe that Bitcoin is destined to be a means of preserving value.

With Bitcoin, anyone can transfer any amount of money at any time, anywhere, with very low fees. In a sense, Bitcoin is like digital cash, in that transactions are almost instant, and once a transaction is completed, it cannot be changed.

In contrast, when a user sends a transaction in the settlement network of the credit card and banking system, they need to go through a series of manual operation processes. Only after manual verification can the legitimacy and rationality of the user's transaction be confirmed, and then the recipient can obtain the funds.

When shopping on e-commerce platforms such as Amazon, after the user initiates a credit card payment, the credit card network will first mark the transaction as "sent". The transaction is only officially completed after Amazon and the network operator jointly verify and settle the payment, which usually takes several weeks.

But in the Bitcoin network, transactions initiated by buyers and sellers can be verified and confirmed almost instantly and recorded permanently on a public ledger.

Eeik Voorhees: People who think Bitcoin is a 'settlement network' should think about this... How many transactions can Bitcoin actually 'settle'?

Recently, people have posted on multiple online Bitcoin communities and social media platforms that Satoshi Nakamoto's original intention in creating Bitcoin was to build a settlement network. Washington Sanchez, co-founder of Open Bazaar and OB1, has also publicly stated that the settlement network is the original purpose of Bitcoin.

However, many experts disagree, arguing that Bitcoin is actually a digital cash network that should be viewed as a store of value, and that users should not expect too much from the Bitcoin network’s ability to handle small transactions.

Gavin Andresen: People will choose Bitcoin as a means of storing value.

Bitsquare: Gold is also a means of preserving value. And you can’t buy coffee with gold…

In June 2015, Eli Dourado, a researcher at George Mason University in the United States, published an article that explored in depth whether Bitcoin is suitable as a payment settlement network.

Dourado writes that Bitcoin was not created as a settlement network, but there is no evidence that Bitcoin’s network function is singular (that is, Bitcoin’s settlement function was formed later or due to market demand).

Of course, if people want, they may be able to buy coffee with Bitcoin in the future. Once Bitcoin becomes a world-class reserve currency and settlement mechanism, why would coffee shops refuse to accept it? Just like no place refuses to accept cash now. But buying coffee is not the original purpose of the Bitcoin system.

Stephen Pair, CEO of Bitcoin payment processor BitPay, published an article this year that demonstrated a similar point, saying that if Bitcoin is a successful payment system, it can also become a settlement system, citing several specific examples.

Some people think that Bitcoin is not capable of settlement. In other words, they think that decentralized cryptocurrencies cannot handle a large number of transactions. In the future, outstanding developers and engineers will prove them wrong.

Therefore, as Bitcoin moves closer to internationalization and mainstream currency standards, users and developers must focus on the development of scaling technologies such as the Lightning Network and SegWit to expand the user base and completely transform the Bitcoin system into a settlement network.