Imagine Tupac Shakur (aka 2Pac) returning to discover modern rap. At least, he’ll have some questions,”What is the dreaded “mumbling” rap? ” Not that 2Pac invented rap, but it’s definitely a contender for the greatest rappers of all time, so assuming he’ll have input isn’t an easy thing.
Satoshi Nakamoto’s return to modern “cryptography” may encounter something similar. Building something as elegant and necessary as Bitcoin, and then realizing later that the market is hungry for endless imitations, can be both bewildering and insulting. Obviously, Nakamoto had a vision.
Based on his own words and Bitcoin specs, we should feel confident while speculating on his vision. In other words, what do we think he was trying to achieve for generations to come? We can start by removing some common doubts. If his idle coins are any indication, it means he wasn’t driven by profits. Obviously, his anonymity is important to him because even after Bitcoin became known globally, his identity is still unknown, so he is unlikely to be motivated by fame or recognition (if he is still alive).
He seemed interested in solving the long-standing problems within our financial system, which were most evident during the 2008-2009 financial crisis. It is no coincidence that Bitcoin was released to the public during the same time. Origin stories are important, especially when navigating something as confusing as modern cryptocurrencies. Altcoins didn’t exist when Nakamoto was inventing Bitcoin, so he wasn’t throwing Bitcoin into the ring with other cryptocurrencies, but it was going against the entire fiat network, meaning his vision was huge.
Bitcoin is a reactive and proactive system: an attempt to remove trust from monetary networks and monetary policy by stripping individuals of decision-making power, and distributing power evenly throughout society. He must have known that Bitcoin would eventually get out of his control, which it did. No monetary system has proven to be as decentralized and secure as Bitcoin, even after 13 years and the creation of tens of thousands of altcoins.
Lord knows how many years or decades Nakamoto has spent watching governments and wealthy people abuse legal systems—something relatively easy to achieve when centralization is the norm. Give absolute power to anyone (especially over money), and corruption is bound to pop up. We are only human, so the only sure solution is to put monetary policy in the beginning, enabling system security to defend against changes, which is the concept and operational standard of Bitcoin.
“The root problem with traditional currency is the trust required to make it work. The central bank must be trusted not to devalue the currency, but the history of fiat currencies is littered with abuses of that trust.” – Satoshi Nakamoto (February 11, 2009)
He identified an economic vacuum that reduces the quality of the financial position of almost everyone – inflation. He chose the words “devaluation,” and then proceeded to design Bitcoin in such a way that devaluation would be nearly impossible. Of all the economic issues, inflation has the most detrimental effect on the vast majority of society. Without a doubt, there are other economic issues that must be addressed. However, we can’t solve every problem at once, so prioritizing only makes sense.
Nakamoto’s priorities must be right, as he sacrificed scalability among other advantages to preserve and protect monetary policy. If we cannot change the behavior of these people in power, we can take power completely from them. Some people benefit from inflation, but most people suffer. The reliability of the Bitcoin network is proof of our ability to stamp out the unfair practice of inflation. Although Bitcoin is a complex technology, the monetary aspect is simple – a fair and transparent monetary policy, a step towards restoring economic hope.
Too many people live by paycheck to paycheck with minimal savings and no investments. Dependence on the purchasing power of fiat currency is the norm (and also a big problem). Bitcoin as a monetary tool allows everyone to have the same opportunity – to accumulate and save as much money as possible and keep any amount of wealth, big or small, without worrying about expropriation or inflation, which is the way money should be. Saving money isn’t rewarding, which is what breeds consumerism. If we ever want to make any amount of financial progress (especially those from the lowest economic classes), our money cannot be continually devalued over time.
Bitcoin fits within the framework of economic equality, which exposes Nakamoto’s intentions. As the network grows and evolves, the safety of Bitcoin becomes more and more apparent. Other than current and temporary market conditions, owning bitcoin is not very risky. We can have high confidence in the predictability of monetary policy (issuance rate) and network security, with peace of mind knowing that our currency will not depreciate over any period of time, which is the exact opposite of fiat currency. Although many altcoins look solid on the surface, none of them have the security of Bitcoin.
For many people, there are no more important financial implications than maintaining the small amounts of wealth we have. Living from a paycheck to a manageable paycheck; Being broke and getting spoiled by inflation is hopeless. Hardworking people should not be afraid of not having enough purchasing power to afford the essentials. The maximum supply of 21 million bitcoins may be the most important feature because all we have ever known is an unlimited supply of fiat currency which leads to higher and higher levels of inflation.
One could advocate other cryptocurrencies as a solution to the inflation problem, and part of the argument would be valid. Although inflation is probably the biggest problem, it is not the only one. Nakamoto’s careful choice of protocol corresponds to the full cash package. Lay the strong foundation first and then build it. When analyzing Bitcoin as a complete set of monetary tools, it undoubtedly outperforms every other cryptocurrency on the market. We can discuss this until Jesus returns, but the market has uncontestedly decided which cryptocurrency belongs in the first place.
Nakamoto’s mindset is clear – the creation and distribution of healthy electronic money that empowers and maximizes self-sovereignty. Thinking about the basics of adulthood, people want to work, spend some of their money while surviving and enjoy life and save the rest for retirement. With fiat currencies and altcoins, appropriate measures were not initially taken to ensure monetary policy and security were maintained, so we have no reason to be confident in the long run. In other words, the abbreviations were taken. Obviously, Nakamoto was focused on building a strong foundation, which takes time. Since the Bitcoin narrative has barely changed since the beginning, early insights into Bitcoin are still relevant, and likely always will be.
This is a guest post from Salvatore Norge. The opinions expressed are their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.