Exchanges are the primary reason crypto value is as high as it is though. Without the easy way to get money in (and usually out) of $COINs there's less speculation, less money flowing in, less market to drive prices. If we were back in the days of Local Bitcoin being the best way to buy coins there'd be even less of the meager adoption we've seen in business too.
A high value is certainly an implicit outcome of taking this literally:
"What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party"
One could make the argument that crypto ownership could be a short-lived thing - you buy some crypto, use it immediately for an electronic payment, then you have no more crypto, which would keep its value low, but then you need a trusted third party to buy the crypto from, and the retailer needs one to sell the crypto to.
Removing a third party means that you need to be paid in crypto, and do all your transactions with crypto. Given that Bitcoin was created with a finite pool of coins, it's obviously necessary that each coin be worth a vast amount of money, for it to replace all fiat currently used for electronic payments.
Right, they said it should be a payment method over the internet. But they failed, mostly for two reasons:
- they not anticipate ASICs, or even GPUs, which destroyed the idea of decentralized mining where individuals would just mine to get coins to spent, and forced people to buy coins instead (leading to the rise of exchanges).
- their Austrian economics prejudice misled them about the nature of money, and the link between money and scarcity. The bitcoin supply was much too small, and too limited in growth, to accommodate for a exponential growth in usage. As a result, bitcoin instantly became deflationary, which is the second worse thing that can happen to something aiming to be a mean of payment (the first one being hyperinflation). For something to be a mean of payment, you need people to be willing to spend their tokens. Economies survive two-digit inflation, but even 10% deflation makes as much damage as Venezuela or Zimbabwe-like hyperinflation.
Had Satoshi not been libertarian, and decided for instance to index the amount of mined bitcoin to the difficulty of the block, they'd have not created an investment asset headed to the moon but they'd have been much closer to create the payment system over the internet they dreamed about (putting aside the privacy and scalability issues of course).
Also the network is far too slow to handle even a fraction of the day to day transactions handled by VISA. Even if you relegate it to more substantial transfers SWIFT handles around 35 million transfers per day and for the whole month of October this year the main chain only handled 7.9 millionish from what I can find. It's so slow there's a whole opaque secondary layer that had to be built to get it even close to potentially handling day to day transactions.
True, but if you think about the initial goal of a decentralized payment method over the internet and not in a crypto-maximalist perspective, it doesn't necessarily make sense to compare it with VISA or Swift which mostly process payments IRL.
When bitcoin was designed, its throughput was a significant fraction of Paypal's which doesn't sound so bad. In fact, having a decentralized, uncensorable and open-source payment system taking 20% of Paypal's market share would have been a major success regarding Satoshi's stated goals, and this was something achievable even with the slow network. But it never happened, and all we have instead is this gigantic VC-funded distributed Casino where hackers and fraudsters thrive.
The inherent problem there is the capacity is essentially fixed without a protocol change causing a hard fork. That's a doomed service in the long run.
> their Austrian economics prejudice misled them about the nature of money, and the link between money and scarcity
Do you have any references or more to say on this? Not arguing. I’d just like to look into it.
I agree with your assessment that they were overly idealist and libertarian in their outlook. It has bled into crypto fundamentalists touting “this isn’t crypto!”.
