More than eight years ago, Satoshi Nakamoto introduced to the world his “peer-to-peer electronic cash system,” Bitcoin. From this description, Satoshi’s obvious intention was to replace cash by creating a new way of making payments. Whether it was to purchase a yacht or a latte, Bitcoin was created to be a frictionless and decentralized means of transferring any amount of value between two people without the need for a middle man.
Beyond a Cash System
But Bitcoin is not simply a payments system. Satoshi purposefully set up Bitcoin with many of the characteristics of gold, including its limited supply and the requirement that energy is needed to increase that supply. This makes Bitcoin supremely qualified to be a long-term store of value. A government can increase the money supply of its currency at the whim of those in charge. Bitcoin’s supply, however, cannot be manipulated, allowing its value to remain strong for years, even decades. Thus Satoshi created both a strong cash system and an excellent store of value.