Bitcoin: an Electronic Cash System

[Darker45]

When I first read Bitcoin's whitepaper, it immediately impressed upon me that Satoshi created a currency that does not intend to replace cash nor even serve as its alternative. I'm referring to cold cash.

Satoshi's invention is an electronic system. Nowadays, however, you can easily notice how the emphasis on "electronic" is omitted. When you search Bitcoin, for example, Wikipedia would define it as a "protocol which implements a highly available, public, and decentralized ledger."^[1] Bitcoin.org would have it as an "open source P2P money." Clicking on it would further define Bitcoin as "an innovative payment network and a new kind of money."^[2] Furthermore, Investopedia would define Bitcoin as "a cryptocurrency, a virtual currency designed to act as money and a form of payment outside the control of any one person, group, or entity, thus removing the need for third-party involvement in financial transactions."^[3]

So, aside from the whitepaper, you can seldom encounter a definition which gives emphasis on "electronic." But Satoshi clearly designed it with "online payments" in mind. What was taken into primary consideration was E-commerce.^[4]

Is it, therefore, somehow a misplaced appreciation of Bitcoin when many are ecstatic every time it is accepted as a payment for a glass of lemonade or a piece of banana?

My interpretation is that Satoshi believed that the cash system is a good system and that such kind of system should also exist online. Until then, there wasn't such a thing. E-commerce transactions were only possible with the participation of financial institutions as necessary third parties.

[1] https://en.wikipedia.org/wiki/Bitcoin
[2] https://bitcoin.org/en/
[3] https://www.investopedia.com/terms/b/bitcoin.asp
[4] https://bitcoin.org/bitcoin.pdf

[mk4]

Is it, therefore, somehow a misplaced appreciation of Bitcoin when many are ecstatic every time it is accepted as a payment for a glass of lemonade or a piece of banana?

Not really. People get ecstatic not necessarily because bitcoin is being used for one of the things it's intendedly made for(payments), but mostly because bitcoin is actually getting used in the first place. We all know that Bitcoin is already a household name, yet adoption is still very low.

[Darker45]

Is it, therefore, somehow a misplaced appreciation of Bitcoin when many are ecstatic every time it is accepted as a payment for a glass of lemonade or a piece of banana?

Not really. People get ecstatic not necessarily because bitcoin is being used for one of the things it's intendedly made for(payments), but mostly because bitcoin is actually getting used in the first place. We all know that Bitcoin is already a household name, yet adoption is still very low.

Again, my point is that Bitcoin wasn't intended for those kinds of transactions. Yes, Bitcoin is intended as a payment method, but online. So if you're dealing with somebody face to face, Bitcoin isn't for it. Cash is the real peer to peer. There are no third parties in between. It's a great system that Satoshi wanted to imitate it in the online world where P2P transactions aren't at all possible.

So to a certain extent, buying a piece of cupcake from a nearby bakeshop using Bitcoin isn't really adoption. It isn't the goal, after all.

[Pesona1]

Is it, therefore, somehow a misplaced appreciation of Bitcoin when many are ecstatic every time it is accepted as a payment for a glass of lemonade or a piece of banana?

Not really. People get ecstatic not necessarily because bitcoin is being used for one of the things it's intendedly made for(payments), but mostly because bitcoin is actually getting used in the first place. We all know that Bitcoin is already a household name, yet adoption is still very low.

But in my opinion, actually we also can't deny that actually accepting bitcoin as an alternative means of payment is a joy, indeed so far bitcoin has been out of the main reason when Satoshi first created bitcoin, now bitcoin is more identical as an investment compared to the main reason namely: To decentralize the payment system that is free from central control or third party intermediaries including banks and the government, at this time maybe without us knowing it in the modern era using bitcoin as an alternative payment is much better and more efficient but the regulations created by the government force us to further optimize bitcoin as an investment asset.

[mk4]

Again, my point is that Bitcoin wasn't intended for those kinds of transactions. Yes, Bitcoin is intended as a payment method, but online. So if you're dealing with somebody face to face, Bitcoin isn't for it. Cash is the real peer to peer. There are no third parties in between. It's a great system that Satoshi wanted to imitate it in the online world where P2P transactions aren't at all possible.

So to a certain extent, buying a piece of cupcake from a nearby bakeshop using Bitcoin isn't really adoption. It isn't the goal, after all.

Bitcoin today isn't whatever Satoshi intended it to be. Satoshi only set the canvas of what Bitcoin is, and it's totally up to the community now what Bitcoin is actually for moving forward.

[bettercrypto]

  You know to tell you honestly, the creation of Satoshi Nakamoto in Bitcoin, is a big help to everyone who knows and believes in it. Yes, bitcoin was created as a mode of payment online, that's why it's called electronic payment like a credit card.

  But the role of bitcoin does not end there, bitcoin also provides an opportunity for any people who believe in it that they can make a profit through buying it in the exchange and do trade activity, In addition, bitcoin can also be used via P2P for sending to different parts of the country around the world, the speed of the transaction is here and there is no hassle.

  So whatever Satoshi's reason for creating Bitcoin is, it doesn't matter to me because the important thing is that it helps my financial needs and even the majority of people around the world.

[franky1]

your reading too much into it in regards to omitting "electronic"

bitcoin is not suppose to be paper. its code. thus by default is electronic

when mentioning online, e-commerce, digital ledger you do not need to then subsequently define "electronic" because its already implied by "online" "e-" and "digital"
we are in 2023, people know that the internet and apps run on electric. it doesnt need to be emphasised

however the "cash for the unbanked" (whether paper or electronic) has been dampened down
heck they are dampening down the "crypto currency" and now calling it crypto assets by trying to shy away from treating bitcoin "as money/cash" and instead treating it as investment

they have further tried defining bitcoin
used as a mainnet lock of value for a subnetwork bridge/sidechain = crypto asset(commodity)
(commodity is a raw product produced or used to create other products)

bitcoin sold on a market=crypto asset(property)
subnetwork bridge/sidechain unit/token = crypto asset(security if under a niche brand/enterprise profit sharing from enterprises activities(corporate tokens like GBTC))

subnetwork bridge/sidechain unit/token = crypto asset(property if decentralised with no defined niche brand/enterprise)

there are then terms of crypto asset(utility) and other terms. all designed to shy away from terms of "currency" "money" "cash"

[Aanuoluwatofunmi]

Using the keyword electronic is not a must before we can fully get inline that we are referring to bitcoin, initially before bitcoin was invented, there has always been research upon research by many people in creating an electronic decentralized system and till when bitcoin was invented, it makes no difference from the digitally decentralized currency we so called bitcoin, since they were both a digital technology that deals with an electronic transfer using a blockchain technology, so to me this makes no difference because the world digital technology has provided a covering for all.

[Ucy]

Ofcourse, it's termed Electronic Cash System because it's fundamentally designed to function electronically, but there is no where it's said you can't use it offline or without something like the internet. It's simply an Electronic(not Internet) cash system. It's a very versatile financial system with currency that could be used like physically cash, online etc, as long as it's used in fraud-proof manner. I don't think Satoshi will be so dumb to restrict it to only online usage considering how centralized the internet can be. And private keys are flexible enough for offline use... A satoshi with evil agenda wouldn't have allowed this.

And satoshi must have considerd the fact that for Bitcoin to thrive/succeed it has to operate as an independent system parallel to the centralized system, and that will mean a network of people coming together as a Nation Independent of the centralized system. This fact is actually inevitable else Bitcoin won't be Bitcoin... or it will be conquered and Centralized

[Ojima-ojo]

Bitcoin does not have physical representation and bitcoin exists on the Internet through devices and codes.

The above simple emphasis on the subject matter is enough to rest the confusion that may arise from your understanding of bitcoin and electronic cash.

Satoshi's intentions as expressed in the white paper have been strictly followed,  but the big question is.

Is Bitcoin really used for online payments, or it is being held as a speculative asset?

The answer is, Bitcoin is nowadays seen and taken as a valuable investment more than it is an electronic cash.

[kryptqnick]

Op's got an interesting interpretation here, I didn't think about focusing on electronic and in principle not viewing Bitcoin as a replacement of cash. To me, Bitcoin's main features are related to removing the intermediary and decentralization. Electronic payments per se are very common without Bitcoin, as one can use PayPal or even simply use Google Pay very often. I guess it wasn't nearly as common in the times of the whitepaper, but it's currency clear that a special currency isn't needed for online payments. That being said, it's true that online payments require an intermediary and centralization, and the idea of Bitcoin being like cash kind of makes sense to me. Bitcoin is still a step forward because cash is of a currency that suffers from inflation and is regulated by authorities of a specific country, but it's still a helpful perspective.

[Flexystar]

That is major change. We can not really replace something that is being used since thousands of years in various forms and after few hundred years we have fiat in the form of notes and coins. Now I dont need to mention the history of these and to where and when they date back because we have already studied it in the basic history lessons.

Now, if bitcoin is in implementation then it has to wait for very long until it gets placed into hearts of every person on the earth. Besides it is a choice and not the legally adopted one. Let's just give it time and future will tell us what it is worth!

There were bars of gold, there were coin of gold, yet today we use it as choice for our trades. We have sculpted it's value into jewels and perfect store value and that is how it is known today.

In similar way, bitcoin has just started it's journey. We will know it's power in the coming years or decades may be!

[Vyeon11]

even though it looks different in the vision and mission and reality now, but I think it doesn't damage the image of bitcoin and satoshi's initial vision and mission of creating bitcoin.
you don't need to think about it too hard, you see, bitcoin is now used by many people around the world, there are even countries that have adopted bitcoin officially and legally, then many people are helped financially, of course all of that is a positive impact from bitcoin.
because in essence I believe satoshi created bitcoin for the good and progress of this world.

[Darker45]

Op's got an interesting interpretation here, I didn't think about focusing on electronic and in principle not viewing Bitcoin as a replacement of cash. To me, Bitcoin's main features are related to removing the intermediary and decentralization. Electronic payments per se are very common without Bitcoin, as one can use PayPal or even simply use Google Pay very often. I guess it wasn't nearly as common in the times of the whitepaper, but it's currency clear that a special currency isn't needed for online payments. That being said, it's true that online payments require an intermediary and centralization, and the idea of Bitcoin being like cash kind of makes sense to me. Bitcoin is still a step forward because cash is of a currency that suffers from inflation and is regulated by authorities of a specific country, but it's still a helpful perspective.

Indeed, "Bitcoin's main features are related to removing the intermediary and decentralization." When you use hard cash, there's nothing to remove because there are no intermediaries involved. The use of hard cash is peer to peer. Nothing whatsoever in between. There's nothing to solve there, and so Bitcoin is not made for it. Bitcoin is superfluous there. The cash system is good enough that it has to be replicated online.

The problem with inflation is not a problem of the cash system per se. It's more of a problem of the current monetary and economic systems. Printing too much money doesn't mean the cash system is bad.

[Kakmakr]

Your statement might have been true, if it was not for the clue that Satoshi Nakamoto left for us in the Genesis block, namely : “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”

Now that tells me that Satoshi was not a big fan of the influence and collusion that there was between the governments and Banks. So,  he developed this technology to provide people with an alternative option... when this corrupt partnership between governments and Banks failed. (He specifically mentioned the word "alternative" in his White Paper) 

So my take on this is that Satoshi created this as a big F#$K you... to the Banks & governments. 

[famososMuertos]

I think that given these days, anyone can interpret it as best they understand it, it doesn't matter, the interesting thing is that two people were able to send money to each other safely, and having individual custody, without the intervention of a third party, which could well be a bank, agent or any of the electronic payment methods of the time.

BTW, bitcoin was a great solution in that sense, but there was another group of users on the wrong side,  having your point of view or the opposite, the important thing is to know that it exceeds those expectations compared to the traditional  electronic cash.

[seoincorporation]

Satoshi's invention is an electronic system. Nowadays, however, you can easily notice how the emphasis on "electronic" is omitted.

I don't think bitcoin is an electronic system, bitcoin is software and to be an electronic system should involve hardware. And you can think "But bitcoin user miners", but you can run the software without having miners.

For me an electronic system is a piece of hardware that works with electricity, for example, a walkman, a microwave, a television, etc... But I don't see bitcoin as an electronic system. The bitcoin environment has some electronic gadgets like miners or hardware wallets, but they are just add-ons, bitcoin can run on a PC as a simple piece of software.

[m2017]

Is it, therefore, somehow a misplaced appreciation of Bitcoin when many are ecstatic every time it is accepted as a payment for a glass of lemonade or a piece of banana?

Not really. People get ecstatic not necessarily because bitcoin is being used for one of the things it's intendedly made for(payments), but mostly because bitcoin is actually getting used in the first place. We all know that Bitcoin is already a household name, yet adoption is still very low.

Again, my point is that Bitcoin wasn't intended for those kinds of transactions. Yes, Bitcoin is intended as a payment method, but online. So if you're dealing with somebody face to face, Bitcoin isn't for it. Cash is the real peer to peer. There are no third parties in between. It's a great system that Satoshi wanted to imitate it in the online world where P2P transactions aren't at all possible.

So to a certain extent, buying a piece of cupcake from a nearby bakeshop using Bitcoin isn't really adoption. It isn't the goal, after all.

That is, mass adoption, when the purchase of a cup of coffee or ice cream can be paid for bitcoin, is this not the goal we should strive for now? But it is precisely something similar that many bitcoin-enthusiasts want to see. First of all, do you see the transition of payments in e-commerce to btc? Then need to add btc as an alternative payment method. Big companies will not go for it right away, but small ones can easily. And when a lot of small companies offer their customers the opportunity to pay with bitcoin, this will be a serious step that can push big businesses to do the same. In fact, we can talk not only about companies, but even about individuals. No wonder it's p2p.

Your point of view allowed me to look at this problem from a different angle. I didn't really like the idea of people offering some local goods or services for btc, but I couldn't figure out why. Now I see that it's a hassle to pay with btc for a chocolate bar when it can be done with cash. Only a very impressive discount or other bonus can encourage people to pay with it. Whereas in e-commerce, bitcoin fits perfectly and can be bought and sold anywhere in the world.

[serjent05]

Is it, therefore, somehow a misplaced appreciation of Bitcoin when many are ecstatic every time it is accepted as a payment for a glass of lemonade or a piece of banana?

Not really. People get ecstatic not necessarily because bitcoin is being used for one of the things it's intendedly made for(payments), but mostly because bitcoin is actually getting used in the first place. We all know that Bitcoin is already a household name, yet adoption is still very low.

Again, my point is that Bitcoin wasn't intended for those kinds of transactions. Yes, Bitcoin is intended as a payment method, but online. So if you're dealing with somebody face to face, Bitcoin isn't for it. Cash is the real peer to peer. There are no third parties in between. It's a great system that Satoshi wanted to imitate it in the online world where P2P transactions aren't at all possible.

So to a certain extent, buying a piece of cupcake from a nearby bakeshop using Bitcoin isn't really adoption. It isn't the goal, after all.

I don't see any problem paying with BTC face-to-face.  It is an add-on feature, instead of paying with cash, you pay with Bitcoin.  And I think it is a positive sign the Bitcoin can be used as payment not only online or what so ever.

From the definition, an electronic transfer does not necessarily means you must order an item online and pay for it with Bitcoin.  You can still do electronic transfers when you buy some snacks in a convenience store that accepts electronic transfers.

I believe the success of adoption is when every person is transacting with Bitcoin by paying for their goods in supermarkets, stores, and malls via electronic transfer regardless if it is face-to-face or not.

[hatshepsut93]

But Satoshi clearly designed it with "online payments" in mind.

How so? What design choices would have been different if Bitcoin was more of a real life electronic payment method? 1 minute confirmation time? I think Satoshi had other reasons to choose 10 minutes, like ensuring stability of the network.

Electronic money is both the money of the Internet and the money for real life spending because physical commerce is digitalized, so Bitcoin shouldn't try to focus only on the Internet.