Row 32808

Row ID: 32808 | Dataset Entry | Axioma AXP Content Repository

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This page contains data entry 32808 from the Axioma AXP content repository. The structured data below represents the complete record for this entry.

Thanks for the reply!

>But all of this is assuming satoshi was using “cash” in the same way Roger is. I think that what Satoshi meant by calling bitcoin “digital cash” was that it could be used as a final settlement without any third parties similar to cash. I don’t think his use of the word cash has anything to do with payment size.

I think Satoshi was actually VERY clear on why he chose the word "cash" to describe his invention. Reread literally the first paragraph of the whitepaper's introduction, reproduced below:

>"Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. **The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions,** and there is a broader cost in the loss of ability to make non-reversible payments for non-reversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. **These costs and payment uncertainties can be avoided in person by using physical currency,** but no mechanism exists to make payments over a communications channel without a trusted party."

So Satoshi was pretty explicitly seeking to create an electronic equivalent to "cash" (in the "physical currency" sense of that word) that would, like physical cash, (1) enable peer-to-peer payments that don't require a trusted intermediary; (2) enable truly-irreversible payments; and (3) have very low transactions costs, thereby enabling "small, casual transactions."

But regardless of what Satoshi meant by "cash," he unambiguously intended for Bitcoin to have extremely low transaction costs, e.g.,:

“Once it gets bootstrapped, there are so many applications if you could effortlessly pay a few cents to a website as easily as dropping coins in a vending machine.”

"Whatever size micropayments you need will eventually be practical. I think in 5 or 10 years, the bandwidth and storage will seem trivial."

"We should always allow at least some free transactions."

There's also the design choice of [making Bitcoin divisible to 8 decimal places](https://old.reddit.com/r/btc/comments/1c0hgry/will_adam_back_debate_for_500000/kyx3x34/)!

>He then goes on to cite the many times Satoshi used the term cash and the fact that he never once used the term “store of value.”

For the record, I think Satoshi obviously understood that Bitcoin would be BOTH a low-friction payments network / "medium of exchange" / electronic cash system *and* a "store of value." Although, in one sense, I don't think "store of value" is truly a separate function of money. Expanded thoughts on this point [here](https://old.reddit.com/r/btc/comments/1bylauo/book_review_hijacking_bitcoin/kynvmip/). I suspect Satoshi may have deliberately downplayed the finite supply / "store of value" aspects of his invention to make it seem less threatening to TPTB.

>I know this one will not br taken well here in this sub, but I’ll say it anyways. He’s dead wrong about full nodes.

I disagree. Some of my thoughts on the "full nodes" argument are outlined [here](https://old.reddit.com/r/btc/comments/1c04oes/decentralization_question/kyv69ft/).

Here's a big-picture summary of my argument for why "small-block-ism" is so dangerously wrong:

1. It directly undermines Bitcoin's money property by increasing transactional friction when literally the entire purpose of money is to *reduce* transactional friction.

2. It is, unambiguously, a radical departure from the clearly-expressed intent of Bitcoin's inventor.

3. It prevailed via a campaign of extreme and outrageous censorship (a campaign that my recent no-warning, no-explanation perma-ban from r/Bitcoin suggests continues to this day).

4. It is based on a fundamental misunderstanding of Bitcoin's security model (i.e., the idea that having "lots" of non-mining, so-called "full nodes" is necessary to keep Bitcoin "decentralized").

5. Moreover, even if that view of Bitcoin's security model were correct, it would, at best, only justify being careful not to scale *too quickly*, not a complete abandonment of additional on-chain scaling. And, given the massively deflationary nature of computer technology, the "safe" rate of on-chain scaling would still follow some underlying *exponential* trend.

6. It forces "scaling" to occur on so-called "second layers" that are necessarily-imperfect money substitutes that become progressively *more* imperfect as on-chain fees rise and the amount of "leverage" in the system increases (i.e., as the "second layers" grow in size relative to the tiny, artificially-constrained base blockchain atop which they operate).

Re: the last point, here's a more detailed post looking at the fundamental problem with the idea that we can "scale Bitcoin with layers": [Link](https://old.reddit.com/r/btc/comments/1bzjz5i/layers/).

Edit: by the way, just happened to notice one of your recent comments in bitcoin sub was censored. “He was often called that before the conclusion of the blocksize kerfuffle“

FieldValue
text Thanks for the reply! >But all of this is assuming satoshi was using “cash” in the same way Roger is. I think that what Satoshi meant by calling bitcoin “digital cash” was that it could be used as a final settlement without any third parties similar to cash. I don’t think his use of the word cash has anything to do with payment size. I think Satoshi was actually VERY clear on why he chose the word "cash" to describe his invention. Reread literally the first paragraph of the whitepaper's intro…
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datetime 2024-05-21
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Raw Record

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Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. **The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions,** and there is a broader cost in the loss of ability to make non-reversible payments for non-reversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. **These costs and payment uncertainties can be avoided in person by using physical currency,** but no mechanism exists to make payments over a communications channel without a trusted party.\"\n\nSo Satoshi was pretty explicitly seeking to create an electronic equivalent to \"cash\" (in the \"physical currency\" sense of that word) that would, like physical cash, (1) enable peer-to-peer payments that don't require a trusted intermediary; (2) enable truly-irreversible payments; and (3) have very low transactions costs, thereby enabling \"small, casual transactions.\"\n\nBut regardless of what Satoshi meant by \"cash,\" he unambiguously intended for Bitcoin to have extremely low transaction costs, e.g.,:\n\n“Once it gets bootstrapped, there are so many applications if you could effortlessly pay a few cents to a website as easily as dropping coins in a vending machine.”\n\n\"Whatever size micropayments you need will eventually be practical. I think in 5 or 10 years, the bandwidth and storage will seem trivial.\"\n\n\"We should always allow at least some free transactions.\"\n\nThere's also the design choice of [making Bitcoin divisible to 8 decimal places](https://old.reddit.com/r/btc/comments/1c0hgry/will_adam_back_debate_for_500000/kyx3x34/)! \n\n>He then goes on to cite the many times Satoshi used the term cash and the fact that he never once used the term “store of value.”\n\nFor the record, I think Satoshi obviously understood that Bitcoin would be BOTH a low-friction payments network / \"medium of exchange\" / electronic cash system *and* a \"store of value.\"  Although, in one sense, I don't think \"store of value\" is truly a separate function of money. Expanded thoughts on this point [here](https://old.reddit.com/r/btc/comments/1bylauo/book_review_hijacking_bitcoin/kynvmip/). I suspect Satoshi may have deliberately downplayed the finite supply / \"store of value\" aspects of his invention to make it seem less threatening to TPTB.\n\n>I know this one will not br taken well here in this sub, but I’ll say it anyways. He’s dead wrong about full nodes. \n\nI disagree. Some of my thoughts on the \"full nodes\" argument are outlined [here](https://old.reddit.com/r/btc/comments/1c04oes/decentralization_question/kyv69ft/).\n\nHere's a big-picture summary of my argument for why \"small-block-ism\" is so dangerously wrong:\n\n1. It directly undermines Bitcoin's money property by increasing transactional friction when literally the entire purpose of money is to *reduce* transactional friction.\n\n2. It is, unambiguously, a radical departure from the clearly-expressed intent of Bitcoin's inventor.\n\n3. It prevailed via a campaign of extreme and outrageous censorship (a campaign that my recent no-warning, no-explanation perma-ban from r/Bitcoin suggests continues to this day).\n\n4. It is based on a fundamental misunderstanding of Bitcoin's security model (i.e., the idea that having \"lots\" of non-mining, so-called \"full nodes\" is necessary to keep Bitcoin \"decentralized\").\n\n5. Moreover, even if that view of Bitcoin's security model were correct, it would, at best, only justify being careful not to scale *too quickly*, not a complete abandonment of additional on-chain scaling. And, given the massively deflationary nature of computer technology, the \"safe\" rate of on-chain scaling would still follow some underlying *exponential* trend.\n\n6. It forces \"scaling\" to occur on so-called \"second layers\" that are necessarily-imperfect money substitutes that become progressively *more* imperfect as on-chain fees rise and the amount of \"leverage\" in the system increases (i.e., as the \"second layers\" grow in size relative to the tiny, artificially-constrained base blockchain atop which they operate).\n\nRe: the last point, here's a more detailed post looking at the fundamental problem with the idea that we can \"scale Bitcoin with layers\": [Link](https://old.reddit.com/r/btc/comments/1bzjz5i/layers/).\n\nEdit: by the way, just happened to notice one of your recent comments in bitcoin sub was censored.  “He was often called that before the conclusion of the blocksize kerfuffle“",
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