TL;DR

This post was originally written in June of 2019.

The claim “Bitcoin was purpose-built to first be a Store of Value” is false. Many of Satoshi’s statements shown as evidence for this claim are taken out of context. When those statements are placed in context and considered alongside all his writings, it’s undeniable that Bitcoin was not built to first be a store of value, but was built for payments.

Video Summary

Updates

June 06, 2019

Added a section discussing of Satoshi’s genesis block comment in Evidence for Store of Value portion.

The question

Did Satoshi build Bitcoin to serve primarily as a store of value, or did he build it for making payments?

To answer this question, I went straight to the source. Thanks to the Satoshi Nakamoto Institute’s archives I was able to read every single thing Satoshi ever posted publicly. Comments from 260 forum threads, 63 emails, and his original source code.

After reviewing all of Satoshi’s writings, I can confidently state that Bitcoin was not purpose-built to first be a store of value. It was built for payments.

This isn’t based on word frequency analysis or other crude techniques. This is based on having read all his statements and the context surrounding them.

You don’t need to take my word for that. This post is so long because I’m going to go walk you through all of Satoshi’s statements that relate to store of value or payments - in their original context - and let you see the evidence yourself. I’ll keep count of how many statements Satoshi made supporting store of value or payments (or both). If you’d rather not read the entire piece, use the table of contents above to skip around.

Where text is bold in quotes it’s my own emphasis added. Feel free to reach out to me add new sources or challenge any of the sources I’ve posted, and I’ll update the post if you make a good argument.

Caveats

Before I get into the evidence, I have two caveats to make.

1. I’m not making normative claims, otherwise known as “should” statements. I’m solely focusing on the concrete historical claim that Satoshi built Bitcoin primarily to act as a store of value. This isn’t about what Bitcoin is today, or what it should be tomorrow, it’s narrowly about Satoshi’s original intent based on his own words.
2. I don’t think Satoshi’s opinion matters that much today. Bitcoin can be whatever we want it to be. But that doesn’t mean that people should be given a free pass to rewrite history and make false claims about Satoshi’s intentions. That’s intellectually dishonest and needs to be called out.

Evidence for Store of Value

It’s clear that Satoshi wasn’t a fan of central banking, and that he knew the monetary policy of Bitcoin gave it unique properties, but just establishing those facts doesn’t imply that Satoshi built Bitcoin to act primarily as a store of value.

As far as I could determine, Satoshi never wrote the words “store of value” a single time. This would seem to pose a problem for those promoting the idea that Satoshi built Bitcoin as a store of value. However, he did talk about the idea indirectly. So to give the argument the best possible chance, let’s examine every instance where he talked about anything that could be interpreted as supporting a store of value, even if it’s a stretch.

Satoshi mentioned Bitcoin’s store of value properties a total of eight times across all his writings. I’ll go through each one below.

Eight mentions isn’t a lot to go on, but let’s look at the best case that can be made. It comes from Dan Held, a vocal supporter of the store of value narrative, who claims, “[Bitcoin] was purpose built day one to be a Gold 2.0.”

Dan posted a long twitter thread earlier this year making his case. The thread became popular and is commonly referred to as good evidence for the store of value claim.

There are 47 tweets he posts, but only six of them actually quote Satoshi discussing anything directly related to store of value. I discuss some of his other tweets in Other claims.

Source #1: P2P Foundation Post

Dan’s first Satoshi quote is from a P2P Foundation post:

The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.

That sounds like support for Bitcoin as a store of value. Let’s add one to the store of value tally:

BTC Use Case	Satoshi Mentions
Store of Value	1
Payments	0

Context

This quote is only two sentences from a long post. If you read through the post, Satoshi is also unambiguously supporting using Bitcoin for payments.

In fact, in the same paragraph of the quote above, he mentioned micropayments:

[The banks’] massive overhead costs make micropayments impossible.

And later in the piece mentioned micropayments a second time:

The usual solution [to the double-spending problem] is for a trusted company with a central database to check for double-spending, but that just gets back to the trust model. In its central position, the company can override the users, and the fees needed to support the company make micropayments impractical.

Micropayments are the quintessential example of a payment, more or less the exact opposite of a store of value.

The opening sentence of the piece makes clear this is about p2p e-cash:

I’ve developed a new open source P2P e-cash system called Bitcoin.

So this source is evidence for both store of value and payments. The score is tied:

BTC Use Case	Satoshi Mentions
Store of Value	1
Payments	1

Source #2: BT Thread “Bitcoins are most like shares of common stock”

Dan’s next Tweet is quoting a short sentence from a BitcoinTalk (BT) forum thread:

Bitcoin [is] more like a collectible or commodity.

Context

The thread is a discussion of whether or not Bitcoin was similar to stocks. Satoshi’s full response is as follows:

Bitcoins have no dividend or potential future dividend, therefore not like a stock.

More like a collectible or commodity.

This is not strong evidence that Satoshi built Bitcoin to operate as a store of value. He’s merely pointing out that it’s not like stocks because it doesn’t have a dividend.

In the interest of trying to interpret Satoshi’s comments in the most favorable light for the store of value claim, I’ll say this just qualifies as a mention and add one to the store of value side:

BTC Use Case	Satoshi Mentions
Store of Value	2
Payments	1

Source #3: P2P Foundation Comment

Dan’s next tweet is from the same P2P Foundation post quoted earlier, but from a comment Satoshi made down the thread:

In this sense, it’s more typical of a precious metal. Instead of the supply changing to keep the value the same, the supply is predetermined and the value changes. As the number of users grows, the value per coin increases

The full quote continues:

It has the potential for a positive feedback loop; as users increase, the value goes up, which could attract more users to take advantage of the increasing value.

Context

This definitely qualifies as support for the store of value position. However, if you read the full comment, Satoshi uses some language that begins to cast doubt on the idea:

indeed there is nobody to act as central bank or federal reserve to adjust the money supply as the population of users grows. That would have required a trusted party to determine the value, because I don’t know a way for software to know the real world value of things. If there was some clever way, or if we wanted to trust someone to actively manage the money supply to peg it to something, the rules could have been programmed for that.

Satoshi is saying that the reason there’s no adjustment of the money supply is that he can’t think of a way for software to do this without trust. If there was a way to do it, or if he thought a peg was a good idea, then he could have programmed it do that instead.

Notice what he isn’t saying. He isn’t claiming that this positive feedback loop was designed intentionally to promote it as a store of value. His description makes it sound incidental to the design.

This is bolstered by the fact that this statement is in response to a question. Satoshi is not proactively stating the details of the monetary policy, he’s only responding with information when asked.

This is true in nearly all the cases I could find where he references store of value. If this were truly his main goal, why only mention it in response to other’s inquiries instead of boldly stating its true purpose?

Still, I’ll add one more to the store of value tally:

BTC Use Case	Satoshi Mentions
Store of Value	3
Payments	1

Source #4: BT Thread " Bitcoin does NOT violate Mises’ Regression Theorem"

Dan’s next two tweets are from the same source, a comment Satoshi left on a BT thread.

As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties: [not useful/no utility]. And one special, magical property: can be transported over a communications channel

If there were nothing in the world with intrinsic value that could be used as money, only scarce but no intrinsic value, I think people would still take up something. (I’m using the word scarce here to only mean limited potential supply)

Comparing Bitcoin to a base metal like gold and discussing its scarcity seems like a case supporting Bitcoin as a store of value. But once again, we must view it in context.

Context

Many of these quotes, when placed in context, aren’t as compelling as they are when standing alone. But this pair of quotes goes a step beyond that, as they’re downright deceptive. They’ve been cherry-picked. Let me post the entire comment, and bold some sections Dan left out:

As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties:

• boring grey in colour
• not a good conductor of electricity
• not particularly strong, but not ductile or easily malleable either
• not useful for any practical or ornamental purpose

and one special, magical property:

• can be transported over a communications channel

If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it.

Maybe it could get an initial value circularly as you’ve suggested, by people foreseeing its potential usefulness for exchange. (I would definitely want some) Maybe collectors, any random reason could spark it.

I think the traditional qualifications for money were written with the assumption that there are so many competing objects in the world that are scarce, an object with the automatic bootstrap of intrinsic value will surely win out over those without intrinsic value. But if there were nothing in the world with intrinsic value that could be used as money, only scarce but no intrinsic value, I think people would still take up something.

(I’m using the word scarce here to only mean limited potential supply)

That’s right, Satoshi is talking about Bitcoin obtaining value in the context of transferring that value and having the recipient sell it, not storing value! He goes a step further and says that Bitcoin “maybe” could get an initial value, but only because people would see “its potential usefulness for exchange.”

Now these quotes don’t sound so strong for store of value and instead are supporting payments as well. I’ll give one mention to each side:

BTC Use Case	Satoshi Mentions
Store of Value	4
Payments	2

Source #5: Cryptography Mailing List, Bitcoin v0.1 released, Reply

Dan’s last direct quote of Satoshi regarding store of value is from a reply he made in email.

It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy

Context

This is another case of cherry picking. Dan conveniently left off the very next sentence. Look at the full paragraph:

It might make sense just to get some in case it catches on. If
enough people think the same way, that becomes a self fulfilling
prophecy. 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.

That’s about as strong an endorsement of the payment vision as possible.

That’s not all. Satoshi’s comments before Dan’s cherry pick contains loads of examples of Satoshi explaining all the ways Bitcoin could be used for payments:

I would be surprised if 10 years from now we’re not using
electronic currency in some way, now that we know a way to do it
that won’t inevitably get dumbed down when the trusted third party
gets cold feet.

It could get started in a narrow niche like reward points,
donation tokens, currency for a game or micropayments for adult
sites. Initially it can be used in proof-of-work applications
for services that could almost be free but not quite.

It can already be used for pay-to-send e-mail. The send dialog is
resizeable and you can enter as long of a message as you like.
It’s sent directly when it connects. The recipient doubleclicks
on the transaction to see the full message. If someone famous is
getting more e-mail than they can read, but would still like to
have a way for fans to contact them, they could set up Bitcoin and
give out the IP address on their website. “Send X bitcoins to my
priority hotline at this IP and I’ll read the message personally.”

Subscription sites that need some extra proof-of-work for their
free trial so it doesn’t cannibalize subscriptions could charge
bitcoins for the trial.

Another micropayments mention. On the whole the email strongly supports the payments side, but I’ll once again add mentions to both sides:

BTC Use Case	Satoshi Mentions
Store of Value	5
Payments	3

That’s all the Satoshi quotes referencing store of value that Dan mentions. In fairness to the store of value position, I found a couple more when reading through all of Satoshi’s writings.

Source #6: BT Thread / Bitcoin List email announcing version 0.3

The best one I found was Satoshi announcing the 0.3 release (and corresponding email with the same text):

Announcing version 0.3 of Bitcoin, the P2P cryptocurrency! Bitcoin is a digital currency using cryptography and a distributed network to replace the need for a trusted central server. Escape the arbitrary inflation risk of centrally managed currencies! Bitcoin’s total circulation is limited to 21 million coins.

This is the single strongest quote in favor of the store of value case that I’ve found. He doesn’t mention payments at all, talks about escaping inflation from central banks, and highlights the 21 million coin cap. This definitely adds to the store of value tally:

BTC Use Case	Satoshi Mentions
Store of Value	6
Payments	3

Source #7: BT Thread “They want to delete the Wikipedia article”

In this BT thread Satoshi mentions two other projects Bitcoin is based on:

Bitcoin is an implementation of Wei Dai’s b-money proposal http://weidai.com/bmoney.txt on Cypherpunks http://en.wikipedia.org/wiki/Cypherpunks in 1998 and Nick Szabo’s Bitgold proposal http://unenumerated.blogspot.com/2005/12/bit-gold.html

Wei Dai’s b-money is an attempt to create a medium of exchange for use in a crypto-anarchy, and leans towards the payments side. Szabo’s bit gold leans towards store of value. Add one to each:

BTC Use Case	Satoshi Mentions
Store of Value	7
Payments	4

Source #8: Cryptography Mailing List, Bitcoin P2P e-cash paper, reply #1

The last quote I found mentioning store of value was an old email from the cryptography mailing list:

The fact that new coins are produced means the money supply increases by a planned amount, but this does not necessarily result in inflation. If the supply of money increases at the same rate that the number of people using it increases, prices remain stable. If it does not increase as fast as demand, there will be deflation and early holders of money will see its value increase.

Coins have to get initially distributed somehow, and a constant rate seems like the best formula.

Once again, this is in response to a question, not a proactive statement that Bitcoin was built to be a store of value. Also, Satoshi’s final sentence makes the coin distribution sound closer to an afterthought than something of central importance.

However it does mention “early holders of money will see its value increase” so I’ll add this to the store of value mentions:

BTC Use Case	Satoshi Mentions
Store of Value	8
Payments	4

Genesis Block Comment

Satoshi included a message in the genesis block of the Bitcoin blockchain:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

This served as proof that the block was created at that date (or later).

Store of value proponents claim this is evidence that Satoshi built Bitcoin as a store of value. I agree that it shows Satoshi didn’t like central banking / financial institutions, but I find it unconvincing as evidence he built Bitcoin as a store of value for several reasons:

1. It serves a clear purpose of proving the date and needs no other explanation.
2. Satoshi was limited to only using whatever headlines happened to be written around the period he published. He wasn’t able to convey any nuanced opinion about his creation by picking a headline someone else wrote, believing otherwise is reading tea leaves.
3. Satoshi making a statement about banks and bailouts doesn’t prove that store of value is his main goal. Satoshi states that he built Bitcoin to “allow online payments to be sent directly from one party to another without going through a financial institution” so him using an example of a failing financial institution isn’t surprising nor does it preclude him believing in the need for Bitcoin for payments.
4. There are more direct ways to make a clear statement than encoding it in hex and - as far as I can determine - never making reference to it again.

Store of Value Summary

Those are all the examples I found which could possibly be interpreted as Satoshi speaking of Bitcoin as a store of value, nearly always indirectly. Across everything he wrote, there were only eight such examples, and just one of them was unambiguously endorsing the store of value use case (the v0.3 announcement) and not mentioning payments at all.

This handful of quotes isn’t compelling to me, but perhaps you think it’s sufficient. If you stopped reading now - and perhaps squinted - maybe you can see how Bitcoin was built as a store of value?

That’s exactly the problem. Instead of looking at the totality of Satoshi’s writings to be as objective as possible, Dan Held choose to only promote the handful of quotes which supported his point and simply ignored everything else Satoshi ever said about Bitcoin being used for payments.

Satoshi’s comments about payments are so abundant that this sin of omission was likely committed willfully. Taken together with the obvious cases of cherry-picking above - often only a sentence away from Satoshi mentioning using Bitcoin for payments - and it’s clear that Dan isn’t interested in the truth of Satoshi’s intentions, only supporting his own narrative.

Again, don’t take my word for it, let’s keep looking at the evidence.

Evidence for Payments

Satoshi mentions payments or references using Bitcoin for commerce a total of 34 times in emails, forum posts, and the original source code.

It’s not only Satoshi’s numerous mentions of using Bitcoin for payments that is notable, it’s also what Satoshi didn’t say. The BitcoinTalk forums are full of people trying to get Bitcoin accepted for commerce and used as digital cash. Never once did Satoshi step in to correct them or suggest they weren’t using Bitcoin properly. Quite the opposite. As you’ll see in the following examples, Satoshi encouraged these efforts and joined in many of these threads.

Source #9: BT Thread “Bitcoin minting is thermodynamically perverse”

While “store of value” is never uttered by Satoshi, he did use the term “medium of exchange,” though only once. But this one use is illuminating, from a BT thread about Bitcoin mining:

It’s the same situation as gold and gold mining. The marginal cost of gold mining tends to stay near the price of gold. Gold mining is a waste, but that waste is far less than the utility of having gold available as a medium of exchange.

I think the case will be the same for Bitcoin. The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be the net waste.

Store of value proponents are fond of analogizing Bitcoin as gold or precious metals, and like to quote the few cases where Satoshi makes the same analogy. However, in this quote Satoshi clearly states what he thinks the primary utility of gold is - as a medium of exchange, not a store of value!

He further confirms this saying “The utility of the exchanges made possible by Bitcoin…” and not by mentioning gold or Bitcoin’s ability to store value.

Money has a combination of features, so this doesn’t prove that Satoshi only cares about the medium of exchange properties of gold or Bitcoin. But it does show that store of value isn’t top of his mind in terms of their utility.

Add one to payments:

BTC Use Case	Satoshi Mentions
Store of Value	8
Payments	5

Source #10: Cryptography Mailing List, Bitcoin P2P e-cash paper, original email

When Satoshi first emailed the cryptography mailing list, his introductory sentence stated:

I’ve been working on a new electronic cash system that’s fully
peer-to-peer, with no trusted third party.

No mention of store of value in that email.

BTC Use Case	Satoshi Mentions
Store of Value	8
Payments	6

Source #11: Cryptography Mailing List, Bitcoin P2P e-cash paper, reply #2

In the same thread Satoshi was questioned how Bitcoin could scale. He replied:

Long before the network gets anywhere near as large as that, it would be safe for users to use Simplified Payment Verification (section 8) to check for double spending, which only requires having the chain of block headers, or about 12KB per day. Only people trying to create new coins would need to run network nodes. At first, most users would run network nodes, but as the network grows beyond a certain point, it would be left more and more to specialists with server farms of specialized hardware. A server farm would only need to have one node on the network and the rest of the LAN connects with that one node.

The bandwidth might not be as prohibitive as you think. A typical transaction would be about 400 bytes (ECC is nicely compact). Each transaction has to be broadcast twice, so lets say 1KB per transaction. Visa processed 37 billion transactions in FY2008, or an average of 100 million transactions per day. That many transactions would take 100GB of bandwidth, or the size of 12 DVD or 2 HD quality movies, or about $18 worth of bandwidth at current prices.

Clearly in support of payments and not store of value.

BTC Use Case	Satoshi Mentions
Store of Value	8
Payments	7

Source #12: Cryptography Mailing List, Bitcoin P2P e-cash paper, reply #3

Continuing the thread, Satoshi again receives another challenge about how security Bitcoin is from an attack. He responds:

Even if a bad guy does overpower the network, it’s not like he’s instantly rich. All he can accomplish is to take back money he himself spent, like bouncing a check. To exploit it, he would have to buy something from a merchant, wait till it ships, then overpower the network and try to take his money back.

This is one of the first examples of him explicitly mentioning merchants accepting Bitcoin, a theme he comes back to time and time again.

BTC Use Case	Satoshi Mentions
Store of Value	8
Payments	8

We’re all tied up now, and there’s still a long way to go on the payments side. I’ll stop tallying individually and give you the final tally at the end.

Source #13: BT Thread “Ummmm… where did my bitcoins go?”

I’ve already shown how Satoshi mentioned micropayments in some of his statements that were supposed to be evidence for store of value, but that’s not the only time he talked about micropayments.

In this thread Satoshi mentions them again:

Creating an account on a website is a lot easier than installing and learning to use software, and a more familiar way of doing it for most people. The only disadvantage is that you have to trust the site, but that’s fine for pocket change amounts for micropayments and misc expenses. It’s an easy way to get started and if you get larger amounts then you can upgrade to the actual bitcoin software.

Source #14: BT Thread “Flood attack 0.00000001 BC” Comment #1

More discussion of micropayments.

Bitcoin is practical for smaller transactions than are practical with existing payment methods. Small enough to include what you might call the top of the micropayment range. But it doesn’t claim to be practical for arbitrarily small micropayments.

Source #15: BT Thread “Flood attack 0.00000001 BC” Comment #2

Same thread, with a different comment where Satoshi expands on his vision for the future of micropayments on Bitcoin:

Forgot to add the good part about micropayments. While I don’t think Bitcoin is practical for smaller micropayments right now, it will eventually be as storage and bandwidth costs continue to fall. If Bitcoin catches on on a big scale, it may already be the case by that time. Another way they can become more practical is if I implement client-only mode and the number of network nodes consolidates into a smaller number of professional server farms. Whatever size micropayments you need will eventually be practical. I think in 5 or 10 years, the bandwidth and storage will seem trivial.

Source #16: BT Thread “Flood attack 0.00000001 BC” Comment #3

Same thread, with a different comment, this time showing an example of the type of thing he expects people would purchase with Bitcoin:

You pay for, say, 1000 pages or images or downloads or searches or whatever at a time. When you’ve used up your 1000 pages, you pay for another 1000 pages. If you only use 1 page, then you have 999 left that you may never use, but it’s not a big deal because the cost per 1000 is still small.

Or you could pay per day. The first time you access the site on a given day, you pay for 24 hours of access.

Source #17: BT Thread “Potential disaster scenario”

Another micropayments mention:

Case 3 comes into play for small amounts. The overhead of doing an exchange doesn’t make sense if you just need a small bit of pocket change for incidental micropayments.

Source #18: Cryptography Mailing List, Bitcoin P2P e-cash paper, reply #4

In this long reply to various questions about Bitcoin, Satoshi mentions shipping goods:

Receivers of transactions will normally need to hold transactions for perhaps an hour or more to allow time for this kind of possibility to be resolved. They can still re-spend the coins immediately, but they should wait before taking an action such as shipping goods.

Source #19: Cryptography Mailing List, Bitcoin P2P e-cash paper, reply #5

In the same email thread he mentions merchants accepting Bitcoin:

Information based goods like access to website or downloads are
non-fencible. Nobody is going to be able to make a living off
stealing access to websites or downloads. They can go to the file
sharing networks to steal that. Most instant-access products aren’t
going to have a huge incentive to steal.

If a merchant actually has a problem with theft, they can make the
customer wait 2 minutes, or wait for something in e-mail, which many
already do. If they really want to optimize, and it’s a large
download, they could cancel the download in the middle if the
transaction comes back double-spent. If it’s website access,
typically it wouldn’t be a big deal to let the customer have access
for 5 minutes and then cut off access if it’s rejected. Many such
sites have a free trial anyway.

Source #20: BT Thread “A newb’s test - anyone want to buy a picture for $1?”

Another mention of merchants and payments:

The recommended ways to do a payment for an order:

1. The merchant has a static IP, the customer sends to it with a comment.
2. The merchant creates a new bitcoin address, gives it to the customer, the customer sends to that address. This will be the standard way for website software to do it.

Source #21: BT Thread “Payment server”

Another mention of using Bitcoin for payments for a shop owner:

That’s the right way to do it as riX says. The software can generate a new bitcoin address whenever you need one for each payment. “Please send X bc to [single-use bitcoin address] to complete your order” When the server receives that amount to the bitcoin address, that could trigger it to automatically fulfil the order or e-mail the shop owner.

Source #22: BT Thread “URI-scheme for bitcoin”

Satoshi couldn’t be clearer about his desire for Bitcoin to be used for retail payments than this short statement in a thread about creating a URI scheme:

That would be nice at point-of-sale. The cash register displays a QR-code encoding a bitcoin address and amount on a screen and you photo it with your mobile.

Source #23: BT Thread “Idea for file hosting and proxy services”

Satoshi started this thread to propose an idea to create an image and file hosting service that charges Bitcoins. At the end he specifically states that this would be useful for anonymous payments.

It would be nice if we made some free PHP code for an image and file hosting service that charges Bitcoins. Anyone with some extra bandwidth quota could throw it on their webserver and run it. Users could finally pay the minor fee to cover bandwidth cost and avoid the limits and hassles. Ideally, it should be MIT license or public domain.

Services like this would be great for anonymous users, who have trouble paying for things.

Source #24: BT Thread “Exchange Methods”

Satoshi comments in a thread about Liberty Reserve and Pecunix, pointing out Bitcoin’s usefulness for small, anonymous transactions:

Bitcoin has unique properties that would be complementary. LR/Pecunix are easy to spend anonymously, but hard to buy anonymously and not worth the trouble to buy in small amounts. Bitcoin, on the other hand, is easy to get in small amounts anonymously. It would be convenient to buy LR/Pecunix with bitcoins rather than through conventional payment methods.

Most customers who convert to LR to buy something would probably ask the seller first if they accept Bitcoin, encouraging them to start accepting it.

Source #25: BT Thread “CLI bitcoin generation”

Satoshi mentions the work he’s been focusing on recently:

So far I’ve concentrated on functions for web merchants, not so much on stuff for remote management of headless coin generators yet.

Source #26: BT Thread “JSON-RPC programming tips using labels”

Satoshi mentions several examples of how people might be using Bitcoin to sell various things:

If you’re selling digital goods and services, where you don’t lose much if someone gets a free access, and it can’t be resold for profit, I think you’re fine to accept 0 confirmations.

It’s mostly only if you were selling gold or currency that you’d need multiple confirmations.

Source #27: BT Thread “Hostnames instead of IP Addresses”

Discussed merchants using Bitcoin:

Problem is, I think merchants would still prefer to use bitcoin addresses to be certain they know what the payment is for. You simply cannot count on users to enter the right thing in the comment fields to identify the transaction. It would only approach practical if we had a mailto style link that prepopulates the comment field with the order number, but then the link could just as well be a bitcoin address.

Just having an open bitcoin server at domain.com that users could send unidentified payments to would be too much of a liability. Regular users aren’t used to the idea of having to identify the payment. Merchants would get too many blank payments followed by “I paid you, where’s my stuff?!” a week later.

Source #28: BT Thread “Bitcoin mobile.”

In a thread discussing using Bitcoin on mobile devices, Satoshi agrees that sending small amounts to custodians isn’t a problem because it’s “walking around money for incidental expenses.”

You can of course use services like vekja.net or mybitcoin.com on a mobile browser, depositing money there to the extent you trust them.

I think that’s the best option right now. Like cash, you don’t keep your entire net worth in your pocket, just walking around money for incidental expenses.

Source #29: BT Thread “Website integration for bitcoin”

In this thread about creating an integration to easily allow websites to integrate Bitcoin for payments, Satoshi laments that he’s been trying to get someone to build a tool for the accounting aspect of this so that people aren’t re-inventing the wheel:

I’ve been trying to encourage someone to write and release some sample Python code showing the recommended way to do the typical accounting stuff, but to no avail. It would be nice if you didn’t have to re-invent the wheel like you’re doing here.

Source #30: BT Thread “Sample account system using JSON-RPC needed”

Only hours after the previous comment, he posted a new thread asking someone to build such a system:

If you’re requiring more than 0 confirmations, it’s nice if you show the current balance (0 confirmations) and the available balance (1 or more confirmations), so they can immediately see that their payment is acknowledged. Not all sites need to wait for confirmations, so the dual current & available should be optional. Most sites selling digital goods are fine to accept 0 confirmations.

A nice sample app for this would be a simple bank site, which would have the above, plus the option to send a payment to a bitcoin address. The sample code should be the simplest possible with the minimum extra stuff to make it a working site.

Source #31: BT Thread “Accounts example code”

Satoshi shared some sample pseudocode in a new thread and the code shows an example of Bitcoin used for commerce:

// if you make a sale, move the money from their account to your "" account
if (move(username, "", amount, 6, "purchased item"))
    SendTheGoods()

Source #32: BT Thread “The Niche List”

This thread started with the following idea from user “kiba”:

This is Operation Economic Growth. Our mission is to grow the bitcoin economy by making everyone specialize in a narrow range of good and services.

Satoshi jumped into the thread later to suggest how to do this (quoting another user first):

1. Download site like rapidshare and other crappy host. Inconvenient captcha and required paypal. Bitcoin can possibly take both roles and streamline the whole process.

Repeating myself here, but there is open source software for that, so it would just be a matter of bolting on a Bitcoin payment mechanism. One good one I found was Mihalism Multi Host. It’s designed as a free host, so it would just need a few tweaks to loosen up restrictions consistent with paid use.

Source #33: BT Thread “Porn”

In a thread about using Bitcoin to buy porn, Satoshi endorses the idea:

Bitcoin would be convenient for people who don’t have a credit card or don’t want to use the cards they have, either don’t want the spouse to see it on the bill or don’t trust giving their number to “porn guys”, or afraid of recurring billing.

Source #34: BT Thread “The case for removing IP transactions”

In a thread discussing removing sending Bitcoin to IP addresses, Satoshi makes several references to storefronts, customers, and payments:

In storefront cases, you would typically only want customers to send payments through your automated system that only hands out bitcoin addresses associated with particular orders and accounts. Random unidentified payments volunteered to the server’s IP address would be unhelpful.

Source #35: BT Thread “Bitcoin snack machine (fast transaction problem)”

In this interesting thread, the original poster “Insti” asks the following question:

How would a Bitcoin snack  machine work?

1) You want to walk up to the machine. Send it a bitcoin.
2) ?
3) Walk away eating your nice sugary snack. (Profit!)


You don't want to have to wait an hour for you transaction to be confirmed.
The vending machine company doesn't want to give away lots of free candy.

How does step 2 work?

Satoshi’s solution is to have a payment processing company manage these transactions:

I believe it’ll be possible for a payment processing company to provide as a service the rapid distribution of transactions with good-enough checking in something like 10 seconds or less.

Later in another comment he says:

the vending machine talks to a big service provider (aka payment processor) that provides this service to many merchants. Think something like a credit card processor with a new job. They would have many well connected network nodes.

Never does he say “Bitcoin wasn’t built for retail payments / coffee / vending machines!” He actively proposes an idea for a Bitcoin payment processing company.

Source #36 BT Thread “Scalability and transaction rate”

The last source wasn’t a one-off occurence. In a thread discussing Bitcoin’s scalability and transaction rate, Satoshi makes clear that the current situation where everyone runs a full node isn’t the intended design, and then points back to the vending machine discussion and endorses the payment processor idea again:

The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don’t generate.

Besides, 10 minutes is too long to verify that payment is good. It needs to be as fast as swiping a credit card is today.

See the snack machine thread, I outline how a payment processor could verify payments well enough, actually really well (much lower fraud rate than credit cards), in something like 10 seconds or less. If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry.

Source #37: BT Thread “Escrow”

Satoshi frequently mentioned that Bitcoin was built in order to allow for things like escrow. In one thread that he started, to explains how it could be used, and his example is focused on real-world commerce:

The basic escrow: The buyer commits a payment to escrow. The seller receives a transaction with the money in escrow, but he can’t spend it until the buyer unlocks it. The buyer can release the payment at any time after that, which could be never. This does not allow the buyer to take the money back, but it does give him the option to burn the money out of spite by never releasing it. The seller has the option to release the money back to the buyer.

While this system does not guarantee the parties against loss, it takes the profit out of cheating.

If the seller doesn’t send the goods, he doesn’t get paid. The buyer would still be out the money, but at least the seller has no monetary motivation to stiff him.

In a later comment in this thread, he also repeatedly talks about “consumers” when discussing the escrow.

Source #38: Original Satoshi Code Included Distributed Marketplace

Satoshi started building a distributed marketplace in the original code.

If you view the commit where this marketplace was removed, you can see that it was clearly intended to facilitate commerce. File names such as “market,” class names mentioning “Review,” “Product,” as well as mentioning advertisements.

Final Tally

I reviewed all 260 forum threads, 63 emails, and the original source code for direct or indirect mentions from Satoshi about Bitcoin serving as a store of value or as a payment method. Here’s the final tally.

BTC Use Case	Satoshi Mentions
Store of Value	8
Payments	34

From these sources, Satoshi mentioned payments more than four times more frequently than store of value.

We can further break these numbers down by whether or not the source mentions solely store of value, payments or both.

BTC Use Case	Satoshi Mentions
Solely Store of Value	4
Both SoV and Payments	4
Solely Payments	30

From these sources, I only found four times that Satoshi’s statements could be interpreted solely in favor of Bitcoin as a store of value, but found thirty instances that could be interpreted solely in favor of Bitcoin as being used for payments.

Timeline

This timeline shows Satoshi’s statements by category from him announcing Bitcoin in late 2008 until he disappeared near the end of 2010. There are multiple instances where Satoshi made statements supportive of the payments side of the argument on the same day, thus aren’t displayed as they overlap on the timeline.

This evidence might be sufficient for you to disregard the claim “Bitcoin was purpose-built to first be a Store of Value.” I can’t see anyone honestly looking at Satoshi’s words and really believing he didn’t build this for payments. But we aren’t finished yet. There’s one last piece of evidence.

The Whitepaper

Store of value proponents have a neat rhetorical trick whenever anyone mentions the Bitcoin whitepaper: They mock the person who mentions the whitepaper.

This is definitely childish, but there’s a kernel of truth behind their ridicule. Satoshi’s original whitepaper shouldn’t be worshiped, nor should it be interpreted as some sort of binding document for what Bitcoin should be today. The whitepaper is describing how Bitcoin was intended to function more than a decade ago, not how it functions today nor necessarily how it should function tomorrow.

What should the whitepaper be used for? Well, there’s really only one thing that we can say with confidence that the whitepaper can be used for: Understanding how Satoshi viewed Bitcoin.

The first piece of communication Satoshi made publicly was an email posting a link to the whitepaper along with the paper’s abstract. The first forum post also contained a link to the whitepaper. He fully controlled his own words and what he chose to include in the paper. Why wouldn’t we read the whitepaper?

Suggesting that the whitepaper isn’t important to understanding Satoshi’s understanding of Bitcoin would be like suggesting that it’s unimportant to read “Computing Machinery and Intelligence” to understand Turing’s view on artificial intelligence. They took the time to condense their thoughts into a comprehensible format for others to read and understand.

I put this section last so that people who have whitepaper-aversion-syndrome would read through all the rest of the evidence first before getting here. If you don’t think that we should read the whitepaper to understand how Satoshi viewed Bitcoin - that doesn’t really make any sense at all - but feel free to read through the other 38 sources above and ignore this section completely.

Whitepaper summary

The whitepaper is long enough to not fully quote, but I’ll pull out the quotes relevant to payments or store of value.

Title

Bitcoin: A Peer-to-Peer Electronic Cash System

This is straightforward. Satoshi succinctly states that Bitcoin is a system where peers can transfer cash electronically.

Abstract

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution …

The very first sentence is all about allowing online payments.

Introduction

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. …

The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions …

Merchants must be wary of their customers, hassling them for more information than they would otherwise need. …

What is needed is an electronic payment system based on cryptographic proof instead of trust…

Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers. …

This introduction section contains some of the clearest evidence for the payments side as there could possibly be. I don’t think the statements themselves need any further comment.

Conclusion

We have proposed a system for electronic transactions without relying on trust. …

It’s no wonder store of value proponents don’t hold the whitepaper in high regard. Satoshi clearly and repeatedly states that Bitcoin is about payments, merchants, commerce, and never mentions anything about store of value.

The whitepaper alongside the other 38 sources makes it clear that Satoshi built Bitcoin for payments, not primarily as a store of value.

Objections

With the evidence this stacked on the payments side, how do store of value proponents try to claim Satoshi wasn’t building this for payments?

Satoshi was just doing marketing

Once again, we can turn to Dan Held. He states that Satoshi only mentioned payments and commerce as a marketing ploy in order to get the attention of his target audience, the cypherpunks:

He had written the whitepaper to fit his target audience, the Cypherpunks. That’s why he uses the words “electronic cash”, “PoW,” etc. which was previously used terminology in Cypherpunk whitepapers. He uses an ecommerce example to make it easier for everyone to comprehend

Again:

He’s marketing Bitcoin to the cypherpunks!!

And again:

When he talks about use cases he’s marketing Bitcoin to the cypherpunks who will build it

This assertion falls flat for many reasons.

1. Satoshi didn’t only communicate with cypherpunks early on. He posted to the P2P Foundation (sources #1 and #3) and his messaging still included payments.
2. Satoshi never changed his messaging. If he supposedly only mentioned payments and ecommerce as marketing to cypherpunks, then why continue discussing payments and ecommerce for years in the BitcoinTalk forums afterwards?
3. Satoshi never corrected anyone else who believed him initially. There’s no record of Satoshi ever saying that Bitcoin shouldn’t be used exactly as he described it being used for initially: payments. Had he secretly been trying to use payments as a ploy, at some point he would have begun discouraging that use case in favor of store of value, but this never happened. See Timeline.

Dan Held’s proposed answer to the question “Why did Satoshi talk so much about using Bitcoin for payments?” is claiming it was an elaborate deception intended to get people using Bitcoin and then changing its primary use case into something different.

There’s a much simpler answer: Satoshi intended Bitcoin to be used for payments, and he reached out to the cypherpunks because he knew they would like the idea. Occam’s razor applies here, there’s no reason to propose a substantially more complex answer than the simple one.

Other claims

Since we’ve been examining the evidence proposed by Dan Held, let’s look at the other claims he made in that Twitter thread. Contrary to what Dan says, he didn’t “provide 50 tweets to support my claim.” The majority of his tweets do not provide evidence that Bitcoin was built to act primarily as a store of value. Let’s break them down.

Some of the 47 tweets don’t even pretend to be evidence.

1. This tweet is a link to his newsletter asking for subscribers.
2. Here he is thanking other people for support.
3. Here he is giving readers his background.
4. Here he just asks a parting question of his readers.
5. Here he asks skeptics for feedback on this thread.

A substantial number of the thread isn’t dedicated to ascertaining the truth about the past - which is ostensibly the point - but instead talking about the present, or even the future.

1. Four tweets are about Charlie Lee discussing the Lightning Network (22-25)
2. Seven tweets are about the store of value versus medium of exchange argument broadly (35-41)

When he does discuss the past, some of the arguments are very weak.

1. Six tweets were devoted to making the connection to the cypherpunk movement to get their help. Here he makes the claim here that Satoshi tried to trick them by claiming it was about payments, see Satoshi was just doing marketing.
2. Five tweets are devoted to making the case that Satoshi’s timing proves he was building Bitcoin as a store of value. (11-15) He does this by highlighting various aspects of the 2008 financial crisis in parallel with some of Satoshi’s actions. But Satoshi had been coding this well before all these events occurred. It couldn’t have been cause and effect, unless Satoshi truly is a time-traveler. Also, the argument of coincidental timing can never be used to prove anything, and even if it could, the fact that financial institutions were proven untrustworthy is every bit as much a reason to create a permissionless digital cash system as a digital store of value system.

Some of the tweets contain some limited evidence for the store of value position. (29, 32, 33) Satoshi clearly wasn’t ignorant of the harm done by central banks and hoped Bitcoin could help. But that doesn’t mean he built Bitcoin to act primarily as a store of value.

In several Tweets (10,15,19,32,24) Dan dismisses the idea of Satoshi building Bitcoin for payments, likening it to Visa, implying that it’s not a radical vision and he had no need for anonymity. This is ridiculous for multiple reasons.

First, the vision of a payments platform that “would allow online payments to be sent directly from one party to another without going through a financial institution” isn’t rebuilding Visa, since Visa is the very definition of a financial institution.

Second, former use cases like the Silk Road or current ones like OpenBazaar prove that permissionless payments aren’t unimportant. People all over the world are able to engage in commerce with each other without middlemen. This means far more privacy than other platforms, and allows for censorship-resistant trade. This directly challenges state control and is both a radical vision and also a good reason to stay anonymous.

The most relevant tweets are the ones I’ve already discussed (Sources #1-5 above). As I’ve shown, several are heavily misleading due to lack of context.

Questions

I have a few questions for those who still believe that Satoshi built Bitcoin primarily to act as a store of value.

1. Why did Satoshi only reference Bitcoin as a store of value a handful of times in all his writings, but mentioned payments and using Bitcoin for commerce dozens of times?
2. If Satoshi’s focus on payments and commerce was only a marketing ploy to get the cypherpunks’ attention, why did Satoshi continue focusing on payments and commerce long afterwards and never shift focus to store of value?
3. In the few cases where Satoshi referenced Bitcoin as a store of value, why are the majority of them only in response to other people questioning him? If store of value was his main focus, why did he never promote this idea directly and proactively?
4. Why did Satoshi participate in various BitcoinTalk threads focused on merchant adoption and using Bitcoin for commerce and openly indicated his support for the idea? (Sources 20, 25, 27, 35)
5. Why did Satoshi mention on-chain micropayments on six separate occasions over multiple years if store of value was his primary focus? (Sources 1, 5, 13, 14, 15, 17)
6. Why do you believe Satoshi intended Bitcoin to act as digital gold when he stated that gold’s primary utility was as a medium of exchange? (Source #9 above)
7. Why did Satoshi state that it “might make sense just to get some” only a single time in all his writings if he was trying to make Bitcoin into a store of value? (Source #5 above)
8. Why did Satoshi focus completely on payments and commerce in his whitepaper but not mention store of value once?
9. Why don’t the anecdotes of numerous early adopters claiming that there was near universal agreement that Bitcoin was intended for payments convince you?
10. If this post isn’t sufficient evidence for you, then is there any evidence that would convince you that Satoshi didn’t build Bitcoin primarily as a store of value?

The end

I believe the evidence speaks for itself, but if anyone does seriously respond to the above sources and questions I will seriously investigate their claims.

This was a fairly substantial time investment. If you think I’ve done something useful here, and you’d like me to keep doing this type of thing, you can follow me on Twitter, or subscribe to my newsletter / blog.

Yes, you should have a stash, but you shouldn’t feel guilty spending either. After having read everything he wrote publicly, I’m confident that Satoshi would agree.