The Bitcoin War: Store of Value or Medium of Exchange |BTC Vs BCH|

by | Jan 24, 2019 | News | 0 comments

The bitcoin war did not end last year. It has started this year again.

What’s this unending feud between Bitcoin Core {BTC} maximalist and its close rival fan base of Bitcoin Cash {BCH}?

The latest argument is about bitcoins primary objective. Did Satoshi Nakamoto create BTC as a medium of exchange or a store of value or did he incorporate both?

Meanwhile, BTC maximalists are those that are of the opinion that BTC would remain the number one cryptocurrency while giving room for the development and deployment of other altcoins.

That been said since Satoshi himself has not revealed himself to defend his creation, the bitcoin community has been in conflict over certain critical matters.

Conflicting Matters

One of such matters was Scaling. The community pondered how Satoshi would scale the bitcoin blockchain.

Some experts proposed the solution of increasing the block size. This was shelved when Satoshi’s old posts resurfaced which warned not to touch the original bitcoin block size.

So, therefore, an idea was brought up to implement a second payment layer still built on the blockchain which was made possible by restructuring the data in the block.

As time went on, the argument turned to convictions, convictions turned to heated debates to a point of no going back.

That’s why on August 1, 2017, the bitcoin blockchain split into two irreconcilables. One of the halves chooses to scale on the bitcoin blockchain itself while the other half chose to scale on a different layer entirely.

This debate didn’t end at the splitting as each side tried to canvass the other about Nakamoto’s ‘true’ vision which heavily involves bitcoin’s primary objective.

Bitcoins Primary Objective; Store Of Value, Primarily

bitcoins primary objective

Unsurprisingly though, BTC maximalists believe that Satoshi’s first intent was to make bitcoin a store of value first and foremost.

This proves the persons supporting this argument correct as the 2017 situation proved that bitcoin to some degree has failed in been ready to be a worldwide currency as a medium of exchange.

In 2017, there were many unacceptable delays in transaction time, including a huge spike in transaction fees making microtransactions nearly impossible.

In 2018 came the launch of the promised payment layer, the Lightning Network’.

Due to this development, bitcoin maximalist changed the argument from being a ‘transformational payment system’ to an ‘apparent store of value’ just as gold, but way better.

This conclusion to turn more attention to the ‘store of value’ proposition was made more obvious since most of the bitcoin newcomers were investing in the cryptocurrency with the hope of a bigger future profit and bitcoin’s value coming from its scarcity.

Bitcoin Cash Community Reacts

bitcoins primary objective

Trying to capitalize on the situation, the Bitcoin Cash community quickly and swiftly took to the microphone ready to retaliate.

They, on the other hand, were of the opinion that bitcoin cash is ready to replace worldwide fiat currencies all thanks to the blockchains infinite scalability.

This simply meant that once the network has been stretched to its limits, the developers could easily scale and increase the block size as they deem fit.

Meanwhile, both parties have continued arguments using phrases from the bitcoin whitepaper as references. 

There were references to gold in the mining aspect of the whitepaper which suggest ‘store of value’ and also there are many references to cash, commerce, merchants, cash payments, etc. in the whitepaper which ultimately depicts ‘medium of exchange’.

Bitcoin; Money Itself

Foremost, I would like to dismiss the idea that a single person knew the exact thoughts of Satoshi Nakamoto when he created the cryptocurrency. Point accepted.

The whitepaper title includes the word ‘cash’ and also made quite a number of references to gold also. Any mistake to ignore any of these terms would lead to a ‘colossal gross misinterpretation’.

Cash is synonymous to exchange while gold is largely synonymous to store of value. Anything money is incomplete without these two elements.

Considering the saying that, ‘money is anything we want or refer it to be’ plus the fact that bitcoin seems to have both crafted mysteriously into it, I put the question to you:

What stops bitcoin from been money itself or a worldwide currency as acclaimed?

Nothing, absolutely nothing.

Verdict: Store of  Value or Medium of Exchange?

Personally, I think bitcoin needs to be used as a medium of exchange to give it intrinsic value. I also think that being a store of value and a means of exchange are closely related and are of utmost and seemingly equal importance.

I personally use bitcoin because I am a die-hard enthusiast and believe that bitcoin could be sound money. Without the ‘store of value’, bitcoin will not succeed and without been used for exchange as well, bitcoin will fall.

So, let’s hear your thoughts and opinions.

Do you use it as a medium of exchange or just buy and HODL? Which would you do and which do you think is most important for Bitcoin?


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Ayoola Akinlade
Crypto and blockchain educator, investor, analyst, trader and network marketer.....i believe strongly in the future of bitcoin, cryptocurrencies and the blockchain technology at large..