Bitcoin has sparked one of the most heated debates in modern finance: Is it truly a store of value, or was it designed to be something more—digital cash for everyday use? While many in the crypto space now treat Bitcoin (BTC) like digital gold, this perspective overlooks its original purpose and the core innovation behind it. This article explores why Bitcoin’s value is deeply tied to its utility as a peer-to-peer electronic cash system—and how losing that functionality undermines its long-term credibility as a store of value.
The Utility-Value Connection
To understand Bitcoin’s role, consider everyday objects. A cup in the cupboard isn’t actively being used, but it holds utility because you can drink from it when needed. Similarly, a bicycle in the garage isn’t providing transportation at that moment, but its usefulness lies in the certainty that it will work when you decide to ride it.
Now imagine a broken cup or a rusted bicycle—neither can fulfill its intended function. They lose utility and, with it, most of their value. You wouldn’t pay for junk unless it served another purpose, like art or scrap.
This principle applies directly to money. Value derives from utility, not the other way around.
Bitcoin was created to be useful—to enable fast, borderless, permissionless transactions. If it can’t reliably perform that function, its claim as a "store of value" begins to unravel.
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The Rise of the “Store of Value” Narrative
Today, many prominent voices in the Bitcoin community argue that BTC should not be used for payments. Figures like Samson Mow, Tone Vays, and Saifedean Ammous promote the idea that Bitcoin’s primary role is to store wealth—like gold—not to facilitate daily transactions.
This narrative gained traction after 2017, when Bitcoin’s network became congested. Transaction fees soared above $50, and confirmation times stretched to days. At that point, using BTC for small purchases was impractical. Legacy systems like bank wires were faster and cheaper.
That technical failure coincided with a shift in messaging: Bitcoin isn’t meant to be spent; it’s meant to be held.
But this argument contains logical gaps:
- “The whitepaper is old” – True, but its solutions remain elegant and prescient. Age doesn’t invalidate sound design.
- “Satoshi isn’t God” – No one claims divine status, but Satoshi’s vision was clear: Bitcoin was built as a peer-to-peer electronic cash system.
- “It scales on Lightning Network” – While Layer 2 solutions help, relying on them admits that base-layer payments failed.
- “Visa is better for payments” – Then why call it money? And what about the 2 billion unbanked people who need accessible financial tools?
Satoshi envisioned a world where anyone could send any amount across borders instantly—without intermediaries. That’s not just storage; that’s active, usable money.
Why Gold Works as a Store of Value
Gold has endured as a store of value for millennia because it’s widely accepted, durable, scarce, and fungible. Crucially, people trust they can sell or trade gold when needed. Its value isn’t abstract—it’s rooted in real-world demand across industries, jewelry, and investment.
But even gold isn’t money in most economies today. It’s an asset class—an alternative to fiat—but not a medium of exchange.
Bitcoin aimed higher: to combine gold’s scarcity with cash’s usability. It eliminated physical drawbacks—no weight, no counterfeiting, no need for vaults—while enabling global transfers in minutes.
When Bitcoin works as intended, it’s not just valuable—it’s usefully valuable.
The 2017 Breakpoint
In late 2017, Bitcoin (BTC) stopped working as cash.
Due to limited block size policies enforced by Bitcoin Core developers, the network couldn’t scale with rising demand. Fees spiked. Transactions stalled. Sending $10 worth of BTC could cost $50 in fees.
At that moment, BTC failed both as money and as a reliable store of value:
- You couldn’t spend it.
- You couldn’t move it affordably to sell it.
- Holding it meant trusting a system that couldn’t deliver on its promises.
And yet, proponents celebrated high fees as proof of “value.” Some claimed users paying $50 fees were demonstrating strong demand.
But paying to remove junk doesn’t mean you value the junk—it means you want it gone. Paying high fees to access your own funds doesn’t prove faith in Bitcoin; it proves desperation.
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The Myth of Staged Monetary Development
Another common justification is that money must evolve in stages: first as a store of value, then as a medium of exchange.
But history doesn’t support this.
Were dollar bills collected like trading cards before they were used in stores? Did people hoard credit cards as investments before swiping them at gas stations? Was PayPal first treated as digital art?
No. These systems gained value because they solved real problems—quick payments, easy transfers, global reach.
Money gains value through adoption and use, not speculation alone.
Bitcoin Cash: A Return to Utility
In August 2017, a group of developers and miners rejected the "digital gold" narrative. They believed Bitcoin should scale on-chain to restore low fees and fast confirmations.
Their solution? Bitcoin Cash (BCH)—a fork of Bitcoin that increased block sizes to support more transactions at lower costs.
Unlike BTC, BCH prioritizes on-chain usability. It allows micropayments, daily spending, and peer-to-peer trade without relying heavily on second-layer systems.
This doesn’t mean BCH replaces BTC—it means the original vision of usable electronic cash lives on.
Can a Broken Network Store Value?
A network that can’t reliably transfer value struggles to store it.
If you can’t sell your asset when needed—or must pay exorbitant fees to do so—its liquidity diminishes. Liquidity is essential for any store of value.
Moreover, long-term holders who bought BTC at $20,000 have seen their wealth drop by over 70%. High fees didn’t protect them—they trapped them.
True resilience comes from utility. Systems that are used daily gain organic demand. They aren’t dependent solely on speculation.
Frequently Asked Questions
Q: Isn’t gold also not used daily but still valuable?
A: Yes, but gold has centuries of established trust, industrial use, and cultural significance. Bitcoin lacks that history—so utility becomes even more critical to build trust.
Q: Doesn’t scarcity make Bitcoin valuable regardless of use?
A: Scarcity matters, but only if there’s demand. A rare item no one can use eventually becomes irrelevant. Utility creates demand.
Q: Can’t Bitcoin be both money and a store of value?
A: Absolutely—but only if it functions well as money first. You can’t store value in something you can’t move or spend.
Q: Are Layer 2 solutions like Lightning Network enough?
A: They help, but pushing all transactions off-chain shifts control to centralized hubs and reduces transparency—undermining core decentralization principles.
Q: Does low usage mean BTC is failing?
A: Declining transaction volume and high fees suggest reduced usability. For a network designed for global adoption, stagnation contradicts its foundational goals.
Q: Is speculation the main driver of BTC’s price?
A: Currently, yes. But sustainable value requires more than speculation—it needs real-world application and widespread adoption.
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Conclusion
Bitcoin’s brilliance lies in its dual nature: it combines the scarcity of gold with the usability of cash. But if it loses the latter, it risks becoming nothing more than speculative digital collectibles.
True value isn’t stored in isolation—it emerges from interaction, exchange, and trust in functionality.
As Satoshi envisioned, Bitcoin was meant to be money people use, not just assets they hoard. And until it reliably serves that purpose again, its claim as a lasting store of value remains unproven.
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