Bitcoin: Elements of Commoditisation

$SirToshi
2 min readJul 22, 2023

Economic Competition
Without economic competition there is only collusion & centralisation.
Location in the Bitcoin White Paper: Abstract
Quote: “nodes can leave and rejoin the network at will”.

Common Accountability
Network users are accountable to one another rather than a central authority through a chain of digital signatures.
Location in the Bitcoin White Paper: Section 2. Transactions
Quote: “We define an electronic coin as a chain of digital signatures”.

Locked protocol.
Explains why the protocol economically incentivises it to remain the same.
Location in the Bitcoin White Paper: Section 6. Incentive
Quote: “He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth”.

Unbounded Scale
Statement indirectly says that there is no block size cap because the transaction fees incentivise the payment processors/minors to compete for fees. If the block size is restricted then the block fee would also be restricted and therefore remove any incentive for economic competition.
Location in the Bitcoin White Paper: Section 6. Incentive
Quote: “…, the incentive can transition entirely to transaction fees and be completely inflation free.”

Fixed Token Supply
A common amount, so there is no central point of authority or control that can increase/inflate or decrease the asset amount/supply.
Location in the Bitcoin White Paper: Section 6. Incentive
Quote: “Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.”

--

--