Great post. I've long been interested in using Ethereum to represent commercial real estate assets, an particularly to represent the cash flows they generate. In this model, a unit would represented as an NFT, and distributions/dividends would be linked to those units as transactions in dollar-denominated stablecoins.
Once you have enough assets on chain, and a history of distributions, it starts to look something akin to the stock market, where each stock has a history of earnings you can use to value it for trading. Importantly, that history of earnings is backed by enforceable legal mechanisms which rely on legal artifacts like 10-Q filings.
I still think this is a good use case and am working on a project to make it real. The challenge is that real estate investing is... pretty boring? Most real estate doesn't double or halve in value overnight. The relative lack of volatility is part of why real estate is such an attractive asset.
Trillions of dollars are locked up in real estate, but it's practically impossible to liquidate interest without selling the entire asset. Refinancing is an option in some cases but it's expensive and slow.
There's a lot of practical utility for this model, but it's not "when moon?" useful, so it's hard to get crypto bros to look at it seriously.
Thanks for helping me see the obvious Brett. A lot of what seems to make all this work is exactly the fuzziness and vagueness, that then needs trust (as non-critical acceptance) and some social financial imaginary to work. So I think the one thing that really stays out of view is the value of that imaginary. But maybe that's what you mean by 'belief system'. Think there is a slight difference perhaps
In a crypto exchange like Binance Bitcoin, and to a lesser extent, Ethereum and BNB play the role of 'money' because other tokens are priced in them and paired with them. Also because it is a market, the language of 'buy' and 'sell' is used, appropriately I think. I have BTC, I want say, XRP, I will 'buy' XRP with BTC in a market in which BTC is the quote asset and XRP the base asset. In these markets, the quote asset serves as both a medium of exchange, and measure of value and seems to me to be nearly as much 'money' as dollars in say, oil markets.
For me therefore, what serves as money can be seen as context dependent.
The main objection to this is that the quote asset you refer is itself always assessed relative to dollars. In other words, can the ratio between BTC and XRP diverge from the ratio between their dollar prices?
I.e. imagine a crypto-token 1 called ABC has a price of $1000, and that another called DEF has a price of $2000. But let's say there is an exchange platform in which ABC is used as the quote asset: would the 'price' of DEF be 2ABC? If so, that looks a lot like a countertrade ratio between crypto-tokens
I find that in interesting question "is BTC used as money (in that sense) within the Cryptomarket?"
I would argue, that the test you suggest, Brett, (that at every point in time the "price" of DEF in ABC is according to their Dollar prices on other markets) is not sufficient. It would only show, that the possibilities for arbitrage deals are used up.
However, what Dil says, where the $-prices of other cryptos fluctuate pretty much proportional to how the $-price of BTC fluctuates, that would be a strong indicator, that indeed these cryptos are priced in BTC. Where they are more constant, and the "price" of that crypto denoted in BTC behaves antiproportional to the $-price of BTC, it indicates that we are more in a countertrade situation.
I'll dwell upon this point more Marvin, but perhaps the main thing to think about is this: even if all the other cryptos are 'priced' in Bitcoin, Bitcoin itself is very clearly priced in dollars, and derives its power via that (i.e. it has no power unless it first gets a price on a dollar market, which in turn induces its countertradability). Given that the thing you're pricing the other cryptos in is itself dependent on the dollar, by implication it means all the other cryptos are indirectly in the same situation
Yes you can find dollar prices on Binance in a market like BTC/XRP, but its not part of the functioning of the exchange. It is a nod to users who think in dollars and who measure risk and profits and losses in dollars. In some users minds, then, dollars are still 'money' i.e. the unit of account by which they measure everything, but in the mechanics of those markets, the quote currencies definitely play a monetary role. So I would say just as the GBP is the money of UK and USD is the money of USA and global finance, BTC is the money of the cryptosphere.
Prices denominated in £ within the UK do not rapidly vary based upon the price of UK goods in $. UK retailers are not constantly checking the $ price of all goods, in case they need to change the £ price.
The absence of need to do this is an expression of the monetary sovereignty of the UK.
Matt are you really claiming that this is not the case on Binance? That the $ sale price of the crypto assets traded there is not always the basis for the 'swap' rates? Is this so?
I would note that the emergence of paired liquidity pools with bonding curves associating them looks like movement towards some degree of endogenous sovereignty for the paired tokens.
Super helpful Brett! Are you going to be covering Mutual Credit Systems in depth soon? You have referred to them a lot in your various articles and videos but I can't find a dedicated article to them.
In TradeLayer we don't have a protocol fee for indivisible tokens (e.g. NFTs) because it's not practical, and if you trade them for LTC or another NFT it's 0 protocol fee.
The reasoning for this is that there must be some underlying fungible money in the system to server as a medium for secured loans against the illiquid assets, but what you're suggesting is someone could make an app that scans for bulletin board notices of comparable value, perhaps chains of them, and then makes a series of trades in order to barter around and possibly bypass fungible liquid currency in the process.
While it would be cashflow neutral for the layer protocol, it's cashflow positive for the underlying chain because it still produces tx fees. You could RGB NFTs on LN, maybe get it more efficient and avoid base layer.
In conclusion: we welcome the possibility of a strange new world facilitated by hyper-barter and possibly social networking and geographic coincidences. If people use this loophole in TradeLayer to countertrade for 0 fees, godspeed, let's see how big it gets.
it's just a very slight observation, but it may be significant: you've chosen a shovel to illustrate a spade. It is, in fact, very difficult to dig with a shovel due to the angle at which the shaft of the handle joins the shovel iron. Just a small point, but something could be made out it, perhaps.
I'm thinking now that it might not be impossible to find some safe way for merchants to be paid for products and services with numbers represented electronically, similar to how they can be paid with numbers stamped on metal discs and printed on paper rectangles, but it looks to me like Nakamoto didn't think it through far enough, if that's really what he was aiming for. The reason that merchants accept coins and paper money is because they can turn around and use those for some products and services offered by others, and it goes around in a circle. It might not be impossible for that to happen with numbers represented electronically, but it might take more than hopes, wishes, and fairy tales for that to ever happen, and I don't see Nakamoto ever discussing that issue. It looks to me like he was focused exclusively on a safe way for merchants to be paid online for products and services, directly from customers, without going through any third party, and without the risk of payments being retracted. It looks to me like he was only concerned about the interests of merchants, how they could be paid without the inconveniences and costs of third-party processing; and not at all about the interests of customers and clients. He might not care at all about how much people are being fooled into gambling their money away in Bitcoin trading, if Bitcoin is being used sometimes by merchants for what he said it was for, and if that was actually what he was aiming for.
The only thing that Nakamoto really talks about in the original Bitcoin whitepaper is how to move limited edition numbers between accounts on a system. That is an entirely different thing to creating a holistic monetary system. All the language that people paste on top of that (like 'paid', 'a P2P monetary system' etc) is just an aspirational linguistic layer put on top of the reality. Bitcoin is a system of branded movable numbers, with a price, that can now be countertraded.
Also, I appreciate your comments, but it is worth going beyond statements like "the reason merchants accept coins and paper money is because they can turn around and use those for some products and services offered by others". This is a very typical 'horizontal' description of a monetary system, but it is shallow. It carries the idea that somehow all you need for a monetary system to work is to convince enough people to accept it such that network effects kick in. It carries the idea that somehow monetary systems are all about individual rationality (e.g. you must convince the shopkeeper by pointing out that it is in their interest to accept money etc), but this really is the wrong way around. The 'rationality' of money only kicks in after the network effects are already induced, which in turn begs the question of how that process happens - this is where 'vertical' descriptions of money and powerful institutions become very useful. The crypto world often operates in a realm of magical thinking - they critique the powerful institutions behind a monetary system, but without offering any real account of how to induce the network effects of a monetary system. This is why crypto promoters endlessly claim that all you need to do is convince more and more people to take the crypto units, despite the fact that the crypto units are very clearly movable priced objects in the much more powerful fiat-denominated markets.
I've been reading Nakamoto's posts in the list where he first discussed his project. I'm not sure I know what he was thinking, but I have an idea of what he *might* have been thinking, and what a lot of people might be thinking now. One way or another we've learned to think of the usefulness of some metal discs and some paper rectangles with numbers on them, as being useful purely because of a voluntary and/or government-imposed agreement to accept them as payments for products, services and debts, without anyone thinking that they have any usefulness in themselves, or that there is anything else backing them up, apart from that agreement. Sometimes that might lead to thinking, or believing people saying, that maybe any number of people could use numbers on the Internet, with each other, in all the same ways we use coins and paper money, and that someone has found a way to do that. Nakamoto *might* have thought that he had found a way for that to happen, and a lot of people might just believe other people saying that crypto was invented for that purpose and will actually work that way some day, if ever enough people agree to it. There's a feeling like "why can't there be a way of doing something with numbers on the Internet, that works just as well as stamping them on metal disks and printing them on paper rectangles?" That might be part of what makes it so easy to pass it off as "coins" and "currency." Nakamoto never compared it to raw precious metals. He called it "cash" and "coins," and proposed it as an alternative to existing online payment systems. Alternative, not replacement. I don't think that he was actually anti-fiat or anti-government, but he might have thought that appealing to those interests would help make the idea popular. It looks to me like all he cared about, or what he wanted people to think he cared about, was a safe way for people to be paid online for products and services, directly from other people without going through some third party, like they can offline with cash. He wasn't the first one who tried to do that, but he improved enough on previous projects, and his project had enough support and good luck that projects hijacking or imitating his have survived longer than any of the previous projects did, not as safe ways to be paid for products and services, but to serve the same purpose as sub-prime mortgage loans did in the past. Not saying that will necessarily end the same way. Just that what people are doing with crypto looks mostly like that to me. Also, I see NFTs in online games as a way of training more people of all ages to gamble away their money and/or their parents' money, in crypto trading.
The surface level imagery of money is of numbers imprinted on objects, but the key nuance is about what the numbers point to. In the normal monetary system, numbers are 'double-sided': you see a positive number in your bank account, and it represents an asset to you, but to a bank it is a legal *liability*. It is not a 'mere number' that has somehow been enchanted through community agreement. In the Bitcoin system, by contrast, the number is 'one-sided'. It is simply written out after a miner exerts energy, and it is written out as an *asset* to the issuer (this is in contrast to the dollar, where the issuer writes it out as a *liabillity*). The fact that there is no liability side to the numbers in Bitcoin is why the crypto community relies so heavily upon commodity imagery (commodities do not have liability sides).
This is not to say that you cannot easily exploit the visual imagery of money to pass off a numbered object as money. Indeed, if you ask kids to create 'money', they will do stuff like cutting out a piece of paper and writing a number on it. This superficially mimicks the surface appearance of a monetary system, but without any of the background structure.
All this is to say, that Satoshi Nakamoto might have been a talented cryptographer, but from a monetary perspective was doing something quite questionable. The Bitcoin system is stuck in a major bind, because it has no liability side, so relies upon commodity imagery, but can't really pull that off, because - as you say - it actually more mimicks the surface appearance of a fiat bank account, rather than an actual 'asset-only' lump of gold. This is why I argue in my I, Token piece, that really Bitcoin is just a system of asset-only limited edition movable numbers, plastered over with commodity imagery.
My thoughts about this have evolved a lot since I commented here. We might not actually be disagreeing. I'll just update you on how I'm thinking about it now.
Now it looks to me like Nakamoto was thinking exclusively about reducing the costs, inconveniences and risks for sellers in accepting online payments, by creating a system that would not require any "trusted third party." His only thought for protecting buyers was, ironically, "routine escrow mechanisms," which by all dictionary definitions require, literally, a trusted "third party"! Also, I don't see him thinking at all about how sellers would be able to use the numbers minted for them by buyers, or how buyers who weren't miners would be able to have numbers minted for them. Maybe he was thinking from the beginning that all that would happen on currency exchanges.
Most of my life I did not have any rational reasons for trusting money. I trusted it from direct experience with it, growing up with it. When I first started using it, my knowledge of it did not go beyond numbers stamped on metal discs and printed on paper rectangles. Whatever the history of that is, however it evolved, now it works for most purposes for most people, without any need for anyone to know what is backing up those numbers or what's behind them. That's why I don't think that it would be *impossible* to use numbers stored on networks, for online payments for products and services. I just don't see any reason to think that it will ever actually happen. I haven't seen anything in Nakamoto's writings, or anywhere else, about how it could ever happen. I don't see any crypto projects even thinking about how that could ever happen. Maybe Bitcoin SV. I haven't looked at that closely enough to see if its developers are aiming or even hoping for it to be used that way some day.
Now instead of thinking of bitcoins as NFTs of Bitcoin Core protocol, I'm thinking of the UTXOs as NFTs of the numbers associated with them, with special minting rules. One way they are minted is automatically when a block is added to the chain. The other way is that anyone who has keys to some NFTs on the Bitcoin Core network (UTXOs) can use them once and only once to mint new ones, as long as the total of the numbers out, including the change and the fee, is equal to the total of the numbers in. I agree, numbers plastered over with commodity imagery. Not actually movable though. That's another part of the deceptive imagery, along with the words, "currency," "coins," and "transactions." Nothing is moved. The number associated with each NFT (UTXO) can be used once and only once, in combination with others, as an input to mint new NFTs (UTXOs), with the total of the numbers minted, including change and fee, equal to the total of the inputs.
Again, I'm not sure that it would be *impossible* for those numbers to ever be widely accepted as online payments for products and services, but I don't see any reason to think that will ever actually happen.
Great post. I've long been interested in using Ethereum to represent commercial real estate assets, an particularly to represent the cash flows they generate. In this model, a unit would represented as an NFT, and distributions/dividends would be linked to those units as transactions in dollar-denominated stablecoins.
Once you have enough assets on chain, and a history of distributions, it starts to look something akin to the stock market, where each stock has a history of earnings you can use to value it for trading. Importantly, that history of earnings is backed by enforceable legal mechanisms which rely on legal artifacts like 10-Q filings.
I still think this is a good use case and am working on a project to make it real. The challenge is that real estate investing is... pretty boring? Most real estate doesn't double or halve in value overnight. The relative lack of volatility is part of why real estate is such an attractive asset.
Trillions of dollars are locked up in real estate, but it's practically impossible to liquidate interest without selling the entire asset. Refinancing is an option in some cases but it's expensive and slow.
There's a lot of practical utility for this model, but it's not "when moon?" useful, so it's hard to get crypto bros to look at it seriously.
I used to actually work in real estate derivatives, so I have some experience of that market ;)
this was great!
Glad you liked it Mike!
Thanks for helping me see the obvious Brett. A lot of what seems to make all this work is exactly the fuzziness and vagueness, that then needs trust (as non-critical acceptance) and some social financial imaginary to work. So I think the one thing that really stays out of view is the value of that imaginary. But maybe that's what you mean by 'belief system'. Think there is a slight difference perhaps
Thanks for the reflection Ivo. You and others in the Emerge network are the experts at imaginaries, so I will need to delve more into that
In a crypto exchange like Binance Bitcoin, and to a lesser extent, Ethereum and BNB play the role of 'money' because other tokens are priced in them and paired with them. Also because it is a market, the language of 'buy' and 'sell' is used, appropriately I think. I have BTC, I want say, XRP, I will 'buy' XRP with BTC in a market in which BTC is the quote asset and XRP the base asset. In these markets, the quote asset serves as both a medium of exchange, and measure of value and seems to me to be nearly as much 'money' as dollars in say, oil markets.
For me therefore, what serves as money can be seen as context dependent.
The main objection to this is that the quote asset you refer is itself always assessed relative to dollars. In other words, can the ratio between BTC and XRP diverge from the ratio between their dollar prices?
I.e. imagine a crypto-token 1 called ABC has a price of $1000, and that another called DEF has a price of $2000. But let's say there is an exchange platform in which ABC is used as the quote asset: would the 'price' of DEF be 2ABC? If so, that looks a lot like a countertrade ratio between crypto-tokens
I find that in interesting question "is BTC used as money (in that sense) within the Cryptomarket?"
I would argue, that the test you suggest, Brett, (that at every point in time the "price" of DEF in ABC is according to their Dollar prices on other markets) is not sufficient. It would only show, that the possibilities for arbitrage deals are used up.
However, what Dil says, where the $-prices of other cryptos fluctuate pretty much proportional to how the $-price of BTC fluctuates, that would be a strong indicator, that indeed these cryptos are priced in BTC. Where they are more constant, and the "price" of that crypto denoted in BTC behaves antiproportional to the $-price of BTC, it indicates that we are more in a countertrade situation.
Correct?
That should be easy to investigate...
I'll dwell upon this point more Marvin, but perhaps the main thing to think about is this: even if all the other cryptos are 'priced' in Bitcoin, Bitcoin itself is very clearly priced in dollars, and derives its power via that (i.e. it has no power unless it first gets a price on a dollar market, which in turn induces its countertradability). Given that the thing you're pricing the other cryptos in is itself dependent on the dollar, by implication it means all the other cryptos are indirectly in the same situation
Yes you can find dollar prices on Binance in a market like BTC/XRP, but its not part of the functioning of the exchange. It is a nod to users who think in dollars and who measure risk and profits and losses in dollars. In some users minds, then, dollars are still 'money' i.e. the unit of account by which they measure everything, but in the mechanics of those markets, the quote currencies definitely play a monetary role. So I would say just as the GBP is the money of UK and USD is the money of USA and global finance, BTC is the money of the cryptosphere.
Prices denominated in £ within the UK do not rapidly vary based upon the price of UK goods in $. UK retailers are not constantly checking the $ price of all goods, in case they need to change the £ price.
The absence of need to do this is an expression of the monetary sovereignty of the UK.
Matt are you really claiming that this is not the case on Binance? That the $ sale price of the crypto assets traded there is not always the basis for the 'swap' rates? Is this so?
I would note that the emergence of paired liquidity pools with bonding curves associating them looks like movement towards some degree of endogenous sovereignty for the paired tokens.
I don't know what models Binance traders or developers have in their heads. I'm just looking at the mechanics.
As Brett has discussed, the functions of money (or mechanics) get confused with the structure of money
Bitcoin is not money; it is a “limited edition digital collectible”
Curious, have you read Graeber’s Debt?
Yes, and its probably the best anthropological perspective out there.
Super helpful Brett! Are you going to be covering Mutual Credit Systems in depth soon? You have referred to them a lot in your various articles and videos but I can't find a dedicated article to them.
For sure. It's long overdue! Thanks for pushing me on that
In TradeLayer we don't have a protocol fee for indivisible tokens (e.g. NFTs) because it's not practical, and if you trade them for LTC or another NFT it's 0 protocol fee.
The reasoning for this is that there must be some underlying fungible money in the system to server as a medium for secured loans against the illiquid assets, but what you're suggesting is someone could make an app that scans for bulletin board notices of comparable value, perhaps chains of them, and then makes a series of trades in order to barter around and possibly bypass fungible liquid currency in the process.
While it would be cashflow neutral for the layer protocol, it's cashflow positive for the underlying chain because it still produces tx fees. You could RGB NFTs on LN, maybe get it more efficient and avoid base layer.
In conclusion: we welcome the possibility of a strange new world facilitated by hyper-barter and possibly social networking and geographic coincidences. If people use this loophole in TradeLayer to countertrade for 0 fees, godspeed, let's see how big it gets.
That’s way more complicated than the world needs to be
it's just a very slight observation, but it may be significant: you've chosen a shovel to illustrate a spade. It is, in fact, very difficult to dig with a shovel due to the angle at which the shaft of the handle joins the shovel iron. Just a small point, but something could be made out it, perhaps.
Thanks for the observation Rob - perhaps this ambiguity can be brought into the metaphor
Cryptos are electronic gambling tokens. Good luck paying your taxes with them ...
I'm thinking now that it might not be impossible to find some safe way for merchants to be paid for products and services with numbers represented electronically, similar to how they can be paid with numbers stamped on metal discs and printed on paper rectangles, but it looks to me like Nakamoto didn't think it through far enough, if that's really what he was aiming for. The reason that merchants accept coins and paper money is because they can turn around and use those for some products and services offered by others, and it goes around in a circle. It might not be impossible for that to happen with numbers represented electronically, but it might take more than hopes, wishes, and fairy tales for that to ever happen, and I don't see Nakamoto ever discussing that issue. It looks to me like he was focused exclusively on a safe way for merchants to be paid online for products and services, directly from customers, without going through any third party, and without the risk of payments being retracted. It looks to me like he was only concerned about the interests of merchants, how they could be paid without the inconveniences and costs of third-party processing; and not at all about the interests of customers and clients. He might not care at all about how much people are being fooled into gambling their money away in Bitcoin trading, if Bitcoin is being used sometimes by merchants for what he said it was for, and if that was actually what he was aiming for.
The only thing that Nakamoto really talks about in the original Bitcoin whitepaper is how to move limited edition numbers between accounts on a system. That is an entirely different thing to creating a holistic monetary system. All the language that people paste on top of that (like 'paid', 'a P2P monetary system' etc) is just an aspirational linguistic layer put on top of the reality. Bitcoin is a system of branded movable numbers, with a price, that can now be countertraded.
Also, I appreciate your comments, but it is worth going beyond statements like "the reason merchants accept coins and paper money is because they can turn around and use those for some products and services offered by others". This is a very typical 'horizontal' description of a monetary system, but it is shallow. It carries the idea that somehow all you need for a monetary system to work is to convince enough people to accept it such that network effects kick in. It carries the idea that somehow monetary systems are all about individual rationality (e.g. you must convince the shopkeeper by pointing out that it is in their interest to accept money etc), but this really is the wrong way around. The 'rationality' of money only kicks in after the network effects are already induced, which in turn begs the question of how that process happens - this is where 'vertical' descriptions of money and powerful institutions become very useful. The crypto world often operates in a realm of magical thinking - they critique the powerful institutions behind a monetary system, but without offering any real account of how to induce the network effects of a monetary system. This is why crypto promoters endlessly claim that all you need to do is convince more and more people to take the crypto units, despite the fact that the crypto units are very clearly movable priced objects in the much more powerful fiat-denominated markets.
I've been reading Nakamoto's posts in the list where he first discussed his project. I'm not sure I know what he was thinking, but I have an idea of what he *might* have been thinking, and what a lot of people might be thinking now. One way or another we've learned to think of the usefulness of some metal discs and some paper rectangles with numbers on them, as being useful purely because of a voluntary and/or government-imposed agreement to accept them as payments for products, services and debts, without anyone thinking that they have any usefulness in themselves, or that there is anything else backing them up, apart from that agreement. Sometimes that might lead to thinking, or believing people saying, that maybe any number of people could use numbers on the Internet, with each other, in all the same ways we use coins and paper money, and that someone has found a way to do that. Nakamoto *might* have thought that he had found a way for that to happen, and a lot of people might just believe other people saying that crypto was invented for that purpose and will actually work that way some day, if ever enough people agree to it. There's a feeling like "why can't there be a way of doing something with numbers on the Internet, that works just as well as stamping them on metal disks and printing them on paper rectangles?" That might be part of what makes it so easy to pass it off as "coins" and "currency." Nakamoto never compared it to raw precious metals. He called it "cash" and "coins," and proposed it as an alternative to existing online payment systems. Alternative, not replacement. I don't think that he was actually anti-fiat or anti-government, but he might have thought that appealing to those interests would help make the idea popular. It looks to me like all he cared about, or what he wanted people to think he cared about, was a safe way for people to be paid online for products and services, directly from other people without going through some third party, like they can offline with cash. He wasn't the first one who tried to do that, but he improved enough on previous projects, and his project had enough support and good luck that projects hijacking or imitating his have survived longer than any of the previous projects did, not as safe ways to be paid for products and services, but to serve the same purpose as sub-prime mortgage loans did in the past. Not saying that will necessarily end the same way. Just that what people are doing with crypto looks mostly like that to me. Also, I see NFTs in online games as a way of training more people of all ages to gamble away their money and/or their parents' money, in crypto trading.
The surface level imagery of money is of numbers imprinted on objects, but the key nuance is about what the numbers point to. In the normal monetary system, numbers are 'double-sided': you see a positive number in your bank account, and it represents an asset to you, but to a bank it is a legal *liability*. It is not a 'mere number' that has somehow been enchanted through community agreement. In the Bitcoin system, by contrast, the number is 'one-sided'. It is simply written out after a miner exerts energy, and it is written out as an *asset* to the issuer (this is in contrast to the dollar, where the issuer writes it out as a *liabillity*). The fact that there is no liability side to the numbers in Bitcoin is why the crypto community relies so heavily upon commodity imagery (commodities do not have liability sides).
This is not to say that you cannot easily exploit the visual imagery of money to pass off a numbered object as money. Indeed, if you ask kids to create 'money', they will do stuff like cutting out a piece of paper and writing a number on it. This superficially mimicks the surface appearance of a monetary system, but without any of the background structure.
All this is to say, that Satoshi Nakamoto might have been a talented cryptographer, but from a monetary perspective was doing something quite questionable. The Bitcoin system is stuck in a major bind, because it has no liability side, so relies upon commodity imagery, but can't really pull that off, because - as you say - it actually more mimicks the surface appearance of a fiat bank account, rather than an actual 'asset-only' lump of gold. This is why I argue in my I, Token piece, that really Bitcoin is just a system of asset-only limited edition movable numbers, plastered over with commodity imagery.
My thoughts about this have evolved a lot since I commented here. We might not actually be disagreeing. I'll just update you on how I'm thinking about it now.
Now it looks to me like Nakamoto was thinking exclusively about reducing the costs, inconveniences and risks for sellers in accepting online payments, by creating a system that would not require any "trusted third party." His only thought for protecting buyers was, ironically, "routine escrow mechanisms," which by all dictionary definitions require, literally, a trusted "third party"! Also, I don't see him thinking at all about how sellers would be able to use the numbers minted for them by buyers, or how buyers who weren't miners would be able to have numbers minted for them. Maybe he was thinking from the beginning that all that would happen on currency exchanges.
Most of my life I did not have any rational reasons for trusting money. I trusted it from direct experience with it, growing up with it. When I first started using it, my knowledge of it did not go beyond numbers stamped on metal discs and printed on paper rectangles. Whatever the history of that is, however it evolved, now it works for most purposes for most people, without any need for anyone to know what is backing up those numbers or what's behind them. That's why I don't think that it would be *impossible* to use numbers stored on networks, for online payments for products and services. I just don't see any reason to think that it will ever actually happen. I haven't seen anything in Nakamoto's writings, or anywhere else, about how it could ever happen. I don't see any crypto projects even thinking about how that could ever happen. Maybe Bitcoin SV. I haven't looked at that closely enough to see if its developers are aiming or even hoping for it to be used that way some day.
Now instead of thinking of bitcoins as NFTs of Bitcoin Core protocol, I'm thinking of the UTXOs as NFTs of the numbers associated with them, with special minting rules. One way they are minted is automatically when a block is added to the chain. The other way is that anyone who has keys to some NFTs on the Bitcoin Core network (UTXOs) can use them once and only once to mint new ones, as long as the total of the numbers out, including the change and the fee, is equal to the total of the numbers in. I agree, numbers plastered over with commodity imagery. Not actually movable though. That's another part of the deceptive imagery, along with the words, "currency," "coins," and "transactions." Nothing is moved. The number associated with each NFT (UTXO) can be used once and only once, in combination with others, as an input to mint new NFTs (UTXOs), with the total of the numbers minted, including change and fee, equal to the total of the inputs.
Again, I'm not sure that it would be *impossible* for those numbers to ever be widely accepted as online payments for products and services, but I don't see any reason to think that will ever actually happen.