What is Bitcoin?

Bitcoin, Currency or Store of Value? A Look at Its Origins, Evolution, and Power Struggles

When Bitcoin first emerged in 2009, it promised a revolution in a decentralised, peer-to-peer form of money that operated outside the control of banks and governments. Designed by the mysterious figure (or group) known as Satoshi Nakamoto, Bitcoin emerged in the aftermath of the 2008 financial crisis, a period when trust in traditional financial institutions had reached an all-time low.

However, over the years, the narrative surrounding Bitcoin has evolved.

Once promoted as electronic cash, it is now often referred to as digital gold. Behind this shift lies a fierce ideological battle, commonly referred to as the Bitcoin Civil War, and growing concerns about whether financial elites are quietly reshaping the Bitcoin ecosystem to their own advantage.

Let's break it down.

What Was Bitcoin Originally Designed For?

In the very first line of the Bitcoin whitepaper, Satoshi Nakamoto describes Bitcoin as:

"A peer-to-peer electronic cash system."

The idea was simple yet powerful: allowing people to send money directly to one another without needing a bank or a third party. Bitcoin would be:

• Borderless

• Permissionless

• Censorship-resistant

• Deflationary (with a fixed supply of 21 million coins)

In a world where central banks can print money at will and governments can freeze bank accounts, Bitcoin was a radical alternative—money that belonged to the people, not the institutions.

The Bitcoin Civil War: Scaling and Ideology

As Bitcoin gained popularity, its technical limitations also increased. Chief among them was the block size, which is the amount of transaction data a block can hold.

• Original block size limit: 1 MB

• Problem: As usage grew, this small size caused slow transaction times and high fees

The civil war led to a divide in the Bitcoin community:

The "Big Blockers"

• Wanted to increase block size to allow faster and cheaper transactions

• Believed Bitcoin should fulfil its original purpose as everyday money

• This camp supported forks like Bitcoin Cash (BCH)

The "Small Blockers"

• Argued that increasing the block size would hurt decentralisation

• Preferred layer two solutions (like Lightning Network) for scalability

• Emphasised Bitcoin as a store of value, not for daily spending

In 2017, the debate reached its climax. The chain split, resulting in the creation of Bitcoin Cash (BCH), while the original Bitcoin (BTC) kept the 1 MB block limit (later slightly increased via SegWit).

This ideological conflict is now commonly referred to as the Bitcoin Civil War. This deep rift continues to affect the community today.

Have Bankers hijacked Bitcoin?

Many early Bitcoin enthusiasts fear that financial institutions, initially viewed as adversaries, have quietly infiltrated the Bitcoin ecosystem. Here's how:

Wall Street Embraces Bitcoin

• Institutions such as BlackRock, Fidelity, and Goldman Sachs now offer products related to Bitcoin.

• The approval of Bitcoin ETFs in 2024 opened the floodgates for institutional investment.

Custodianship and Centralisation

• Large amounts of BTC are now held in centralised custody (e.g., Coinbase, ETF custodians)

• Centralised custody undermines the core Bitcoin principle: "Not your keys, not your coins"

Mining Centralisation

• Massive mining operations and pools dominate Bitcoin's hash rate

• Many of these mining operations are large corporations and venture capitalists

While these developments bring legitimacy and liquidity, critics argue that they also result in control shifting power away from individuals and back into the hands of financial elites. Some believe the reframing of Bitcoin as "digital gold" rather than usable currency plays right into this agenda.

From Digital Cash to Digital Gold

Why did the store of value narrative win?

1. Scarcity Narrative: Bitcoin's 21 million coin cap makes it an ideal hedge against inflation.

2. Slow & Expensive Transactions: With high fees and limited throughput, using BTC for coffee isn't practical.

3. Institutional Preference: Wall Street loves scarce, passive assets with minimal risk of disruption, offering more upside.

The "store of value" framing is safer. It fits neatly into the traditional financial system. But it's also not what Satoshi described. In fact, Satoshi once criticised high fees and slow confirmation times, saying:

"If Bitcoin needs to grow to be a major payment network, it has to scale."

So, has Bitcoin matured, or has it been co-opted?

Where Does Bitcoin Go From Here?

Bitcoin now straddles two worlds:

• In one, it's a revolutionary tool for achieving monetary freedom, empowering people in authoritarian regimes or countries with unstable currencies.

• In the other, it's an investment product, traded on Wall Street, held in cold storage by billion-dollar funds.

Whether this duality is a strength or a betrayal depends on who you ask.

One thing is clear: the battle for Bitcoin's soul is ongoing. And while financial institutions may be influencing the narrative, Bitcoin remains open-source, decentralised (to an extent), and in the hands of those who choose to use it.

Final Thoughts

Bitcoin started as an act of defiance against banks, bailouts, and centralised control. Along the way, it became a battleground of ideologies, shaped by both visionaries and opportunists.

Today, it is both:

• A hedge against inflation, and

• A lifeline for the unbanked.

Has it been manipulated? Perhaps. However, the protocol remains open to anyone who wants to build, fork, or innovate.

Ultimately, Bitcoin is what we make it. The technology is revolutionary and will change the face of finance; hopefully, it will be used for the greater good and not for the benefit of the privileged few!