Examining the Writings of Satoshi Nakamoto: A Monetary Analysis of the Bitcoin Protocol

This paper considers the design of the Bitcoin protocol from a monetary perspective. To this end, it relies heavily on the publications of the creator(s) of Bitcoin, Satoshi Nakamoto, on different mailing lists and forums. It first expounds the political and economic motives which led Nakamoto to build an electronic system of payment based on ‘proof’ rather than on ‘trust’. Then, it considers the predetermined nature of the issue of bitcoins and support the view that one consequence of this issuing rule is that the bitcoin has no ‘monetary standard’ in any of the senses that have been attributed to this term in the literature. Finally, it deals with the concept of ‘synthetic commodity money’ and the widespread comparison of bitcoin to the Iraqi Swiss dinar. The conception of the monetary standard as a measure of the appreciation or depreciation of money is then used to distinguish the bitcoin from the Iraqi Swiss dinar.