In 2008, a mysterious figure using the name Satoshi Nakamoto claimed to have invented "electronic cash," a peer-to-peer payment system with its own native money. He said it solved the double spending problem, something that had supposedly held digital money back. People accepted it as truth. They assumed there was digital money inside the system because Nakamoto said so. But the fact is, no money exists in the system at all. Nakamoto's creation was not a payment system that solved the double spending problem, but a simulation of decentralized data management.
Across all societies and eras, money has always been something real, a substance with a clear function. It might be a physical substance, like cows, tobacco, shells, stone, or metal. Or it might be intangible, like debt, which is the modern type of money. If we track money, we use a ledger, recording two fields: a number, indicating the amount of substance, and an ID, identifying who holds the substance. A bigger number means holding more of the substance. A smaller number means holding less. What does that mean in practice?
Consider gold, a physical substance with functions like resistance to corrosion, conductivity, density, and luster. The more gold you hold, the more of these functions you can get. Gold stores value because, in the future, its functions can benefit people. Even if you do not need these functions yourself, you can offer them to those that do.
Now consider Rai stones, a historical form of money made from large stone disks. Stone is a physical substance with properties like mass, hardness, durability, and surface area. These allow it to anchor objects, divide space, absorb heat, or resist erosion. The more stone you hold, the more of these physical functions you can get. Rai stones store value because their functions can benefit people.
Next, consider modern money: fiat currency like dollars. It is not physical like metal or stone, but it is intangible. Dollars are born as debt owed to the U.S. banking system, meaning they must eventually be returned to it. So if you hold dollars, you hold a substance with a debt-clearing function. You hold something others need. Dollars store value because their function can benefit those who owe to that system. The more dollars you hold, the more of that function you can offer to those who need it.
The pattern we observe is unmistakable. Money is always a substance. Numbers in the ledger only express the size of that substance. A substance stores value because, in the future, it can serve those who need its function. Without a substance, there is nothing to measure, and ledger entries would not exist.
This brings us back to Bitcoin. If we actually check Nakamoto's system, we see nothing but a database and a protocol managing it. The database is called Blockchain because it is maintained decentrally by many entities, not just one. It contains numbers tied to IDs, just like actual ledgers that track money. Entries are updated either by the protocol or by the users themselves.
However, there is no substance. Unlike a metal called gold, a stone called Rai, or a debt called dollars, there are no digital coins called "bitcoins." Number holders cannot identify any digital substance in the system whose size grows with a bigger number.
Nakamoto claimed that his system has electronic cash, essentially digital money. If that were true, we should identify a digital substance with a distinct function that grows with a bigger number. For instance, MP3s, PDFs, and software files are digital substance, with a clear function: providing music, knowledge, or performing tasks like text editing. If someone holds more of that substance, more bytes should be stored. So, a holder that supposedly has 1,000 bit-coins should be able to show a thousand times bigger digital substance than the one with only 1 coin. But all they can show is a few extra digits.
Without digital substance in the Bitcoin system, there is no function. Without function, no value. Without value, nothing to store. And without anything to store, there is no money.
Nakamoto’s claims in the white paper show a deep ignorance of what money is. What Nakamoto essentially thought is that money is numbers. If it were true that money is numbers, then the digit 6 would store six times more value than the digit 1. It could offer six times more benefit to people. But this is physically impossible, as they are both just one symbol. Money is always an actual substance with a clear function. Numbers only express its size.
Without a substance in Nakamoto's system, there is nothing to pay with or transfer. Meaning, the system is neither a payment system nor a solution to the double spending problem. Also, the Bitcoin blockchain is not a ledger, as it tracks no substance. So what is this system, really? It is obvious. It is a simulation of decentralized data management. Nothing less and nothing more. It manages data, but there is no money, no substance to track with that data. There is nothing to be spent, either single or double. The data is about nothing. The system is merely a technical demonstration, a sandbox, a demo of how data might be shared and updated across many machines. It is a concept test, not a paying network.
Yet the world took it as the real deal, and people are giving up actual money to join the system. Not only that, they are using Nakamoto's simulation to run a kind of self-governing pyramid scheme, one without a centralized operator. They are giving up more and more actual money just to hold numbers in a simulation. In the beginning, they gave up a small amount to make the simulation increase a number by 1. Now they give up a staggering 90,000 dollars for the same digital increment.
The tragedy is that what started from ignorance has spiraled into one of history’s greatest money redistribution schemes. The world believed it was investing in a revolutionary new form of money, but all it got was yet another participant-driven scheme, where people's investments depend entirely on new entrants joining.
There is another layer to this tragedy. Unlike traditional schemes, this one consumes enormous amounts of energy, comparable to the annual electricity usage of entire countries like Argentina or Sweden. This makes it not just a financial blunder but an ecological one as well. It also makes it a failed simulation. Spending so much energy just to manage data is not something that can have real-world application.