Imagine you write your name, or any arbitrary identifier, such as a random string like “qViLJfdGaP4EeH”, on a piece of paper. Next to it, you write “50.” You then ask a friend: What does this “50” actually mean, what referent it represents? Is it a length? A temperature? The number of items in a room? A promise to pay 50 dollars? Shares in a company? Units of a commodity? The number of imaginary unicorns you just invented? Or perhaps a score in a game?
Your friend obviously cannot tell. Moreover, whatever referent you claim it represents, you cannot prove it if all you have is an identifier and a number assigned to it. Any assertion about its meaning remains an unprovable, and ultimately false, statement.
The Bitcoin whitepaper is exactly that kind of false statement. In it, its author, Satoshi Nakamoto, described a protocol that assigns numbers to identifiers and presented it as a system for managing “electronic cash.” He repeatedly used terms like “digital coins” and referenced financial institutions, strongly suggesting that the numbers carried a monetary referent.
In reality, however, all that exists is a complex, digital version of that simple piece of paper. Instead of a single sheet, we have a distributed database replicated across thousands of devices. This database records which numbers belong to which cryptographic identifiers (addresses). There are rules governing how these numbers are initially created, how they may be reassigned, and how duplication is prevented. Yet there is still no external referent. If Nakamoto had instead spoken about meteorology and claimed the system measured temperature, or about sports and claimed it recorded game scores, nothing in the protocol itself would need to change. The only things that would exist are identifiers and numbers.
There is nothing in Bitcoin that resembles the structures found in actual financial institutions: legally enforceable obligations, creditor–debtor relationships, collateralized claims, loan contracts, equity stakes, or rights to future cash flows. Likewise, there is nothing that corresponds to the tangible elements of meteorology or sports, such as thermometers, timers, scoreboards, rule-defined scoring systems, or physically observable performance.
Out of nowhere, Nakamoto declared that his system was financial in nature and millions of people accepted the claim without scrutiny. Someone initially gave up pizza to have a number assigned to an identifier created within Nakamoto’s system, and that was recorded by adding an entry to the database. Others began joining in, giving up ever-larger amounts of electricity, money and goods to acquire these numbers.
Yet to this day, no one can point to any actual referent outside these numbers. If they claim they bought “coins”, they cannot prove it. If they claim they bought a game score, an imaginary unicorn count, or corporate shares, the situation is no different: the assertion remains equally unprovable.
All they can prove is that the numbers are related to a process of random guessing and verifying hashes, making them a kind of score in that process. Yet, they keep believing they are related to finance. They often say like "fiat money is also numbers," ignoring the fact that sports results, meteorological measurements, scientific data, stock ownership records, and traffic flow statistics are also numbers. Systems in every field use numerical data, but the data is just the expression of the referent.
In the end, Bitcoin is nothing more than a sophisticated list of meaningless numbers attached to meaningless identifiers. People collectively believe in a monetary referent that does not, and cannot, exist within that system. Like any other shared delusion, it persists only as long as enough people continue to act as if the emperor is wearing clothes.
