Intro

Hey Degens,

Let’s say the quiet part out loud:

If Bitcoin was supposed to be money you spend, why does almost everyone just hodl, speculate, or YOLO leverage it instead of buying coffee with it?

Today’s issue is less about “what price target next?” and more about an uncomfortable, bigger question:

Did Bitcoin fail its original intended purpose?

To answer that, we need to separate:

• What Satoshi actually wrote

• What the market actually did

• And what took over the “everyday money” role instead

TL;DR

• Satoshi’s stated goal in the whitepaper was “a purely peer-to-peer version of electronic cash” for online payments without financial institutions.

• In practice, Bitcoin became a macro asset (digital gold / collateral / reserve) more than a day-to-day payments system. Academic surveys now mostly analyze BTC as a speculative or safe-haven asset, not as a currency.

• Payments reality: Only a small share of consumers use crypto for payments, and that share declined from 2022–2024 in US data. Even among crypto owners, only ~14% used it for payments in 2024, forecast to ~20% by 2026.

• Stablecoins quietly stole the “spendable crypto” job. They now dominate stable-value transaction volume, with trillions in annual transfers and a growing slice of cross-border payments.

• Lightning proves the tech can work as cash, but adoption is still niche vs. BTC’s market cap (8M+ monthly LN txs, merchant Lightning share ~15% by mid-2024).

• El Salvador’s “Bitcoin as money” experiment flopped in daily usage and was ultimately rolled back under IMF pressure in early 2025 — BTC lost legal-tender status after low real-world use.

• So: As everyday “peer-to-peer cash,” Bitcoin has largely failed so far.
  But as censorship-resistant, neutral settlement and macro asset, it has arguably over-achieved vs what anyone in 2008 thought possible.

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Main Event
1. What was Bitcoin actually supposed to be?

Satoshi’s whitepaper is brutally clear in the title:

And the abstract hits the mission in the first sentence:

Key pieces of that vision:

• Peer-to-peer: Alice pays Bob directly, no banks, no PayPal, no Visa.

• Electronic cash: Everyday transactions, potentially including micro-payments, which Satoshi explicitly calls out as blocked by traditional mediation costs.

• Trustless: Replace “trusted third party” with cryptographic proof and a public ledger, so no one entity controls the system.

What is not in the paper:

• “Digital gold”

• “Number go up forever”

• “Wall Street collateral layer”

Those narratives came later.

2. What the Market Actually Did With Bitcoin

From currency → “weird macro asset”

Over the last decade, the way economists and central banks talk about BTC shifted:

• Research and official reports tend to describe Bitcoin as:

  • speculative investment, or

  • potential store-of-value / hedge,
    rather than a functional everyday currency.

They point to:

• High volatility → terrible unit of account for salaries, rent, pricing.

• Throughput and fees → on-chain BTC handles ~7 tx/sec vs tens of thousands on Visa; when demand spikes, fees can hit double digits in USD.

• User behavior → people mostly hold or trade BTC, not spend it.

So BTC migrated up-market into a role that looks more like:

That’s very different from “my internet coffee money.”

3. Evidence Bitcoin Struggled as Everyday Money

3.1 Consumer payment data: tiny slice, shrinking in some regions

Take the U.S. as one example:

• A 2025 Federal Reserve research brief shows that the share of U.S. consumers using crypto for payments (purchases or transfers) fell from nearly 3% in 2021–2022 to under 2% in 2023–2024.

That’s already a tiny slice—and it shrank.

Globally:

• Estimates put worldwide crypto ownership around 6.8–6.9% of the population (~560M+ people in 2024), but most are holders, not daily spenders.

So yes, a lot of people own BTC. Very few spend it.

3.2 El Salvador: Bitcoin as legal tender… and then not

El Salvador was the ultimate “Bitcoin as money” stress test:

• 2021: BTC becomes legal tender alongside the USD.

• Government rolls out the Chivo wallet and a $30 BTC bonus to push adoption.

• Academic and policy analyses later show:

  • Most people claimed the bonus and stopped using it

  • Merchants accepting BTC were a minority

  • Volatility + UX + distrust crushed everyday usage

By 2025:

• IMF and independent studies describe the experiment as “bold but flawed” with minimal real adoption and no clear macro benefit.

• The country revokes Bitcoin’s legal-tender status (though it still holds BTC reserves), effectively saying: “This isn’t working as our cash, but we’re not fully exiting the asset.”

That’s a huge datapoint against “BTC as daily money,” at least in its current UX/regulatory form.

4. Lightning Network: The “It Can Work as Cash” Counterpoint

To be fair, we should separate Bitcoin-the-base-layer from Bitcoin-the-payments-stack.

Lightning is basically the “second attempt” at Satoshi’s payments dream.

4.1 What Lightning actually delivers

Recent data shows:

• The Lightning Network processed around 100 million transactions in Q1 2025, up ~28% from Q4 2024.

• Well-configured nodes can achieve:

  • Sub-second payment times,

  • Tiny fees (fractions of a cent).

That’s very much “peer-to-peer electronic cash” in practice:

• Fast

• Cheap

• Borderless

• Non-custodial if you choose

4.2 …but adoption is still niche

Zoom out though:

• One large payments processor reported that only ~6% of all Bitcoin orders from 2018–2025 used Lightning, peaking at 15.4% in 2024 and then dropping to 11.7% in 2025.

• Lightning still handles far less volume than global card networks or stablecoins, which are processing tens of trillions a year.

So Lightning is real, improving, and important—but it’s not yet “the money layer for everyone.”

5. Who Actually Became “Internet Cash”? (Hint: Not BTC)

If you look strictly at who is being used like money, stablecoins are the ones speed-running Satoshi’s payments dream (minus the “fixed supply” ideology).

5.1 Stablecoin volume vs TradFi rails

Recent numbers:

• Total stablecoin transfer volume exploded from $3.3B in 2018 to $18.4T in 2024, overtaking Visa’s ~$15.7T and surpassing Mastercard.

• A Binance-summarized report pegs daily stablecoin transactions at around $3.1T, more than Visa’s daily volume and just behind ACH in the U.S., with total stablecoin market cap over $300B.

• TRM Labs and others estimate that stablecoins now account for ~30% of all on-chain crypto volume, with >$4T in volume in the first eight months of 2025 alone.

That’s… a lot of “peer-to-peer electronic cash,” just mostly dollar-pegged, not BTC-denominated.

5.2 Why stablecoins won that lane (for now)

A few simple reasons:

• Price stability: No one wants rent due in an asset that might be –15% week over week.

• UX: Wallets, exchanges, and fintech apps made USDT/USDC flows feel close to Web2.

• Regulation: New frameworks like the U.S. GENIUS Act in 2025 explicitly target stablecoins, giving clearer rails for banks/fintechs to integrate them.

So functionally:

• Bitcoin = collateral, reserve, macro bet

• Stablecoins (on BTC, ETH, Solana, etc.) = the thing people actually use as digital dollars

BTC is still foundational, but it’s less like the cash in your pocket and more like digital T-bills / gold in your vault.

6. So… Did Bitcoin Fail?

Let’s break it into three verdicts.

✅ 1. As a protocol experiment: Success

• It solved the double-spend problem using a decentralized, permissionless network.

• It has stayed secure and operational since 2009 with no central operator.

• It proved you can have global, non-sovereign, censorship-resistant value on the internet.

By computer-science standards, that’s a huge W.

❌ 2. As mass-market “peer-to-peer cash”: Mostly a failure (so far)

If the standard is:

Then:

• Consumer usage for payments is tiny, and even shrinking in some major economies.

• The most aggressive state-level push (El Salvador) ended in low usage and legal-tender rollback.

• The heavy transactional lifting has clearly drifted to stablecoins and other rails.

On that axis, Bitcoin basically lost the “everyday cash” race, at least in this era.

⚖️ 3. As a neutral reserve & settlement layer: Massive, unintended success

Where Bitcoin did win (and is still winning):

• As a macro asset:

  • Held by companies, funds, and even states.

  • Deep derivatives and ETF markets.

• As neutral, censorship-resistant collateral and settlement base layer that other systems sit on top of.

• As a political & cultural symbol of “exit from fiat” and “money not controlled by any single government.”

So the honest one-liner:

Degen Toolbox: How to Treat BTC Going Forward

Here’s how I’d frame it for your readers—both traders and builders.

7.1 If you’re investing or trading

Think in lanes, not narratives:

• Lane A – BTC as macro asset

  • Treat it like a long-duration, high-volatility bet on:

    • Non-sovereign money demand

    • Institutional adoption

    • Global liquidity cycles

  • Your questions:

    • “What does the Fed path look like?”

    • “Are ETFs + treasuries accumulating or distributing?”

    • “How over-levered is the derivatives stack right now?”

• Lane B – Stablecoins as money

  • Don’t expect BTC to behave like stablecoins. BTC is more SPX/Gold hybrid; stables are dollars with extra features.

  • Your questions:

    • “Where is stablecoin growth fastest (regions + chains)?”

    • “Which infra tokens actually capture fees from that flow?”

7.2 If you’re building

Ask yourself:

• “Am I building on top of BTC the asset, or BTC the payments stack?”

  • Asset side → custody, derivatives, treasuries, on-ramps, structured products.

  • Payments side → Lightning, stablecoin bridges, FX, B2B rails, remittances.

And be honest about user behavior:

• Right now, most users want BTC as something they hold and stablecoins as something they spend. If your product assumes the opposite, you’re swimming upstream.