Good currency incentivizes transactions, not just allows for them. Good stores disincentivize transactions through future gains and taxes.
This is the fundamental distinction often overlooked in conversations about Bitcoin and its potential as money. While Bitcoin was originally envisioned as a decentralized digital currency, its deflationary design—hard-capped at 21 million coins—ensures that it behaves more like a digital commodity than a true medium of exchange.
The problem isn’t just that Bitcoin is slow or that fees are high (problems Lightning Network tries to solve). The deeper issue is that Bitcoin’s deflationary DNA creates a built-in incentive to hold, not spend. The more valuable Bitcoin becomes, the less it makes sense to use it for everyday transactions. Why buy coffee with Bitcoin today if it might be worth twice as much in a year?
This behavior is perfectly rational—but it’s also why Bitcoin (and Lightning, by extension) struggles to function as currency. Even though Lightning improves Bitcoin’s fiscal usability—making it faster and cheaper to move—it cannot change Bitcoin’s monetary character. Lightning is still tethered to a deflationary asset whose core use case is value storage, not circulation.
And this is why Bitcoin ends up behaving more like digital gold or equity than like cash. In fact, we already have a class of assets designed to store value over time—stocks and bonds. These not only appreciate, but also actively discourage frequent transactions through capital gains taxes and the prospect of missing future returns. Bitcoin behaves similarly: the longer you hold, the more you (potentially) gain; the more you transact, the more you risk losing future upside.
A good store of value resists movement.
A good currency must move.
Currency needs to incentivize flow, not accumulation. That’s what makes the U.S. dollar so successful—not just that it’s easy to spend, but that it makes more sense to use it now than to save it forever. Inflation plays a crucial role here. A moderate, managed inflation rate nudges people to keep money moving—paying wages, buying goods, starting businesses—rather than hoarding it in hopes of future appreciation.
What we need, then, is not a faster deflationary token like Bitcoin over Lightning, but a blockchain-native, inflationary, and transparent currency—something that combines the accountability of decentralized ledgers with the monetary elasticity of fiat. That’s the way to achieve high velocity, broad adoption, and healthy economic coordination on-chain.
Until then, Bitcoin and Lightning will remain excellent tools for storing value—but they will never be true currencies. Because good currency isn’t just about being able to transact—it’s about being designed to encourage it.
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