Get ready, get ready. Reading this may make you angry and confused, it may confuse you, and you may even get mad enough to punch your screen (don't do it). Consider this as a trigger warning.
Bitcoin is a database. a period. This is what it is. A blockchain is a database to store past updates to be able to reproduce the current state of that database, the UTXO cluster. The entire Bitcoin protocol is built Database. What is a valid entry in that database, and what is an invalid entry for that database? Who is allowed to suggest entries to that database, how can you ensure that only those users' entries will be considered and accepted? What authentication mechanism restricts writing entries to this database? How do you control database entries so that people can't do too much and cause the program that manages the database to overload or crash? How can you make sure people can't make individual entries large enough to cause other denial-of-service concerns?
It's all about the database.
Proof of work? The whole purpose of this in the protocol is to manage who can actually process updates to the database. Bitcoin is supposed to be a decentralized system, so it needed a way to update the database in a decentralized way while allowing users to reach consensus on all their individual copies of the database in a single update to it. If everyone is just updating their own version of the database themselves, it is not possible for everyone to reach consensus on one version of the database. If you rely on a few authority figures to handle updates, the update process is not truly decentralized. This was the point of POW, to allow anyone to process the update, but not without incurring a verifiable cost in doing so.
Proof of Work is simply a decentralized mechanism for updating the database.
The entire peer-to-peer network architecture? It exists only to propagate proposed database update entries (transactions), and final database updates (blocks). Do nodes verify transactions when they enter their memory pool? It is to pre-filter the proposed input updates to the database and ensure that they are correct. Do the nodes verify that the block meets the required difficulty target? It is to filter the previously proposed database update and ensure its validity before passing it to other nodes to update their local copy.
A peer-to-peer network exists only to reconcile multiple copies of the same database.
Bitcoin scenario? It literally exists for the sole purpose of acting as an authorization mechanism for entries in the database. In order to delete an existing entry in the current database state, UTXO set, the user proposing this update must provide an authentication proof that meets the conditions of the script that locks the current database entry. Only existing entries, or UTXOs, can be “spent” in order to allow new entries to be created in the database. Miners are the only ones in the protocol that are allowed to create entries without fulfilling the condition of removing an existing entry by meeting the licensing requirements set forth in its lock script.
The Bitcoin script is just a mechanism to control and restrict who can write to the database.
Every aspect of what Bitcoin is revolves around the core central function of maintaining a database, and ensuring that the many network participants who maintain their individual copies of that database stay in sync and agree on the current state of the database. All the characteristics that make Bitcoin a form of money, or a means of payment, Literally derived from how it works as a database.
Many people in this field believe that this database should only be used as a means of payment, or a form of money, and I sympathize with this opinion. I also think this is the most important use case for it, and I think every effort should be made to scale this specific use case as much as possible without sacrificing the sovereignty and security of being able to directly interact with this database yourself.
But it's still just a database when it boils down to the objective reality of what Bitcoin is. People willing to pay the satoshi-denominated costs to write an entry deemed valid under the rules of that database can do so. There is nothing you can do to prevent them from changing what is considered a valid entry in that database, which would necessitate convincing everyone to adopt a new set of rules regarding valid entry.
People can freely compete within the consensus rules to write whatever they want into this database, as long as they pay the required costs of the rules and the mining incentive structure to do so. a period. Are many of the things people can enter into a database stupid? Yes. Of course they are. The Internet is full of amazing amounts of stupid stuff in isolated databases everywhere. why is that? Because people are willing to pay the cost of putting stupid things into the database.
Whether it is database users paying the provider and running, or the operator itself allowing certain things to be entered as part of operations without passing the cost on to the user, is irrelevant. This stupid stuff only exists somewhere in digital form because somehow, the cost of doing so is paid.
Bitcoin is fundamentally no different from any other database in this regard. The only difference is that there is no single owner or gatekeeper dictating what is and is not allowed. Each owner of a copy of the Bitcoin database is able to allow or disallow whatever they want; The problem is that if they choose to reject something that everyone finds acceptable, they don't agree with everyone. Their local database is no longer in sync with the global default database that others follow and use.
If you find that some database entries are unacceptable, by all means change the rules by which your local copy validates new entries. But this is cutting off your nose to spite your face. Ultimately, Bitcoin operates on one simple, intuitive principle: pay to play. If people pay the fee, they can play. This is how it works.
Ultimately, it is entirely up to each individual what they want to allow or disallow in their database, but going beyond all the semantics and philosophical debates going on now, one thing remains undeniably and objectively true: Bitcoin is a database.
