"Bitcoin is a database. This is an inescapable technological reality. Money itself is simply a ledger, a record of who has what. Even physical cash is simply distributing that "database" in the real world. You no longer have to check against some central ledger to verify anything because the simple act of handing it to you is that process of verification."
"By its very nature Bitcoin requires supporting the inclusion of arbitrary data (read: data that it is impossible to know or define ahead of time) in order to allow users to transact. You don't know ahead of time how much money you will send (the satoshi field in outputs), where you will send it (the script field), what blockheight you might wish to spend it at (the nLocktime field in a transaction, or the nSequence field in a transaction input)."
Bitcoin functions as a database recording ownership through ledger entries, and money is fundamentally a ledger that records who holds value. Physical cash distributes the ledger itself, enabling verification by transfer without consulting a central authority. Bitcoin aims to reproduce cash's key property of permissionless spending so users can spend without a database operator's approval. Attempts to control or censor ledger content mirror futile efforts to police physical cash markings. Bitcoin transactions must accept arbitrary data—the satoshi amounts, script destinations, nLocktime and nSequence timing fields—to enable flexible spending conditions. Removing arbitrary data support would prevent Bitcoin from operating as a system. Metaprotocols layer protocols atop Bitcoin leveraging this capability.
Read at Bitcoin Magazine
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