The power of Bitcoin is that it’s thermodynamic measurement device (not just a database of balances). Every satoshi input and output can be traced through the ledger, allowing anyone to verify that the conservation law holds, no double-spend has occurred, and that every joule of work has crystallized into permanent structure. If transaction amounts were encrypted, this transparency would vanish. You could no longer audit the full energy pathway of the system. The conservation of inputs and outputs would rely on cryptographic proofs and trust in their construction, not open verification. At that point, Bitcoin stops being a universal energy ledger and collapses back into the same model as fiat. That destroys its role as a measurement system, because measurement requires direct visibility of conservation at every step.
You can’t measure Joules to Satoshis if amounts were encrypted as you could not publicly measure the entropy resolution of each block. This destroys the innovation of Bitcoin.
Arbitrary data inscriptions are different as they are not about conservation of supply, but about expression. They are still monetary because they cost sats and consume scarce blockspace, but their semantic form (plaintext vs encrypted) should be left to the user’s discretion. Forcing all data to be encrypted would erase Bitcoin’s role as a public inscription medium. The ledger would no longer carry messages visible to the community, only opaque ciphertext. This matters because inscriptions are not noise, they are proofs of energy expenditure with meaning attached. Sometimes that meaning is private and should be encrypted. Sometimes it is public and meant to be witnessed. Bitcoin’s neutrality lies in allowing either, so long as the thermodynamic cost is paid.
Bitcoin’s genius is to keep the energy ledger public while leaving freedom at the edges. Conservation must remain observable, but inscription must remain free of choice.
