I think where people stop thinking correctly about the block size is that no matter how big it is, it's still finite and can't possibly scale to "buy a cup of coffee" as the network grows. Imagine many billions of transactions a day on the network, some for buying coffee. What it needs to do is be auditable by individuals running their own node, this is why small blocks are essential to the continued viability of the network. Layer 2's are where smaller purchases should and do take place for the most part. Trust minimized scaling for small purchases, not sure if lightning is the winner, but at the moment the most utilized and mature L2, time will tell though.
Discussion
Lightning won’t be “the winner” in the sense you are thinking. Lightning scales *payments,* but not UTXO ownership.
We will simply have different protocols for scaling different functions of money. I highly suspect that CTV (or something similar) will be the dominant UTXO ownership scaling primitive, but time will tell there.
I think Lightning has pretty much cemented itself as the major payments scaling and bridging technology, and competing with its liquidity at this point would be difficult without a legitimate 10x disruptor. Which I would be thrilled to see, but find incredibly unlikely in the short term. I suspect the improvements will be incremental, and will actually be updates to Lightning, rather than a replacement.
It’s hard to understate the scaling potential of the *combination* of UTXO scaling AND payments scaling. Imagine if 90% of lightning channels were “virtual,” and never actually had to be confirmed on chain. This is what we could potentially see, and it would be awesome.
🤙🤙🤙