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Someone recently posted a YouTube video addressing transaction fees in the base later. They did a thought experiment and the math on hundreds of millions of BTC users in the future competing for on chain settlements. The gist of it was that there is finite block space, finite transactions per unit time, and that fees will inevitably be cost prohibitive except for the largest transactions. The math is easy enough to understand for how many layer one settlements can be done in a given year based on protocol limitations.

The speculation is that fees will approach five figures as more adoption occurs. Have any of you ever gone down that rabbit hole to look at that possibility? It's one of my worries for the long term success of this technology. What say you?

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Discussion

GHOST 2y ago

On chain transactions don’t really make sense for day to day shopping. Fees are a concern as you noted and sitting at the register with your ice cream for 10 minutes isn’t going to work.

At the adoption level you are talking about the price of bitcoin will be orders of magnitude higher than they are now. Which means most transactions will be a couple thousand sats or large zaps.

Enter layer 2 chains like lightning, liquid, ark, and I’m sure new ones over time. Fast, cheap, and perfectly suited to quickly pay for whatever you need.

In the future on chain transactions will be major financial transactions and layer 2 will be what most people use everyday.

waxwing 2y ago

It's an inevitable consequence of the success of such a protocol imo.

(Not "5 figures", just large. I have no idea what figure exactly).

Important to understand that in various ways, individual on-chain txs are likely to represent aggregation of many actual financial events. Lightning channel opens/closes are just the very early example of this, it will become a lot more sophisticated and layered over time.