Replying to Avatar Dr. Bitcoin, MD

If it becomes too expensive to transact on chain, and it becomes too expensive to transact on chain in sufficient fashion to run a censorship resistant L2 network, then bitcoin literally becomes digital gold: totally centralized.

Bitcoin is far from condemned to such a future. But it needs work. And balance to keep a network running…miners need a reason to mine and users need to be able to transact at prices reasonable for the value onchain transactions provide. But new software needs to be written to make the best use of block space and that work is under way.
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MethFred 8mo ago

a high fee environment in Bitcoin isn't sustainable. we're talking 100 sat/vB or more. that's about 30k sats for simple txs.

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Dr. Bitcoin, MD 8mo ago

I totally agree. Except high is relative to the number of payments a single on chain transaction represents. $1000 tx fee is totally fine if it represents 10,000 decentralized censorship transactions on an L2.

I do think the old days of individuals using on chain bitcoin for P2P transactions will never scale to incentivize mining while remaining censorship resistant and decentralized. But this has been recognized by the smart kids since like day 2 of bitcoin. Hal instantly saw this and suggested something like banks to solve the scaling problem, but I think lightning and other L2s will make on chain transactions worth the cost because they compress many payments into a single bitcoin transaction.

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MethFred 8mo ago

a simple rule of thumb i use: if there's spam, it's cheap