It’s always the case that low-value UTXOs may become immobile in a high-fee environment. Sufficiently small value UTXOs are dust—never worth moving even at 1 sat/vbyte. This is true no matter what enhancements we consider (base chain, Lightning, covenants etc.)
What covenants allow is more people holding keys per UTXO. So you could have relatively high-value UTXOs that are still movable in a high-fee environment, but which encode promises to pay a large number of key holders.
In the fullness of time, block space is unbounded. We’ve seen that even though occasionally fees become quite high, they don’t seem to stay that way forever.
Sorry, the TL;DR wasn’t based on your message but my own. I was summarizing my reply. I should have labeled it “Summary” instead.
I remain confident that decentralizing Bitcoin by making more efficient use of block space will make it more valuable than it would be otherwise.
If we do nothing, roughly 10-20 million people can hold keys on chain. Everyone else will have to use some kind of trust-based layer on top. 10-20 million is still way better than the status quo (banking), but increasing the number of people with keys is even better, IMO.
TL;DR: More key holders = number go up.
Money is a pure speculative good. No matter what the market thinks of your other assets, you speculate that people will want your money. The more people who want your money, the more valuable it is.
Densifying allows more people to hold keys on chain. More people can use the money. More people with a stake in the censorship-resistance and decentralization of #Bitcoin.
It is my belief that more is better regarding people with keys on chain. People who want the money and want to secure it make it more valuable.
For these reasons, I am SELFISHLY pro densification (pro covenant). More key holders = number go up.
Covenants will not, by themselves, allow unlimited scaling on L1. What they enable is greater density of key-holders on chain by sharing UTXOs. This could mean multi-party Lightning channels, for example.
Pegged shitcoins are still shitcoins. Holding your keys on Liquid or an eCash mint doesn’t make it sovereign. You can still get rugged by the issuer, or State regulators taking down the issuer, or hackers hacking the issuer, etc. etc.
It’s true that everyone can’t have their own UTXOs. However everyone could hold their own keys if we adopt densification measures (such as the various covenant proposals).
Even then though, it’s infeasible to have everyone using their own keys to do L1 daily transactions. Fortunately, shared UTXOs offer L2 scaling. Lightning is one example.
We must protect #Bitcoin decentralization. We do this by densifying to make ever more efficient use of precious block space.
Love the nostr:npub17tyke9lkgxd98ruyeul6wt3pj3s9uxzgp9hxu5tsenjmweue6sqq4y3mgl snuck in there 🧡
#QuietPartOutLoud
What’s the second best crypto asset?
Definitely leans dystopian. He thinks the world is basically fucked except for America. But like I said, he has some fundamental misunderstandings about money, which is a big deal if you’re trying to predict the outcomes of geopolitical changes spanning decades.
I’m halfway through Peter Zeihan’s “The End of the World is Just the Beginning”. I can’t vet the geopolitics, but the man has some serious misunderstandings of money which casts doubt, IMO, on his whole suite of predictions. 
QQ: is the structure of any of the growing number of #Bitcoin 501.3(c)s replicable? I’ve been thinking of starting a Bitcoin-based non-profit, and it would help myself and others immensely if there was a template. #asknostr
nostr:npub1qny3tkh0acurzla8x3zy4nhrjz5zd8l9sy9jys09umwng00manysew95gx nostr:npub1trr5r2nrpsk6xkjk5a7p6pfcryyt6yzsflwjmz6r7uj7lfkjxxtq78hdpu nostr:npub1j4u5gjzjyggr3h96x3gjy4akdgwxuk7mgvumv72gym2qyje7fn5s47d6x9
This guy know what I’m talking about
Write your fears down on paper. Then throw them away.
It’s from Alan Watts, IIRC.
nostr:npub1r0fj5wr200n0dz9nm37ysrhuy8xeg66ratq5hf960q62caaz8e5sqpuzz3 may recall.
F I A T J A F I S M nostr:note1l050u2vc7c73ncz8lfphm7lqp757pqazvjvhhfsrrvf9hruhlj2scups3v