delvingbitcoin
Is it time to increase the blocksize cap?
Posted on: June 3, 2024 20:02 UTC
The future of Bitcoin hinges on its adoption and scalability.
As it stands, Bitcoin's infrastructure can support roughly 700,000 transactions per day. However, considering a hypothetical scenario where Bitcoin becomes a global currency used for daily transactions by billions, the number of transactions could easily reach 10 million per day. This vast discrepancy highlights a significant bottleneck in Bitcoin's capacity to handle the volume of transactions that would come with being the world's currency. In such a scenario, it is conceivable that large financial institutions might outbid regular users for transaction space, pushing the cost of transactions to prohibitive levels. Consequently, any unspent transaction outputs (UTXOs) valued at less than $1000 in Bitcoin could become worthless, as their value would be less than the cost required to spend them.
On the other hand, if Bitcoin fails to become the universal currency it seeks to be, it could be argued that it has not achieved its foundational goal. This dichotomy presents a critical examination of Bitcoin's long-term viability and purpose. The success or failure of Bitcoin, therefore, is not just a matter of technological capability but also of its ability to meet its ambitious goal of becoming the currency of choice for billions worldwide. This analysis underscores the importance of scalability solutions for Bitcoin to avoid the potential pitfalls of high transaction costs and limited accessibility, ensuring its place as a viable global currency.