Does Bitcoin Need To Scale

[Hydrogen]

Basic premise

• Bitcoin HODL may have no reason to scale
• For the same reasons 401ks, roth IRAs, precious metals and other HODL investment vehicles are not structured to accommodate thousands of ATM convenient fund transactions per second

....

High volatility, instability and price fluctuations are more strongly correlated with day traded FOREX assets which can be utilized to buy a cup of coffee. In contrast to the polar opposite.

Long term investment vehicles, tend to prefer lower average volatility coupled with balance locking virtually identical to crypto staking. Or limited options for withdrawal, with some time based penalties for early fund access.

There may be a fundamental conflict between being a high volume day traded asset which can be utilized to purchase daily goods and services. And being an optimized HODL asset. Which in traditional finance is geared towards lower volatility, less volume and reduced access. A conflict which is seldom acknowledged.

I think this is an interesting discussion topic for crypto. What do you think?  

[1715084551]

1715084551

[stompix]

In the last 24 hours, there were 341 000 transactions with around 900 000 outputs.

At this pace, assuming everyone would simply hodl and not move a coin, it will take 20 years for everyone on earth to get a bitcoin, if everyone would then want to move that coin to a different wallet it will take another 20 years if they would want to send it to an exchange and sell another 20 years.
So, between getting your coins, sending them to storage and then selling them to cash out you will have an average of 40 years.
That's some extreme holding, isn't it?



 

[Kakmakr]

Forex (Fiat currencies) are used for trading and daily use, why should Bitcoin be any different? The lightning Network is supposed to function as the high volume side-chain for daily transactions and the normal day trading are mostly done on internal exchange platforms and not on the actual Blockchain. (Only when you withdraw to BTC at the exchange or sending BTC to the exchange)

Nah... Bitcoin is very well developed to handle both the load from daily "currency" transactions and the smaller day trading and withdrawals from exchanges.  

[DooMAD]

The answer people provide to that question is going to depend primarily on their personal perspective.  Those who want to see Bitcoin closely resemble digital cash are likely going to lean more towards 'Yes'.  Those who use it as more of an asset class may naturally lean more towards 'No'.  In practice, there isn't a right or wrong answer.  Only an answer that will suit any given individual's preferences.

My thinking is, whether anyone thinks it needs to scale or not, those who believe Bitcoin does need to scale will focus their efforts on developing towards that goal.  So, given the nature of permissionless development, they are the ones with the impetus behind them.  I don't really see how anyone could develop towards the goal of preventing scaling, given that there are many ways to achieve it which don't necessarily require full consensus.

Essentially, the picture points to scaling happening regardless.

But if we're talking exclusively about the speculators who want to see Bitcoin as an "optimized HODL asset", I'd say there's too much of a dichotomy in Bitcoin for that to ever be practical.  You can certainly use Bitcoin in that manner if you wish, but I doubt that's ever going to be the only way it's used.  So it will never be "optimised" in that regard.  You're always going to have those people sharing this network with you who want to spend their BTC like a currency.

[davis196]

I think that there's no contradiction between the long term HODL investors and the short term crypto day traders.They both need each other.
The day traders provide market liquidity and can pump the price,creating bullish rallies and the possibility of reach a new ATH.On the other hand,the expectations for new bullish rallies and a new ATH are the main reasons the HODLers are buying and HODLing their bitcoins.
If we try to view this from another perspective,the HODLers are reducing the market supply of BTC,by holding their Bitcoins,therefore creating conditions for the Bitcoin price to go up(limited supply+increased demand=higher price+higher price volatility).
This is exactly what the day traders want.It's a win-win.

[exstasie]

High volatility, instability and price fluctuations are more strongly correlated with day traded FOREX assets which can be utilized to buy a cup of coffee. In contrast to the polar opposite.

Forex assets in your brokerage account can't be used to buy a cup of coffee. And that's mainly what we're talking about isn't it? Most people treat BTC like an investment asset, including Wall Street. That equates to lots of BTC locked up with custodians, and lots of HODLing, regardless of what investors can do with it in theory.

There may be a fundamental conflict between being a high volume day traded asset which can be utilized to purchase daily goods and services. And being an optimized HODL asset. Which in traditional finance is geared towards lower volatility, less volume and reduced access. A conflict which is seldom acknowledged.

What's the conflict exactly?

The potential reward associated with BTC investment greatly outweighs the volatility risk. Smart money can see that.

[RealMalatesta]

I believe bitcoin is a currency and because of that it should be able to scale to a lot of transactions per day.
If we are having trouble with times and prices of fee's right now, think about what would happen if bitcoin became a regular standard of payment method?

Like let's say you have a debit card but it is purely based on your bitcoin holdings, you go out to a restaurant and eat something and pay with bitcoin, then you go to movies and buy the ticket with bitcoin, and after the movie you go to a cafe to eat a desert and then you go home, all of which was paid with bitcoin which is awesome right? We all want bitcoin to be something like that right?

But, if we can't even handle the current situation how are we going to make it work for the days we could spend like that?

[pixie85]

Without some scaling solutions like segwit and the lightning network Bitcoin would have bottlenecked long ago.
If you were trying to send a transaction in January of 2018 you knew how painful a bottleneck can be.

I suspect that this situation would only grow and make people unable to process a transaction without waiting a week or paying $200 in fees.

[Rengga Jati]

Will this thing depend on each person or holder of the BTC and other assets whether they want to scale or not?
Bitcoin is interesting asset not only for hodl but also for trading. Let set aside the trading in this case and focus on hodl.
So far, Personally, I only have target of holding my BTC safely in the wallet. It depends son how I manage the asset so far. But importantly, they must be diversified.
1. For long term holding or investment, I think I need some ways to scale in what times or years I will hold the bitcoin, how many years, at least it should be more than 4 years, Why? I have no exact reason for this. 
2. Holding to get the target of reaching a certain amount of the BTC price. It may be safe enough and I need to disversify the selling tme of this BTC asset.

However, if it is discussed generally, we may not have any exact scales that can be the guidance for the price and also period. 

[alani123]

Define scale... People usually use that word talking about something completely different with bitcoin.

Anyway, I think the point trying to be made here is that BTC doesn't generate a stable positive cash flow as for example QQQ or S&P500 would do long term.

Well, my take would be that with BTC a positive cash flow isn't important. BTC is cash money, but completely disconnected from any systemic risks as modern finance defines them. There's absolutely no possibility of bank collapse, hyperinflation, government or state failure etc. People that hold BTC already must have their means to survive otherwise with their everyday transactions.

Frankly, BTC is a better instrument of facilitating every day transactions only in places where inflation is crazy high and government can't easily support its citizens. In such occasions there are some edge cases that could see more utility from BTC than their local cash. But most people in let's say Venezuela where there is a lot of inflation don't even have regular access to good computers or Internet.

Long term investment vehicles, tend to prefer lower average volatility coupled with balance locking virtually identical to crypto staking. Or limited options for withdrawal, with some time based penalties for early fund access.

That sounds much like term deposits and government bonds. Well, these options aren't real investments. They bear no risk. They merely let you beat part of the projected annual inflation but not much more.

There may be a fundamental conflict between being a high volume day traded asset which can be utilized to purchase daily goods and services. And being an optimized HODL asset. Which in traditional finance is geared towards lower volatility, less volume and reduced access. A conflict which is seldom acknowledged.

This is a topic that has been widely discussed. There's an inverse relation between bitcoin's utility as a payment tool and its price for example. Because when prices skyrocket, so do the fees. So when bitcoin goes up in price, it's not so useful for payments anymore because you have strong counter incentives to use it for everyday payments due to fees consisting of an evergrowing part of your transactions as prices rise.

[TitanGEL]

Will this thing depend on each person or holder of the BTC and other assets whether they want to scale or not?
Bitcoin is interesting asset not only for hodl but also for trading. Let set aside the trading in this case and focus on hodl.
So far, Personally, I only have target of holding my BTC safely in the wallet. It depends son how I manage the asset so far. But importantly, they must be diversified.
1. For long term holding or investment, I think I need some ways to scale in what times or years I will hold the bitcoin, how many years, at least it should be more than 4 years, Why? I have no exact reason for this. 
2. Holding to get the target of reaching a certain amount of the BTC price. It may be safe enough and I need to disversify the selling tme of this BTC asset.

However, if it is discussed generally, we may not have any exact scales that can be the guidance for the price and also period. 

I saw a lot of posts that have a problem in terms of holding, why you will hold your bitcoins when the trend is in bearish where it keep making lower lows and lower highs. It is sounds crazy but you are holding in order to lose money if you do it if the trend is bearish. There is also no risk management that I see for those who keep do HODL where they just hold and they do not have stop loss levels that can help them to minimize their losses. There is nothing wrong in doing HODL, the wrong is if you do HODL where the trend in downtrend and if you do not have proper risk management about it.

[Naida_BR]

It is very doubtful what people think about bitcoin.
Some think that Bitcoin needs to be utilized as an asset that is going to be used for the daily transactions and some others that is a digital asset that gains value in long term.
Personally, I believe that Bitcoin is the second option. If we want a crypto to be used in daily transactions we must use another coin but not BTC.

[hatshepsut93]

High volatility, instability and price fluctuations are more strongly correlated with day traded FOREX assets which can be utilized to buy a cup of coffee. In contrast to the polar opposite.

Fiat currencies change by a fraction of percent per day, and a few percent movements generally happen only a few times per year. This volatility is nothing compared to Bitcoin.

More consumer transactions would mean less volatility for Bitcoin, because the current speculation is based on uncertainty whether Bitcoin will succeed as a widespread payment method or not. If it will, then there will be less reason to speculate.

[DoublerHunter]

^ There is no right or wrong answer to this question for bitcoins are similar to fiat currency it depends on the personal perspective if they will treat them as a long term investment or be used in a daily transaction. Both of these has it's own role in the stock market for they can bring a pump and dump to the value of cryptocurrency but making bitcoins on a day trading will be great besides it is also the reason why we will hodl bitcoins and earn as much as we could for we could use it somehow on our necessities. On my own, I prefer seeing my bitcoins as a form of payment replacing the fiat currency and not being governed by any banks globally.

[DooMAD]

Define scale... People usually use that word talking about something completely different with bitcoin.

Exactly.  There are several varieties.  It's difficult to ascertain whether the OP was referring to all, or only some, of these:

• A decent amount of scaling can come from optimisations and efficiency savings - squeezing a larger quantity of transactions into the space we currently have available.  This is generally considered to be the least contentious option.  We'll hopefully see a few of these in the not-too-distant future.
  
  
• Willing users can opt to send smaller transactions off-chain, sacrificing some security for speed and cost-effectiveness - leaving more space in blocks for significant sums that require the greater security provided by on-chain transactions.  Contentious to some, but it's a moot point.  Still in a fairly early developmental stage.  Currently more suitable for the tech-savvy "power users", rather than less experienced ones.  If successful, it could have the largest impact of all.
  
  
• We can increase blockweight if absolutely necessary - a potential sacrifice to the decentralisation of the network in order to achieve greater throughput.  Highly contentious to many.  Difficult to achieve consensus on.  Generally considered a last resort.
  
  

[BrewMaster]

but bitcoin is not an investment, it is not stock, ... it is a currency. in fact without bitcoin being a currency it becomes worthless and things like HODL lose all meaning. you see everything has a value according to its utility. if bitcoin was only an investment then there would not be any reason for it to exist. if you think about it a little you can see that it would mean that we created a blockchain to store wealth and gain wealth and nothing else! and that makes no sense and is not a utility. not to mention it won't grow at all.

the only reason why bitcoin has grown in the past decade is because it is a decentralized payment system. and a good one at that.
coming back to your question the answer is obviously yes bitcoin needs to scale to become a better payment system.
why do you think hundreds of thousands of hours have gone into developing scaling solutions? why would they even bother with LN if bitcoin was only an investment and didn't need to scale?

[exstasie]

but bitcoin is not an investment, it is not stock, ... it is a currency. in fact without bitcoin being a currency it becomes worthless and things like HODL lose all meaning. you see everything has a value according to its utility.

Bitcoin requires a base level of transaction liquidity (spending and reciprocal acceptance) to have any value, that's true. So does anything else that is used as a store of value.

However, I think it would be very wrong to say its value is based on its utility. The past hype cycles alone sort of prove that. Bitcoin's value is still mostly speculative. The market is pricing in the future likelihood of adoption. In my opinion, adoption means people buying BTC (whether to use or hold) because that's what defines market demand, not utility.

If nobody were willing to spend BTC, it would be worth nothing. If the mining security model failed, it would be worth nothing. But assuming these conditions are met, speculators take them as a given. In other words, these metrics are not what the market price is based on.

[yhiaali3]

For me, I just don't want to see bitcoin as an "optimized HODL asset" but I hope to see it spread like Fiat currencies around the world and you can then use Bitcoin to speculate or as a currency to buy the things you need.
I hope (and I think that this will become reality one day) that I see Bitcoin as a global currency used in the whole world without restrictions and without the need to exchange it for another currency such as the dollar or other, where you can buy online or from the store located near your house or use it on the stock exchange.
So for me, I don’t care much about holding bitcoin until the price goes up and I don’t care if it goes down because you can work in either case but what matters most to me is the spread of bitcoin.

[DooMAD]

but bitcoin is not an investment, it is not stock, ... it is a currency. in fact without bitcoin being a currency it becomes worthless and things like HODL lose all meaning. you see everything has a value according to its utility.

Bitcoin requires a base level of transaction liquidity (spending and reciprocal acceptance) to have any value, that's true. So does anything else that is used as a store of value.

However, I think it would be very wrong to say its value is based on its utility. The past hype cycles alone sort of prove that. Bitcoin's value is still mostly speculative. The market is pricing in the future likelihood of adoption. In my opinion, adoption means people buying BTC (whether to use or hold) because that's what defines market demand, not utility.

I've often suspected that any attempt to define the value through a single aspect is going to land wide of the mark.  It seems more like a combination of factors that result in the value.  Also missing from that linked post is the production cost of mining and probably a few more facets besides those that I haven't yet considered.

[Febo]

Does Bitcoin Need To Scale

It dont. But will be way more valuable and useful if it scale a lot. It is simple as that. Bitcoin can stay exactly as it is right now and both Lightning and Liquid can fail and any other scaling solution. That dont mean suddenly no one will use Bitcoin anymore. We will. But that add on of use case and value that more transactions would bring will not be here.

[Ozero]

In fact, the normal scalability of the cryptocurrency, which allows transactions to be performed without undue delays, is, first of all, the convenience in using the cryptocurrency. A cryptocurrency that is less slow in transaction than bitcoin probably no longer exists. Therefore, to raise the question of whether it is necessary to increase the scaling of bitcoin, this means whether we need a bitcoin that will be convenient to use. In my opinion, the conclusion is obvious.

[$crypto$]

Bitcoin is a very important asset for those who will do a large scale in the long run for the HOLD they will think that volatility will be high at the same time later and this is a matter of time where assets will be safe in safer storage.

But on a scale, people certainly have their own goals about the assets in HOLD that they do to cover liquidity with funds that cannot be drawn in for a long time.

There are also their daily traders just to increase the volume that occurs in the market so that this will add higher liquidity and bitcoin will become more trusted by investors.

[famososMuertos]

I think that scalability must be oriented to satisfy all users. Regardless of particular needs or usage trends.

Today with bitcoin we are in that stage of execution, the technological one, perhaps stuck thinking about how we improve (scalability) the Bitcoin.  when at this time, it really isn't necessary.

GB.

[Naida_BR]

Bitcoin is a very important asset for those who will do a large scale in the long run for the HOLD they will think that volatility will be high at the same time later and this is a matter of time where assets will be safe in safer storage.

But on a scale, people certainly have their own goals about the assets in HOLD that they do to cover liquidity with funds that cannot be drawn in for a long time.

There are also their daily traders just to increase the volume that occurs in the market so that this will add higher liquidity and bitcoin will become more trusted by investors.

There are many people who want to use Bitcoin for making purchases and daily transactions.
This way Bitcoin needs to scale. It is the most known cryptocurrency and people want this to be used for their transactions are it is the easiest converted crypto to fiat and fiat to crypto.

[DooMAD]

I think that scalability must be oriented to satisfy all users. Regardless of particular needs or usage trends.

Okay, but what does that actually mean in practice?  I sincerely doubt there's a specific amount of scaling which can please everyone.  Someone is always going to moan that the balance is wrong somehow.  People talk about it like it's the simplest thing in the world, but it's actually a really complex issue.

[inoes]

Bitcoin is a very important asset for those who will do a large scale in the long run for the HOLD they will think that volatility will be high at the same time later and this is a matter of time where assets will be safe in safer storage.

But on a scale, people certainly have their own goals about the assets in HOLD that they do to cover liquidity with funds that cannot be drawn in for a long time.

There are also their daily traders just to increase the volume that occurs in the market so that this will add higher liquidity and bitcoin will become more trusted by investors.

There are many people who want to use Bitcoin for making purchases and daily transactions.
This way Bitcoin needs to scale. It is the most known cryptocurrency and people want this to be used for their transactions are it is the easiest converted crypto to fiat and fiat to crypto.

until now BTC is still the most trusted coin with evidence of holding> 60% of all scalability. but will this last long? maybe I will answer "no". many problems faced by BTC such as speed, reward, and usage. the conclusion is that for now BTC is worth considering, but for the next few years there will be other crypto that need to be taken into scale.

[Hydrogen]

Attempt at better defining this topic.

Most long term investments are defined in terms of low daily volatility and incremental long term growth. As opposed to the polar opposite of those things.

Long term holdings are usually not attached to merchant solutions allowing for thousands of transactions per second like credit cards. You'd likely never expect to hear a HODL'er of real estate, gold or 401K's complain about not being able to utilize their long term holdings to buy a cup of coffee, due to a lack of real time transactional speed.

To some degree the "bitcoin must scale" paradigm claims btc should become more like a short term traded asset, with higher short term transactional volume and greater volatility. Which might be comparable to implementing a credit card scheme off of a 401k account.

Bitcoin's deflationary model however could be better suited towards producing value through lower volatility and a lower transactional volume. Which could be more appealing to long term investors who prefer investing their capital in safer markets defined by lower volatility rates.

In a sense, bitcoin tries to be a jack of all trades. When it might be better suited to being a specialized HODL master of one. With a profile closer to what one would expect from long term HODL assets. There's a counter argument here which says bitcoin's long term emphasis is a best of both worlds, a benefit rather than a hindrance. I'm not trying to prove things one way or the other. Only interested in hearing what others might say on the topic.

[slapper]

The contradiction does not exist inside bitcoin. Everyone can utilize bitcoin benefit either long term investors or a day trader. Thats what makes bitcoin different from other assets in the world. Despite the highly volatile, people can see the advantages that lie behind bitcoin. Moreover, price is not the only thing which seduces people. The security and the decentralization are also what people are looking for. In the world full of scammer and robbers, the blockchain system is the solution reducing most of the bad parts of this world. This technology is being developed for many years. The combination of tech and asset has brought us a new dimensional investment stronger than anything in this world.

There are still many years ahead to know whether bitcoin will continue to survive or not. But in my opinion, bitcoin will be used and utilized in most parts of the world in the near future. No one can deny the assistance of the cryptocurrency.

[exstasie]

Most long term investments are defined in terms of low daily volatility and incremental long term growth.

What kind of assets are you talking about? Stocks? Gold?

Gold seems comparable to BTC in terms of supply dynamics and speculative nature. It's also known to be quite volatile. In a similar manner, I see Bitcoin retaining high volatility while also enjoying long term growth.

Bitcoin's deflationary model however could be better suited towards producing value through lower volatility and a lower transactional volume. Which could be more appealing to long term investors who prefer investing their capital in safer markets defined by lower volatility rates.

Bitcoin's deflationary model causes hoarding, I get that, but why would it cause lower volatility? If anything, I would think the opposite, since Bitcoin's relative scarcity produces thin, illiquid markets that are easily moved by big buys and sells.

[bitgolden]

When looking at the fees right now it needs to scale and definitely looks like there needs to be scaled. Look at the exchanges, they are right now doing around 0.0005 on average and that is about 6-7 dollars and that is just way too much and takes about 30-60 minutes as well. That is why I believe there needs to be some sort of situation where people should be able to pay a lot less.

If they could find a way to drop that to something like 0.00005 and add another zero there, that would be around 60-70 cents instead of 6-7 dollars and even though that is still not "cheap" at least it prevents it from being expensive.

People may think dropping the price to 10% of what it is right now could be hard but remember we have also dropped it a ton with segwit as well, so why not do the same once more to drop it again?

[Hydrogen]

Bitcoin's deflationary model causes hoarding, I get that, but why would it cause lower volatility? If anything, I would think the opposite, since Bitcoin's relative scarcity produces thin, illiquid markets that are easily moved by big buys and sells.

Imagine if the US mint reduced fiat production capacity by 50% today. And by another 50% four years from now. Similar to bitcoin's halving reducing rewards for miners. Halving introduces scarcity which could promote long term HODL growth.

One of the questions with bitcoin volatility is to what degree mining dumps cause it. Miners have a steady stream of crypto which could allow them to set price. If they coordinated to dump high or dump low they could move the price and determine volatility. Crypto mining being centralized in china, could give them some control in determining not only price but also its relative stability over time.

Reward halvings could diminish this capacity, which could reduce volatility as mining dumps gradually became smaller in scope.

When looking at the fees right now it needs to scale and definitely looks like there needs to be scaled. Look at the exchanges, they are right now doing around 0.0005 on average and that is about 6-7 dollars and that is just way too much and takes about 30-60 minutes as well. That is why I believe there needs to be some sort of situation where people should be able to pay a lot less.

Scaling doesn't guarantee the cost of fees will decline.

In the past, miners produced blocks that were only 10% to 50% full to create artificial scarcity in transaction capacity. To drive the cost of transactions up. Similar to how metals industries like aluminum manipulate supply in markets. They also create artificial scarcity to drive prices up.

Bitcoin charges "6-7 dollars" for transactions, that banks and others would charge $20 to $50+ for BTW.

[erikoy]

Over  a period of time and due to a high transaction of bitcoins there will be a difference in it of course and it will need bitcoin to scale to get back to its original supply. Some were possibly losses and this made bitcoin market price too high. Due to transaction which left little amount of bitcoin in wallet and the numbers holding bitcoin arou d the world then this could be a mere reason for bringing bitcoin to scale. In case of transactions there are miners that collect some of it as transaction fee but it will be accumulated and then it will depend on the miners if to sell bitcoin back or not.

[exstasie]

One of the questions with bitcoin volatility is to what degree mining dumps cause it. Miners have a steady stream of crypto which could allow them to set price. If they coordinated to dump high or dump low they could move the price and determine volatility. Crypto mining being centralized in china, could give them some control in determining not only price but also its relative stability over time.

Reward halvings could diminish this capacity, which could reduce volatility as mining dumps gradually became smaller in scope.

Newly mined BTC, especially after this last halving, has a much smaller effect on the market than existing holders. There are more than 18.5 million BTC in existence and 2.6+ million BTC deposited on exchanges right now. 27K BTC per month from miners pales in comparison.

I agree that miners have less and less effect on price over time. The fundamental issue of volatility though has more to do with the lack of available BTC and fiat on spot exchange order books.

[seagates]

Bitcoin dont need to scale if we will assume bitcoin as store of value. However, we need much higher TPS if btc will be payment method

[DooMAD]

Bitcoin dont need to scale if we will assume bitcoin as store of value. However, we need much higher TPS if btc will be payment method

That's likely too simplistic an overview.  If BTC couldn't be used as a payment method, would that have a negative impact on the value?  If a 2.5g gold bar could be spent as a currency at your local supermarket, would gold then potentially have a greater value as a commodity?  Until we know the answers to those questions (and we likely never will), then it's potentially wrong to assume that Bitcoin doesn't need to scale to remain a store of value.

[exstasie]

Bitcoin dont need to scale if we will assume bitcoin as store of value. However, we need much higher TPS if btc will be payment method

That's likely too simplistic an overview.  If BTC couldn't be used as a payment method, would that have a negative impact on the value?  If a 2.5g gold bar could be spent as a currency at your local supermarket, would gold then potentially have a greater value as a commodity?  Until we know the answers to those questions (and we likely never will), then it's potentially wrong to assume that Bitcoin doesn't need to scale to remain a store of value.

My take is it's not one or the other, store of value vs. payment method. Any form of money is both, to differing degrees.

Without some minimum level of transaction liquidity (spending and acceptance as payment) Bitcoin can't really have value. Anything that effectively can't be bought or sold (liquidated) is worthless.

Now, what that minimum level is, I really don't know. What I do know is we can't plan for a "network" where no is transacting, and I am very thankful that not every BTC user is a hoarder.

[amishmanish]

This assumption and narrative of Bitcoin being a long-term store of value has never felt cool to me. I understand that the security, cost of ownership and ease of transaction make it a very good candidate similar to Gold. Yet, bitcoin is also supposed to be the mainstay of a decentralized economy. The major hurdles in that path are regulatory as well as the apprehension about exploitation of its pseudonymous nature by maleficent entities. That is the hurdle that the community needs to cross to build confidence about this transaction medium which is decentralized, borderless and allows people to earn a new form of money not being eaten away by inflation.

To get there, scaling,  in terms of transaction speed and capacity is wholly important.

[el kaka22]

The reason why volatility would get lower and lower is the fact that there will be more people buying and selling while there is less to be sold and bought, those are two different things. Just because there is more right now on the market doesn't mean it is bought and sold a lot, liquidity was low just a month ago (now that there is bull it went up again) but as you can see since it has good amount of it on the market it still had low liquidity.

With same reasoning, you can remove millions of bitcoin from the market, but as long as there are 100x more people buying and selling what is left, that means the liquidity will be high and when the liquidity is high big movements like selling 10k bitcoins or buying 100 million dollars worth of bitcoins will not really change the price all that much.

[exstasie]

This assumption and narrative of Bitcoin being a long-term store of value has never felt cool to me. I understand that the security, cost of ownership and ease of transaction make it a very good candidate similar to Gold. Yet, bitcoin is also supposed to be the mainstay of a decentralized economy.

It's not supposed to be anything. Bitcoin is whatever the market (users) says it is. If the market mostly uses it as a speculative gold-like asset, so be it.

I also think the decentralization and store of value narratives go hand in hand. To be a store of value, we need a sustainable mining incentive. That means fee revenue needs to rise over time. The only way to reliably do that is to limit block space. Conveniently, this is also what needs to be done to maintain decentralization of nodes and miners.

[Police Indo]

This assumption and narrative of Bitcoin being a long-term store of value has never felt cool to me. I understand that the security, cost of ownership and ease of transaction make it a very good candidate similar to Gold. Yet, bitcoin is also supposed to be the mainstay of a decentralized economy.

It's not supposed to be anything. Bitcoin is whatever the market (users) says it is. If the market mostly uses it as a speculative gold-like asset, so be it.

I also think the decentralization and store of value narratives go hand in hand. To be a store of value, we need a sustainable mining incentive. That means fee revenue needs to rise over time. The only way to reliably do that is to limit block space. Conveniently, this is also what needs to be done to maintain decentralization of nodes and miners.

full of risk to invest in BTC, only because it is the first coin with a limited  of stock, and the largest transaction volume in cryptocurrency is the consideration of selecting this coin as an asset that is considered valuable. if one day is worthless, then the only thing that is considered to hold it is "as a collection".

[Vishnu.Reang]

In the last 24 hours, there were 341 000 transactions with around 900 000 outputs.

At this pace, assuming everyone would simply hodl and not move a coin, it will take 20 years for everyone on earth to get a bitcoin, if everyone would then want to move that coin to a different wallet it will take another 20 years if they would want to send it to an exchange and sell another 20 years.
So, between getting your coins, sending them to storage and then selling them to cash out you will have an average of 40 years.
That's some extreme holding, isn't it?

Older users are going to hold their coins until their targets are achieved. Now these targets can vary from user to user. For some, it may be $100,000 per coin. For someone else, it may be $250,000 per coin. And for a different set of people, it can be $1,000,000 per coin. But that doesn't mean that the new users can't get the coins. They can purchased the coins if they want. But the prices have gone up by so much and the new investors may chose to buy very small amounts, say BTC0.01 or even BTC0.001.

[DooMAD]

and the new investors may chose to buy very small amounts, say BTC0.01 or even BTC0.001.

If Bitcoin is still popular in 50 years and we've moved on to pricing things in μBTC, I suspect people at the time will find it amusing that anyone thought BTC0.01 was a small amount.  It's possible the average person, whether they're hoarders or spenders, will likely have far fewer than that as scarcity increases.

[Betwrong]

I think that scalability must be oriented to satisfy all users. Regardless of particular needs or usage trends.

Okay, but what does that actually mean in practice?  I sincerely doubt there's a specific amount of scaling which can please everyone.  Someone is always going to moan that the balance is wrong somehow.  People talk about it like it's the simplest thing in the world, but it's actually a really complex issue.

Yes, it is. We have the "Blockchain Trilemma", according to Antonopoulos , when "we can't design for security, decentralization and scalability at the same time". If we want BTC to scale(and we definitely want that), we have to sacrifice some security or decentralization, or a bit of both. And although I personally believe that this problem will be solved by developers in the near future, I realize that it's surely not a simple one.

[deisik]

There may be a fundamental conflict between being a high volume day traded asset which can be utilized to purchase daily goods and services. And being an optimized HODL asset. Which in traditional finance is geared towards lower volatility, less volume and reduced access. A conflict which is seldom acknowledged

It is not acknowledged because it is irrelevant

These days no one is trying to buy a cup of coffee (a generic phrase or term for daily goods and services) with gold or other tangible assets. It is only with cryptocurrencies which are often considered and referred to as competitors to fiat money in this capacity but which can't actually play such a role that the conflict comes to surface. In other words, if they were not called currencies, and no one referred to them as such, there would be no conflict. It only exists in our mind as an instance of some vague cognitive dissonance

[beerlover]

There is a very limited amount of bitcoin to be mined, so miners are really working towards making a small amount of money each time and they are spending a ton of money to make that bitcoin, hence why they are trying to make their profit from the miner fee's which is causing all of this.

What needs to be done is not the transactions getting cheaper because that would basically be the result but not the solution, but to make sure that difficulty drops a ton and in order to drop difficulty this many people shouldn't be mining. If there was only a few places mining with few equipment, it would be actually faster, not because it is faster to calculate, but because there is no difficulty at all which means you constantly mine blocks back to back. In order to do that we need to make sure miners lose money and quit mostly.

[DooMAD]

In order to do that we need to make sure miners lose money and quit mostly.

No, the idea is that no one can "make sure" of anything.  The moment anyone had enough influence to do what you're suggesting, the whole thing would blow up in your face.  Allow the system to regulate itself.

Also, what you're suggesting sounds wrong anyway.  But the first point is the important one.

[stompix]

~

Older users are going to hold their coins until their targets are achieved.

If you look again at the numbers you'll realize that older people are going to hold their coin until death and that youngsters are going to sell them when they are sold.

Ok, let's use Bitcoin as an investment, what investment is that when only 200k poeple area able to buy and 200k are able to sell in a day? This assuming exchanges or banks will not have to combine their inputs when receiving coin and leave those coins like that till they send it to a buyer to minimize txs. Right now it's impossible for more than 1/3 of all Americans to receive a bitcoin transaction once a year.
Of course, this if we all deal with our own wallets and not with PoP (promise of payment) coins that are just a number on some website.

Bitcoin will have to scale for world usage, even if its investments or daily purchases, it's a must. How will this be done? This I'm starting to wonder myself.

There is a very limited amount of bitcoin to be mined, so miners are really working towards making a small amount of money each time and they are spending a ton of money to make that bitcoin, hence why they are trying to make their profit from the miner fee's which is causing all of this.

Miners can't set fees.

What needs to be done is not the transactions getting cheaper because that would basically be the result but not the solution, but to make sure that difficulty drops a ton and in order to drop difficulty this many people shouldn't be mining.

It's the other way around, difficulty drops when people stop mining, if you drop the difficulty now to 1 what you will achieve will simply be that all blocks will be mined in a few seconds till the difficulty adjustment when things will go back to normal.

If there was only a few places mining with few equipment, it would be actually faster, not because it is faster to calculate, but because there is no difficulty at all which means you constantly mine blocks back to back. In order to do that we need to make sure miners lose money and quit mostly.

Great idea, let's fuck everything!!!

[Ozero]

In the matter of scaling bitcoin, we first need to decide what we need it for. If we need bitcoin to be used as a means of payment, then we need to increase the number of transactions that can be processed with its participation in a second. Moreover, it should be noted that this is exactly how bitcoin was originally conceived, that is, as a means of payment.
 If we accept that it is enough to make only large transactions with Bitcoin, then it is not necessary to continue to scale it.
In my opinion, striving to increase the scaling of bitcoin is necessary, it must have a margin of safety in any case.