Here's my math involving 8 billion people:
If we assume 7000 tx's per block, then the 144 daily blocks gives 1 million transactions. Most blocks will have less than 7k tx's, but let's go with this high tx figure for now just to explore the math.
If we divide 8 billion people by 365 million tx's per year, we arrive at almost 22 years per tx in terms of bandwidth, which impacts the tx fees.
Granted, a certain percentage of the world's population are children who will not need to spend from a savings UTXO on L1. Then there may be a certain percentage that don't use Bitcoin at all. Finally there are hodlers that have a 5, 10 or 15 years horizon for their savings.
If I am optimistic, 1 L1 tx every 10 years should be affordable for most people, so that leaves L1 as primarily a savings layer, while L2-L3 offers cash functions via decentralized banks/nodes.
Replies (4)
22 years between average transactions is a bit long. However, we are decades away from having that many people using it. By then a 10x block size increase may be trivial, which would bedrop it to 2.2 years, which is a decent savings frequency.
Well, it's more an indication of bandwidth, which in turn impact fees. It is ability to pay the fees that impacts how often people can use L1.
A block size increase would be negative since it would reduce the decentralization aspect, demonstrated in the Block Wars. Without a strong decentralization, the store of value will change to reflect the worsened security; downward.
Besides, an increase in bandwidth will still cause the mempool to be filled up with anything the market is willing to spend XYZ on in regards to tx costs.
The ability and willingness to pay for expensive transactions is the primary driver of fees.
I see it in a similar way except that larger transactions will be prioritized meaning that small transactions might wait even longer than 22 years.
I view bitcoin as a replacement for FedWire. Exchanges, ecash federations, countries and whales will use L1. Everyone else will use L2s etc.
Yup. Bitcoin is primarily a store of value. E-cash transfers will happen on Bitcoin L2-L3s.
