1 sat \ 1 reply \ @hades 1 Dec 2022 \ parent \ on: Will small UTXOs become a problem in a mempool-collapsed future? bitcoin
The number of bitcoin is increasing right now with block rewards, but eventually the destruction of bitcoin will roll numbers the other direction. Satoshi's wallet, deaths, dust, sends to incorrect addresses...21 million gets reduced significantly. Distribute what's left to the entire population of Earth. Now have them all open LN channels. In 2015 Credit Suisse calculated the value of everything at $250 trillion. That's $2.5 million per satoshi not calculating lost satoshis and assuming Bitcoin has become the world currency. Only the wealthy can afford to open a channel and they will charge you to use it because it's a free market and they need to make back the on-chain fees then make a profit. You either need more layers than LN, or you need adoption to never go hyper and instead reach an affordable middle ground. Sure they can compete, but why would they if there are only a few players that run the market and you must use them? I think you're 10-15 year prediction may be spot on...but I try to look at this in 100-500 years and see if our model breaks.
Again, I repeat my competition argument. I understand your point that opening a channel won't be a thing for the average Joe in the future, but if the "channel opening" class is still in the thousands or more, they will compete with each other and drive (and keep) fees down in a fee war.
I also agree with the need for more layers. The same idea of bigger but more expensive transactions that we are discussing with on-chain will also happen with the LN. I can picture a future of large Fedimints using LN to settle between them and users mostly using minted tokens for their day to day interactions.
But I still think that LN will remain cheap because of competition. To be honest, I don't think the price of Bitcoin doesn't have that much influence in what LN Routing fees look like.
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