Would Bitcoin and its blockchain be able to handle mainstream adoption as a store of value without the need for second-tier solutions? Genesis Mining’s head of mining, Philip Salter, has mixed views.
“I think Bitcoin is a good store of value regardless of the transaction fees,” Salter told Cointelegraph. “The problem is: the higher the fees, the higher the minimum value that can be efficiently transferred.”
Bitcoin (BTC) has stood its ground up to this point, with BTC maintaining its place as the highest capitalization asset in the crypto industry for the past 12 years. Bitcoin today is viewed more as a store of value than digital cash, however, and Salter believes that this shift in perception can add complications:
“A few years ago, it was possible to store and transfer $ 1 efficiently because broadcasting fees were virtually zero. Right now, sending a transaction can easily cost $ 15, so sending an extra $ 1 doesn’t make sense. If this trend continues due to the increased use of BTC and higher BTC prices, it will become unacceptable to transfer values in joint amounts and it will only be an effective store of value for very large amounts. ”
“That’s why I think 2nd layer solutions are a necessity not only for using BTC as a currency, but also for the long-term viability of BTC as a store of value,” added Salter. Industry players have been working on layer two scaling solutions like Lightning Network to enable small transactional capabilities.
Salter himself uses Lightning Network solutions for his own Bitcoin endeavors. “Personally, I’ve switched my personal wallet to a lightning-fast wallet (Phoenix) so that I can pay with coins quickly and cheaply, even in these crazy times,” he said. “For anyone who tried Lightning two years ago and found it confusing, I highly recommend trying again now because it’s far more established and easy to use.”
The discussion focused on the scaling debate of Bitcoin in 2017 and 2018. In September 2020, MicroStrategy stated that it had no major issues during one of its BTC accumulations. The company bought 38,250 BTC with a combination of off-chain and on-chain options.