Oddbean new post about login | logout Ultimately it comes down to how many UTXOs want to move in a given time period relative to how much blockspace there is. There are a lot of tiny UTXOs relative to block space available for a year, so moving them can be cost prohibitive. And in a future world where sats are way more valuable than today, it likely means that a lot more people own sats and are trying to use blockspace, which drives the transaction fees up. So those tiny UTXOs might be worth more but still remain cost prohibitive to move in many cases since fees are also higher. It’s good to consolidate UTXOs when it is cheap to do so, albeit taking into account some privacy considerations and so forth.
also please do the math to understand what bitcoin is and what will be: a scenario with high tx fees means a scenario with high demand for blockspace. It means probably also high net-value for bitcoin, and so high fiat-denominated price and high pirchasing power for bitcoin. This means that 50k sats will value at some point 1k $ bucks BUT your 50k sats UTXO will become unspendable; moving bitcoin onchain will cost the fiat equivalent of thousands of dollars. Add some Pareto effects and the consequent "squeeze", and the situation will be also more extreme. This is bad? I dont think so. This is dangerous? Absolutely yes, and we need more tools to scale bitcoin off-chain if we want to prepare ourself for the "worst-best-case scenario".
just some maxy deranged math nostr:nevent1qqsgl9hahnn3l5ru5u0j9j6lpt8njptt9wxkcdsj0mpsccyw7flwrhspz4mhxue69uhkummnw3ezummcw3ezuer9wchsygpaq0znvzzptvwhrrrhsmhpp0d5ueaua5ezql3j3q8wnezrqxseaspsgqqqqqqsec7v59
So what's an alternative? We can't store on lightning so have to consolidate what we have an hope for the best.
An alternative is to stake on lightning in large channels, so that the close UTXOs will be big. Not the most simple alternative, but an alternative. There are liquidity providers that gives you inboud liquidity for a fee. The scenario we talk about will maybe come in a far future, and lightnig specs will changes a lot, we will see the options we will have. I think that economic activity of 50k sats would fiind their routes out of bitcoin, like on ecash (on virtual bitcoins). For me its ok scale the security and trust assumption for wallets based on how much is on stake.
I would divide the mempool into 3 parts. High value tx that can afford high fees. Low value tx for poor, for devs and for L1/L2 interaction. Then the middle layer which could be attacks, gambling, spam. If we expand the mempool in line with the hardears of the day, the fee attacks will become more expensive, and also help secure the chain on top of the top tier fees.