One of the criticisms that people like to make against Bitcoin is that it has been slow to scale.  Although the Lightning Network has been steadily gaining steam, it’s never happening quickly enough for the people pushing their altcoin magic elixirs.  They concern-troll about the next bull run and what it will do to Bitcoin because “after all, we’ve already seen that Bitcoin wasn’t ready for the previous bull runs.”

These people accept it as true that Bitcoin somehow failed during what happened at the end of 2017 and into 2018 where the price spiked to about $20,000.  They love to bring up how high the transaction fees went.  They’ll also talk about how long it took for transactions to be confirmed on the blockchain.

How do we expect Bitcoin to gain mass adoption with such a failure?

But that’s not the correct question to ask because Bitcoin has not failed during any of the previous bull runs.

The Lightning Network is a second layer scaling solution that provides users with the ability to make nearly instant transactions at a rate of millions of transactions per second using real Bitcoin.  This creates incredible opportunities for Bitcoin and makes the case to definitively answer many of the scaling criticisms.  However, it takes time to safely and securely implement such an endeavor, especially with open source software, so it might not be ready for primetime when the next bull run hits.

And that’s fine.  Bitcoin has a limited block size that clears about every 10 minutes.  Since the supply of block space cannot increase, it should be no surprise to anyone that as demand goes up for block space, then the price will also go up.  And though obvious, it also needs to be said that transaction fees are going to seem high when Bitcoin shoots up in price if you only consider their price in USD even when fees priced in Bitcoin remain the same.

Yes, it has gotten expensive in USD in past bull runs to make transactions in Bitcoin’s base layer.  What was happening behind the scenes?  Let’s consider a case where it is not just an increase Bitcoin’s price in USD that causes fees in USD to get expensive.  High transactions fees are a signal that a lot of people are bidding to have their transactions added to the upcoming blocks.  Users who really want to make sure their transactions are added to the next block would be willing to pay higher fees.  In other words, the Bitcoin protocol was making sure that the most important transactions were receiving priority.  It made people think twice about trying to send unnecessary or frivolous transactions during this time.

What would happen if it didn’t?  If prices did not adjust with heavy demand, then the network would have been thrust into absolute chaos.  No one would know what to do or when to expect a payment to be added on chain.  Adding extra money to the transaction to make sure it gets confirmed quickly would be of no benefit.  It would severely damage the usability of Bitcoin.

While it might not have been all that convenient or cheap, Bitcoin functioned beautifully during the bull runs.  It would have been great to have a secure and suitable scaling solution already, but since that did not happen, I don’t know what could have been a better realistic outcome.