Can Bitcoin Become a Mainstream Store of Value Without Layer Two Solutions?

The Great Bitcoin Debate: Store of Value vs. Digital Cash

Bitcoin has journeyed through a vibrant ecosystem as the most recognized cryptocurrency, but recently, it seems to be wearing a new hat: the esteemed store of value. Philip Salter, head of mining operations at Genesis Mining, emphasizes that though Bitcoin is a robust store of value, its current transaction fees raise eyebrows. High fees mean it’s hard to transfer pennies, and that’s where the plot thickens!

Transaction Fees: The Elephant in the Room

Remember a time when you could send a buck without the dreaded transaction fees weighing you down? Salter recalls these glory days: “Some years ago it was possible to store and transmit $1 efficiently, since tx fees were effectively zero.” Fast forward to today, and those glory days are officially on the run! With fees now soaring to upwards of $15, transferring small amounts feels downright ludicrous.

The Complicated Relationship Between Value and Fees

As more folks flock to Bitcoin and prices inflate higher, Salter warns it might be a rich person’s game in the not-too-distant future. “If this trend continues, it will become prohibitive to transfer value in common amounts,” he cautions. Essentially, Bitcoin could end up being reserved for the wealthy—a high-stakes fiat currency version, if you will, leaving those with limited funds out in the cold.

Why Layer Two Solutions May Be the Lifesaver We Need

In the ever-evolving landscape of cryptocurrency, the Lightning Network has emerged as a star player. Salter advocates for second-layer solutions, saying they are not just necessary for maintaining Bitcoin’s currency status but also its longevity as a store of value. He personally upgraded to a lightning-only wallet and sings its praises, insisting it’s worth a second look if you found it confusing in the past.

A Conclusive Look at Bitcoin’s Future

Bitcoin has done remarkably well over the last 12 years, remaining the go-to cryptocurrency with the most significant market cap. As the industry champions layer-two solutions to combat ongoing scaling debates—events that were once the center of attention in 2017 and 2018—only time will tell if Bitcoin can effectively juggle its role as both a currency and a store of value without further complications.