- May 27, 2023
- Posted by: [email protected]
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Dan Held, the chief marketing officer of Trust Machines, discussed the rising transaction fees in Bitcoin and their potential impact on the community at the recent Bitcoin 2023 conference in Miami. Held highlighted that the increased fees were a result of the growing demand for Bitcoin’s block space, driven in part by the emergence of ordinals like Bitcoin nonfungible tokens and BRC-20 tokens. He saw this as a positive development for Bitcoin’s long-term security model and suggested that the fee spike could encourage users to explore alternative solutions.
Held acknowledged the anticipated shift of Bitcoin from a payment method to primarily a settlement network, referencing Nic Carter’s presentation at the MIT Bitcoin Expo in 2018. He used the analogy of cargo ships and containers to explain the concept of layer-2 solutions. Held compared the Bitcoin network to a cargo ship and the transactions within it to containers. Layer-2 solutions, such as the Lightning Network, allow multiple transactions to be bundled together, reducing the load on the base layer. This bundling of transactions on layer 2 can represent thousands or millions of transactions in a single layer-1 transaction.
According to Held, Bitcoin on Layer 1 was expected to be predominantly utilized for large-value settlements, with transaction costs likely to rise even more. He underlined the significance of adopting several Bitcoin layers rather than focusing primarily on Lightning as the solution. Liquid, Rootstock, and Stacks were considered feasible options by Held.
Regarding the scaling lessons from Ethereum, Held stressed the need for openness and agnosticism within the Bitcoin community. He urged the community not to punish developers working on different layers or chains and emphasized the presence of other layer-2 solutions besides Lightning. Held also highlighted the importance of educating users in regions like Africa and South America about the benefits of low-fee transactions facilitated by alternative layer-2 solutions.
Dan Held examined the impact of rising transaction fees in Bitcoin and encouraged users to explore layer-2 solutions. He emphasized the shift of Bitcoin from a payment method to primarily a settlement network and the importance of embracing various layers and solutions. Held also emphasized the importance of openness, agnosticism, and education in the Bitcoin community.
