in an earlier article I looked at defining the function of decentralization in the Bitcoin network. In short: If we do not define the function of decentralization in the first place. How can we even know which network characteristics we want to preserve!? There are many effects influencing decentralization, and they have positive and negative feedback loops!

The same is true for Bitcoin as a SOV — probably the most important use case/selling point, Bitcoin currently offers. If we do not define the general framework in which we all work together on certain goals — how can we as a community know how to get there!? Isn’t it much easier to discuss the methods or a combination thereof, which can help achieving the defined goals?

I see many people claiming Bitcoin to be a settlement network not a payment network. That is a perspective I share. However, that alone doesn’t make it a sustainable SOV. I am not worrying about Bitcoin adoption as a payment network. I am worrying about Bitcoin adoption as a SOV. What is needed for Bitcoin to function as a SOV is accessibility to the stored funds. Current user numbers and usage enable Bitcoin to work properly as a SOV. Further growth will probably lead to limitations for Bitcoin as a SOV and delayed user adoption.

Potential users for Bitcoin at current capacity

Bitcoin-1MB* as a SOV (BaaSOV) users (assuming 4 tpa): 20M

Bitcoin-1MB* as a Payment (BaaP) users (assuming 800 tpa): 100k

(*)transaction cap @2.5 tps

Conclusion:

While BaaSOV seems to be easily scalable with known and tested linear on-chain methods, second layer tech is a sheer necessity to accommodate the daily BaaP usage if mass adoption was ever to happen.

tl:dr; BaaSOV should be scaled on-chain; BaaP should be scaled off-chain but on-layer