Satoshi Nakamoto built Bitcoin to be “A Peer-to-Peer Electronic Cash System”. Based on this alone, it would be reasonable to assume that Bitcoin is already a widespread medium of exchange. Yet this goal remains as elusive as ever.

A commonly cited reason for this failing is scalability. The Bitcoin network can handle 7 transactions per second (with segwit). This number pales in comparison to Visa which is capable of supporting up to 30,000 transactions per second, and processes 2,000 transactions per second on average.

Enter lightning network. In 2016, Joseph Poon and Thaddeus Dryja proposed a scaling solution for Bitcoin which would enable it to process a near limitless number of transactions per second. 2 years later and it’s working. Lightning network is already live in test net and is performing as advertised. Sure, there are still bugs and issues, but there are also talented developers working hard to solve them. Lightning network (LN) is coming. It’s a matter of when, not if.

And yet, when you take a closer look at transaction patterns in the Bitcoin network, there is little reason to think that Bitcoin will be transacted with more because of LN. If scalability is truly the reason people don’t transact using bitcoin, then we should expect the network to always be busy, the mempool to always be full, and endless complaining from users.

This is not the case. In the last 60 days, the average amount of transactions added to the mempool per second sits at between 1–4.

Even at the speculatively driven historical high from around November, 2017 to January, 2018, Bitcoin was not tremendously overloaded. Certainly, the situation was far from ideal, and LN could have been a great help, but there were neither hundreds nor thousands of transactions being added to the mempool every second.

Of course, this is hardly a rock solid indication of what is to come. If Bitcoin succeeds in truly cementing itself as a widespread medium of exchange, then we will indeed see numbers like that one day.

But it is clear, at least at this point in time, that scalability is not the factor that is hindering Bitcoin from getting there. For this reason, it is reasonable to argue that LN will not suddenly turn Bitcoin into a widespread medium of exchange. It may improve Bitcoins capabilities, but it is not a magic pill.

So let’s focus on the real question: why is Bitcoin not transacted with more? Is it simply a matter of time and adaption? Or is it something deeper?

To truly try to answer these questions, we need to explore a classic debate: gold standard vs. fiat.