Hi @aology,

Thank you for asking these questions, I do appreciate it.

Bitcoin can only do about 3(!) transactions per second. This puts a high form of competition on transactions. If one wants it done faster one needs to offer more fee. This makes the use of smaller units below a default minimal fee of 0.0001 BTC absolute superfluous. (From my point of view.)

The rest will be put into a buffer {mempool}, that means transactions that want to pay zero fees or very low fees. That could take very very long time to confirmed, what is the use then? A cup of coffee, for instance, cannot be bought that way.

This, to me, makes Bitcoin already completely impractical to use for small value transactions.

Bitcoin needs to be moved on by miners, Proof Of Work {POW} mining. While the reward per block halves, it is at 12.5 BTC already, the market value should at least double. This is already way 'behind' what it could have been if those involved 'selling' Bitcoin as 'the peoples money' would have quit that wrong kind of propaganda.

It is mathematics and logic that can tell anybody who takes time to reason to understand that Bitcoin is going to be great for doing large to extreme high value transactions. These one would want to be done fast and secure, as if it were a gold transportation. There will come a time soon when paying a pizza with BTC would be stated as being completely irrational.

Because when the value of 1 BTC equals 400.000 USD then the extra cost would be at least 4$ KB {KiloByte}. Probably even higher as demand will grow for high value transactions. Even now a minimal fee of 0.026 $ per KiloByte {KB} will just move a transaction into the memory buffer. Forget getting a cup of coffee with tht kind of network hold up.

Lower fees, more low value transactions

While the rewards per block halve over time something else needs to compensate the miners. That could be BTC becoming like the cryptos version of gold, which I think it is. And it should be possible to buy a house with 1 BTC.

Miners would be happy to include such a transaction in block. Not a tx of 2 Dollar worth for John Doe his daily cup of Java. If transactions would be cheap, that would mean Bitcoin would become worthless. (Now there might be a future solution to this but that would involve 256bit computers.)

So a part of the BTC 8 digits becomes useless, or use for rounding. The more expensive Bitcoin will become the more useless the digits above 3 or 4 will become. Forget even paying for diner with BTC, or it must be thousands to pay.

Cheaps transaction costs will raise demand for low value transactions. This will cause miners to stop mining, as it has no gain for them to do so anymore. Also 1750 transactions per 10 minute block only filled with tiny value payments will be bad for trust of the market in Bitcoin.

The house example, I sell mine for 400.000, BTC already dropped to 20 USD because that unrealistic 'peoples money' hype did do its bad thing. Now I'd want my house money to get in right away, takes 6 confirmations, but I am okay waiting for an hour...

But then my transaction can not get confirmed, because apparantly there are 100.000 transactions of a few dollars worth choking the network. It might take about a day or more. So I may have to raise my fee to 400 dollar to get into priority. This is bad, more high value transactions will move away from Bitcoin, miners will stop and the price of BTC will drop to near zero.

This is the wrong way of doing things, from my point of view...

More cryptos, there is enough room

Because Bitcoin needs to go towards very high to extreme value, to be able to hold enough capital in those 21 million, to buy real estate with for example, it needs to outgrow the myth of that there can be only 'one'.

It has been released as Free and Open Source, so anyone could join in and new developements could be done and innovations could be made. We are having this conversation the Steem blockchain that does a block like 3-2-1-DONE...! If not for Bitcoin, this probably would not have been.

Bitcoin could never do a transaction like 3-2-1 and it is payed, free of any fee! But BTC has a different use, as I did my best to explain. And Steem has its use, that is more like the peoples money.

And still there is room for many others. They will all have different functions. Those that are just constructed to make a quick buck, like all the so called ICOs {Innitial Coin Offers} that are popping up currently will fade away over time.

But things like Bitcoin, Litecoin, Vertcoin, Digibyte and so on will all be needed to fill the need in demand. Each in their own field. And there will be decentralized exchanges making it easy to interchange between them. SegWit is a part of that proces.

And we, as Steem members of course know how powerfull it is, already handling more transactions in a day than Bitcoin and Ethereum combined! #Steem's relative #Bitshares even doing more txs a day than Steem. And #EOS the next family member will do millions transactions parallel!

They all are within their own speciality, together making the cryptos realm substantive. In this realm there is room for Gulden, Doge and Verge too. Because there are countries where people cannot have a banking account, but the have mobile phone. #Bitcoin would be way to expensive for them, to use at the local market, so mayb the could use Verge better.

And so on, the examples would be endless...

A long reply ends...

Well, I do hope I was able to answer your questions.