Mircea and his #BTC-assets brigade has already declared 20mb blocks to be an attack on Bitcoin, so some degree of fireworks/popcorn/tears/LULZ/drama are guaranteed.
Forcing txn fees higher to contain the blockchain bloat would also implode the BTC price because you will destroy the ideological propaganda that caused people to predict much higher BTC prices due to network effects.
You would essentially be relegating Bitcoin to a hobbiest experiment on the virtues of small currencies used by a fraction of the population with that population sparsely distributed over the globe.
This is correct. Can't believe people can't see this. Or maybe they do but don't care.
The only thing which causes people to infer rising BTC prices in the future is a rising BTC price in the present. 99.99999% of people don't give even a whiff of a fart of a tiny little shit about the "network effect" even assuming they've heard of it (which they haven't).
But that rising BTC price in the present is ultimately supported by people who DO care and DO research and BUY COINS when the price is NOT rising.
Until the UXTO set is able to be pruned and/or otherwise optimized for (sub)linear growth, your starry-eyed fantasies about billions of direct, Metcalfe-empowering BTC users are dead.
Let's buy ourselves 5 years so we can solve the UTXO.
Fortunately, the network effect still works when billions of people indirectly use BTC via altcoins, sidechains, and institutions kept honest by realtime auditing.
Nobody (except possibly Gavin-the-clod) is powerful enough to "relegate Bitcoin to a hobbiest experiment." That ship has sailed; that horse is out the barn, that toothpaste is out the tube; that goose is cooked. The Bitcoin cat is out of the bag, and heaven help anyone who tries to put her back in it.
Bitcoin's "intrinsic value" is its future promise of certain functionality -- functionality that is described in every intro to bitcoin and VC pitch in existence. This functionality -- hell even the simplest BTC P2P transfer -- does not work with 1MB blocks once the network transactions exceed its capacity consistently. Even lightning network people calculated that overlay networks DO NOT WORK with 1MB blocks.
This ship is going to hit an iceberg, stop dead in its tracks and start leaking water as soon as the 1MB limit is hit consistently. But you are right the cat is out of the bag. For the technology. The US government, in partnership with major banks, are going to be right there ready to deploy an "decentralized" solution but actually only banks can run full nodes (permission-required decentralized). And it will trade USD. And only banks and the govt can issue the "coinbase" txn or see the full blockchain, or allow the creation of new addresses (accounts).
Bitcoin's functional advantage will disappear and it will be reduced exactly to digital gold. Except there's no reason to hold it vs gold or any other altcoin because you can't fucking transfer it anyway.
The problem with Bitcoin is that so many people didn't get on the train. So now they hope it will fail so they can board a new train -- Monero, Etherium, whatever. And they go onto these forums concern trolling as if they are actually Bitcoin proponents. But suck it up. There is no other train available to you -- the next train will have exclusive membership and will actually be a rocketship (think Apple ipay) deployed simultaneously onto millions of POS, default installation in your phone, automatically connected with checking accounts for several major banks etc.
