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Bitcoin’s Transaction Bottleneck
In a detailed thread on social media, Bons criticized Bitcoin’s transaction limits and its ability to handle self-custody at scale. He pointed to the network’s maximum capacity of about seven transactions per second (TPS).
Using data from Glassnode and Bitcoin’s code, Bons explained that its 33 million on-chain users could face a major bottleneck during a mass withdrawal. He warned this could trigger a “death spiral,” where a price crash forces miners to shut down, slowing the network and worsening panic.
“The system could collapse under pressure,” Bons said, outlining how delays could lead to declining hash rates, longer block times, and falling prices in a vicious cycle.
Comparison to Competitors
Bons compared Bitcoin’s 7 TPS to Visa’s 5,000 TPS and other cryptocurrencies that surpass 10,000 TPS. He said Bitcoin’s transaction speed today is not good enough for real life.
Bons also pointed to Bitcoin’s shrinking security budget, which, he claimed, could make things worse. He said that Bitcoin’s original vision to serve as “peer-to-peer electronic cash” had been pushed to the side, reducing it to a mere speculative asset.
Social Media Backlash
Bons’ analysis sparked heated debates on X (formerly Twitter). Critics, such as tech expert Patrick Flanagan, dismissed his claims, arguing Bitcoin has survived similar criticisms in the past.
Bons responded, saying the risks grow with Bitcoin’s user base. He emphasized that even a small percentage of users withdrawing simultaneously could destabilize the network.
Some users suggested alternatives like trading wrapped Bitcoin (WBTC) on Ethereum, which bypasses Bitcoin’s limitations. While Bons acknowledged this, he warned that such solutions could intensify sell-offs for on-chain users.
Comparisons to Gold
The debate also touched on Bitcoin’s self-custody model and comparisons to gold. One user questioned how long it would take to liquidate global gold holdings. Bons argued that while gold has its limitations, its theoretical transaction capacity far surpasses Bitcoin’s.
Calls for Change
Critics of Bons’ analysis noted that Bitcoin has weathered similar challenges in the past. However, his warning adds to ongoing discussions about Bitcoin’s scalability and usability.
Despite his criticism, Bons remains hopeful about the cryptocurrency space. He suggested that Bitcoin’s original ideals are thriving in other blockchain projects.
As Bitcoin continues to dominate the market, concerns about its long-term scalability and resilience remain hot topics. Bons’ warning highlights the need for careful consideration as the network seeks broader adoption.
English (US) · 