Scalability Principle

The nature of Bitcoin stability implies an inherent economic pressure precluding linear scalability. The block size limit consensus rule establishes the arbitrary trade-off between utility threshold and system security. Yet at any block size the system remains non-scalable due to the necessity of confirmation finality. In other words, a finite set of transactions must be selected, which implies that others may be excluded, necessitating a competitive fee market for inclusion.

Aggregate demand can be increased through the use of off-chain confirmation for below-threshold scenarios, settled on chain. This represents an individual security compromise (for lower-value transactions), avoiding a system security compromise (for all transactions). This cost-security compromise produces its own limit. In other words Bitcoin stability is a consequence of inherent non-scalability. This stability implies price is not unbounded but can rise with scalability improvements.