Bitcoin's tiny on-chain capacity is actually a feature, not a bug.
Because of the limited block size, if a rush of people go to withdraw from exchanges, the chain grinds to a halt and they're stuck.
This makes Bitcoin a great option for fractional reserve: custodians want to be able to sell more than they actually have, and prevent this from getting exposed in a "bank run" scenario.
Notice how individuals aren't scrambling to use it, but custodial institutions are. 🧠
Thankfully there are plenty of other unstoppable cryptocurrencies with more capacity.
I think such a scenario would plummet Bitcoin's market dominance.
Agreed on both counts.