Operation Medusa.

To destroy the hydra beast, which is a greek mythology monster with a thousand heads, you need the head of Medusa to convert the hydra into stone, and once transformed into a stone statue, you destroy it with a simple hammer. And this is pretty much what I am proposing that governments do to destroy Bitcoin and all its siblings, the altcoins.

The government and those who depend on it will use Wall Street and the rich to destroy the cryptocurrency hydra beast. You cut one crypto, another ten will emerge, so you have to kill it all at once. Here is where banks, institutions, news, wall street, and every rich person with power will be needed.

They will all buy Bitcoin and promote it and Blockstream since it is an agent, they will make sure blocks keep at 1MB, so the rich will bring users to the network, and eventually, once fees go as high as possible, China will shut down miners and make mining illegal claiming damage to the environment, so fees will go higher to the point poor people will not have enough money to even pay for one transaction fees, at that point average fees will be 0.10 BTC or more. Blockstream won't allow block increases saying that internet data caps also attack decentralization. I wrote this a few months ago, and now I am rewriting it and updating it with the new developments since the first revision. China has banned mining, and miners fleed to other countries. Still, many countries will choose the environment narrative to prohibit mining at a large scale, ignoring that miners seek renewable sources because it makes sense to save on electricity.

Because of block size capacity, I expect the following; If you bought 0.10 BTC in 2020, that was $1600, if the price of bitcoin is $100k, and the average transaction cost is 0.01, which is $1000 fees; you would sell and get profits, but ten transactions away, and your 0.1BCH is gone. And with Lightning Network, you will need at least double the fees, and you will have routing fees; once on-chain fees are 0.01, you can bet routing nodes will charge you more than just a few satoshis. As fees, on-chain increase that justifies routing fees increases as well.

Eventually, small investors won't participate, not even if they hold 0.1 BTC. Not everyone will be able to save that much, so at some point, you will be forced to use paper Bitcoin or PayPal Bitcoin on which you don't control your keys; PayPal is already doing that, that will be best case scenario you can use paper Bitcoin which means you can print as many coins as you want. CashApp is implementing bank accounts with a Bitcoin derivative, so custodians are the future. El Salvador, since it is an emerging nation, its citizens must accept by law a bank account that probably is already engaging in fractional reserve practices.

Worst case, the government says because Bitcoin fees are so high and users lost their investment essentially because they don't have enough funds to even pay for transaction costs, they could declare Bitcoin illegal to protect investors. People will say yes because they have lost their small investment. People will want blood once they realize the money they invested is not worth the transaction cost and will demand an answer, and the answer will come as always; "the government is here to help."

And lightning network won't help you because it is double the on-chain fees plus routing fees, and custodian lightning networks are as reasonable as paper Bitcoin worthless and can be printed away at the government command or the corporation controlling your custodian account.

If 0.01 is the going average tx fee, that means you will need at least 0.02 BTC to open a channel, and if you opened a channel for 0.003 BTC a long time ago, your funds on that channel wouldn't be good because everything will be put into reserve or commit fee. Meaning your small channels become worthless the moment fees go up, which will be centralized the network more and more because large nodes will appear one after the other, and small pocket nodes won't be able to compete.

All that I just mentioned before is just the start of the Medusa operation; once small investors can't use Bitcoin because of fees, they will have to rely on custodians, and the government will force those custodians to print on behalf of the government or its corporations, that is if they decided because once fees are large enough they can freeze the whole network by turning off miners while costs go up and up until only the rich can get out, and the poor unavailable to move their satoshis while they lose value.

If BTC fees ever reach ETH levels, people will try to say that everything is fine while trying to get out, but it will always be the small investor that will foot the bill if fees get too high and the network becomes unusable. But the good news is that those that have Bitcoin receive a superior Bitcoin which is Bitcoin Cash, and those with small pockets can now buy that which works for a fraction of the price that it should be pretty much getting a bargain, in my opinion.

Bitcoin Cash is the Bitcoin that doesn't need any custodians, so you know you are getting the real deal, and it won't cost you an arm and a leg to utilize now has DeFi, thanks to SmartBCH, which will bring more use cases.