Bitcoin's Economic Capacity

Bitcoin works to achieve high economic capacity, rather than transactional capacity, in its settlement transactions. Optimising for economic capacity means that transactions which are finally settled on the bitcoin blockchain are incentivised to have as large a value as possible, and/or to contain layers of aggregated payments, so network users are charged fees based on transaction data size rather than transaction value size.

The reason for this peculiar structure is that data size imposes costs for bandwidth and storage space on all network participants. The costlier it is to be a network participant, the fewer people will be able to fully participate, thereby reducing the decentralisation of the network. The effect is that bitcoin is scalable at the level of value rather than transaction throughput. This sets it apart from most other value transfer methods, which charge fees based on transaction value size, not data size. Therefore, sending a 1 btc transaction costs the same as a 10,000 btc transaction, meaning that high-value transactions pay a significantly lower percentage fee.