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This problem does not exist with Lightning, which is what makes it even better for smaller merchants and smaller transactions.
Yes, this problem does not exist when it comes to capacity!
But the capacity problem still persists when you need to migrate people to LN!
So, thre are 4.5 billion Visa cards there, let's say 10 years ? So 450 million users to Lightning each year, 52,560 blocks/year so 8500 funding tx in a block...nope!
Of course we could batch those tx, there would be an improvement, but still, nowhere near enough!
The only way is to abandon the principle of not your channel not your coins, lols, and go for a centralized custodial solution again!
And we're back to square one, why even use it?
The direction of your post is correct, but I would not make it so simple to claim that ideological reasons for not spending Bitcoin are the primary reason for which current on chain use is low. I think we see these trends across shitcoins too so that indicates that this claimed cause here is not the primary factor that determines the current situation.
USDT and USDC are taking market share here, on this damn bitcointalk forum, 5 years ago Bitcoin was the undisputed king here, now apart from collectibles and signatures stablecoins have takn over all deals. Loans in BTC? A thing of the past! Asic miners? USD only!
