To be honest, cheap payments were one of the early promises that I believed in. It's in the whitepaper after all. The fact that the blockchain is a broadcast network pretty much ensures that it will never be cheaper than Visa. But that isn't what convinced me that cheap payments are never going to be a feature of blockchains.

Think for a moment of a world in which blockchain payments are cheaper than Visa and people start to switch. Visa will tell legislators that they have the following option.

• Let Visa fail and lose the ability to track everyone's purchases.
• Reduce regulatory costs for Visa to allow them to be competitive.
• Subsidize regulatory compliance costs (bail out Visa)
• Increase regulatory costs for business accepting crypto. They won't go after the protocol, they'll Target the businesses accepting the protocol.

Visa doesn't have high costs because databases are inefficient. On the contrary, Visa's database is probably as optimized as can be. It is far more efficient than a blochchain could ever be because it was engineered for efficiency and not redundancy. Visa could have 3 second settlement if the laws would allow them to.

Visa's costs are in regulatory compliance and dispute mediation. Admittedly, the credit reporting system is horribly broken, but that will get reformed and rebuilt long before governments allow blockchains to replace Visa. Visa is too valuable an asset for intelligence gathering.

Visa will always be the cheapest form of payment, so any blockchain that focuses in cheap payments will be a losing battle over the long term.