My advise to you is to start looking at growth in another light. While it seems reasonable to track "adoption & growth" by an increase in the userbase, I have recently come to the conclusion that what might be even more preferable is a growth in capital.
I guess this comes back to our different idea of Bitcoin's value proposition but to put it shortly, my opinion is that more expensive transaction fees on the blockchain will hardly hinder the adoption of capital looking to buy a spot and park their money in the unforgeable ledger. That is because bitcoins are a unique collectible unlike anything the world has seen since gold. Unfortunately much like gold some characteristics limit its direct use as a mean of exchange. Gold's shortcoming is in its physicality, Bitcoin's own is the decentralization tradeoff.
This is just for the record as Peter is doing an admirable job of explaining things, I have highlighted the fundamental failings in your logic which makes you come to the wrong conclusion. I fully expect you to ignore this and hand-wave it away, but here goes...
1. Growth in capital is a reactive process, it is a market response to the growth of the whole ecosystem. There have been altcoins with enormous early capital such as Auroracoin where $100 million in market cap rapidly went to zero, like morning mist in the sun. This was because the capital temporarily existed but there was no ecosystem to maintain it.
2. Bitcoins are not a "unique collectible" because while bitcoins are truly finite, cryptocurrency is infinite. Litecoin is just Bitcoin with a different name and a few minor software changes. Many new coins exist such as Monero and NXT and Etherium. ALL of these could do the job of Bitcoin if Bitcoin vanished. The only thing keeping Bitcoin at No.1 is a positive feedback loop: ecosystem usage (transactions) > utility value -> market price -> mining power -> PoW security of blockchain -> more public interest -> more ecosystem usage
The problem with the 1MB is that it will eventually cripple this all-important feedback loop.
Your Auroracoin false equivalence does not stand. An irrational pump & dump does not compare in any way to a collector's item.
I think Bitcoins are absolutely a unique collectible. I hate to "call up" authority but its own creator was well aware of that:
Maybe it could get an initial value circularly as youve suggested, by people foreseeing its potential usefulness for exchange. (I would definitely want some) Maybe collectors, any random reason could spark it. - Satoshi Nakamoto
It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy. -Satoshi Nakamoto
Aug. 27, 2010: Bitcoins have no dividend or potential future dividend, therefore not like a stock. (Theyre) more like a collectible or commodity. - Satoshi Nakamoto
This typical "cryptocurrency is infinite" reply seems shortsighted and IMO shows a misunderstanding of Bitcoin's origin of value.
If we were to derive the latter from "ecosystem usage" as you represent it : transactions on the blockchain, then we should argue Bitcoin is a pretty low value network since the velocity of transactions on the network is, frankly, very low. Have a quick look at the top 500 (you can even go up to 20,000) on the website here
http://bitcoinrichlist.com/top500?page=40. A very short glance should make it very clear that most bitcoins rarely move on the blockchain.
In other words, very little people actually use Bitcoin for exchanges of goods and services traded on the blockchain. Therefore, I believe, the "utility" value in your feedback loop is incorrect. The actual primary use case of Bitcoin is for people to store wealth by exchanging fiat currency for bitcoins or, in the case of miners, work/energy. This is exactly how a collectible comes into existence. An organic process where an "unforgeably costly commodity repeatedly adds value by enabling beneficial wealth transfers." (1) Beneficial wealth transfer, in our case, is not transfer of goods or services, but an exit from the fiat system and/or also a speculative move.
By creating value that way, its market prices increases which encourages miners to put more energy into creating them therefore increasing their rarity by making them harder to forge. This increasing price and growing rarity attracts more collectors and on it goes. This is what the feedback loop looks like to me. The current rarity of Bitcoin may very well be a product of its first-mover advantage but it is pointless to dismiss it in the present. That is why Bitcoin should not be thrown into the same bucket as other crypto.
Don't get me wrong, Bitcoin will eventually evolve into a much larger network where an increasing amount of goods and services will be traded for them but I expect this "utility" to remain marginal until Bitcoin grows its collector base by a couple order of magnitudes and ultimately peak when Bitcoin is used as a unit of account.
For all these reason I believe my conclusion still stand and no, 1MB will not cripple this feedback loop.
(1)
http://szabo.best.vwh.net/shell.html#Attributes of Collectibles