Regarding the third point, for bitcoin to be an analog to gold we must keep in mind that gold is universally known and valued. If bitcoin prematurely choked off its own growth and abandoned efforts to mainstream it, I suspect it would slowly wither and die as competing altcoins rose to take its place as an everyday, mainstream cryptocurrency.
The current price of bitcoin is based largely on expectations of future growth. Choke off that growth and I suspect a large portion of its current valuation will evaporate.
It is also important that you reconsider this myth that capping Bitcoin's transactions is a cap on its userbase.
Bitcoin, as is, can provide a refuge for the wealth of ANY person on the planet. It can currently accommodate an infinite amount of capital.
The distinction is important because reality shows us that actual Bitcoin users are by and large not much interested in transacting or spending their coins. A great majority of the coins in existence have been and should continue to sit pretty in their cold wallets for years to come.
Why should we expect this to be different for future users? If you believe, much like I do, that the next trove of adopters is likely to be institutional investors with an interest in Bitcoin as a commodity/asset then why should we be worried so much with the system's transactions throughput? Do you expect the Winklevies to go on a shopping frenzy with their 100,000 coins? The analogy with gold is tired but it remains true: it should be expect that most bitcoins in circulation will be stored in digital vaults and shall remain untouched for a long period of time.
All of this is to say that you should stop focusing on "mainstream" users and what you assume their interest in Bitcoin will be. We should expect these to be last in line in your mass adoption scenario.
You make a valid point that a large number of users can still adopt bitcoin IF the transaction velocity of the money supply remains low enough. But this doesn't address my point that gold has a high value in part because everyone values it. To get to that point
I think the average person needs to have some kind of tangible contact with bitcoin, obtaining and using it at least occasionally. And that would mean that mainstreaming of bitcoin as a payment processing system has to come first. The digital gold function (with the implication of high value) would derive from that success, IMHO.
I don't see how that is true. In fact I'm quite certain a majority of the biggest bitcoin owners have never really bothered using it as transactional currency aside from for some niche use case or outright curiosity.
Don't forget that we are not targetting the "average person". They are not the ones that will bring value to Bitcoin.
The digital gold function, as a store of wealth, is the primary natural function of Bitcoin. It is the first step toward any considerable rise in its currency application.
http://nakamotoinstitute.org/mempool/the-two-ideologies-in-bitcoin/I agree that the largest holders are probably not using it in both ways. What I'm saying is that additional people won't come to value bitcoin as a store of value if they don't value it (or other crypto) for other reasons first. Bitcoin has been around now long enough that most people with disposable or investable income have at least heard of it. So why aren't they investing? We can give reasons relating to media coverage and technical squabbles and so forth, but in the end it boils down to a lack of personal familiarity with bitcoin. It's too much of an abstraction.
Can bitcoin maintain value or grow in value if the user base remains limited, comparable to or only modestly larger than today? Maybe, in the absence of competition and with sufficiently strong intensity of interest among the user base. But there is quite a lot of potential competition waiting in the wings from altcoins, that alone puts bitcoin (along with each of the alts) in a succeed-or-die situation. So holding at 1 MB blocks is risky - it only works if doing nothing (on this point) is really the best option. Given how much has changed with bitcoin use and scale since 1 MB blocks were implemented, I'm skeptical this will remain the case much longer.
And since most of the community has voiced a preference for larger block sizes, it is hard to believe that a decision to maintain the status quo would result in a retention of strong interest/support from the bitcoin community. Some would gravitate to alts, giving the best of them additional support, others would leave crypto. I don't see anyone going into bitcoin or increasing their stakes because of a decision to hold at 1 MB.