If we bitcoin remains as is, soon transactions could take up to 1 hour to confirm, meaning bitcoin will become a useless micro payment tool..

But if we choose to increase the block size bitcoin will become more centralized?

So whats the solution?

My take on it is that bitcoin should remain as is, meaning the block sizes should remain the same, and transaction confirmation time is not an issue, since bitcoin was never intended to be a quickest way to send, decentralization was the main goal, lets not forget that.
So bitcoin transactions taking hours to be confirmed is nto an issue, bitcoin is the gold of the crypto world, other alt coins that are quicker to use an more practical for micro payment situations will emerge, but bitcoin should remain as the back bone of crypto currency.

Yes quick confirmation is essential for micro payments, like buying something at a store, you don't want to wait an hour to wait until the payment is confirmed. But bitcoin is not only used for micro payments, some people use bitcoin to send money over seas, as seen with cyprus and greece, sending millions or even billions of dollars any where around the world in a number of hours doesn't sound so bad does it?

So in my opinion bitcoin should be left untouched, soon new alt coins will fill in the void space beneath bitcoin and will complete the crypto world.