We investigate the continuum limit of a compact formulation of the lattice U(1) gauge theory in 4 dimensions using a nonperturbative gauge-fixed regularization. We find clear evidence of a continuous phase transition in the pure gauge theory for all values of the gauge coupling (with gauge symmetry restored). When probed with quenched staggered fermions with U(1) charge, the theory clearly has a chiral transition for large gauge couplings. We identify the only possible region in the parameter space where a continuum limit with nonperturbative physics may appear.
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