Fast & efficient text file data read in C

I have a college project (data structures and algorithms) to do in the C/C++ language. The project is about to create a simulation of a social website that is scalable and good in performance. I am saving the data into text files.

There are 2 ways to read data and run the program-

1. Fetch the required data from the text files when needed.
2. Fetch all the text file data during run time into some data structure and then use it.

Which one would be the best to implement considering the scenario of scaling and performance?