Bitcoin Forum

There is a major flaw which will prevent Bitcoin from ever going into widespread use, which is that you must download all previous transactions since the beginning of time to even start using Bitcoin.

Right now the block chain is already a couple of GB and takes more than a day to download and verify on even a fast connection, but what happens if Bitcoin handles a significant fraction of even the US transactions, let alone the world transactions?  The block chain becomes what? several hundred TB long and takes over a lifetime to download? and grows linearly with time?

This program has been reviewed by hundreds, if not thousands of developers, and they all though it was perfectly acceptable to use an algorithm that scales O(N) with the number of transactions since the beginning of time? WTF?!? :o

FAIL.

You think you're the first person to ponder this issue?  ::)

Most users of Bitcoin don't need the blockchain at all, or even to download the client software. Ponder on that for a min.

This is on purpose, though there has been discussion in the past about truncating the blockchain. I don't think it will happen.

There are other ways, like a hybrid client/server model. Bitcoin Spinner (https://bitcointalk.org/index.php?topic=52674.0), the Android app I use for my active wallet, uses a method like this. BCCAPI (http://code.google.com/p/bccapi/) is one implementation of this, and there is another open-source alternative whose name escapes me at the moment.

Basically, this architecture allows a server to manage the Bitcoin blockchain. The user's public key is handed to the server, which then responds with balance and pending transaction information.

To send money, the client requests a new transaction from the server. The server sends it to the client, the client signs it with it's private key, and the signed transaction is sent back to the server for network inclusion.

It's fast, secure, and does not require the client to download the whole blocks. Desktop clients are possible, though I've not seen one. Perhaps one day, one could make money by hosting a relay server in exchange for a modest monthly fee.

How so? Are you thinking of physical Bitcoins, or of second-order users who will potential use the Bitcoin network as a transaction protocol, exchanging for state fiat at each end?

It is interesting that you posted this as I was just thinking about it on the bus to college today.gadsdengraphics, Under that model does the user still have full control over their wallet or will their wallet be stored on a remote server?

The new solution the DCAO will be announcing this summer will give access to Bitcoin to everyone in the world without ever worrying about the blockchain.

Keep your panties on.

There really is no "wallet", there are only private keys. Those are stored only on the device, so the Bitcoins associated with that private key is as secure as the device upon which they are stored.

try Electrum: http://ecdsa.org/electrum

What is the new solution?


If I understood what gadsdengraphics proposed, the private key remains on your computer and is never sent to the server.  You just sign a transaction generated by the server, so the server never has control of your wallet (i.e. private key).

Won't the future blockchain bandwidth issue be solved with Internet2? 100Gbits
Also, I'll be able to store the terrabytes of blockchain on my 2 petabyte MicroSD card.

That's the consensus. I don't think there's really an issue with bandwidth or storage, at least on a PC - the issue with the blockchain is one of how long it takes a device to get up to speed.

That's the open source alternative to BCCAPI I was thinking of.

Relying on Moore's law to solve the problem?  Maybe in the future computers will be able to download all global transactions that have happened since 2012, but it will take a while to reach that point.  And until we do reach that point, the growth of Bitcoin is limited by how much current computers can download and store.

I'm curious how much running a block chain server would cost today if Bitcoin was actually handling all the world's transactions.  It could be a significant cost overhead to using Bitcoin.

What kind of overhead does VISA have keeping track of all VISA transactions?

Guys - this is not a problem that needs solving in the future. It's solved now.

Use instawallet.org. No blockchain. There are dozens of other alternatives also.

The "full client with full blockchain" is not required to use Bitcoin. Grandmothers will never have their own blockchains locally. Far more than half of all people using Bitcoin will not use the blockchain often, if ever. Just as people who use email don't typically run their own email hosting server, and people who use Wikipedia don't keep a local copy :)

Wait, the wallet is stored on the instawallet server?  No thanks.  But Electrum and BCCAPI do look like good alternatives.

Also I use StrongCoin.com and there is a great wallet service at BlockChain.info - there are many wallet services.  This is not an issue as many have stated.

It all depends on what your risk profile and convenience vs security concerns are. I'd never store large amounts on instawallet, for for day to day stuff, it's super easy.  And yeah Electrum is a great option also if you'd rather keep the coins on your machine (just don't forget backups!).

Electrum does not need regular backups. It uses a deterministic wallet. you just need to write down the seed somewhere, or to memorize it.

As I understand StrongCoin, it works similarly to BCCAPI or Electrum in principle - the server never knows your private key.

I'd want to do a lot more research before using it though.

web wallets use javascript.
this means that javascript code is sent by their server to your browser when you visit the wallet.
if the server gets hacked, I am afraid the "server never knows your private key" assumption will fail miserably...

True, sort of.

The only opportunity for a hack to succeed is when a private key is entered - that should be only when the public key is created, and when signing transactions. This presents a much smaller attack surface than a fully hosted service, where your private key is available to be captured at an attacker's leisure.

Still, as you said - if you enter your private key on a website, you are subject to what's coming from that site. You're executing code on your machine from an outside source, with all of the gaping security issues that come with that.

Cool

You know the biggest flaw of all in Bitcoin? Its ignorant and socially awkward user base.

https://i.imgur.com/SV2xx.gif