I've been reading up on the Bitcoin system and have noticed one serious potential issue with the infrastructure. Much has been said about "deflation eventually destroying the currency" - well, no. It limits certain forms of investment, but lets others flourish. That coins can be subdivided will allow the system to continue, as people simply pay smaller fractions.
This leads to a problem though. As Bitcoin becomes more popular, and as smaller and smaller fractions are transferred, coins will tend to fragment, and the result will be an explosion in the size of the history peers need, even when data not needed for transaction processing is moved out.
One potential solution is a service that combines fractional coins, but I've been considering how to produce such a service and keep it secure and it's a tough problem.
I tried searching for other articles on this topic and couldn't find any. Has anyone else considered this problem?
Anyone can combine coins, just send coins from a bunch of addresses to one address.
Additionally, blockchain trimming and headers only mode significantly reduce storage needed to hold the blockchain.
