Here's a thing that worries me regarding the possible future growth of Bitcoin:
As I have understood it, every peer has a dataset of every transaction ever made in Bitcoins. I've looked into a block at blockexplorer.com and have estimated a single transaction to average at a size of 600 Byte.
Now there is PayPal. After this
article from sexy Ms. Gail Turley Paypal handles nearly 4 million transactions per day.
Now let's assume Bitcoin will grow to the same size as Paypal. 4 million transactions would produce a datavolume of 2.4GB a day. That is a lot, even considering Moore's law.
Also don't forget that Bitcoin is much more useful for microtransactions than Paypal, so with the same userbase it would produce even more transactions.
Does this radically limit Bitcoin's growth or have I missed something?
Once the latest transaction in a coin is buried under enough blocks, the spent transactions before
it can be discarded to save disk space.
A block header with no transactions would be about 80 bytes. If we suppose blocks are
generated every 10 minutes, 80 bytes * 6 * 24 * 365 = 4.2MB per year. With computer systems
typically selling with 2GB of RAM as of 2008, and Moore's Law predicting current growth of
1.2GB per year, storage should not be a problem even if the block headers must be kept in
See the PDF for more details, but the gist is only the most recent transactions need to actually be kept. Once we are certain they can't be reverted by a double spend attempt, we can drop the transactions and just keep the block headers.