The amount of data Bitcoin-transactions produce

[Nick]

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. According to this article 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?

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[FooDSt4mP]

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?

From http://www.bitcoin.org/bitcoin.pdf:

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
memory.

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.

[Nick]

Oh, I didn't know that. I have to admit that the whole concept still confuses me from time to time. Thank you!
However, 4 million transactions a day would still produce a volume of 2.4 GB which every active client has to download, whether this data is actually saved in the long term or not.
2.4 GB per day are 100MB per hour. It's possible with current broadband-connections, but it would still clog a major part of one's internet-connection.

[theGECK]

This could become an issue if internet connections become throttled, or have a cap placed upon them. People who have such a cap, do you notice bitcoin having any significant impact on your data?

[FooDSt4mP]

Oh, I didn't know that. I have to admit that the whole concept still confuses me from time to time. Thank you!
However, 4 million transactions a day would still produce a volume of 2.4 GB which every active client has to download, whether this data is actually saved in the long term or not.
2.4 GB per day are 100MB per hour. It's possible with current broadband-connections, but it would still clog a major part of one's internet-connection.

Meh, my connection is 2MB per second (16Mb).  So we're talking about 1.3% of my bandwidth.  Also, not all clients need the full block chain.  It's really only needed for miners.

[Mike Hearn]

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. Does this radically limit Bitcoin's growth or have I missed something?

See here:

  https://en.bitcoin.it/wiki/Scalability

Note that 4 million transactions per day sounds like a lot, but it's actually only ~45tps average.

The current BitCoin software for various reasons would top out at 7 transactions per second, but some of those limits are artificial - intended to stop the block chain ballooning in size before the network and software is ready for it.

Evolving the network to support PayPal volumes of traffic is quite possible. Right now the BitCoin network is "flat", that is, every node stores a full copy of the block chain and is capable of mining. Satoshi never envisioned it would stay this way. In future the node software will probably monitor the hosts capabilities and if the machine is beefy enough, become a supernode with a full copy of the block chain. Other nodes will run in client modes and do simplified payment verification, as described in the paper.

As to storage, tx pruning isn't implemented today, but the design of the system allows for it.

[Pieter Wuille]

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.

Depends on what you want. Once support for thin clients exist, just keeping the block headers in the assumed best chain is enough, but for fat clients (including those miners connect to), you'll always need a database of all unspent coins (transaction outputs).

[Mike Hearn]

Yes, that's his point. Txns in which all outpoints are spent can be discarded when they are buried deep enough (including on fat clients/supernodes).

[asdf]

Yes, that's his point. Txns in which all outpoints are spent can be discarded when they are buried deep enough (including on fat clients/supernodes).

What if an outpoint never gets spent, such as with lost coins. Will this create a kind of memory leak of transactions that can never be discarded? Is this a significant problem if at all?

[Mike Hearn]

It will create a disk space "leak" but disk space is so cheap it's really not an issue.