Each bitcoin is kilobyte of data now..In future?

[BTCIndia]

Network rate is approximately 1700 thash and will reach 4000 thash by year end. Now, here comes the question. Every bitcoin is data. Right? Some random codes containing trail from inception to its currency holder. Every Bitcoin is information or consider it as dollar "hiding" his own story within.. where he took birth, with whom he stayed and for how long etc.

When transaction is broadcast to network. Network task is to scrutinize the coin, its details, its history and testify on it validity- known as confirmation. Am I right so far?

If we take a look at blockchain then, it values is growing that means, it is accumulating lot of data. And I guess right now, every coin has only few Kilobytes of data. But, with time, every coin will have MB's of data within. And processing those transaction containing bulk of coins(data) them won't be for a common miner but large companies with majority of mining power. Right?

Wallet are anonymous and I think, it won't be for long. People with technology/resource will know, which wallet are owned my whom. Particular transaction is initiated from X country to Y country. And then, they'll try to get a hold on money transfer from regulate mining. And to make sure, transactions occurs people doing transaction will be forced to pay higher miner fees to some under ground miner to verify their transaction. What are the possibilities of these "under ground miner" processing transaction? Because, we've seen exponential growth of network and will continue to be some. Its only matter of time that mining will be business for elite and those Bitcoin right now having few Kilobytes of information will be worth few MB's capable of being scrutinized by 'elite miner.'

There was some company from Singapore conference-2013 called Epithyte or something like that working on to certify particular coin/account as account involved/using good coins and bad coins. I mean, categorizing coins is two categories depending on good/bad usage plus accounts.

Is it so?

[Rannasha]

There are some incorrect assumptions in your post. Primarily the fact that the "size" of a coin doesn't grow as it gets transacted more. Old transactions are stored in blocks and it is not necessary to trace the entire history of a transaction to validate it. A transaction has inputs and outputs, where each input is in turn an output from a previous transaction. When a new transaction is received by a node, it will make sure that all inputs of the transaction correspond to valid outputs from previous transactions that haven't been spent yet. An output is considered valid if it's included in the current blockchain.

No more history is checked other than the last step preceding the new transaction. So the size of a transaction will not increase in the coming years and processing it will still be doable by consumer nodes on basic hardware.

[BTCIndia]

There are some incorrect assumptions in your post. Primarily the fact that the "size" of a coin doesn't grow as it gets transacted more. Old transactions are stored in blocks and it is not necessary to trace the entire history of a transaction to validate it. A transaction has inputs and outputs, where each input is in turn an output from a previous transaction. When a new transaction is received by a node, it will make sure that all inputs of the transaction correspond to valid outputs from previous transactions that haven't been spent yet. An output is considered valid if it's included in the current blockchain.

No more history is checked other than the last step preceding the new transaction. So the size of a transaction will not increase in the coming years and processing it will still be doable by consumer nodes on basic hardware.

Okay! Thanks for explanation! Now, I understand better. So, this increasing size of blockchain is due to increase number of transctions and blocks. Not increased amount of data hiding within Hash/256 bit digest in bitcoin. Sorry! If I said anything wrong, I'm not a coder. I'm just trting to understand things in better way.

[Rannasha]

There are some incorrect assumptions in your post. Primarily the fact that the "size" of a coin doesn't grow as it gets transacted more. Old transactions are stored in blocks and it is not necessary to trace the entire history of a transaction to validate it. A transaction has inputs and outputs, where each input is in turn an output from a previous transaction. When a new transaction is received by a node, it will make sure that all inputs of the transaction correspond to valid outputs from previous transactions that haven't been spent yet. An output is considered valid if it's included in the current blockchain.

No more history is checked other than the last step preceding the new transaction. So the size of a transaction will not increase in the coming years and processing it will still be doable by consumer nodes on basic hardware.

Okay! Thanks for explanation! Now, I understand better. So, this increasing size of blockchain is due to increase number of transctions and blocks. Not increased amount of data hiding within Hash/256 bit digest in bitcoin. Sorry! If I said anything wrong, I'm not a coder. I'm just trting to understand things in better way.

Indeed.

And herein also lies a way to reduce the blockchain size. Since only one step back in the history is required to verify a transaction, anything that came before it can in theory be pruned. That means that large parts of blocks can be removed without losing the power to validate transactions. Of course, you do lose the ability to trace a coin all the way back to its origin if you do this, so there should always be enough nodes that keep the full unpruned blockchain.

[BTCIndia]

There are some incorrect assumptions in your post. Primarily the fact that the "size" of a coin doesn't grow as it gets transacted more. Old transactions are stored in blocks and it is not necessary to trace the entire history of a transaction to validate it. A transaction has inputs and outputs, where each input is in turn an output from a previous transaction. When a new transaction is received by a node, it will make sure that all inputs of the transaction correspond to valid outputs from previous transactions that haven't been spent yet. An output is considered valid if it's included in the current blockchain.

No more history is checked other than the last step preceding the new transaction. So the size of a transaction will not increase in the coming years and processing it will still be doable by consumer nodes on basic hardware.

Okay! Thanks for explanation! Now, I understand better. So, this increasing size of blockchain is due to increase number of transctions and blocks. Not increased amount of data hiding within Hash/256 bit digest in bitcoin. Sorry! If I said anything wrong, I'm not a coder. I'm just trting to understand things in better way.

Indeed.

And herein also lies a way to reduce the blockchain size. Since only one step back in the history is required to verify a transaction, anything that came before it can in theory be pruned. That means that large parts of blocks can be removed without losing the power to validate transactions. Of course, you do lose the ability to trace a coin all the way back to its origin if you do this, so there should always be enough nodes that keep the full unpruned blockchain.

+1

Heartily thanks to community for clarifying my doubts!