Will The Bitcoin Blockchain Get Too Big? Problems/Solutions Explained

October 8, 2018 , admin 0

Bitcoin is by far the most popular cryptocurrency. It is continually trending, and it still has massive value predictions. The question many have been asking lately is, “Will the bitcoin blockchain get too big?”

Many wonder if bitcoin will not scale as it increases in mass-adoption.  The decentralized peer-to-peer transactions that currently take place via blockchain technology are managed via bitcoin miners. This is the core of the verification needed to power blockchain, not to mention the energy needs.

If the bitcoin blockchain grows the way many cryptocurrency enthusiasts predict, a bottleneck could occur. Let’s take a deeper look at the management requirements and potential for a grander oversight if the bitcoin blockchain gets too big.

It Takes 28 Minutes to Process A Bitcoin Transaction

The current processing rate of 28 minutes per bitcoin transaction, as of July 2018, is one potential concern when it comes to mainstream adoption of bitcoin blockchain in tandem with fiat currencies.

For example, let’s say that bitcoin and blockchain predictions come to fruition and all transactions in North America are now done via the bitcoin blockchain. That would amount to 167.8 billion transactions (non-cash) in 2018.

That equates to about 466.1 million transactions per day, around 323,688 transactions per second. If it takes 28 minutes to process a single bitcoin transaction, the load may be too much for miners to authenticate hashes and digital signatures, creating a bottleneck.

Bitcoin Blockchain “Block” Size Is Another Issue

Each blockchain transaction takes about 250 bytes at the current rate. If all transactions were processed on the bitcoin blockchain, each block would have an astronomical amount of gigabytes of data. Each block currently has a 1MB size limit.

Each blockchain ledger has nodes attached. The nodes are what keeps the blockchain working the way it was intended, decentralized and validated across multiple miners, who validate and add each to the ledger.

If the bitcoin blockchain gets too big, the bottleneck of transactions can have a big impact on UTXO RAM requirements and storage space. To put it into perspective, over 2,000 transactions per second would require more than 25 TB annually.

Miners, the ones tasked with keeping the blockchain technology efficiently processing transactions could have serious problems in terms of capacity and energy needs.

Can The Bitcoin Blockchain Get Too Big?

If bitcoin predictions and the utility of blockchain is realized by financial institutions, corporations, and governments, and the switch to a bitcoin blockchain only system is made, then yes, the bitcoin blockchain can most certainly get too big.

If this happens, what will bitcoin and blockchain technology amount to? Well, Satoshi Nakamoto’s vision of a decentralized peer-to-peer network would falter. The massive amount of energy and money needed to keep the bitcoin blockchain running as is would require centralization.

The nodes needed to process the transactions would eventually be bought and monopolized by overseeing centralized institutions that have the money to expand and manage the colossal blockchain. After all, they would need to process hundreds of billions of transactions with a steady increase year-over-year.

This probably sounds a bit familiar right? That is because present day financial institutions already have this centralized model in place, as well as credit card processing companies, like Visa, American Express, and MasterCard.

Luckily There Are Solutions For A Bloated Blockchain

If you are worried that the bitcoin blockchain will get too big and transactions will take in excess of a month to process, don’t stress too much. There are a few solutions to a bloated blockchain.

  • Hardware: By the time the blockchain has exceeded its 1MB per block, 1TB disk drives will be commonplace and ready to take on the perpetual need to scale. The only issue is the transfer of data, since all transactions are on a ledger till the end of time. But surely is someone is working on this issue as well.
  • Software: Yes, the blockchain is growing at alarming rates, but so is software innovation. There are cutting-edge software solutions for the cryptography used that can keep the blockchain a decent size and keep all data in place.

Wrapping Up . . .

More people, institutions, corporations, and governments are finding the utility of blockchain technology useful. This technology can reshape the antiquated processes in place, as well as heighten a number of much needed aspects, like data and personal information security. The good thing is that technology for technology will continue to be developed, keeping the systems of the future scalable and of value.