lundi, juin 24, 2013

How bitcoin may be already crumbling under its own success

The bitcoin community has recently discussed about government interference, but today, I want to discuss 2 mostly overlooked bitcoin news:
 * blockchain has reached a size of 8 Gb
 * transactions shall have, now, a minimum size

 These 2 events/news are closely related. Every transaction contributes to the 8Gb ledger size, and "they (the miners?)" want to limit the ledger size. This will be done by fighting transaction spam i.e. eliminating insignifiant exchanges and non-financial transactions such as those initiated by satoshidice.

Why is it needed to limit transactions when there are so few users?
Is limiting transactions today a sign that bitcoin will not scale well?

Some predict that bitcoin market capitalization will reach orders tens, hundred of billions or even trillions.
 * How many people will use bitcoins in a few years?
 * What will be, then, the size of the bitcoin ledger? Will it still be manageable? 

Most probably to keep the ledger at a computable size, transaction size will be limited to higher limits. People will be less able to use it, then, for day to day transactions, if the limit is set to 0.1 bitcoin (equivalent to 100$?) for instance.

Maybe are we going to need to use other currencies, for smaller amounts, such as litecoin sometimes deemed as "silver compared to bitcoin's gold"? If "open currencies" become mainstream, I guess in addition to gold and silver, copper, iron, lead and feather coins are going to be needed to be able to manage the huge number of transactions when half the planet is going to use these new currencies.

Today's amount of transfers is looking like ripples compared to tomorrow's tsunamis of transactions. If we consider bitcoin as the "Napster" of open currencies and expect future open currencies, answering to those questions, which I personnally find unsolved yet, is something essential.

Or ... did I miss something?
A few weeks ago, I understood that maybe oldest parts of the ledger will be dropped. When will that happen?

 Anyway the amount of transactions is already a problem because today  "they" feel they should limit the number of transactions.