'7 Million Transactions a Second' — Research Paper Declares 1TB Blocks Feasible
This week a research paper was published by the founder of Lokad, a quantitative supply chain software company, and it details how terabyte blocks (TB) implemented into the bitcoin cash (BCH) blockchain could be “feasible both technically and economically.”
Also Read: Thomson Reuters Adds Bitcoin Cash to Eikon Platform
Research Paper Describes How Terabyte Blocks Could be Applied to the Bitcoin Cash Network
On Sunday, December 17 the researcher and founder of Lokad, Joannes Vermorel, published a paper called “Terabyte Blocks for Bitcoin Cash.” Vermorel argues that the original Bitcoin whitepaper describes a system where it can achieve extremely large blocks that follow alongside the path of Moore’s Law. The concept of Moore’s Law means every two years technology gets more advanced within the integrated circuit and transistor production environment. Vermorel’s paper explains that terabyte blocks could work while also being economically sound. Further, the transaction output of a terabyte block could contain around 4 billion Bitcoin Cash transactions, according to Vermorel’s research.
“Assuming a worldwide population of 10 billion humans, terabyte blocks offer about 50 transactions per human per day,” explains Vermorel’s paper.
50 transactions per day per human appears sufficient to cover all human-driven activities; and only a healthy machine-to-machine market would require an even greater number of transactions.
1TB Blocks Can Work Using Existing Hardware and Software
Vermorel also goes into great detail on how a mining rig could be built to process 1TB blocks by utilizing “a combination of existing and proven hardware and software technologies.” Moreover, the cost associated with the mining rig is considerably low enough to ensure a healthy decentralized ecosystem, Vermorel explains. The researcher also describes how the financing of terabyte system could work, and assumes the upper bound monetization for a terabyte blockchain is around $0.5 USD per year per user. Vermorel believes his monetization estimate is conservative.
In 2016, Google is extracting about 7 USD per user per year, while Facebook is extracting about 16 USD per user per year — If Bitcoin reaches 1TB per block, a large portion of the world economy will be running on top of this blockchain offering numerous monetization opportunities.
I fail to see why, collectively, the market would not manage to extract at least 5 USD per user per year on average through blockchain related services. At this point, we are entering the realm of profitably funding a thousand more copies of the terabyte blockchain.
7 Million Transactions Per Second
Vermorel also goes into various points and issues that would be tethered to scaling a terabyte blockchain, including scaling transaction propagation, cryptographic validation, and economic validation. The paper explains that based on Vermorel’s studies, terabyte blocks could scale to far more than the current 1MB block size that only allows for 3-4 transactions per second.
“Terabyte blocks represent 7 million transactions per second — An optimized implementation only requires two reads, and two writes per transaction to the persistent UTXO storage,” explains Vermorel.
The paper details that at the moment terabyte block figures are “wildly unrealistic” but Vermorel believes the Bitcoin ecosystem will take at least five years until terabyte blocks are needed.
“Since the publication of the original Bitcoin paper 8 years ago, practically every cost quoted in this document has been reduced by a factor greater than 10 — The cost of long-term data storage is already anticipated to be divided by 3 by 2020 — The bandwidth cost is also expected to decrease by 30% per year for the coming years as well,” the terabyte block size paper reveals.
I am not accounting for any additional software improvements — Flexible Transactions and Schnorr signature could reduce the transaction size by more than 20% — Pruning the blockchain itself could probably halve the amount of storage actually needed.
Recent 1GB Block Size Testing
The paper follows the latest tests by the Bitcoin Unlimited team who have recently experimented with 1GB block sizes on a testing network. This year on October 13, the (BU) chief scientist Peter Rizun announced the team had successfully mined a 1GB, which provided significant transaction throughput results. With these test results, and Vermorel’s research paper, terabyte blocks for the Bitcoin Cash network may not be an outlandish concept; especially when Vermorel’s analysis assumes no decrease in hardware costs, no software breakthroughs, and utilizes existing technologies.
What do you think about terabyte blocks for the bitcoin cash blockchain? Do you think it is technically and economically feasible? Let us know what you think about Vermorel’s paper in the comments below.
Images via Shutterstock, Joannes Vermorel’s blog, Woobull.com, and Our World In Data.
Need to calculate your bitcoin holdings? Check our tools section.
