Exponential data growth could push any blockchain into centralization

This year, 2017, will be the final breakthrough for the blockchain technology. It started to buzz allready in 2016 and Social Media platforms like SteemIt surely helped making it go mainstream. In the city of Groningen, Nederland, last weekend, there was a blockchain hackathon, 45 hours of blockchain programming. A total of 400 people in 50 teams from 11 countries working on several projects. It's huge, it's one of those things that makes the city of Groningen great. Actually the province of Groningen is number one in the world, it's the best. We've got the infrastructure for the Blockchain Tech to grow and become a succes. (So far the infomercial, need to get paid somehow, right.) But joking aside, in 2017 the term 'Blockchain' will become known by most of humanity. Next year the Blockchain Hackaton surely will return to Groningen.

A few days ago I fired up my local NXT blockchain to catch up again. There are several ones that I try keep up with on my GNU Linux systems. And to my pleasant surprise I saw that the value of one of my accounts almost had gone to 4 million NXT. Had not checked that one for quite a while, being busy with other real life stuff. And while I was at it, I also got the Slothcoin blockchain up to date and saw that it was a good time to mine some more SLOTH. Yes, I know, it might not have any value to anybody, just a few lovers of the Sloth, like me, but it is something to keep going, even if only for the fun of it. While I learned a lot going through the code of that specific coin. And I thought about having another go at the blockchain, by creating another coin.

It is going to be huge, no kidding

The most easy thing would be using the NXT Monetary System, soon to become the new Ardor blockchain. But it is more fun to really hack and slash about some code and compile it. Specially because I'm not a real coder, more of a geek actually and I do not 'C' that well. Yet, I like the number crunching, going through the code, like solving a puzzle. Like, I just wrote, a geek. And what really got me wondering, again, while I was doing the pre-calculations, was the extreme amounts of generated data that already comes with the most simplefied type of basic blockchain. It's huge, really, it's big, humongous, if that is in fact a word.

And maybe you know how the blocksize limit of about 1 Mega Byte (it is not exactly 2^ 20 though) is a becoming a real pain in the lower region of some, in the Bitcoin realm. It even caused different types of Bitcoin developements to emerge from the chaos. Yet, maybe the SegWit (Segregated Witness) developement will lead to a new found consensus soon. This could raise the amount of data created by the Bitcoin blockchain, every year, by four. And that would mean full nodes need to secure 4 times more information and back it up. The hardware industry will have to supply with the tech development to match demand. Also glassfiber broadband internet infrastructure will become a 'must have', very soon.

Doing the math

Let's do the Bitcoin data amount per year puzzle. If you would like to do the math with me, here we go. A year is 365.25 days long, It has 365.25*24 = 8766 hours and 8766 * 60 = 525'960 minutes in it. Now, on average a new Bitcoin block is created every 10 minutes. So, that is 6 new blocks every hour, instead of 60 if the blocktime was 1 minute. Or 525'960/10 = 52'596 new Bitcoin blocks are added to that blockchain every year. If the blocks were 1 MB {MegaByte} then this would be about 52 GigaByte blockchain growth every year. That is when every block would be filled completely. After 8 years of Bitcoin that could fill up almost half a Terra Byte {TB} of diskspace.

Now, that is not the case, because only the last few years the blocks got filled big time, up to their limit. Therefore it is understandable, from my point of view, that part of the Bitcoin developers want to quadruple the blocksize. But, that could also mean a more than 200 GigaByte a year blockchain size growth. And four times more data transport over the internet, from peer to peer. And those nodes do need to have the right hardware and a highspeed broadband internet connection, with high upload capacity. Never mind the download.

So, when I started to calculate the numbers and figures for the coin I already had in store for release, I already doubted when it got to the choice of the blocksize limit. Setting a one and a half minute blocktime and a blocksize of 256 KiloByte was not all that bad. The amount of blocks per year would then be 8766*40 = 350640, going at a maximum of 256 KB data per piece. In effect dividing it by four would result in the amount of MegaByte {MB} growth per year. The blockchain size growth then would come to 350640/4 = 87660 MegaByte a year, or about 85 GigaByte. And this would nicely fill up a TeraByte harddisk in about 12 years. This already could be done, safely. That could mean it should be able to handle about 25 transactions per second, at least.

There are limits and challenges

One of the limitations of the way Bitcoin functions, and all its derivatives, is in the figures it can handle. Number crunching like a boss, but severly limited in size of the figures. That is not only a challenge to solve for Bitcoin and those alike, it is something that comes with the current state of the blockchain tech. With the exponantial growth every year in size, not only limited to the Bitcoin blockchain, the peer to peer network could shrink. Simply because not every full node will be able to keep up with the adjustment to size growth and need for glassfiber powered broadband speed. This could actually mean centralization, or blockchain oligarchy forming.

Specially when more transactions per second are needed. Now, with the Graphene blockchain technology these high speed needs can already be realized. It is the power that is beneath Steem, and it almost works clockwise. And it also shows that some form of centralization is needed to make this possible. In this case the network nodes that take care of the blockchain are called witnesses. The hardware plus high speed internet connection that is needed to be able to become a trustable witness for any Graphene based blockchain are pretty tough. But all within the current possible technology standards. And it almost doest things by the tick of the clock, well every 3 ticks. Still, Bitcoin and alike are moving like turtles, compared to the Graphene blockchain.

Speed rise and size growth are a real challenge for the near future of the blockchain developement.

Compression and purging

To some extend effective compression and data purging might safe the day, at least for a while. While compression might be quite easy to implement in more ways, purging is not that easy, at least as far as I can see. Also the amount of transactions per second that need to be possible is one urgent challenge that many blockchains have to deal with. Just raising the size of the blocksize limit is not a constructive solution, in my opinion. But all of this will make the coming years very exciting, when it comes to the blockchain developement. And 2017 will still be the mainstream breakthrough, so soon you'll be talking blockchain at school, work, sports, parties and at home.

If the Graphene blockchain technology really can do about 33'333 transactions a second then that is the winning one for the near future. It is way ahead of all the others, so yes, you have a safe bet at Steem, Bitshares and its derivatives. Although there is still that thing about data growth and high speed infrastructure to be solved. In speed and capacity terms it is lightyears ahead of the others though.

At its current state and the exponential data growth speed it seems almost inevitable that most mainstream accepted blockchains will become more or less centralized. And in the near future that could also mean, in effect, mainly controlled by banks, multinationals and governments. There are signs that surely show a fast developement in that direction. Not exactly in line with the idealistic idea that 'Satoshi' had for creating Bitcoin.

Many chains for the people

This does not mean that peer to peer, decentralized, blockchain networks are out off league for the rest of humanity. The great part of the blockchain technology is that it is mostly Free Open Source. So any individual or group can start a blockchain to their own liking and good use. With the possibility to interchange between different blockchain types in the very near future. So an amount of Bitcoin could be locked at a certain address in that blockchain, freeing a certain amount of TORUM on the Ardor sidechain, or Steem on the Graphene blockchain. And vica versa...

So, I guess there will be solutions coming, clever use of cryptography creating interfaces between all kinds of blockchains. Where Bitcoin might be used more and more to mainly move large value around, where Graphene will do lots of small transactions for every day to day use.

And you and I will have a lot to talk about this year and the ones to follow, because finally talking Blockchain aint considered Jibberish anymore...

Have a great day!

image cc0 license Michael Wuensch at pixabay