Bitcoin: Data Cost

Somehow my blkindex.dat file became corrupt the other day so I got a little nervous as I remember that one .dat file contained all my bitcoins – within a split second I realized this is the wallet.dat file so I quickly backed it up again for added piece of mind. While in the bitcoin data directory I noticed the size of the blkindex.dat file was over 1 gigabyte! And then the blk0001.dat was 2GB, blk0002.dat was another GB! Let’s not forget about debug.log – another gigabyte. Over 5GB to be able to use the currency? And how many people are using the currency? A lot. This is a problem that is inherently created due to the nature of the currency. But what are some possible solutions?

With wallet backed up, I decided to change the working directory for the bitcoin client. After copying my wallet to the new location and setting up the path parameters it was time to start bitcoin. As expected, I had to re-download the entire block index again. This process took over two days to sync with the network and download all the blocks and multiple gigabytes of network traffic.

Bitcoin is still very young, and the block chain is only going to grow. How large will the chain be next year, in 5, 10, or even 100 years from now. I know about the design of the currency having a sort of ending point in that the number of blocks is finite but we still have to consider transactions when realizing the potential for data usage.

Is it even possible to alter the nature of bitcoin? I believe that since bitcoin is de-centralized, there can be no changes to the method in which this data is handled. This rules out most possibilities to control the potential exponential growth in data usage. Too bad we couldn’t artificially raise the block difficulty and raise the value of the block (like a reverse stock split). Who would even have the authority to make such a change?

Bitcoin 2.0? Perhaps the only solution would be to create a new currency based on fixing the shortcomings of the current iteration. For now, this is really not a problem, and it may never become a problem. Still, it is discouraging knowing that bitcoin is not perfect and such a complex cryptographic abstraction of value is needed in today’s society where fraud, scams and other dishonest human behaviour is rampant.

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