An analysis of Bitcoin's throughput bottlenecks
This analysis is complete nonsense because it starts with assumptions that are entirely arbitrary and biased toward the argument of not scaling Bitcoin:<p>&gt;&gt;Bitcoin.org documents the minimum requirements for running a full node, however with the current state of technology, we must substantially lower these requirements so as to make running a full node as accessible as possible to even people in poorer countries<p>No, people in poorer countries only need to be able to write transactions <i>with their own private keys</i>.<p>You can easily find trusted sources of blockchain data, and even poll multiple sources to ensure you are not being fed false information by one source.<p>If your government blocks access to all those sources with a national firewall, you can use a VPN, which is much easier than running a full node, to bypass it.<p>What you don&#x27;t want is people in poorer countries having to trust third parties with their <i>private keys</i>, which is exactly the result of limiting on-chain throughput so that the vast majority of people use trusted third parties to hold their digital currency and transact it on their behalf.<p>If we take the assumption that only people who have enough bandwidth to stream Netflix 24 hours a day should be able to run a Bitcoin node, we get maximum allowable throughput at least 100X greater than today, and even that requirement is arbitrarily stringent, as Bitcoin could be distributed enough to be impossible to shut down with an even smaller percentage of the world population being capable of running a full node.<p>The analysis also assumes that a user should be able to run a full node with<p>1. Computing resources they already own for their own personal computing needs.<p>2. By only utilizing 10% of those resources.<p>Using a dedicated node, with computing resources that the user purchases and utilizes 100% for Bitcoin node operation, is ruled out, again arbitrarily for no reason that would be relevant to a global network attack scenario.<p>Thus the analysis contains assumptions like this:<p>&gt;&gt;But since most Bitcoin users are more affluent, for analysis of current Bitcoin I&#x27;ll use a range of 250-500 GB for the 90th percentile users, and 500-2000 GB for the top 10%. Note that I&#x27;m using wide ranges because I&#x27;m less certain about these numbers.<p>In reality, tens of millions of people could easily afford to purchase tens of TB of storage for running dedicated Bitcoin nodes, and tens of millions of people is easily enough to make shutting down or controlling the Bitcoin network impossible for any nation-state actor.<p>So this assumption that Bitcoin nodes need to be able to run on machines with only 500 GB to 2 TB of storage, with only 10% of that, i.e. 50 GB to 200 GB, allocated to running a Bitcoin node, is absolutely absurd.<p>And this is just storage, which the analysis assumes is okay to limit to the top 10% of the global population. For bandwidth, the analysis assumes that 90% of the world population, which includes some of the poorest people in the world, should have enough for running a full node.<p>This idea that the lower classes in India should be running a Bitcoin full node, or else the Bitcoin network will somehow be jeopardized, would be comical if this weren&#x27;t a serious attempt at swaying public opinion.<p>Basically the analysis is implying that it&#x27;s okay for it to cost $100 in fees to conduct a single Bitcoin transaction, which is out of reach for even the wealthy in rich countries, but that it is not okay that poor people in India not be able to run a Bitcoin full node on their own device - and let&#x27;s not forget - while utilizing only 10% of their device&#x27;s network resources. Just absurd..<p>To summarize, the analysis assumes that it should be possible to run a Bitcoin node using 10% of the typical personal computing resources of 90% of the world population, when in reality all Bitcoin needs to be shutdown and censorship proof is that it be possible to run a full node using something on order of 500% of the typical personal computing resources of the richest 1% of the world population, i.e. the richest 80 million people, who live in the developed world, given many of those people <i>are</i> willing to purchase dedicated hardware and bandwidth for running a Bitcoin full node, and many would do that if the network actually came under any threat of a coordinated global attack on the network.<p>Considering all this, this analysis could easily be under-estimating how much Bitcoin could increase its throughput by a factor of 1,000X. It&#x27;s a very disingenuous and biased analysis that obfuscates this fact by being loaded with analysis and data that 1. imply credibility and 2. hide and distract from these totally bogus starting assumptions.<p>Finally, the analysis only considers a physical network attack. The political attack, of countries banning Bitcoin internally, and the best defenses against that, are not considered.<p>In reality, the best defense against a political attack is allowing Bitcoin to scale by 100 or 1,000 times in throughput, to increase the proportion of the population that is economically dependent on the network, and would oppose attempts to politically attack it. And in reality, a political attack is much more likely, and dangerous, to the ability of cryptocurrency to fulfill its potential to financially empower the world&#x27;s population, than a physical network attack.