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.
'7 Million Transactions a Second' — Research Paper Declares 1TB Blocks Feasible
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.