Author: Eric Voskuil 2017-03-31 18:58:44
Published on: 2017-03-31T18:58:44+00:00
Bitcoin's decentralized system provides an advantage over centralized systems like Visa in terms of storing public information. The architecture and hardware requirements for a Bitcoin node are different from those of a centralized store of private information. However, if the system becomes centralized, it becomes private and fragile, requiring significant investment by the central authority to maintain. Maintaining decentralization leads to trustlessness, while centralization leads to fragility. Scaling Bitcoin to massive sizes presents significant challenges, such as block sizes of 4.5 GB and petabyte-sized databases, which cannot be processed by a single machine. Thus, a computer cluster would be required, which is much more expensive to set up per-resource due to synchronization and redundancy requirements. Peak transaction volumes are typically 20-50x the size of typical transaction volumes, further complicating the scaling problem. Additionally, maintaining such a system would require a team of experts and redundancy measures to prevent data loss. Massive systems like Bitcoin operate differently and are much more costly per-unit than tiny systems. When discussing scalability problems, one should consider the cost structures of other systems operating at similar scales. For example, data centers that process airline ticketing for larger airlines have cost structures above $5 million per year. Visa is likely even more expensive.
Updated on: 2023-06-11T22:41:05.491552+00:00