Whilst going through hundreds of emails and forum posts written by Satoshi Nakamoto (all of which are documented for posterity at the Satoshi Nakamoto Institute), one particular correspondance I came across stopped me in my tracks. Why? Because it — an email written by Satoshi himself no less — talks about scaling Bitcoin (a topic that has caused absolutely no end of controversy and disputes in the space).
In an email exchange with Mike Hearn (who later went on to become a major contributor to Bitcoin) dated April 12th 2009, Satoshi writes:
“The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost. It never really hits a scale ceiling. If you’re interested, I can go over the ways it would cope with extreme size. By Moore’s Law, we can expect hardware speed to be 10 times faster in 5 years and 100 times faster in 10. Even if Bitcoin grows at crazy adoption rates, I think computer speeds will stay ahead of the number of transactions.”
-Satoshi Nakamoto, in an email to Mike Hearn.
At the time he wrote this Satoshi clearly had an intended scaling-plan in mind. He very clearly knew Bitcoin’s potential as a future world currency, and although he never mentioned how Bitcoin would scale, he quite clearly had a plan.
Note: there’s also one other instance in the Satoshi archives that I can find where he eludes to Bitcoin-scaling.
In a Bitcoin Talk Forum post dated 2010-08-05, Satoshi mentioned how Bitcoin will eventually be suitable for micropayments:
“While I don’t think Bitcoin is practical for smaller micropayments right now, it will eventually be as storage and bandwidth costs continue to fall. If Bitcoin catches on on a big scale, it may already be the case by that time. Another way they can become more practical is if I implement client-only mode and the number of network nodes consolidates into a smaller number of professional server farms. Whatever size micropayments you need will eventually be practical. I think in 5 or 10 years, the bandwidth and storage will seem trivial.”
-Satoshi Nakamoto, in the Bitcoin Talk Bitcoin Forum.
Bitcoin’s maximum on-chain capacity is currently about 7 transactions per second — a figure woefully short (to put it mildly) of the kind of capacity it would need to be a form of daily-use money.
Nowadays (nearly 14 years after Satoshi wrote the above messages) the Bitcoin-scaling method that has gained the most traction is The Lightning Network (a promising solution first proposed in 2015) — a network that introduces the idea of off-chain transactions (here’s a good introductory article on Investopedia for more info).
This clearly wasn’t Satoshi’s intended method however. What was? Well, there’s no way to know with absolute certainty of course, but many (MANY!) have argued that his intended method was simply to increase the Bitcoin block size from 1MB (basically the larger the block size the more transactions Bitcoin can do) to, well… nobody knows: possibly he even saw no eventual upper bound at all!
The problem with increasing the block size however — for anyone reading who hasn’t yet understood the crux of the problem — is that the overall size of the entire Bitcoin blockchain is already (at the time of writing) a pretty sizeable 500GB, and if Bitcoin were to increase its block size from the current 1MB to say 1000MB then yes: we’d go from a capacity of about 7 transactions per second to around 7000 per second, but the hardware cost to run a full node (required to mine Bitcoin) would drastically increase (if it’s taken fifteen years to get to 500GB then imagine it being over 1000 times this size in another 15 years), thereby resulting in the hardware required to mine becoming increasingly more expensive and mining, as a result, increasingly more and more centralized: which is against the very ethos of decentralization that Bitcoin stands for!
How did Satoshi Nakamoto intend to scale Bitcoin?
Well, probably by increasing the block size (how else?).
Given the many developments since Satoshi wrote the above messages however (many of which have been in the areas of mining — with miners using large mining pools, making them increasingly more centralized, for example), it’s impossible to know if he would change his mind on his previous ideas around Bitcoin-scaling.
And sadly, he’s no longer around for any of us to ask.
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