3. The waste of duplicating data
Each miner maintains a complete copy of the BlockChain.
If, for example, the BitCoin BlockChain is 1 terabyte (10^12), and there are 100,000 miners, that makes 100 petabytes (10^17). It’s terribly inefficient. I repeat: it is terribly inefficient, terribly inefficient and terribly inefficient. And I only repeated it three times. Adding minors does not increase the capacity of the BlockChain. In reality, a BlockChain would work just as well with a single miner. The remaining 99,999 are technically redundant. We are talking about trust, of course, but a hundred independent miners would be more than enough to guarantee it.
If there are 100,000 miners it is because the BitCoin price is so high that even 1/100,000 of the reward offered covers the price of the energy consumed. But only where energy is cheap, for example in China. In France, it’s been a long while since mining is not profitable any more.
This is a huge waste of energy and storage capacity, and it is just beginning. As the BitCoin price increases, there will be more miners to share the reward. The BitCoin reward is divided by 2 every 4 years. “All other things being equal”, if the BitCoin price rises fourfold during this time, we will have twice as many miners. History has shown that this is not a fanciful speculation.
4. The scarcity of bandwidth
The BlockChain register is extended at a determined pace. Pages are added at a fixed pace, and each page can contain a fixed volume of data. For an idea of the order of magnitude, BitCoin can record 7 transactions per second (TPS) worldwide. This is enough when there are a few hundred thousand users making a few transactions a day. But because of the popularity of BitCoin, we need to record well over 7 TPS.
In cases of scarcity, a question of governance arises: logically, all that is needed is to get all the miners to agree to extend the pages or turn them faster. Except. Except that the transactions to be entered wait in a queue, and for miners the lengthening of this queue is an opportunity: they can auction the first spots in the queue. In order for a transaction to be registered promptly, one has to pay a fee the miners. In the case of BitCoin in particular, this financial reward is all the more interesting as, as explained earlier, the reward distributed to miners is reduced each year.
By way of comparison: Visa or MasterCard register in the order of 100,000 TPS. With 7 TPS, we are obviously a long way off the mark. For a currency…