Welcome, welcome to One Minute Crypto! I'm your host, Chronos, and today I'm excited to talk about an idea that Gavin Andresen recently posted about a new technique to help scale Bitcoin Gavin is a long-time Bitcoin developer, having taken over the lead role of the project after Satoshi Nakamoto stepped down in 2011
Today's new post actually references Bitcoin Cash by name, but his idea could be used for any blockchain that uses Bitcoin's security model, yes, including Dogecoin In this video, we're going to get into a little bit of technical depth on his idea, so don't worry if some of this goes over your head But first, I want to thank our sponsor, Americas Cardroom, the most trusted US online poker site Use the bonus code "Chronos" and you'll get up to $50 in free cash! Deposit with your favorite cryptocurrencies at Americas Cardroom So Gavin's post, which he titles "Half-baked thoughts," outline a way to reduce the UTXO set of a bitcoin node
The UTXO set, or unspent transaction outputs, is the information about all the coins that haven't yet been spent, basically, the who-owns-what in bitcoin As the blockchain grows, which is the record of all transactions that have ever occurred, the UTXO set typically grows as well But this set needs to stay small, because it's best to keep it in memory for quick access when validating transactions When people think about scaling bitcoin, they often think about how big the blockchain is getting, but there are a couple other aspects to consider One is the bandwidth needed to broadcast transactions to each node, and another is the UTXO set that we just taked about
Gavin's idea is to improve on one front, while making a compromise on the other Basically, he is thinking about expanding the information that's included when a new transaction is broadcasted, which means that bandwidth requirements would be increased by about 2 or 3 times the normal load With that extra information, the transaction itself would store most of the proof that its inputs are valid UTXOs, so the UTXO set can be shrunk dramatically Thanks to compression techniques, this would leave this set at a tiny fraction of its former size Another benefit of this idea is that the initial blockchain download for new nodes would be much, much faster
Instead of pulling the entire blockchain, a new node would simply need to receive the block headers, and these new compressed versions of the UTXO information, which I think could lead to more than a 90% reduction in the payload So, is this idea practical? Well, in my opinion, the transaction throughput bandwidth requirement is actually one of the more limiting factors of bitcoin scaling, so this tradeoff doesn't seem worth it to me This means that the act of "upgrading" to this could actually be a downgrade for some node operators Even though this idea probably won't get implemented as-is in the near future, it's still a great example of thinking outside the box for bitcoin scaling I've put a link in the video description if you want to read all about the details and the conversation on this topic
It's great to see a top-tier developer like Gavin Andresen brainstorming about how to solve the age-old issue of bitcoin scaling What are your thoughts on his idea? Let us know in the comments below, and don't forget to subscribe Thanks for watching!