Wouldn't the blockchain size become a bottleneck if all payments happened on Bitcoin?

Question

I am learning about Bitcoin. I understand that bitcoins are stored on a ledger, and the ledger itself is widely distributed and available to all parties. I also understand that the ledger stores all the previous bitcoin transactions for all the bitcoins.

Suppose in the hypothetical future, everybody moved to bitcoins, with no USD or other fiat currencies. What would be the ledger size in bytes due to all transactions that happened within a year? If you were to record all past transactions from the time bitcoins started, so you could track it, it seems to me it would quickly become a huge network bottleneck, as the ledger is updated over the network. Even the size of the ledger itself might become a big concern over a few years.

Has anybody looked into this aspect of bitcoins?

Answer 1

That would indeed create a lot of data. However, there are solutions for this.

First of all, as a normal consumer you don't store the blockchain anyways. Only some nodes like Bitcoin services and generally those who choose to store the blockchain.

Secondly, even as a miner, keeping the UTXO pool available fast is important. They don't need the entire blockchain which shows you all previous payments available at high speeds. They only need to know what unspent money there is and how it's possible to spend it. That's much less. Storing the blockchain itself isn't much of a problem because storage space is super cheep, compared to mining equipment and their energy costs.

And third, what you probably want to know, high activity on the main chain can and very likely will be avoided via lightning networks and payment processors. Both have their own advantages and disadvantages, of course. You can read about lightning networks in the linked Bitcoin wiki article. I wrote about payment processors 2 hours ago in my answer to this question.