122 gb bitcoin blockchain

In the blockchain system, the transactions 7 are recorded by any of the network nodes within the blocks that form the chain and these data remain permanently in the blocks in order to be verifiable. Indeed, all the nodes participating in the network can and should record and check the transactions and access the information contained in the blocks and the chronology of the block sequence at the same time.

Furthermore, blockchain-based cryptocurrencies Bitcoin in particular introduced the concept of scarcity into the digital world. Nowadays, blockchain represents a secure database that can ensure digital signature, timestamping, and hashing. The system grants the security of recordings by using asymmetric complementary key encryption, which guarantees protection for the data entered in the chain Diffie and Hellman, ; Rivest et al.

The combination of public and private keys and the hash function enable the origin of a particular message to be secured by guaranteeing its secrecy, authenticity and integrity, which also extends to the metadata and data contained within the blocks. The system creates a hash footprint for the particular transaction, to which it assigns a non-modifiable timestamp.

As a result, the data entered into the blockchain, once validated by the nodes, can no longer be modified or deleted. The data is recorded for an indefinite time, and it is not possible to delete this data. These characteristics are in direct conflict with the Data Protection 8 regulatory framework specifically with the right of erasure 9 and there appears to be no workable legal solution to solve the issue at present 10 Mantelero, This study investigates the nature of blockchain independently by its applications in specific cryptocurrencies or other log systems in relation to Data Protection, and aims to propose a practical legal solution to the conflicts between the public and immutable features of the distributed blockchain and Privacy rights, such as the right to be forgotten.

In the first part, the study addresses the technical characteristics of blockchain as originally proposed in the Bitcoin protocol and how it works. In the central part, the study focuses on the Privacy issues relating to the blockchain system, paying attention to the main characteristics of distribution, anonymity and transparency and what they imply in terms of imputability and accessibility. The study also provides an overview of the clash of blockchain-based Intelligent Systems with Article 22 of the GDPR on automated decisions, when the blockchain infrastructure holds personal data.

In the final part, the study describes a potential solution for Privacy conflicts, based on the concept of centralised model of governance of the blockchain which can allow the appointment of an accountable entity data controller , and, finally, draws conclusions.

Background: What Is Blockchain and How Does It Work Many people today, especially in the field of Computer Science, claim that blockchain can be a solution for preserving privacy security aspects specifically Seybou Sakho et al. Although it may seem as though blockchain could plug many gaps in privacy protection, 12 this technology may instead pose a threat to both Privacy rights and Data Protection principles. In other words, blockchain is composed of a set of single-unit files which contain specific information the blocks.

They are linked to one another in chronological order the chain. The chain of blocks is therefore distributed amongst terminals nodes that contain software to analyse the chain itself. This software must check that the occurred transactions correspond with the formal information of the preceding set of blocks.

The nodes approve the transaction if the metadata of the proposed modification are consistent with the metadata from the previous block. This means that the new block must share one of the parties with the old block i. In other words, the nodes run the computational software on the chain to ensure both the coherent origin of the new blocks and their validity. The blockchain is therefore a record book of the sequence of the transactions. The system ensures the authenticity of the data contained in every block thanks to a hash function connected to end-to-end asymmetric cryptography.

This chronological chain of the performed transactions, recorded in blocks, forms the precise blockchain architecture. Every node has the computational power to analyse the current status of the chain and the proposed amendment.

Hence, if it verifies that the amendment is consistent with the previous blocks, it approves it Zheng et al. The blockchain is said to be practically unmodifiable, due to its architecture. There would also be a computational limit to falsifying it, due to the exponential increase in computational capacity needed to reverse modify the chain, from the last block to the first.

This is worth bearing in mind for the purposes of this study. Blockchain functioning. The applications, indeed, are numerous, and with the advent of the IoT Atlam et al. Blockchain Distributed E-Ledgers and Privacy Issues What Blockchain Entails in Terms of Data Processing Blockchain architecture is precisely tailored to support all applications that involve micro-transactions or logging records.

However, the range of applications is more extensive as these technologies also connect other domains and can interact with each other. In general, in all these IoT environments, the blockchain can be used to ensure that all the processes are recorded, shared and tracked Kshetri, Given that both the IoT ecosystem in general and e-Health environments, more specifically, involve processing of sensitive personal data, such as health conditions, as well as biometric and genetic data, it is evident that blockchain applied to these kinds of ecosystem must be fully compliant with the GDPR and the specific provisions for these kinds of data.

However, this procedure does not change the previous blocks, meaning that the incorrect information remains in the set of old blocks of the chain without the option to delete or amend this information. In order to amend all of the blocks in the chain that contain a piece of incorrect information, full control of the majority of the nodes that make up the blockchain infrastructure would be required, together with the related computational capacity for amending all the blocks. Therefore, if the blockchain follows the typical distributed architecture, this is not practically feasible or economically viable.

This shows both the strength and weakness of blockchain, as it ensures both a permanent non-modifiable record and a resilient method of updating information contained in the blocks at the same time. The main issue that arises is that the diffuse nature of the e-Ledger allows every node 33 to access the content of each block meaning full transparency of private information. This is linked to another dichotomic aspect of the blockchain: if the architecture is designed to ensure anonymity of the parties, it is legally unreliable; 34 by contrast, if it ensures identification and transparency over personal information, it clashes with Privacy rights.

Assuming that blockchain systems such as those mentioned above must identify the parties, this raises many privacy issues, especially in IoT or e-Health environments 35 or in any situation in which blockchain architecture collects and records personal data.

This uncontrolled and anonymous accessibility poses one of the main threats to individual privacy because it leads to a piece of information being disseminated publicly. Indeed, if incorrect or false personal information is input into a block, the chain is not able to certify the validity of the content itself and its correspondence with the truth, i. The mismatch between content information and metadata information is clearer in Smart Contract applications Raskin, The parties, the object of the transaction e.

However, the contractual conditions, description of the products, terms of supply and payment represent the content, which does not appear in the block, or where it does appear, it cannot be validated by the nodes as true, real, valid, lawful or legitimate.

Therefore, blockchain can validate that a particular transaction occurred at a particular time, between specific parties, for a particular object 42 and with certain conditions; however, it is not able to guarantee that the price that appears in the transaction was the real price paid, 43 that the description of the goods was accurate, correct or incorrect, or that the conditions agreed between the parties were respected.

When this content includes personal data, this could create significant problems, as the GDPR also protects false or inaccurate personal data. Therefore, an individual whose personal information appears incorrectly in the blockchain is able to enforce all the data protection remedies that are actionable Bolognini et al.

Other studies have already highlighted the need for a legal entity to determine who is responsible for a particular blockchain network Henderson and Burnie, This means that any blockchain infrastructure that contains personal data would need a trusted third party to assume the position of data controller which would imply governance of the infrastructure. This data controller would then certify, or be accountable for the validity of the personal information introduced into the system, in order to render the blockchain itself compliant with the GDPR provisions.

In addition, a publicly accessible distributed blockchain involves that none of the GDPR rules concerning accountability can be applied 47 due to the diffuse nature of the e-Ledger and its anonymous accessibility Buocz et al. In turn, that there is no way to apply any liability rule and therefore none of the players in the chain would be legally protected against any unfortunate occurrence.

On the contrary, even if the nodes were not anonymous, the subjects that manage them or are part of them , i. Therefore, if no data controller exists, the miners cannot be appointed as data processor, even if their would have been identified.

In essence, the blockchain system was created to bypass the intermediation of any entity in the exchange of goods, which is the case for electronic payment Figure 2. This idea is firmly linked to the current payment system in which central banks act as a trusted intermediary to allow the exchange of money, payments and general transactions. Even PayPal, which was founded with the same intentions as Bitcoin, had to and still does adhere to the global payment regulatory system and therefore is connected to the banking system to process payments made through its service platform.

Governance models for e-Ledgers. This kind of idealistic free and accessible space seems connected to an utopic concept of democracy, which would ensure an high level of transparency in order to match information accessibility for the public.

Therefore, the idea of removing the intermediary from payments in peer-to-peer relationships was not new at all and yet was only an attempt that has been successful so far to reproduce this mechanism in online relationships.

Note that this was only made possible by introducing the concept of scarcity on the Net, as well as by introducing the actual possibility for it, which has been a technological revolution. Cash and Bitcoin, 53 however, share another crucial common feature, which also informs the respective systems behind said currencies, 54 i. The State grants that the currency that people use as cash for their payment was issued; had a stable and exchangeable value; was accepted among parties in a specific territory; was limited and governed by rules; and had a fixed scarcity.

It is indeed fact that offline transactions payments for goods are recorded for tax purposes by sellers, but this does not involve the payer being identified. Nakamoto built Bitcoin on the concept of anonymity to grant that nobody controlled the peer-to-peer transactions performed throughout the blockchain, even ex-post.

Nevertheless, the concept of anonymity must not be confused with the concept of potential identifiability i. From both a purely legal and a Data Protection viewpoint, there is a grey area between the status of being anonymous and the status of being identified and this is the status of being unidentified but still identifiable.

This is exemplified precisely by the aforementioned example of ordinary cash payers in offline transactions. One can remain unidentified but still identifiable, meaning that an individual can be anonymous in practise until the identification occurs. This is an ordinary feature of everyday life for citizens, in which the system requires everyone to be recognisable.

This concept is evident for images representing individuals: anonymised images do not show any personal feature eyes, mouth, nose, hairs, tattoos and so on and therefore they compromise identification and re-identification This is the normal way for Legal Systems national States to ensure the stability of socio-legal relationships and the enforcement of and punishment for criminal actions and civil liabilities.

The difference between anonymity and recognisability 63 is that the former ensures that no one can ever trace a specific activity back to anyone and relate it to a specific individual imputability , whilst the latter allows the individual to remain unidentified if there is no need to connect a specific action to a specific individual for particular socio-legal reasons.

The concept of imputability is indeed the element that connects identity and accountability, and therefore stands in between anonymity and identification. In any system, the ability to identify a unit, an individual, an element allows the system itself to impute ascribe a situation an action, a deed or occurrence to that single subject. This, in turn, enables the system to make that subject responsible for their behaviour and the related cause-effect events. Essentially, imputability means the ability to differentiate 64 between different individuals to establish who did what and, if the event caused damages, whom to hold accountable for these outcomes.

It can be speculated that these two dogmatic features can work with the functioning mechanisms of particular online payments and cryptocurrencies. Nevertheless, this does not need to be valid for other different blockchain applications.

Transparency Misconception and Its Difference From Accessibility The idea of distribution can also be based on the democratic concept of transparency. This kind of conceptualisation, however, relies on both an ontological and epistemological misjudgement on the qualitative nature of transparency. Something is transparent if it can be seen by those for whom it is intended, meaning they have the tools even technical that enable them to access it.

For instance, an open access code is considered transparent but, actually, it is accessible only to those who know that particular coding language and have the technical tools laptop, broadband, and coding software to read the code. For anyone without access to these tools, it is no more transparent than an encrypted code and they essentially have to trust those who can read it who spontaneously emerge as trusted third parties and blindly rely on their judgement.

Indeed, transparency should be distinguished from accessibility and in terms of Law this is evident. For instance, it is possible that documents related to activities performed by public institutions are not published transparent but they can still be accessed on request. As a result, the privacy of participants would be upheld, as would the general interest in being able to access all the written examinations under specific circumstances.

However, even if transparency differs from accessibility, this does not mean that the concept itself is not important. It only means that these two concepts should remain differentiated and treated accordingly when designing the architecture of a system infrastructure. This is important, especially given that transparency may infringe on individual privacy rights or interests, and that accessibility requires elements in addition to mere visibility to be properly implemented.

Privacy Dilemmas Concerning Information Immutability, Storage, and Availability Blockchain should not be only be intended for cryptocurrency, as is often the case, especially in non-technical contexts. It can actually reach its full potential in many other and diverse applications, ranging from commercial to public aspects of society. One of the main privacy issues with blockchain is the immutability of personal information entered into the chain, mainly once a node introduces new data.

This activity is in direct conflict with the principle of the right to be forgotten Di Ciommo, ; Pizzetti, , 68 , 69 as well as with the right of opposition and rectification. To Centralise or Not to Centralise? These issues involve at least two other crucial aspects to consider: without centralisation, there is no possibility to appoint any data controller i.

Moreover, the distributed nature of the ledger implies distributed storage, which not only undermines the security of personal data but also implies that the provisions for data transfer outside the EU can be completely bypassed. The lack of a trusted third party to validate personal data in the blockchain as real, true or exact, can therefore reflect on the usability of personal information in e-Ledgers. Without this kind of external certification, non-verified personal information entered into the chain may even be the subject of illicit usage or even a tool for manipulation purposes.

Although these solutions could work in practical terms, they may not be sufficient to ensure that the GDPR provisions and, in general, the legal requirements are adequately respected. Indeed, the fact that the GDPR is not a standalone regulation, but instead must be read in relation to the whole legal system and the principles that inform it must always be taken into account. In general, addressing the issue of blockchain incompatibility with the right to be forgotten erasure , the classical solution that the literature proposes, relies only on pseudonymisation and encryption.

The Need for an Accountable Entity Data Controller Although pseudonymisation and encryption appear to be workable solutions, they actually avoid addressing the elephant in the room, which is the lack in the distributed ledger of any subject able to perform, or accountable for performing the encryption.

Furthermore, even if the encryption mechanism were embedded in the system by default, it would still be necessary to have an appointed entity to manage encryption and decryption when needed. This legal entity must be appointed or identified in some way for the sake of allocating responsibility, and correspond precisely to what the GDPR defines as a data controller.

However, this is an external input not taken into consideration in a blockchain system Fabiano, The Clash of the Titans: Anonymous Nodes vs. Besides, the distributed nature of the e-Ledger can be exploited for unlawful profiling purposes on the personal data contained in the system, as both the content and metadata of the block may be tracked and exploited to micro-target the data subjects Riva and Barry, The only barrier to this kind of exploitation is that the rule demands that the information is manifestly made public by the data subject, but it appears to be an insignificant requirement.

Indeed, regarding publicly disclosed information, it may be argued that if one finds personal information related to someone else in a public register, 86 this may be sufficient to presume that the information is compliant with the requirements of article 9 2 e.

Furthermore, anonymous transactions undermine the primary element of stability, trust, and accountability of any socio-legal relationship, namely the imputability of actions to a specific subject. Indeed, complete anonymisation, even if it was possible through a high level of encryption, creates an obstacle for the usability and service trust of the blockchain itself. This is especially true in economic, IoT and e-Health environments, which require a high degree of transparency, accessibility, and accountability.

Indeed, we must bear in mind that applied e-Ledgers must serve the primary purpose to certify the continuity and validity of transactions or actions in the system, to create a stable and reliable record system. No system is stable or reliable if there is no accountability and in turn, accountability cannot exist without identification, for imputability purposes, as seen above.

This is a simple legal equation and cannot be solved using encryption or avoiding addressing the key point of the lack of data controllers. When this information involves personal data management, Data Protection applies. Any decision that is made on the analysis of meaningful information requires a certain level of abstraction, which, in turn, implies interpreting ability. In legal situations social relationships with legal effects , every legal interpretation, as well as the reasoning linked to it, must be justifiable.

Particularly when it comes to legal decisions made by judges, the motivation for the practical application of a specific interpretation is what ensures the Rule of Law. Indeed, the legal decision cannot be arbitrary and must follow the mandatory legal canons provided by the legal system. The decision must therefore be coherent, logical, adhere to the legal provisions, and be justifiable in every step of the reasoning. These safeguards help to ensure the accountability of the decision itself.

The benefit of this approach is evident when interpreters make bad judicial decisions, because it enables the system to observe patterns of behaviour, to provide alternative remedies for reviewing the decision, and to ensure the correct application of the law. Blockchain technology could serve as a potential solution to part of this problem.

As a reasoning- log tool, a blockchain framework could be used to ensure that an analytical IS run on the chain to elaborate data can be explained in every step of the analytical process right to explanation. This procedure should ensure that the legal reasoning can be retreaced, i. Also, this blockchain mirror system would require a permanent and separate register for the whole Intelligent System activity in order to allow an ex-post reconstruction of its analyses and performances.

In turn, these legal solutions would require an accountable entity to manage the system. Blockchain-Based Smart Contracts and Data Protection Smart contracts are one of the many blockchain-based applications for the Law, 91 and they could meet the requirements of those business fields in which standard transactions can be automated.

This technology allows computer-coded transactions to automatically execute all or parts of an agreement that underpins a relationship between different parties Cuccurru, Practically speaking, this allows an industrial supply relationship to be automated in a way that manages payments when and as certain events occur in the supply chain.

The benefit of this system is evident in industrial and business applications and may be applied to IoT smart environments as well, despite the risks that it still faces See Kolluri et al. Nevertheless, it should be remembered that smart contracts actually represent only a technological upgrade to the technical infrastructure underpinning these relationships.

Legally speaking, smart contracts have some practical limitations because their effects in some cases bypass and therefore conflict with some general legal principles, regulations, and contract law provisions. This principle must be read in combination with many contract law principles, which are aimed at ensuring symmetrical positions, 94 fairness, 95 and avoiding contra legem 96 dispositions in private agreements.

For instance, in the supply agreement example, if the goods supplied are damaged, the counterparty may want to suspend the payment but would be prevented by the automated execution of the smart contract. Thus, the party affected by the damaged goods would either be required to pay the sum, or it could try to block the payment which is increasingly difficult when the process is automated and suspend any further supply.

In both scenarios, the party suffers damages. These scenarios become more dangerous if provisions in a smart contract directly contravene a law or suggest that no law applies inside of a smart contract. However, these issues could be overpassed if an accountable entity manages the system that runs the smart contracts, as this entity could intervene upon request of the parties to suspend the automation.

This accountable entity would also play the role of data controller for the personal data entered, or however processed, within the system in general and the smart contract in particular. Smart contracts could also be adopted for creating smart consent forms, in which both data subjects and controllers could keep track of the real-time data processing and related compliance when performed by an Intelligent System using blockchain technology. Blockchain-Based Automated Decision and the Human-in-the-Loop Incongruity When blockchain-based IS performs any interpretative activity which may involve the concept of decision based on personal information, it affects the Data Protection regime for automated decisions.

In order to apply to this situation, Article 22 of the GDPR requires that the decision based on automated processing or profiling must have legal or significant effects on the data subject. This can be the case in IS decisions performed in blockchain-based systems for smart contracts, e-Health or IoT services when they involve personal data processing. Automation is a key concept in the GDPR, as it is strictly linked to the notion of data processing and it is referred to in a wide variety of specific provisions in the regulation itself.

Blockchain security methods include the use of public-key cryptography. Value tokens sent across the network are recorded as belonging to that address. A private key is like a password that gives its owner access to their digital assets or the means to otherwise interact with the various capabilities that blockchains now support.

Data stored on the blockchain is generally considered incorruptible. Data quality is maintained by massive database replication [41] and computational trust. No centralized "official" copy exists and no user is "trusted" more than any other. Messages are delivered on a best-effort basis. Early blockchains rely on energy-intensive mining nodes to validate transactions, [28] add them to the block they are building, and then broadcast the completed block to other nodes.

Because all early blockchains were permissionless, controversy has arisen over the blockchain definition. An issue in this ongoing debate is whether a private system with verifiers tasked and authorized permissioned by a central authority should be considered a blockchain.

These blockchains serve as a distributed version of multiversion concurrency control MVCC in databases. To prolong the blockchain, bitcoin uses Hashcash puzzles. In , venture capital investment for blockchain-related projects was weakening in the USA but increasing in China. As of April [update] , bitcoin has the highest market capitalization. Permissioned private blockchain See also: Distributed ledger Permissioned blockchains use an access control layer to govern who has access to the network.

They do not rely on anonymous nodes to validate transactions nor do they benefit from the network effect. If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control percent of their network and alter transactions however you wished. It's unlikely that any private blockchain will try to protect records using gigawatts of computing power — it's time-consuming and expensive.

This means that many in-house blockchain solutions will be nothing more than cumbersome databases. The process of understanding and accessing the flow of crypto has been an issue for many cryptocurrencies, crypto exchanges and banks. This is changing and now specialised tech companies provide blockchain tracking services, making crypto exchanges, law-enforcement and banks more aware of what is happening with crypto funds and fiat -crypto exchanges. The development, some argue, has led criminals to prioritise the use of new cryptos such as Monero.

It is a key debate in cryptocurrency and ultimately in the blockchain. Centralized blockchain Although most of blockchain implementation are decentralized and distributed, Oracle launched a centralized blockchain table feature in Oracle 21c database. The Blockchain Table in Oracle 21c database is a centralized blockchain which provide immutable feature.

Compared to decentralized blockchains, centralized blockchains normally can provide a higher throughput and lower latency of transactions than consensus-based distributed blockchains. Public blockchains A public blockchain has absolutely no access restrictions. Anyone with an Internet connection can send transactions to it as well as become a validator i. Some of the largest, most known public blockchains are the bitcoin blockchain and the Ethereum blockchain.

Private blockchains A private blockchain is permissioned. Participant and validator access is restricted. To distinguish between open blockchains and other peer-to-peer decentralized database applications that are not open ad-hoc compute clusters, the terminology Distributed Ledger DLT is normally used for private blockchains.

Hybrid blockchains A hybrid blockchain has a combination of centralized and decentralized features. Sidechains A sidechain is a designation for a blockchain ledger that runs in parallel to a primary blockchain.

Blockchain technology can be integrated into multiple areas. The primary use of blockchains is as a distributed ledger for cryptocurrencies such as bitcoin ; there were also a few other operational products that had matured from proof of concept by late The economist and Financial Times journalist and broadcaster Tim Harfor d discussed why the underlying technology might have much wider applications and the challenges that needed to be overcome.

The number of blockchain wallets quadrupled to 40 million between and For example, the bitcoin network and Ethereum network are both based on blockchain. On 8 May Facebook confirmed that it would open a new blockchain group [85] which would be headed by David Marcus , who previously was in charge of Messenger.

Facebook's planned cryptocurrency platform, Libra now known as Diem , was formally announced on June 18, China implements blockchain technology in several industries including a national digital currency which launched in A key feature of smart contracts is that they do not need a trusted third party such as a trustee to act as an intermediary between contracting entities — the blockchain network executes the contract on its own.

This may reduce friction between entities when transferring value and could subsequently open the door to a higher level of transaction automation. But "no viable smart contract systems have yet emerged. A number of companies are active in this space providing services for compliant tokenization , private STOs, and public STOs. Games Main article: Blockchain game Blockchain technology, such as cryptocurrencies and non-fungible tokens NFTs , has been used in video games for monetization.

Many live-service games offer in-game customization options, such as character skins or other in-game items, which the players can earn and trade with other players using in-game currency.

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Ethereum ETH DApps, decentralized applications based on the Ethereum smart contract, were the most frequently breached blockchain target. Cryptocurrency exchanges, businesses that allow their clients to trade crypto to other assets, were also highly targeted last year. The third spot in the list is occupied by blockchain wallets — digital wallets that allow crypto holders to store their cryptocurrencies. The nature of blockchain wallets makes them the most profitable target to cybercriminals.

Blockchains themselves were also affected by hacks in Each type of DApps was breached three times last year. Finally, saw two scams involving Ethereum-based tokens, a type of the token issued solely on the Ethereum blockchain. However, it is not clear how much financial damage these scams have caused.

Blockchain-linked hacks drop for the first time in 5 years In our mid-year report on blockchain-related attacks , we observed a decline in hacks. Now that finally wrapped up, we can see that the trend persisted till the end of the year. In , blockchain-related hacks dropped for the first time in the last five years. While the drop is not very significant, it still indicates an overall decline in blockchain-related hacks. This means that one can fully validate the entire Bitcoin blockchain and check the validity of new blocks, with well under 10GB of disk space.

This is a pretty neat feature and represents a strong efficiency. For instance, 4. This efficiency does not seem to apply to Ethereum. It is fair to say that as far as we know, the Ethereum developers have not tried to make this more efficient, as there have been other priorities, but even if they did attempt this, they would be unlikely to achieve the efficiency savings that one can see in Bitcoin.

The state is computed from the transaction history and essentially contains: all Ethereum account balances, storage associated with every deployed Ethereum smart contract and account nonces. The state is updated and computed after each block, based on the previous state and the new transactions in the block. A merkle root hash of the state is included in each block header, ensuring consensus of the network state. The state data continues to grow as Ethereum progresses and as mentioned above, the latest state is comparable in size to the blockchain itself.

If a node was to store all the complete states, for every block, this would be a gigantic amount of data, perhaps significantly larger than even the 9TB archive node. An individual Ethereum transaction could have a very small impact on the state or a large impact on the state. At the same time, a transaction that fails because it runs out of gas, will also have a minimal impact on the state.

In contrast, other types of transactions, which may have a small data footprint on the blockchain themselves, could have a large impact on the state, for instance one transaction could interact with a smart contract which could change multiple account balances. This is the key difference between Bitcoin transactions and Ethereum transactions.

Just by looking at an individual Bitcoin transaction you can tell the impact it has on the state of the Bitcoin network and you can see what is going on. With Ethereum, you cannot necessarily do this, with Ethereum you can normally only know what a transaction does by also computing the state of the entire network. You may be thinking, ok so Ethereum works differently than Bitcoin, in that there is no clear link or relationship between the head state size and the number of transactions, but the same principles of pruning could still apply.

Why can there not be part of the state that is old, unused or expired, that could be pruned and excluded from the head state? Ethereum does not really work like that. When smart contracts are deployed, there is never really any mechanism to close or end the contract, it just continues to exist forever, even if it is no longer used.

Any account can interact with any smart contract or any part of the state at any time. In order to validate a new block, a node must therefore have the latest state of all the smart contracts and the entire system. Only limited pruning or efficiencies are therefore possible when it comes to reducing the size of the head state.

The head state is therefore likley to continue to grow over time. Bitcoin vs Ethereum Blockchain: Conclusion The comparison between the blockchain size for Ethereum and Bitcoin is not always particularly relevant. The Bitcoin blockchain is mostly sufficient to tell you all you need to know about the Bitcoin network.

However, to be fair, one way in which the blockchain data size is comparison is somewhat relevant is the minimum amount of data you need to download over the internet to perform an initial synchronisation.