This question as stated above is a bit vague, but let me make it a bit more clear:

Recently, I have seen many services pop up that state that they are secure, fault-tolerant, trustless and scalable because they use a blockchain (often the Bitcoin block chain, the Ethereum blockchain or one of many other or proprietary 'block chains') to store the important parts of the data the services handle.

Now, security and fault-tolerancy I can understand, because (after a few more blocks are mined):

  • Everone can check the integrity and authenticity of a transaction because ECDSA-signatures are used, giving the system non-repudiation as property.
  • Everyone has a copy of the block chain so-far stored locally, making it virtually impossible to destroy data. ❦
  • it becomes virtually impossible to alter a previously-made transaction, because this means that all hashes of blocks after that need to be re-calculated.

Now, because of ❦, the system is also trustless, assuming everyone can read/understand the data from the blockchain directly (i.e. the service's interface to the block chain is released as open-source software). This is where quite a few services claims fall short.

However, the final claim: scalability. I cannot understand how a system can be scalable if it involves the copying of all the (trans)actions its users did to all other users' computers (again, this follows from ❦): It will both take a lot of time and a lot of disk space to do all this copying, and at some point a physical limit will be reached in which more actions are taken than can be written to the blockchain and in which it takes longer to catch up to the head of the chain than that new transactions appear. In both cases the system will break down (?).

I can see only one ways to resolve this, which is to use 'light wallets' for the end users, in which case the system is no longer trustless, as these users need to trust that the parties they talk with are honest in the version of the block chain they show, so this breaks the other claims.

I don't believe all of the systems that state 'Blockchain inside' use this approach.

So my question: What other techniques are used to make a Blockchain-based system more scalable, and how scalable (in transaction throughput) is a system as a result?

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    I have a pruned bitcoin node. It's validated every bitcoin transaction and is up-to-date, but only takes up about 6 GB of disk space. It doesn't have knowledge of any spent transactions once it has validated them, it only keeps track of unspent ones, which is all it needs to validate future transactions. If there is a bottleneck to blockchain scaling, it is network bandwidth, not disk space. – Paul Jun 12 '17 at 21:36
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    I feel reminded of this question: What is the Lightning Network proposal? What problem is it trying to solve? – Murch Jun 13 '17 at 23:17

Blockchains are not really scalable. For the most security, blockchains need to be replicated on as many devices as possible. Those devices are full nodes and must download and verify every single block and transaction. In order to increase the number of transactions, transactions have to become smaller and blocks have to become bigger. Unfortunately increasing block size and transaction capacity will result in more resources required to verify and store them all.

  • Yes you're right but with the prune feature in bitcoind makes the space needed smaller and even if you don't want to use the prune feature with technology advancing HD is becoming cheaper and cheaper. – Marc Alexander Jun 16 '17 at 0:33
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    The prune feature is not a solution. Yes it reduces disk space, but you are also throwing away the vast majority of the blockchain. This means that you can't help new nodes start nor can you lookup historical transactions. It still requires the entire blockchain to be downloaded and verified, so pruning does not really help with scaling at all. – Andrew Chow Jun 16 '17 at 0:45
  • I agree. I was just throwing it out there that it is possible.. but can be not recommended depending on what you're actually doing with it. – Marc Alexander Jun 16 '17 at 0:50

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