Lokad founder Joannes Vermorel published a research paper on a quantitative supply chain software company this week that explains how terabyte blocks (TB) executed into the Bitcoin Cash (BCH) blockchain could be achievable economically and technically.

The researcher and founder of Lokad authored a paper entitled “Terabyte Blocks for Bitcoin Cash.” Vermorel argued that a system where huge blocks that follow the Moore’s Law can be achieved is described in the original whitepaper of Bitcoin. In the concept of Moore’s Law, technology gets more advanced biennially within the integrated circuit and transistor production environment. The paper illustrates how terabyte blocks could work while being economically sound. Also, a transaction output of a terabyte block could carry roughly four billion Bitcoin Cash transactions.

“Assuming a worldwide population of 10 billion humans, terabyte blocks offer about 50 transactions per human per day. 50 transactions per day per human appears sufficient to cover all human-driven activities, and only a healthy machine-to-machine market would require an even greater number of transactions,” explains Vermorel’s paper.

Joannes demonstrates how a mining rig could be developed to process 1TB blocks by utilizing “a combination of existing and proven hardware and software technologies.” Furthermore, the price related to the mining rig is relatively low enough to ensure a healthy decentralized ecosystem. The Lokad founder details how the financing of terabyte system could function. He also assumes that the upper bound monetization for a terabyte blockchain is approximately 0.5 USD per user annually.

In 2016, Facebook is extracting around 16 USD per user every year while Google is extracting about 7 USD per user every year. A significant portion of the world economy will be turning to blockchain providing various monetization opportunities once Bitcoin reaches 1TB per block.

“I fail to see why, collectively, the market would not manage to extract at least 5 USD per user per year on average through blockchain related services. At this point, we are entering the realm of profitably funding a thousand more copies of the terabyte blockchain.”

The research also touched several points and issues that would be tethered to scaling a terabyte blockchain and transaction propagation, economic and cryptographic validation. The study also shows that terabyte blocks could scale beyond the current 1MB block size that only enables for 3-4 transactions every second.

The Bitcoin Core (BTC) blocks have been filling up throughout 2016 and 2017 which caused transaction throughput congestion. Vermorel explains:

“Terabyte blocks represent 7 million transactions per second — An optimized implementation only requires two reads and two writes per transaction to the persistent UTXO storage.”

The paper explains that the terabyte block figures are currently unrealistic, but Joannes believes that the Bitcoin ecosystem will need terabyte blocks after five years. The terabyte block size paper reveals:

“I am not accounting for any additional software improvements — Flexible Transactions and Schnorr signature could reduce the transaction size by more than 20% — Pruning the blockchain itself could probably halve the amount of storage actually needed.”

The paper follows the recent tests by the Bitcoin Unlimited (BU) team who experimented with 1GB block sizes on a testing network. BU chief scientist Peter Rizun announced on October 13 that the team mined a 1GB, which provided substantial transaction throughput results. Terabyte blocks for the Bitcoin Cash network may not be an outlandish concept considering the test results and the research paper.