Well Gavin, at least for now, isn't too worried about disk space usage. It'd only take a couple of months to fully implement the last parts of pruning if he worked on it seriously, and it's hard to imagine the block chain doubling in size in only a few months. That'd be a nice problem to have. Even then, 16 GB isn't all that much. I have 182 GB free on my computer and it's a pretty ordinary laptop.
At the moment Gavin's biggest worry is security. The payment protocol is designed to complement the Trezor project and give us better security than the best banks. Also, as I said, Pieter has said he wants to work on pruning, so that might be another reason Gavin's not prioritising it at the moment. Pieter has a full time job these days so it's harder for him to find the time, but even so, he's done amazing work on scalability and I'm sure he'll be able to finish off the pruning work some time this year. I'd guess the block chain will be under 12 gigs by the time pruning starts. So no risk of a crisis.
In short, yes it's important and will happen, but we're not going to see Bitcoin collapse if it doesn't happen this year. The numbers just don't work out that way.
Awesome job. However how does the use of SPV clients prevent centralization of the Bitcoin network? Are SPV clients equally sovereign when it comes to deciding which blockchain, which new blocks and transactions are valid?
I guess that's a rhetorical question? Anyway, at least for other people who are reading, no as described in Satoshi's paper they only validate the block headers. So they pick the hardest chain and then assume the contents are likely to be correct. You can't mine with them but in practice "best chain is correct" is usually good enough, at least for normal individual users.
If you can afford a full node, that's better. But most casual users won't want to run one. The next most decentralised after that is SPV. No central or trusted servers. You place your trust in the majority consensus instead.
If we didn't have SPV clients then Bitcoin usage would be dominated by services like blockchain.info or Coinbase. Both great companies and sites, but ultimately people would end up putting their money into "BitBanks" and relying on third party companies. Those organisations would then either get regulated out of existence, or become real banks and start lending out their bitcoins at interest. In some ways Bitcoin usage is already dominated by these sorts of wallets and it's not even hard to run bitcoin-qt today, so you can imagine how common it'd be in future with much larger blocks. That's why my no 1 priority is to try and build SPV wallets that are competitive with centralised bank-like services, to avoid that future and keep people using the P2P network directly without any middlemen (or more technically, with only p2p nodes and miners as middlemen).
Re: conspiracy theories, yes, sorry. Quite often people on this forum claim that because I work for Google, I must have some incentive to try and centralise Bitcoin or
. It's nonsense of course, Google is focused on Google Wallet and hardly cares about Bitcoin. In fact Google not only employs me but also Pieter, who has done more work on pruning than anyone. It's about as relevant as the fact that Jeff once worked for Red Hat.