Ok so im reading the mini blockchain whitepaper. It appears to be a marginal improvement in some ways but it doesnt address the fundemental difficulty in scaling blockchains. The scalability problem doesn’t have anything to do with the size of the blockchain. It comes from the fact that each actor's transactions must be verified by all other network participants. Its the same math as network effects, except its a negative network effect.
Suppose actors make 1 transaction per minute.
1 actors = 0 verifications because he doesnt need to verify his own transactions.
2 actors = 2 transactions per minute. 2 * 2 actors = 4 transactions verifications. They dont need to verify their own so 4 - 2 = 2.
3 actors = 3 transactions per minute. 3 * 3 = 9 verifications. they dont need to verify their own so 9 - 3 = 6.
4 actors = (4*4)-4=12
5 actors = (5*5)-5=20
ect...
0,2,6,12,20,30,42,56,72
This very quickly gets out of hand when you consider that there is a cost associated with verifying a transaction. even if that cost is infinitesimal.
Actors (users) are not verifying nodes, so you math is slightly incorrect in that respect.
However, your point remains valid that transactions scale O(NxN) by Metcalf or Reed's law. And verifying nodes probably don't scale by N actors.
However, Metcalf's law doesn't tell you the frequencies at which actors do transactions. Visa is currently at about 6000 transactions per second, so this can be verified with a single Intel CPU, so no problem for verifying nodes.
Scaling up to 6 billion people and micro transactions (more frequent transactions) might present a scaling problem. I've looked at Lamport signatures schemes that can verify 100,000+ transactions per second on a single i7 cpu. Since verifying nodes tend to be pools with considerably more resources (amortized over a large amount of hashrate), then a 10 - 100 cpu farm (or a Tilera 64 core cpu) is not unfathomable without destroying decentralization of pools.
Long-term the solution is simple. An ASIC for verification will scale sufficiently to 6 billion and micro transactions.
In short, no problem! Mini-block chain addresses the problem of block chain size and its impact on decentralization of mining. Cryptonite does not include anonymity however.
