Bitcoin Transactions Types and Their Impact on Storage Scalability

Abstract

As a decentralized system, Bitcoin has earned its reputation as a reliable and secure method for online payments, eliminating the need for a trusted third party. It supports a range of transaction types, such as Multisig, Pay-to-PubKey (P2PK), Pay-to-Script-Hash (P2SH), Pay-to-Public-Key-Hash (P2PKH), SegWit, and Coinbase. These transactions are designed to meet specific user needs, such as throughput and security. For example, the SegWit method modifies the transaction structure and increases the block size to enhance throughput. Similarly, P2PKH reinforces the security of transactions by covering the public key until the funds are used. However, these changes directly affect the growth of blockchain storage, which is one of the main challenges for Bitcoin's adoption. To the authors' knowledge, we found no comparative studies on storage costs between transaction types. To bridge this gap, this paper presents an exhaustive analysis of the storage used by these Bitcoin transaction types. We analyzed 845 million transactions and found that transaction types such as P2SH and SegWit have reduced storage efficiency. This study paves the way for future research to achieve scalable storage solutions in Bitcoin.