Key Highlights
- Ethereum co-founder Vitalik Buterin proposes “restricted storage” to improve scalability while keeping the network decentralized.
- The idea focuses on separating certain data into specialized storage systems rather than keeping everything in the main state.
- This approach aims to reduce long-term storage pressure and improve efficiency.
Ethereum co-founder Vitalik Buterin is pushing a new direction for how Ethereum can handle growth without breaking its network.
In a detailed X post on Tuesday, he shared an idea that mainly focuses on improving how data is stored on the blockchain using a concept called keyed nonces and restricted storage systems. He explained that this is not only for privacy features, but also a way to help Ethereum scale better in the future.
In his post, he said keyed nonces are “not just a way to add stronger in-protocol support for privacy solutions,” but also a first step toward building new storage systems inside Ethereum.
According to him, the idea is to design new types of storage inside Ethereum that are built for specific use cases, instead of treating all data the same.
Privacy transactions and the nullifier problem
At the center of this is how privacy transactions create something called nullifiers. These are used to stop double-spending in privacy systems. The issue is that nullifiers cannot be removed once created. Over time, they keep stacking up.
Buterin provided a long-term example: if Ethereum processes around 2,000 privacy transactions per second for eight years, the network could end up with around 500 billion nullifiers stored on-chain. He breaks this down as a simple growth calculation, showing how quickly the numbers scale when usage stays consistent over time.
Moving data into restricted storage
The main concern is that this type of data does not disappear, so it builds permanent pressure on Ethereum’s storage. Instead of letting it grow inside the general state, the idea is to move it into a dedicated storage system built only for nullifiers. This is where restricted storage comes in. It limits how the data is used, but keeps it efficient and easier to manage at scale.
He further argued that this structure actually makes Ethereum easier to keep decentralized. One reason is that nullifiers have a simple job: they are only used to check validity and do not require complex interactions. Because of this, they can be handled in a more controlled way than the general blockchain state.
Why special storage matters for scaling
Buterin mentioned several scaling approaches enabled by this design:
- One approach is sharding, where different nodes only store a small portion of the total nullifiers while still staying connected to honest peers in other groups.
- Another approach uses bloom filters, which reduce storage requirements by compressing verification data into very small sizes per nullifier.
These methods help reduce the burden on individual nodes.
He also noted that these techniques do not work well for a fully dynamic state. This kind of state requires constant full access across all nodes, which forces heavy hardware demands. Without specialized storage, builders might need to download extremely large datasets, which he describes as potentially reaching tens of terabytes in extreme cases.
Broader context
The broader message is that a general-purpose state is harder to scale when it grows without structure. But if Ethereum separates certain workloads into specialized systems, those parts can be made cheaper and more efficient to run. This keeps the core network usable while still supporting complex applications like decentralized finance.
“Create new types of storage that are more optimized for handling categories of use cases that we care about, with restrictions on their use that make them usable at extreme scale while preserving the protocol’s decentralization,” he said, summarizing his direction.
In simple terms, the approach suggests that Ethereum should stop treating all data the same and start using smarter storage rules so it can grow without breaking.
Also Read: Ethereum Founder Vitalik Sends $1.83M ETH to Railgun Protocol
