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What are the growth projections for the size of the Ethereum blockchain? Is it too early to start talking about the need for side chains? Will economics naturally pressure DAPPS to either choose the main chain or side chain depending on the cost of gas versus the perceived value that the DAPPs transactions provide?

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Growth will depend on adoption so it's hard to predict, but the situation is better than you may think. Ethereum's blockchain is designed to allow very effective pruning. For details, see Vitalik's blog post on the subject: https://blog.ethereum.org/2015/06/26/state-tree-pruning/

Pruning is currently implemented in the Parity client by Ethcore; they say it reduces your disk burden by an order of magnitude: https://blog.ethcore.io/1-0-is-here/

Long-term, the plan is to shard the blockchain, so any given node only needs to hold part of it. The current Serenity proof of concept implements the sharding scheme described here: https://github.com/ethereum/EIPs/issues/53

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