"Bitcoin" is a system of incentives. From this principle I have a prediction of how even 100GB blocks could potentially be handled by "Bitcoin".

Imagine 2 miners.

One is "ideologically pure"

Every byte of every transaction that ever was needs to be on the blockchain forever.

Well, just the fees alone make this a non-issue as far as maintenance. but if we play devil's advocate and say "we might run out of space someday..." , ok.

So how does "Bitcoin incentive" play in?

The 2nd miner only keeps history of, say, the last year only - and everything before that is pruned of all spent "outputs".

Both miners will be able to validate transactions - but operation costs for the 2nd miner is far less.

Will the 2nd miner worry that the chain might be rolled back 1 year? Nah - if a blockchain being used by most of the world can still be rolled back by 1 year, Bitcoin might as well be considered dead.

So i don't think Bitcoin needs to get a "protocol change" ever to optimize for future large block storage.

I think each miner will naturally prune their data to keep costs down.

(edit: if 1 year seems short, make it 10 years - no problem)

The "incentive" here is that a miner is not rewarded for keeping ALL the data, because "pruned" miners are just as good at validating as "full" miners. Just as good being 99.9%

In fact, it is not possible to fake a transaction because all the hashes must match up.

(edit: This is where I am going of on a tangent)

Can someone please explain why pruned blockchain is not the "standard operating procedure"? Why is anyone keeping full blockchain data?

Each unspent transaction has its hash included in the hash-tree that leads to the block's hash - you cannot fake a transaction without being able to come up with dozens of hashes that when hashed give you the block hash.