> Computing diffs will becomes slower with larger trees Not usually. Computing a diff is roughly O(n) with the size of a diff. This is because unchanged leaves

> Computing diffs will becomes slower with larger trees Not usually. Computing a diff is roughly O(n) with the size of a diff. This is because unchanged leaves of the tree can be seen as identical (because the are content addressed) and are skipped. So to compute the diff you only need to recurse into changed directories. So having a million files in the root directory and one has changed is very fast to diff as you just diff that one file. The worse case is the diff happening in a very deeply nested directory with lots of files in each of the subdirectories but even that is quite cheap as diffing a sorted directory listing is O(n) with the size of the listing. (The actual worst case is diffing large files as most text diff algorithms are worse than O(n))