Published on: 2016-08-09T02:21:29+00:00
Chris Priest, a bitcoin developer, proposed a change to the blocksize limit of Bitcoin in August 2016. The current blocksize limit is denominated in bytes, which means that miners choose transactions based on their fee/byte ratio. Transactions with many inputs require more fees as they are bigger in size. Priest believed that this was a flaw in Bitcoin and suggested a change to the blocksize limit denominated in outputs.This change would incentivize microtransactions, decrease the UTXO set, and bring data that could be used to determine how to scale Bitcoin in the future. However, his initial proposal was rejected due to requiring a database index. Priest's new proposal, called BIP131, achieves the same effect as his initial proposal without needing a database index.If the blocksize limit were removed and replaced with a "block output limit", miners would choose transactions based on maximum fee per output. This would essentially make it free to include an input to a transaction. If the blocksize limit is to be changed to a block output limit, the number should be roughly the amount of outputs found in 1MB blocks today. Blocks can be bigger than 1MB, but the extra data in the block will not result in more people using bitcoin, but rather existing users spending inputs to decrease the UTXO set.Priest's proposal would also serve to decrease the UTXO set, as there is a "minimum profitability to include an input to a transaction" which increases as blocks fill up and fees rise. Any UTXO worth less than a certain amount, such as 2 cents, is not economical to add to a transaction and is likely to never be spent. This contributes to the "UTXO bloat problem" that many people talk about as being a significant issue.In conclusion, Chris Priest's proposal to change the blocksize limit of Bitcoin to a block output limit would incentivize microtransactions, decrease the UTXO set, and bring about data that could be used to determine how to scale Bitcoin in the future. Though his initial proposal was rejected, his new proposal achieves the same effect without requiring a database index. The blocksize limit should be roughly the amount of outputs found in 1MB blocks today if this change is to be implemented. However, there are still those who oppose the change.
Updated on: 2023-08-01T18:50:29.558915+00:00