Author: Billy Tetrud 2021-08-26 21:21:25
Published on: 2021-08-26T21:21:25+00:00
During a discussion at BitDevs in Austin, an interesting point was made regarding the dust limit in Bitcoin. It was argued that the dust limit, which is a per-node relay policy, incentivizes miners to mine dust outputs since the cost of maintenance for storing them is lower than their immediate reward in fees. However, this short-term incentive could lead to increased network centralization and decreased privacy if users resort to direct relays with miners. The existence of a dust limit also encourages Layer 2 protocols to have similar rules where outputs below the dust limit are given over as fees to miners. One potential solution proposed by Jeremy Rubin is to add something to the consensus rules that decreases the vbytes for a transaction that consumes dust outputs, thus saving the future cost of maintenance and making the fee lower for such transactions. However, it is unclear how to evaluate the magnitude of this future cost. Despite the potential drawbacks, the dust limit may still be incentivize-compatible for miners.
Updated on: 2023-06-15T00:50:10.458113+00:00