From: James Ferguson <jamesfergusonch@gmail•com>
To: Bitcoin Development Mailing List <bitcoindev@googlegroups.com>
Subject: [bitcoindev] OP_KEEPCHANGE - mitigating dust outputs
Date: Wed, 25 Sep 2024 17:44:47 -0700 (PDT) [thread overview]
Message-ID: <83296012-d713-482a-ad7a-3fd9bf7cded9n@googlegroups.com> (raw)
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My first post to list - Hi
- tell me if I am in the wrong place or following idea is absurd
- otherwise please onboard me towards adding value (tell me when I've
overlooked standards etc)
So, at risk of proving foolish - I think I may have a novel and useful
idea (did some searches and found nothing).
best James
Title: "Keep the Change" dust mitigation
Category:** Consensus (Soft Fork - I think)
*Abstract *
Introduction of provisionally named "OP_KEEPCHANGE" allows small residual
UTXO (change) to be automatically credited to the primary recipient’s
address.
This aims to reduce inefficiencies associated with the creation of dust
outputs, reduce bloat, improve transaction efficiency, and optimise network
performance by minimising the accumulation of tiny un-spendable UTXO.
*Motivation*
When a user sends Bitcoin, any leftover amount is typically returned to a
change address controlled by the sender.
If this leftover amount is sufficiently small (dust) it is not economically
spendable, representing a small reduction in the money supply.
This causes problems:
- UTXO bloat: More UTXOs mean a larger blockchain size, increasing storage
and bandwidth requirements for nodes and threatens decentralisation.
- Higher transaction fees: Dust outputs, when combined in future
transactions, increase the transaction size, leading to higher fees.
- Inefficient use of UTXOs: Managing numerous small change outputs makes
transaction construction more complex and potentially inefficient.
OP_KEEPCHANGE mitigates these issues while offering additional secondary
benefits:
a) Prevention of Value Erosion:
When transferring funds between wallets owned by the same party, small
change amounts can lead to minor value erosion due to repeated fees and
inefficiencies.
This proposal eliminates such erosion by crediting the residual amount to
the recipient wallet.
b) Enhanced Privacy: .
This provides a slight improvement in transaction privacy by obfuscating
the typical patterns used to identify change outputs.
c) Mitigation of Money Supply Reduction:
As dust UTXOs accumulate over time and become economically unspendable,
they effectively reduce the Bitcoin money supply.
This proposal helps mitigate a calculable reduction in the overall Bitcoin
supply, preserving value and improving the network’s long-term
sustainability.
d) Recipient Benefit A provider (eg a merchant) accepting bitcoin or fiat
exchange users buying bitcoin (especially small sums after DCA'ing) gain a
small proportional uplift in revenues at no cost to the sender)
f) Reduction in dust threshold: In so far as transaction costs are reduced
a small reduction in the dust threshold is thereby achieved
g) Equitable with positive feedback : By reducing dust UTXO size increases
- larger UTXO makes for lower default dust - All users benefit from reduced
dust whether they make further OP_KEEPCHANGE transactions or not
*High Level Specification Outline*
- Introduce OP_KEEPCHANGE
- Assume some dust threshold (XXX satoshis) configurable by wallet user
- During input UTXO selection to transfer some value, a wallet or user
seeks the minimum change value that would normally be generated as a return
UTXO. This involves by judicious input UTXO selection.
If this is below the dust threshold a transaction can be marked with
OP_KEEPCHANGE
- When used in a transaction, `OP_KEEPCHANGE` signals that any excess
change be added to the primary output instead of generating a separate
change output.
Instead of funding eternally useless UTXOs the recipient’s output is
increased by this amount.
*Summary*
By implementing this fairly simple backwardly compatible mechanism, the
Bitcoin network can achieve greater efficiency, decentralisation, cost
savings, and improved privacy for its users while maintaining a healthier
and more predictable money supply.
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next reply other threads:[~2024-09-26 0:48 UTC|newest]
Thread overview: 3+ messages / expand[flat|nested] mbox.gz Atom feed top
2024-09-26 0:44 James Ferguson [this message]
2024-09-26 1:22 ` Pieter Wuille
2024-09-26 9:05 ` James Ferguson
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