Subject: Re: [bitcoin-dev] [Lightning-dev] Removing the Dust Limit

From: Jeremy <[email-masked]>
Date: Thu, 19 Aug 2021 23:51:31 -0500

one interesting point that came up at the bitdevs in austin today that
favors remove that i believe is new to this discussion (it was new to me):

the argument can be reduced to:

- dust limit is a per-node relay policy.
- it is rational for miners to mine dust outputs given their cost of
maintenance (storing the output potentially forever) is lower than their
immediate reward in fees.
- if txn relaying nodes censor something that a miner would mine, users
will seek a private/direct relay to the miner and vice versa.
- if direct relay to miner becomes popular, it is both bad for privacy and
decentralization.
- therefore the dust limit, should there be demand to create dust at
prevailing mempool feerates, causes an incentive to increase network
centralization (immediately)

the tradeoff is if a short term immediate incentive to promote network
centralization is better or worse than a long term node operator overhead.

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my take is that:

1) having a dust limit is worse since we'd rather not have an incentive to
produce or roll out centralizing software, whereas not having a dust limit
creates an mild incentive for node operators to improve utreexo
decentralizing software.
2) it's hard to quantify the magnitude of the incentives, which does matter.