I think the proposal is interesting in that it could be an interesting way to solve the dust problem. While most solutions to dust focus on reducing how much are created and encouraging consolidating utxos to avoid them becoming dust, this proposal could utilize dust for valuable purposes. Why use valuable Bitcoin for NFTs or colored coins when dust can be split into it's unit satoshis and used with no loss of utility?
Simple and elegant. I like it. If we're giving ACKs: ACK. Tho TBH I don't see any reason NACK this - seems like this doesn't affect consensus, doesn't affect relay, doesn't affect anything except people that run this algorithm on the blockchain. If people want to do something like this, people are going to do it whether or not the bitcoin community wants them to. A standard would be good rather than everyone doing their own thing.
One thought I had was: what happens if/when it comes to pass that we increase payment precision by going sub-satoshi on chain? It seems like it would be fairly simple to extend that to ordinals by having fraction ordinals like 1.1 or 4.85. Could be an interesting thought to add to the proposal.
> If a transaction is mined with the same transaction ID as outputs
currently in the UTXO set, following the behavior of Bitcoin Core, the
new transaction outputs displace the older UTXO set entries, destroying
the ordinals contained in any unspent outputs of the first transaction.
What you mean by "the same transaction id" here is unclear. I was interpreting the proposal to mean that UTXOs are all assigned a set of ordinals, and when that UTXO is spent, it transfers it's ordinals to outputs in the transaction the UTXO is spent in. Is that what you mean by this sentence? If so, I'd suggest rewording.
@Damian
> If I receive some Bitcoin I cannot know if some or any of those have been at any point in the past been stolen, I assume the transaction is honest, and in all likelihood it is likely that it is.
This isn't true at all. Some bitcoins are indeed known to be stolen and even blacklisted by some companies/governments. I don't see how ordinals changes anything related to this.
Those could be used for NFTs but not something like colored coins. It would be a strict subset of ability, tho its an interesting idea in its own right.