Subject: Re: [Bitcoin-development] A suggestion for reducing the size of the UTXO database

From: Jim Phillips <[email-masked]>
Date: Sat, 9 May 2015 14:16:46 -0500

On Sat, May 9, 2015 at 2:06 PM, Pieter Wuille <[email-masked]>
wrote:

> It's a very complex trade-off, which is hard to optimize for all use
> cases. Using more UTXOs requires larger transactions, and thus more fees in
> general.
>
Unless the miner determines that the reduction in UTXO storage requirements
is worth the lower fee. There's no protocol level enforcement of a fee as
far as I understand it. It's enforced by the miners and their willingness
to include a transaction in a block.

> In addition, it results in more linkage between coins/addresses used, so
> lower privacy.
>
Not if you only select all the UTXOs from a single address. A wallet that
is geared more towards privacy minded individuals may want to reduce the
amount of address linkage, but a wallet geared towards the general masses
probably won't have to worry so much about that.

> The only way you can guarantee an economical reason to keep the UTXO set
> small is by actually having a consensus rule that punishes increasing its
> size.
>
There's an economical reason right now to keeping the UTXO set small. The
smaller it is, the easier it is for the individual to run a full node. The
easier it is to run a full node, the faster Bitcoin will spread to the
masses. The faster it spreads to the masses, the more valuable it becomes.