Subject: Re: [Bitcoin-development] Chain dust mitigation: Demurrage based Chain Vacuuming

From: Pieter Wuille <[email-masked]>
Date: Mon, 3 Dec 2012 13:05:41 +0100

On Mon, Dec 3, 2012 at 12:19 PM, Michael Gronager <[email-masked]>wrote:

> (Also posted on the forum:
> https://bitcointalk.org/index.php?topic=128900.0)
>
> The amount of "dust" in the block chain is getting large and it is growing
> all the time. Currently 11% of unspent tx outputs (UTXO) are of 1Satoshi
> (0.00000001BTC), 32% is less than 0.0001BTC and 60% is less than 0.001BTC.
> (Thanks to Jan for digging out these numbers!)
>

I've noticed this too, and it is a concern indeed.

> I have an idea for a possible mitigation of this problem - introduction of
> demurrage - not as in it normal meaning as a percentage over time (see:
> http://en.wikipedia.org/wiki/Demurrage_(currency) btw, this has also been
> tried in freicoin), but as a mean to recycle pennies over time. The
> proposal is simple - UTXOs age out if not re-transacted - the smaller the
> coin the faster the aging:
> 1-99 Satoshi: lives for 210 blocks
> 100-9999 Satoshi: lives for 2100 blocks
> 10000-999999 Satoshi: lives for 21000 blocks
> 1000000-99999999 Satoshi: lives for 210000 blocks
>

If this were a proposal at the time Bitcoin was created, I would definitely
be in favor, but I feel we can't just change such a policy right now - it's
not what people signed up for when they started using the system. I also
see no way to implement this without a hard fork, which would require
planning at least 1-2 years in advance (imho). By that time, the economic
landscape of Bitcoin may be vastly different, and either dust spam will
have killed it, or we will have found another solution already.

Personally, I think the best solution is to change the mining policy to
prioritize (and perhaps favor for free relay/inclusion) transactions that
reduce the number of UTXO's.

-- 
Pieter