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

[Ross Nicoll <jrn@jrn.me.uk>]

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I think potential fee subsidies for cleaning up UTXO (and/or penalties 
for creating more UTXO than you burn) are worth thinking about. As 
Gavin's post ( gavinandresen.ninja/utxo-uhoh ) indicates, UTXO cost is 
far higher than block storage, so charging differently for the in/out 
mismatches should make good economic sense.

Ross


On 09/05/2015 20:16, Jim Phillips wrote:
> On Sat, May 9, 2015 at 2:06 PM, Pieter Wuille <pieter.wuille@gmail.com 
> <mailto:pieter.wuille@gmail.com>> 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.
>
>
>
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