BIP-110 update: v0.4.1 release and implementation submitted to Bitcoin Core

[neonrooks]

@dathonohm

Arbitrary data impacts full validation by rapid expansion of the UTXO set which, as demonstrated in the recent spam waves, does not necessarily grow linearly. Disk space is also a concern, though secondary.

I asked about blocks; the UTXO set is another matter.

Above is a 3 year chart of the UTXO count, which is currently at 165,086,123 (verified by my own node at block height 944021), down from a high of over 180 million. It appears that the “rapid expansion” has already ended. If we take a conservative estimate of each user controlling just 2 UTXOs, we have at best ~80 million users in the Bitcoin network. Are we to propose changes to Bitcoin once we reach 100 million users? Or 200 million users? Is having many UTXOs harming Bitcoin?

@dathonohm

Yes, during the recent spam waves, transaction fees often went so high that most monetary use became impractical, due to non-payment spam pricing out payments. This situation is nonsensical for a payment network.

The Bitcoin network has faced this many times in the past and will again in the future. Part of a permissionless system is allowing users to waste their money on whatever transactions they choose. Pricing out payments does not make sense - this implies you have the right to confirmed transactions at any time for any fee rate. It is nonsensical to ignore a dynamic fee market for transactions.

Transaction fees are currently low, which can only mean the “spam waves” have ended long before BIP-110. I don’t see a reason for change based on the lack of evidence.