Unbreaking testnet4

The message discusses an innovative approach to adjusting the halving mechanism on testnet, diverging from the traditional method observed on mainnet. Typically, the halving process reduces the mining subsidy by half at predetermined intervals to control the cryptocurrency's supply. However, the proposed alternative suggests a radical shift: instead of decreasing the block subsidy, it recommends halving the entire existing supply of unspent transaction outputs (UTXOs) at every halving event. This method would employ modifying the GetBlockSubsidy function within the validation.cpp file to issue a fixed subsidy, contingent upon specific consensus parameters being met.

The implications of such a change are profound. Firstly, this method guarantees that the total supply never exceeds the 21 million coin cap inherent to Bitcoin, aligning with its deflationary nature. Secondly, it addresses the issue of hoarding by disincentivizing the accumulation of assets, as the value of held coins would decrease by half at each halving event. Lastly, this strategy promises to enhance liquidity on the testnet by ensuring that coins remain in active circulation, addressing potential stagnation.

Despite its benefits, the proposal acknowledges significant technical challenges. Updating the UTXO set comprehensively at each halving interval would demand considerable computational resources, potentially leading to inefficiencies. Moreover, over time, this process could result in numerous zero-value UTXOs, raising questions about their manageability and the feasibility of eventual cleanup efforts.