By: Doctorbuzz1 {GitHub} Limit "Bulk Dust" with a default filter or consensus.

In an ongoing discussion about the best strategies to mitigate UTXO abuse within the Bitcoin network, a novel approach has been suggested to introduce a mechanism known as "tiny_count." This concept aims to add a layer of friction specifically targeting data storage abuse without adversely affecting non-data transactions. By setting a conservative threshold for the tiny_count at 100, the proposal illustrates how this could effectively disrupt the practice of embedding large data, such as images, across numerous public keys or UTXOs. An example given highlights an image of Pepe pumping iron labeled with "UTXO," which was distributed among 1,859 fake public keys/UTXOs. Under the proposed system, this image would be fragmented across at least 19 transactions, assuming no on-chain indexing is utilized.

The fragmentation of data into smaller chunks introduces several implications worth considering. Firstly, it increases transaction fees by at least 6%, albeit this percentage escalates with reduced tiny_count thresholds. For instance, adjusting the tiny_count to 50 results in approximately 11% higher fees, while a further reduction to 20 spikes fees by roughly 24%. These calculations take into account an additional 200 bytes per input transaction but do not factor in the potential need for more sophisticated indexing solutions. Beyond the financial implications, this strategy also complicates the atomicity of transactions. Specifically, it necessitates some form of indexing to link multiple parts of a single image or data set, thereby adding layers of complexity and increasing the risk of transaction confirmation delays. Furthermore, it might inadvertently push entities aiming to misuse the UTXO space towards alternative methods like OP_RETURN or exploiting the witness space for data storage.

The underlying motivation for proposing a tiny_count is to deter UTXO abuse while minimizing false positives that could penalize legitimate transactions. Although the starting suggestion of a tiny_count of 100 aims to strike a balance between effectiveness and inclusivity, there appears to be room for exploring more stringent thresholds. A nuanced adjustment to the tiny_count, possibly lowering it to 20 with an accompanying increase in fee penalties to around 24% plus the added transactional complexities, presents a compelling case for its potential to significantly reduce misuse. Such measures, while aimed at preserving the integrity and efficiency of the blockchain, underscore the delicate balance between security and user experience within the evolving landscape of Bitcoin development.