Dust Expiry: Clean the UTXO set from spam

In discussing the optimization of transaction data handling, a key point is made regarding the simplification process for unspent transaction outputs (UTXOs). The argument suggests that limiting the simplification to only low-value UTXOs may not be the most efficient approach. Instead, it proposes a broader application where any UTXO with confirmations exceeding a certain number, denoted as N, could be simplified. This threshold is based on the assumption that blockchain reorganizations (reorgs) would not go beyond N blocks deep, making it safe to apply this simplification to UTXOs above this confirmation level.

Furthermore, the discussion introduces the idea of employing two distinct formats for transmitting transaction data among nodes. The current format, which relies on using "txid:vout" to identify UTXOs, would be maintained for compatibility purposes. In parallel, a new, more compressed format would be introduced for use exclusively between nodes that support this updated protocol. This dual-format strategy aims to enhance the efficiency of data transmission by reducing the amount of information needed to be sent and processed, particularly in communications between nodes that both understand the new, compact format.