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

Jim Phillips jim at ergophobia.org
Sat May 9 19:16:46 UTC 2015

On Sat, May 9, 2015 at 2:06 PM, Pieter Wuille <pieter.wuille at gmail.com>

> 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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