[bitcoin-dev] [Lightning-dev] Removing the Dust Limit

[Antoine Riard]

I'm pretty conservative about increasing the standard dust limit in any
way. This would convert a higher percentage of LN channels capacity into
dust, which is coming with a lowering of funds safety [0]. Of course, we
can adjust the LN security model around dust handling to mitigate the
safety risk in case of adversarial settings, but ultimately the standard
dust limit creates a  "hard" bound, and as such it introduces a trust
vector in the reliability of your peer to not goes
onchain with a commitment heavily-loaded with dust-HTLC you own.

LN node operators might be willingly to compensate this "dust" trust vector
by relying on side-trust model, such as PKI to authenticate their peers or
API tokens (LSATs, PoW tokens), probably not free from consequences for the
"openness" of the LN topology...

Further, I think any authoritative setting of the dust limit presents the
risk of becoming ill-adjusted  w.r.t to market realities after a few months
or years, and would need periodic reevaluations. Those reevaluations, if
not automated, would become a vector of endless dramas and bikeshedding as
the L2s ecosystems grow bigger...

Note, this would also constrain the design space of newer fee schemes. Such
as negotiated-with-mining-pool and discounted consolidation during low
feerate periods deployed by such producers of low-value outputs.
`
Moreover as an operational point, if we proceed to such an increase on the
base-layer, e.g to 20 sat/vb, we're going to severely damage the
propagation of any LN transaction, where a commitment transaction is built
with less than 20 sat/vb outputs. Of course, core's policy deployment on
the base layer is gradual, but we should first give a time window for the
LN ecosystem to upgrade and as of today we're still devoid of the mechanism
to do it cleanly and asynchronously (e.g dynamic upgrade or quiescence
protocol [1]).

That said, as raised by other commentators, I don't deny we have a
long-term tension between L2 nodes and full-nodes operators about the UTXO
set growth, but for now I would rather solve this with smarter engineering
such as utreexo on the base-layer side or multi-party shared-utxo or
compressed colored coins/authentication smart contracts (e.g
opentimestamp's merkle tree in OP_RETURN) on the upper layers rather than
altering the current equilibrium.

I think the status quo is good enough for now, and I believe we would be
better off to learn from another development cycle before tweaking the dust
limit in any sense.

Antoine

[0]
https://lists.linuxfoundation.org/pipermail/lightning-dev/2020-May/002714.html
[1] https://github.com/lightningnetwork/lightning-rfc/pull/869

Le dim. 8 août 2021 à 14:53, Jeremy <jlrubin at mit.edu> a écrit :

> We should remove the dust limit from Bitcoin. Five reasons:
>
> 1) it's not our business what outputs people want to create
> 2) dust outputs can be used in various authentication/delegation smart
> contracts
> 3) dust sized htlcs in lightning (
> https://bitcoin.stackexchange.com/questions/46730/can-you-send-amounts-that-would-typically-be-considered-dust-through-the-light)
> force channels to operate in a semi-trusted mode which has implications
> (AFAIU) for the regulatory classification of channels in various
> jurisdictions; agnostic treatment of fund transfers would simplify this
> (like getting a 0.01 cent dividend check in the mail)
> 4) thinly divisible colored coin protocols might make use of sats as value
> markers for transactions.
> 5) should we ever do confidential transactions we can't prevent it without
> compromising privacy / allowed transfers
>
> The main reasons I'm aware of not allow dust creation is that:
>
> 1) dust is spam
> 2) dust fingerprinting attacks
>
> 1 is (IMO) not valid given the 5 reasons above, and 2 is preventable by
> well behaved wallets to not redeem outputs that cost more in fees than they
> are worth.
>
> cheers,
>
> jeremy
>
> --
> @JeremyRubin <https://twitter.com/JeremyRubin>
> <https://twitter.com/JeremyRubin>
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