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

ZmnSCPxj ZmnSCPxj at protonmail.com
Sat Aug 21 03:10:46 UTC 2021

Good morning Jeremy,

> one interesting point that came up at the bitdevs in austin today that favors remove that i believe is new to this discussion (it was new to me):
> the argument can be reduced to:
> - dust limit is a per-node relay policy.
> - it is rational for miners to mine dust outputs given their cost of maintenance (storing the output potentially forever) is lower than their immediate reward in fees.
> - if txn relaying nodes censor something that a miner would mine, users will seek a private/direct relay to the miner and vice versa.
> - if direct relay to miner becomes popular, it is both bad for privacy and decentralization.
> - therefore the dust limit, should there be demand to create dust at prevailing mempool feerates, causes an incentive to increase network centralization (immediately)
> the tradeoff is if a short term immediate incentive to promote network centralization is better or worse than a long term node operator overhead.

Against the above, we should note that in the Lightning spec, when an output *would have been* created that is less than the dust limit, the output is instead put into fees.

Thus, the existence of a dust limit encourages L2 protocols to have similar rules, where outputs below the dust limit are just given over as fees to miners, so the existence of a dust limit might very well be incentivize-compatible for miners, regardless of centralization effects or not.


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