Bitcoin will soon block small transaction outputs

Small value amounts are useful for smart property: <a href="https://en.bitcoin.it/wiki/Smart_Property" rel="nofollow">https://en.bitcoin.it/wiki/Smart_Property</a><p>The tl;dr: Represent a piece of property, say a stock certificate, as a small value of bitcoin. By transferring the bitcoin to another user, you are transferring the ownership of the property. This can be useful for creating distributed markets where property can be traded for bitcoins without requiring a trusted intermediary.<p>I don't understand why this is such a big deal for the developers. You see a lot of panic about UTXO bloat. It seems to me this can be solved by making the UTXO cache a bit smarter. If you have a very small value output that has not been used in a while, store it on the harddrive, not in RAM. If the output shows up in a new transaction, you will have a cache miss, but that doesn't seem like a serious issue. If the client is smart property aware, store those dusty-looking outputs in a seperate cache.<p>This might be an attack vector for DDOS attacks, but that should be solvable by throttling the processing of transactions that miss the cache.<p>The propogation of transactions that are not in the RAM cache might be a bit longer, but that is the price you pay for making a transaction with dust.

I assume the reason behind this is to block people from encoding data into the block chain by doing thousands of worthless transactions. If I recall correctly someone recently encoded the URL to a child porn site into the block chain, this is the only reasonable response to prevent it from happening again IMO.

I do not understand this move. If blockchain size is an issue, I don't understand why the focus isn't pruning the blockchain so that only the hashed headers are stored for past transactions. This defeats the point of having 8 decimal places if you can only reasonably use 3+.

No central authority - well at least until we hit a small technological bump and it becomes mildly annoying - then we will solve the problem with a decree or fiat.

So this slows the growth of the blockchain. If blockchain length is already becoming an issue today, what happens a year from now if trading volume multiplies as much as it did in the past year? What happens in five, ten years? Could the blockchain outstrip the economic feasibility of maintaining it at some point, or is there a mechanism already built into Bitcoin that addresses this?

This isn't a protocol change, so it's not really a big deal. It's basically a strongly worded (coded) suggestion from the core developers to discourage micro-transactions and blockchain spam (SatoshiDice, encoding data in the blockchain, etc)<p>If miners decide they still want to include these transactions, they can.<p>This is the way it should be since miners bear the cost of every transaction in the form of computing/network/storage resources.

This sucks. I thought one of the killer apps for bitcoin was going to be micropayments. Oh well maybe the world will switch to litecoin.

Actually what's changing is the default value for minimum transaction size, which can be overridden by nodes and clients who wish to. Further reading @ <a href="http://www.reddit.com/r/Bitcoin/comments/1drslh/082_will_not_eliminate_microtransactions/" rel="nofollow">http://www.reddit.com/r/Bitcoin/comments/1drslh/082_will_not...</a>

I haven't gotten around to reading the Bitcoin paper yet. But in cases where features like this are added, don't they rely on most miners moving over? Otherwise, won't some miners reject the new block while others accept it?<p>Or it is only for non-confirmation mode that "dust" is dropped?

This is idiocy. I know it's a knee jerk reaction to ZOMG-PORN-IN-THE-BLOCKCHAIN!!1!, but c'mon. We can use such steganography all over the net.<p>Do we have to show proof-of-concept by putting porn into the DNS records? How about imgur; You know all those LSBs in the pictures? Think it's hard to get google search to propagate your steganography for you [and then have Bing steal it?]<p>The genie is out of the bottle, I'm surprised that the bitcoin / litecoin /cryptocoin world is where a line got drawn in the sand.