WARNING! Bitcoin will soon block small transaction outputs

[wheatstone]

Who decides what a transaction is worth? Value is subjective, and even if you can't think of a reason why someone might be willing to pay a lot to send a transaction that doesn't mean they don't exist.

The user experience is horrendous. You can still do it, if you want to. There will undoubtedly be miners who are willing to include such a non-standard transaction for a fee (or maybe even without). As always, miners are free to accept whatever (valid) transactions they want. This simply changes the default to something more sane, improving the general user experience.

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[DeathAndTaxes]

d) this change is trying to prevent the sending of amounts so small it costs more to spend them than they are worth (how is it sane to want to keep this property?!).

Who decides what a transaction is worth? Value is subjective, and even if you can't think of a reason why someone might be willing to pay a lot to send a transaction that doesn't mean they don't exist.

The fees do.  Lets say the only way to spend USD was to mail them to a recipient.  A stamp costs $0.46 obviously paying $0.47 ($0.01 + $0.46) to make a $0.01 payment is UNECONOMICAL.  The fact that you could make a $0.01 payment (literally mail a US penny to a creditor) doesn't change the fact that it is UNECONOMICAL.  Right now transactions below ~5000 satoshis are uneconomical.  They won't be spent because the cost to spend them is greater than the value gained in spending them. 

In the future (if/when exchange rate rises significantly) the threshold on economic transactions will decline.  That is all "dust" is.  Dust is the threshold where an output isn't economical to spend.  Prior it 0.8.2 you could create outputs that due to economics likely would never be spent after 0.8.2 you can't.  Remember the dust threshold is now a variable.  The default value makes it 5430 satoshis however miners are free to set it to whatever they want.   

Miners have an incentive to both:
a) not exclude economical (meaning will be respent in the future) transactions because that would be turning away paying customers
AND
b) exclude non-economical transactions as they bloat the UXTO and raise miner's costs perpetually.

Thus miners have no incentive to set the dust threshold incorrectly.  Too high means less revenue and too low means excessive future cost.  0.8.2 lays the foundation for a more comprehensive system to balance the needs of small transactions with the cost paid by everyone

There is cost to bitcoin, there will ALWAYS be a cost to Bitcoin.  Now today that cost is partially "hidden" because the block subsidy is so large but the cost still exists.  Bitcoin is an efficient payment mechanism because it is p2p and there are no natural monopolies so (economic theory tells us)  the cost of transactions will be low.  Low doesn't mean zero.

[scintill]

Who decides what a transaction is worth? Value is subjective, and even if you can't think of a reason why someone might be willing to pay a lot to send a transaction that doesn't mean they don't exist.

By "amounts so small it costs more to spend them than they are worth" I mean it costs more BTC in fees to re-spend than the mathematical value of the output*.  In other words, there is no economic reason to ever spend that output, unless the fees model changes or you manage to spend it without a fee.  It's like seeing a penny on the ground and knowing it will cost 10 cents worth of food to "pay" for the energy expended reaching down and picking it up (probably exaggeration, of course.)  What economic motivation is there to do that?  In Bitcoin, miners and other full nodes have to carry those pennies that people thought it was fun to throw around with no motivation to pick up, for the foreseeable future.  Miners have never been obligated to accept this abuse, and it's looking like many of them will put an end to it now.

Yes, I suppose sending 1 satoshi to one of Satoshi's addresses may have more subjective value to you than to the cold, hard 1-satoshi literal value.  If so, express that burning desire by paying a premium in fees and maybe someone will mine it for you.

Sorry if this feels brusque.  I find the attachment to 1-satoshi divisibility silly as it's just as arbitrary as 5430 satoshis.  I'm disappointed the network has been censoring my attempts at spending 0.1 satoshis.

*By the way, if I'm understanding the 1/3 fraction in the patch, 5430-satoshi outputs are still quite uneconomical to spend.

[TimJBenham]

I understand that Gavin is a busy man, but IMHO, promptly and accurately responding to such disinformation and FUD attacks, should be given high priority, because it may damage bitcoin more than any technical attack could.

What does everyone else think about this?

I think the technical people should be focused on technical stuff, not PR.

[Theraty]

Is this really going to happen or has it already happened. I'm just curious to see if it did or did not.
And do any of yous know what the new minimum limit is?

[DeathAndTaxes]

Is this really going to happen or has it already happened. I'm just curious to see if it did or did not.
And do any of yous know what the new minimum limit is?

It is in version 0.8.2 of the QT client.  0.8.2 is sill l RC and not final yet.
There is no hard minimum however the default value for dust is 5430 Satoshis (~0.6 US cents at current exchange rate).

[Theraty]

Its a minminum we can live with I say, but what if bitcoin goes up to $1000. Does the bitcoin minimum deposit go up?

[DeathAndTaxes]

Its a minminum we can live with I say, but what if bitcoin goes up to $1000. Does the bitcoin minimum deposit go up?

The dust threshold is a variable, there is no minimum (or maximum) just a default.  The default value in v0.8.2 is 5430 satoshis, that default will likely be changed in future versions.  The min mandatory fee (on low priority txs) for example has been changed 4 times in the history of Bitcoin to accomodate increasing value.  

Also (even in the absence of future version) any miner can change the dust threshold by changing a single line in the config file. Right now this very second a miner could (if they chose) run 0.8.2 with a dust threshold of 1 satoshi if they felt the default of 5430s was too high.  They could also run with a dust threshold of 8196s (~$0.01 at current exchange rate) if they felt the default was too low.

[boonies4u]

... the default value for dust is 5430 Satoshis (~0.6 US cents at current exchange rate).

5430 Satoshis is also known as a Gavin.

What do we call the next default then?

[David Rabahy]

Remember when a Gavin was 5430; man those were the good old days.

[boonies4u]

5430 Satoshis is also known as a Gavin.

What do we call the next default then?

The default dust threshold can always be known as the Gavin, whatever value it currently has. Honor where honor's due.

I think it is kind of misleading, since a Satoshi will always be  (and always be known as) .00000001 bitcoins.

[bitcoingenerat0r]

Bitcoin is not suitable for micro transactions. This is all. Nothing new  here, it was pretty obvious from the very beginning that all those dusters are allowed to shit into blockchain only until there are not enough more serious transactions to fill the blocks.

If you want to spam blockchain, patch the client or use another one and hope that miners will be amenable to serve you for free.

I agree! I don't understand the querulous people. Bitcoin still suitable for micro transactions. But 54 uBTC is 0.000054 which is 0.006728 USD in the current exchange rate.

Micro transaction is 0.99 USD or 0.50 USD or 0.25 USD. Maybe 0.01-0.10 USD. But less than 0.01 USD is not micro. It is dust. Fragments.

By the way, the banks steal the cent fragments. The client only blocks them until their value increases enough.

[solex]

Bitcoin is not suitable for micro transactions. This is all. Nothing new  here, it was pretty obvious from the very beginning that all those dusters are allowed to shit into blockchain only until there are not enough more serious transactions to fill the blocks.

If you want to spam blockchain, patch the client or use another one and hope that miners will be amenable to serve you for free.

I agree! I don't understand the querulous people. Bitcoin still suitable for micro transactions. But 54 uBTC is 0.000054 which is 0.006728 USD in the current exchange rate.

Micro transaction is 0.99 USD or 0.50 USD or 0.25 USD. Maybe 0.01-0.10 USD. But less than 0.01 USD is not micro. It is dust. Fragments.

By the way, the banks steal the cent fragments. The client only blocks them until their value increases enough.

Yes. And...

Exactly! Can anyone detail any previous fiat transaction they had for an amount < 1 cent?

silence on this, so far.

[marcus_of_augustus]

Umm, apparently there were some guys from india at the conference that said they needed transactions in the rupees range.

I don't know what a cup of coffee costs in Bangalore but I can't imagine it is that much once the conversion is done ...

http://www.numbeo.com/cost-of-living/city_result.jsp?country=India&city=Bangalore

Smallest atomic unit here seems to 0.33L bottle of water at 15 rupees (about 0.0022 btc) ... although there is 1 min. of Prepaid Mobile Tariff Local (No Discounts or Plans) for 1 Rps. (about 0.00015 btc)

[solex]

Umm, apparently there were some guys from india at the conference that said they needed transactions in the rupees range.

I don't know what a cup of coffee costs in Bangalore but I can't imagine it is that much once the conversion is done ...

http://www.numbeo.com/cost-of-living/city_result.jsp?country=India&city=Bangalore

Smallest atomic unit here seems to 0.33L bottle of water at 15 rupees (about 0.0022 btc) ... although there is 1 min. of Prepaid Mobile Tariff Local (No Discounts or Plans) for 1 Rps. (about 0.00015 btc)

LOL. But even those are larger than the 0.000054

Used to be able to get candy for 1 cent, occasionally 3 for a cent, in the days before the inflation megatrend.

[AliceWonder]

I don't mean to make any enemies but if this is what people are getting upset over then bitcoin has made it.

I still haven't bought any, but I've played at some faucet sites just to get some practice currency, you know, make sure I can wipe my client data and restore.

Even they payed me more than the cutoff limit, and not by a small amount.

I don't think this is a big deal and bitcoin-qt isn't the only client in town. Use another if you don't like it.

[bg002h]

Does the push for eliminating dust raise the desire for off-chain transactions? I should think this would jumpstart off chain efforts.

[DeathAndTaxes]

Does the push for eliminating dust raise the desire for off-chain transactions? I should think this would jumpstart off chain efforts.

Is there a huge "real" (i.e. non trolling) demand to pay people tiny fractions of a penny either on or off blockchain?  I would guess not and thus it won't jumpstart anything.

[wolongong]

All the faucet sites have to implement off chain money boxes now

[nimda]

All the faucet sites have to implement off chain money boxes now

Good. They were just inflating the blockchain anyhow.