What dust mean in bitcoin and why small amount can be a problem?

[KiaKia]

I like the fact that you asked this question as many newbies don't even know this about Bitcoin transaction, I also believe that you had the right answer already, especially from charles-tim and few others.

At least your Bitcoin wallet told you what was wrong? You should be able to figure that out yourself instead of blaming the Blockchain, it's impossible to send 1 sat when the transaction fee is over 200, @Bitmaxz said it all.

By the way, what are you trying to do with that small amount of Bitcoin anyways? The smallest amount of Bitcoin that I have toyed with was $1 worth and it's sendable, right now it's over a thousand satoshi per $1 bitcoin.

Even those that DCA very small amount into Bitcoin don't use $1, talk less of going way lower in the hundred sats, yes it's your money but what are you doing?

Faucets are a good example, few that exists won't even allow you to withdraw if the balance is too small, it's called safety protocol or your Bitcoin gets hanged for a long time or likely get rejects. I'm glad you asked because now you know.

[Zaguru12]

Now assuming I broadcast a dust transaction to my own node and a miner include it, does that make the UTXO spendable forever? Will other nodes see it as a valid if it appears in a block even if they haven't relay it before?
From everything I have read here I feel like there is no perfect solution. It's either you pay fees now to consolidate or you risk getting stuck in the future.

If the miner actually picked the transaction, that’s the transaction actually satisfies the miners own dust limit he includes it into his mempool and added to his candidate block which later if it gets added to the blockchain will be broadcasted to other nodes for verification and if the block is valid, that is the transactions in that block is valid then the block will be added to the blockchain.

Dust transactions are not an invalid transaction. Just that nodes/miners do not just accept them in their mempool or add them to their candidate block. If it is done then it get into the blockchain with other valid transactions

[snowpega]

The dust is set by the nodes. Most nodes use the default.

546 sat for legacy addresses
294 sat for segwit bech32
330 sat for taproot.

If you want to send below that, you will need to run your own node and set it to the amount that you want. But on Bitcoin Core those are the dust limit. You can not spend lower than those sats.

This is to avoid or reduce spamming the bitcoin mempool.

Good explanation. Do these dust amount changes occur according to the transaction being processed on the network?
Like, what if the transaction is too small or too big? Does it stay constant? As you said, most nodes use the default dust set by the running node.
And is it possible to limit the own node dust limit? Then how does that affect whether those transactions get accepted and passed along by other nodes using the default settings?

And if someone is limiting their own node, will the transaction be processed further, or will it be ignored? I have some of these questions, hehe. Hope you won't mind it. And also, if any of my questions are not correct, then also guide me on that. Thank you!

[Mia Chloe]

Once a node receives a new block, it checks whether the block is valid or not. If the block is valid, it's added to the blockchain. In other words, nodes check whether the block follows consensus rules or not.
It doesn't matter whether the transactions that have been included in the block follow nodes' standard rules or not.

And this exactly explains why we can have a totally empty block and by empty block I'm referring to one with no transactions so long the block is valid and has been successfully hashed other nodes have to add it for extra validation and I think it was where using bitcoin Knots was trying to be different.

~snip

Most of them are still leaving high fee rates which makes dust limit higher. Ordinarily I was almost becoming certain that 1000 sats as the minimum till LoyceV shocked me with a 100sat transaction through his node.

[Cricktor]

If Bitcoin can be divided into million sats, ...

I read all the answers but can't remember that someone corrected OP's statement. Actually one Bitcoin is 100,000,000 sats, that's one hundred million of them.

And this exactly explains why we can have a totally empty block and by empty block I'm referring to one with no transactions so long the block is valid and has been successfully hashed other nodes have to add it for extra validation and I think it was where using bitcoin Knox was trying to be different.

I know you don't mean it, but as we are in the Beginners & Help section, we shall not confuse newbies with incorrect or inaccurate statements. A block with no transaction IS invalid, taking your sentence by the letter. The very first and mandatory present transaction of every block has to be the coinbase transaction, therefore what you call an "empty block" is actually a block with a single coinbase transaction but none other, like from mempool or whereever a miner pulls transactions out of his hat..

It's Knots, not Knox (Samsung labeled Knox for something like fancy pants mobile device security stuff) and to my knowledge Bitcoin Knots (filter crap) doesn't prevent "empty blocks".

Excuse me being a pedantic.

[Mia Chloe]

I know you don't mean it, but as we are in the Beginners & Help section, we shall not confuse newbies with incorrect or inaccurate statements. A block with no transaction IS invalid, taking your sentence by the letter. The very first and mandatory present transaction of every block has to be the coinbase transaction, therefore what you call an "empty block" is actually a block with a single coinbase transaction but none other, like from mempool or whereever a miner pulls transactions out of his hat..

Congratulations on a a successful ragebait lol... Loll thanks for clarifying and THIS is actually what I did mean. You are on point same as I am because is a similar argument with; is "an empty cup" on a table empty or filled with air.

It's Knots, not Knox (Samsung labeled Knox for something like fancy pants mobile device security stuff) and to my knowledge Bitcoin Knots (filter crap) doesn't prevent "empty blocks".
Excuse me being a pedantic.

Yeah this was fully typo corrected it already. Loll fortunately your pedantic nature has or likely in no time will help a newbie better understand why empty blocks are even a thing in the first place. Ohh interesting well let me sacrifice my smerits left so you can enjoy 4000

[Comeacross]

I like the fact that you asked this question as many newbies don't even know this about Bitcoin transaction, I also believe that you had the right answer already, especially from charles-tim and few others.

At least your Bitcoin wallet told you what was wrong? You should be able to figure that out yourself instead of blaming the Blockchain, it's impossible to send 1 sat when the transaction fee is over 200, @Bitmaxz said it all.

By the way, what are you trying to do with that small amount of Bitcoin anyways? The smallest amount of Bitcoin that I have toyed with was $1 worth and it's sendable, right now it's over a thousand satoshi per $1 bitcoin.

Even those that DCA very small amount into Bitcoin don't use $1, talk less of going way lower in the hundred sats, yes it's your money but what are you doing?

Faucets are a good example, few that exists won't even allow you to withdraw if the balance is too small, it's called safety protocol or your Bitcoin gets hanged for a long time or likely get rejects. I'm glad you asked because now you know.

I don't really mean to blame the blockchain. I was just wondering why my wallet couldn't let me send it.

Nothing much. I wasn't actually trying to do anything much but just doing some testing on my wallet after reading about UTXO and dust and I wanted to give it a practical test to see what happens when one attempts it. I'm doing DCA with small amounts on my conveniency so I was worried about stacking bunch of sat inputs in the future.

[LoyceV]

till LoyceV shocked me with a 100sat transaction through his node.

My Fulcrum Electrum server doesn't allow creating outputs under the dust limit. Only miners can get non-standard transactions confirmed. See Mara Slipstream.

[Cricktor]

OP, if you're testing stuff, why don't you use Testnet3 or Testnet4 coins which are supposed to be worthless? There are faucets where you can basically get Testnet coins for free and could have enough for testing a lot of transactions, e.g. at https://altquick.com/faucet/.

See Mara Slipstream.

Mara's Slipstream service is in the meantime defunct for quite some time (I stopped counting the weeks) for whatever reasons. They also don't respond (at least to me) if you write to their support contact address provided on the maintencance landing page.

[nc50lc]

Now assuming I broadcast a dust transaction to my own node and a miner include it, does that make the UTXO spendable forever? Will other nodes see it as a valid if it appears in a block even if they haven't relay it before?

Yes, there's nothing in the consensus rules that will invalidate a UTXO with dust amount.
And it's not a hard requirement for the transaction to first make it into a node's mempool for them to accept the block that contains it.
Otherwise, we'll get issues with block propagation since each node's mempool aren't all 100% identical.

Additionally, being "non-standard" means that most nodes uses that configuration (it's like a setting rather than strict rule), so not following the majority's config makes a transaction non-standard.
To get a broader picture of this, it's worth researching these terms: "Bitcoin Consensus Rules" and "Bitcoin standards/policies"

From everything I have read here I feel like there is no perfect solution. It's either you pay fees now to consolidate or you risk getting stuck in the future.

Ah, so you're concerned on the fee.
Some wallets will try its best not to produce dust change, what wallet are you using?
Based from the OP, it looks like Electrum; if so, that's a good one with decent coin chooser and usually wont leave dust change.

If ever it's sent to you (dust attack, etc.) you can just ignore the UTXO using coin control, donate it without using other inputs or at least send it to an OP_RETURN output so it wont clutter the UTXO-set.

[LoyceV]

From everything I have read here I feel like there is no perfect solution. It's either you pay fees now to consolidate or you risk getting stuck in the future.

Have you read my topic on Consolidating small inputs? Now is one of the best times ever to do this, and pay 0.2-ish sat/vbyte in fee.

[UchihaSarada]

Have you read my topic on Consolidating small inputs? Now is one of the best times ever to do this, and pay 0.2-ish sat/vbyte in fee.

It's easy to use 1 satoshi/ vbyte in fee rate but for smaller fee rates than 1 sat/vbyte, he will do some technical steps.

How to make a bitcoin transaction and pay less than 1 sat/vByte.
LoyceV's 0.1 sat/vbyte Electrum Server Adventure.

[hosemary]

Like, what if the transaction is too small or too big? Does it stay constant? As you said, most nodes use the default dust set by the running node.

The dust limit doesn't depend on how big the transaction is.

And is it possible to limit the own node dust limit? Then how does that affect whether those transactions get accepted and passed along by other nodes using the default settings?

By changing your own node's settings, you may be able to broadcast your transaction, but all nodes with default settings will still reject it and it's very unlikely that your transaction will be included in the blockchain.

[Comeacross]

Ah, so you're concerned on the fee.
Some wallets will try its best not to produce dust change, what wallet are you using?
Based from the OP, it looks like Electrum; if so, that's a good one with decent coin chooser and usually wont leave dust change.

If ever it's sent to you (dust attack, etc.) you can just ignore the UTXO using coin control, donate it without using other inputs or at least send it to an OP_RETURN output so it wont clutter the UTXO-set.

No. I'm using a different wallet currently not Electrum. It probably has coin control too but I haven't tempered with it yet because I don't want to mess things up. I might test it later with a separate wallet since Electrum does dust avoidance by default. But what do I risk if someone purposely send me dust? Is it just paying a higher fee when I try to consolidate later or there is a risk of privacy too since it links my address together?

Have you read my topic on Consolidating small inputs? Now is one of the best times ever to do this, and pay 0.2-ish sat/vbyte in fee.

Thank you for the reference link. With the DCA, one ends up with a lot of sats UTXO from exchange withdrawal. For someone with around 50 UTXO and thousand sats each, which is more better between batching and one shot consolidation when fee is around 0.28 sat/vB? Assuming I batch 20 at a time over some days, I will definitely pay a bit more in total fees but it won't link all 50 input together on chain but if I do it all at once it's more cheaper but the UTXO is obviously a private link. What do you recommend for someone who want to balance fee saving and chain analysis?

[LoyceV]

what do I risk if someone purposely send me dust? Is it just paying a higher fee when I try to consolidate later or there is a risk of privacy too since it links my address together?

Both are possibilities, and both can be avoided by using Coin Control.

With the DCA, one ends up with a lot of sats UTXO from exchange withdrawal. For someone with around 50 UTXO and thousand sats each, which is more better between batching and one shot consolidation when fee is around 0.28 sat/vB? Assuming I batch 20 at a time over some days, I will definitely pay a bit more in total fees but it won't link all 50 input together on chain but if I do it all at once it's more cheaper but the UTXO is obviously a private link. What do you recommend for someone who want to balance fee saving and chain analysis?

You missed a step: withdrawing from exchanges usually costs a lot more than making your own low-fee transaction. So depending on amounts, you may want to wait and not withdraw each time you buy Bitcoin. If you have 50 UTXOs on 50 different addresses, you can consolidate them for as little as 2 cents per input. When deciding how much to consolidate into one address, you should think about how much you're going to spend at once in the future. You don't want to buy coffee with the same input you use to buy a jet.

[Zaguru12]

But what do I risk if someone purposely send me dust? Is it just paying a higher fee when I try to consolidate later or there is a risk of privacy too since it links my address together?

Yes dust attack can actually causes one to spend more on fees but I doubt that’s the reason for that. Two of the reasons I think one is attacked by dust is simply because of privacy where the attacker wishes the victims consolidates that dust with other UTXOs and send them to a new address and if eventually leads to a place which exposes the victim privacy they get to know, but basically this is obsolete because with chain analysis this days you can actually follow up transaction line of that address to any destination.

The second reason which is the most likely reason to me is that the attacker sends that dust from an address similar to the one the victim regularly sends coins to (this address can be generated through vanity addresses generation) or similar to that wallets address, hoping that the victim actually copy’s the address from the transaction history to send coins and hopes it copy’s this address and send coin to it.

This dust attack doesn’t do anything other than this, you simply use the freeze feature available in some wallets to freeze that UTXO not to mix with other UTXO as input for you.
 

With the DCA, one ends up with a lot of sats UTXO from exchange withdrawal. For someone with around 50 UTXO and thousand sats each, which is more better between batching and one shot consolidation when fee is around 0.28 sat/vB? Assuming I batch 20 at a time over some days, I will definitely pay a bit more in total fees but it won't link all 50 input together on chain but if I do it all at once it's more cheaper but the UTXO is obviously a private link. What do you recommend for someone who want to balance fee saving and chain analysis?

It’s still same thing to me if only you’re consolidating to one address after all, if take 20 UTXO from that address and then sends the rest UTXO to that same address in another transaction, it will still show that you control that same new address.

If you that thread you will clearly see where it’s said that with consolidation you are likely losing privacy, so even if this two transaction you’re still losing privacy, in fact I will say do it once so you don’t end up with two different UTXO on that new address again

[nc50lc]

-snip-

But what do I risk if someone purposely send me dust? Is it just paying a higher fee when I try to consolidate later or there is a risk of privacy too since it links my address together?

The fee isn't much of an issue for now (as long as the average fee isn't higher than 3sat/vB) since it's already countered by that 3sat/vB dustrelaytxfee policy.
So as long as your spend/consolidate transaction's fee rate isn't higher than that, including an input with minimum value wont reduce the overall amount that you can send.
Because its added size to the transaction's overall size wont use the other inputs' amount to cover for its bandwidth;
basically, it's free money if you don't value your privacy or if you'll consolidate with all of your address as inputs anyways.

The real danger is its impact to your privacy as explained by the users above this reply.
The catfish vanityaddress scheme (address poisoning) is just silly but it I've seen some articles that there are victims of it.

Since you're using an exchange, be careful since some AML algorithms also follow UTXO flow, not just addresses.
So it's best to keep those spam UTXO isolated in case those are from questionable sources because it might get you in trouble when you deposit back to your exchange account from your self-custodial wallet if you accidentally spend it.

No. I'm using a different wallet currently not Electrum. It probably has coin control too but I haven't tempered with it yet because I don't want to mess things up. I might test it later with a separate wallet since Electrum does dust avoidance by default.

If it's a well-written self-custodial wallet, then it must have that feature.
Usually, such wallet picks the best UTXO(s) available to cover for the intended amount to be sent without producing a small change as much as possible, will even include the remaining dust to the fee if needed.
But since it still depends on your available "coins" (UTXO) its coin-picker can still fail to do that if it doesn't have any choice.

[B2Z]

The problem you are facing is actually called dust and it is not unreasonable but there is a real reason behind it.

Dust basically refers to a small amount of Bitcoin, and this small amount of Bitcoin cannot be used because if this small amount is used, it may cost this amount or more in transaction fees to transfer it, which will cause a user to suffer more losses than profits. In the case of such transactions, many times the transaction gets canceled or blocked, but the transaction fee is lost to the user.

There are some amounts of Bitcoin that are actually considered as the lower limit of use, but there are some small amounts of Bitcoin that can be broken into Santoshi, but those that cannot be broken or are not suitable for breaking are generally considered as dust. There is a concept called “dust limit”, which helps to prevent the blockchain from being filled with unnecessary small transactions (spam). 
So, it's your money, but the reality of the network rules and fees means that you won't be able to use this amount or that using this amount will cause you to suffer more financial losses instead of gains.