Killing the Dust – The End of All Faucets!

In case you have not heard about it, yet: There has been a small uproar in the bitcoin community lately when the bitcoin foundation silently announced that they are planning to kill all dust transactions on the network.

Dust? What’s that all about?

Dust transactions describe bitcoin transfers that deliver very tiny amounts of BTC to their receivers. Following the bictoin foundation’s latest recommendation (see here) , these kinds of transactions are to be considered as “uneconomic dust” and should not be accepted on the network if any single output of any transaction is below 54.3μBTC.

But bitcoins are infinitely divisable!

Indeed, they are! And it will stay that way! What has been proposed is not a fundamental change to the way bitcoins themselves work. It is the policy for accepting transactions on the network, and in fact just the default configuration, that will be affected in the next update to the bitcoin software (v0.8.2). A bitcoin server operator may still chose to change theses settings to their own liking.

Your bitcoins will always stay dividable down to the single satoshi, you will just have a very hard time sending or receiving amounts below the threshold if most servers will no longer confirm these transactions.

So what’s the problem with this dust?

Part of the bitcoin’s fraud prevention requires every single transaction ever processed to be saved forever. This means every transaction will require some bytes of data to stay on the network for eternity. The size of a transaction in bytes does not come from the amount of bitcoins transacted, but rather from the number of inputs and outputs used in this transaction. Data storage does not come free, and the network requires some time to process, verify and include individual transactions in the network.

So that’s where the problem is! If we have heaps of tiny “dust” transactions on the network, a lot of storage and computation power must be used to transfer values of no significance. This slows down the network and creates costs to those who run bitcoin servers. That’s why the bitcoin foundation is planning to consider such transactions as spam and wishes to no longer process them.

How can sending money be spam?

We need to keep in mind that a single satoshi does not have any real value (yet). If you are sending a single satoshi today, you are really only transacting a value of ~$0.000001. Even the proposed dust threshold equals little more than half a cent($).

The recent history has shown that there are few malevolent individuals who are sending satoshi transactions to non-existent receivers, just to embed some bytes of rubbish on the network. That’s real bitcoin spam. It hurts the credibility of bitcoin and potentially slows down legitimate transactions.

Bitcoin transactions do require a transaction fee already, which is in part also supposed to limit these spam transactions, but it is still fairly easy to circumvent these fees if you know your ways. A dust threshold on the network will make undertakings like these much more pricey and hopefully helps keeping spam off the network all together

The End of All Faucets!

Really? No, not really! We were just being dramatic!

But, many faucets and other “free bitcoin” sites (check our List) are creating transactions that would have to be considered spam by the new policies. If these sites want to continue their service, they will need to implement accumulation functions to keep balances for an address stored locally and only sending the users their satoshis once they have collected enough to not be seen as dust. A lot of the sites which are lacking such functions today are already making steps into this direction, so there’s not really any need to be worried about your free μ-coins!

Our lottery is also on the safe side! All our prizes are well above the dust threshold. Speaking about the lottery, have you grabbed your tickets yet? No? Then go and visit the Lottery now.

The Bottom Line

Bitcoins were created as a money alternative, and no person in their right mind would demand to pay/receive half of a cent, or even less. If the value of bitcoin was to rise 10 fold, the dust threshold would certainly be lowered again to match the real value of bitcoins. We should welcome this change to the protocol as it will stabilize and secure the growth of the bitcoin network while it becomes more and more relevant in the “real” economy.

 

[UPDATE 30.05.2013]: It’s official. The Version 0.8.2 has been release. Read here

So, what do YOU think? Is it a change for good? Or do you think this is going to hurt the community? Let us know in the comments below.


6 thoughts on “Killing the Dust – The End of All Faucets!

  1. Douglas Stewart

    Some faucets have already banded together to remedy this problem on their own. If you go to Can Has Bitcoin and submit your address (and follow the link that says “want more, click here”) all of the following sites will save your payments through Coinbox.me and then send them to you once they have reached a more substanstial total. So as soon as this problem arose people got together to fix it. Im sure we will see this happen with all faucets and other giveaways as well

    1. adminadmin Post author

      Hi Douglas, thanks for your comment. I have edited the article above to be more clear on this. After all it is a great change to the spam policies and i am sure most if not all faucets will adapt to it. It might make the life of some programmers harder for a day or two, but in the end all users will benefit.
      Any user who has tried paying with a wallet filled with dust will know how hard it is to get these dust-filled transaction to confirm (already today) due to their sheer data size. So anyone should be happy to not receive every single satoshi immediately ;)

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  4. Mike

    The problem with this is that it will effectively kill the concept of the Satoshi. The Satoshi will become meaningless because you can’t send anyone less than 5430 of them.

    This will spark a whole new and rather laughable social phenomenon. what will the new minimum unit be called? the thing that will go in the wiki as “equal to 5,430 Satoshis”. and if bitcoin price rises to more than what the devs consider “enough” the unit will change it’s default value – will it then get a new name? will half of the sites on the interwebs update the unit to show the correct value while the rest remain out of date and wrong?

    furthermore, this completely undermines the principle of “no central authority” – there IS a central authority! it’s the bitcoin foundation (the devs!) – if they decide to limit the minimum transactable amount, 99% of the world will go along and they will effectively succeed. This is the worst part. This is the first time i’ve heard of that they have so disregarded one of the very underlying principles of bitcoin that makes bitcoin what it is.

    expect the price/value of bitcoin to tank big-time.

    bitcoin “it was fine until the devs ruined it.”

    of course this is mostly satirical. I do appreciate the anti-spam benefit, but at the same time, realize that it’s akin to the old “omg, the internet is running out of ip’s” scare. total false alarm… people just started using the ips that there were more intelligently, and even without ipv6 there is utterly no problem at all. so i do hope it works out. maybe later they can figure out how to transfer a single satoshi more intelligently and it wont be such a problem after all. but to label it “dust” and limit transactions to a minimum amount? bitcoin has now taken it’s first step towards central regulation.

    IMHO, a FAR more responsible thing for the devs to have done would have been to implement the functionality with a default of 1 satoshi, and let the NETWORK make the decision as to what is “dust” and what is not. That is, after all, the whole POINT of the bitcoin system from what i can see – DE centralized decision and authority.

    Has anyone published a paper that illustrates what the total disk storage space would be if the entire blockchain of 21 some odd million bitcoins that will exist sometime in the future was made up entirely of 1 satoshi transactions? how about speculations about transaction rate being processed in the network and what if every transaction was only 1 satoshi, so as to illustrate a worst case scenario. THAT information should have been in the article. The fact that it’s not makes it much easier to think that no proper study has been made and someone just went “omg DISK SPACE!” and that was the extent of their thinking before panicking. NM the fact that a 4 TB hdd only costs $160. I guess $160 is too much to invest if you want to be serious about bitcoin. how long will it take for the blockchain to exceed 4tb WITHOUT this change being implemented?

    obviously the devs wouldn’t have been so silly as this hypothetical hyperbole suggests, but where is the info demonstrating the truly noteworthy need for placing a limit? where is the philisophical discussion that concludes that the problem is so severe that it is worth undermining one of the most important principles of the system, which could dramatically affect end-user confidence, in order to solve said severe problem? please point a link to all that stuff!

    I shake my finger at the devs for such a suprise, which could be considered being a bit reckless with the infrastructure. this is something that should have been common knowledge among the users and commented / debated on for months and months. Maybe i’m new and way behind the curve, but this seems to me like a snap reaction. I hope it works out and doesn’t prove to be a mistake. I truly, honestly hope it works out, so i can later tell the devs, “phew, that was a close one, i’m glad it worked out for you. Please be more careful in the future.”

  5. Mike

    also, after so many months have gone by since this happened, how has it panned out so far? has anyone really cared?

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