Are there any solutions to Bitcoin dust (unspendable UTXOs)?
There has to be thousands of people that are amassing large amounts of Bitcoin in “small bills”. Is there a solution to this at all? Just don’t spend small amounts of Bitcoin ever?
Discussion
Yes, the solution is "don't spend small amounts". That's why we have layer 2 protocols.
Gold had a similar problem in ancient times. Small amounts would get lost/stolen. Hence the eventual development of layer 2 protocols consisting of pieces of paper representing gold deposits. And the cycle continues.
Makes sense to me. I’m trying to figure out what the best practice user flows are for regular people then.
Like can we think of lightning channels like bar tabs? Isn’t the cost of opening and closing a channel small enough to be considered “dust” as well?
As a lightning channel, you *could* transfer an amount equal to the small change you have on hand to another channel - perhaps overpaying the imbalance. That would require software support (rather tedious to calculate manually).
Man, the whole “balancing” thing with lightning is so confusing.
It would be cool if there was a lightning app that didn’t hide that functionality, but instead displayed it in a really intuitive manner
Like consolidating UTXOs?
Yeah I’m wondering if there is any research into new ways to fix this problem. Or if the solution is just layer 2
I assume you mean aside from doing lots of normal Layer 1 transactions? My understanding is as long as you're willing to pay a lot of fees, you can accomplish this with normal L1 transactions. And the advice is: do this _now_ while fees are relatively now, because when they're permanently sky high your window of opportunity will be closed forever.
This podcast discusses it at length: https://whatismoneypodcast.com/episodes/bitcoin-utxos-101-with-wicked-smart-bitcoin-wim462-4Jya4Iab
Exactly. I just don’t think “fix it while you’re in a bear market!” Is a viable answer