what happens to a utxo in the future when #bitcoin tx fees exceed the value to the utxo?
we say those are useless, and to save your utxos so you don't have a problem in the future with #utxo #management. but that situation creates a very possible use case:
what if a nation state takes a large sum of bitcoin and divides it up into utxos that can't be transferred on-chain (utxos the size of 100, 500, 1000, 2000) then prints each utxo private key on a promissory note so they can be transferred physically off-chain?
each note could be verified at the time of tranfer and transferring the value on-chain would result in the destruction of that utxo.
the nation state would essentially back their entire currency system with an amount of btc that determines the exchange rate, and they would only need to peg their physical cash, not their entire currency market cap.
it would essentially eliminate counterfeit cash and preserve all on-chain tx fees, while backing their monetary system with a hard, finite asset.
would love to get some feedback on this idea
Replies (9)
that wouldn't work... someone could take a picture of the note, pay for something with the note, then later, maliciously transfer the btc after the transaction.
I'm still fascinated with what happens to btc when it gets to $0.01 = 1 sat. the private key couldn't be printed on the note, but the public key could, allowing for verifiability.
tx fees would lock the utxo from transfer for probably anything less than 2,000 sats, probably a lot more if network congestion averages high.
You could also redeem the notes from the issuing authority for an on-chain transfer.
i feel like this is an unintended feature of bitcoin (but maybe it's by design) to back a physical cash, off-chain system.
am i just day dreaming?
I’ve been thinking about this for some time, too. Like you said, duplicate prints and also trusting the government didn’t print duplicates, all learn to a trusted intermediary. And if you have to validate it at transfer, then you have to have the internet connection, and if you have an internet connection, then what’s the point of the physical.
Keep turning this rock over—someday it’ll crack.
Why would anyone accept a system that makes it possible to rob them again and is back to the chains of slavery ?
It is not about if that is possible, we are already in such system, it is about if we accept it !
Not you keys not your coins !
Second, third and all other layers should either make ownership possible or have some other build in mechanism that makes creating more impossible.
The only way to stop being exploited, abused, milked like a cow is NOT accepting it.
that's true, you would need to be contacted. but verification would be up to the receiver (most likely a store), so the giver wouldn't need to be connected, just the receiver.
i think i understand what you're saying. basically, why would that evolve.
I'm trying to understand what systems might evolve out of bitcoin far down the line. what happens when a utxo doesn't exceed the tx fee?
some teach utxo management to prevent locking up funds. but what if you could leverage that problem? that's what I'm getting at
BTC will be/is a layered system.
On chain high value transactions high fees where ownership/settlement is important.
On lower chains, like LN now, smaller transaction will be done fast & cheap.
If needed this system will evolve.
is a 100 sat utxo worth 100 sats in the year 2140?
isn't that utxo essentially worthless because it can't me moved on-chain anymore because tx fees exceed the value?
what happens when a utxo value falls below the tx fee?
will a 100 sat utxo be worth 100 sats in 2140?
if you can't move the utxo on-chain without destroying the value, doesn't it mean that utxo is worthless?
